"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen

"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister

"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont

"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister

"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Friday, January 20, 2012

Great Grandfather's Depression?

(or good news from the historically true and the new)

Debt and Transformation by Krugman

5 Lessons From The SOPA/PIPA Fight by Yglesias
Risk Premium and Multiple Interest Rates

John Taylor has a blog post linking videos by him and Alan Blinder on changes they made to their South-Western Cengage economics textbooks in light of the recent craziness in the economy. (via Thoma)

Taylor's is typically awful given that he's a conservative. Blinder's is good given that he has added section on bubbles, unconventional monetary policy, the mortgage market and multiple interest rates among other things.

Multiple Interest Rates
What happened recently was that Treasury/government interest rates dropped and private interest rates rose given the increase in risk premiums. The spread rose after the panic of 2008. So the private market "impared" credit and destroyed it and it was up to the government to make up the difference.

The Federal government did somewhat, but state and local governments "impared" credit and demand and Republicans tried to block anything that would help the economy.

Thursday, January 19, 2012

You may remember Mark Walhberg's character in The Other Guys not knowing what the Federal Reserve is or does. In Contraband, an allegory of our current economic malaise, his character floods the economy with money and does the Fed's job, albeit with counterfeit money. His friend's construction company is on the dumps so the friend cons Wahlberg's character into doing a smuggling run. The counterfeiter is played by Diego Luna, a name Will Ferrel (who costarred in The Other Guys) repeated often in his Bush play.


Good season opener of Justified with Raylan Givens outsmarting and beating a stone cold-Anton Chigurh*-type killer on the quick-draw.

New Girl had Lizzy Caplan who was awesome in True Blood and Party Down among other things.

* From No Country For Old Men
Zakaria Gets the Story Half Right on Workers and Jobs by Baker
Now for the part that Zakaria gets right; Germany has done well because of its different attitude towards its workers. It is German government policy to try to persuade employers to keep workers on their payroll even during a downturn through policies like work sharing. This ensures that the workers continue to stay in the workforce and upgrade their skills. By contrast, many workers in the United States face long-term unemployment and some may never work again. 
Germany has been so successful with this policy that its unemployment rate is now 1.6 percentage points lower than it was before the recession began. That is in spite of the fact that its GDP growth has been no better than GDP growth in the United States. The difference has been its labor force policy. 
Zakaria notes the importance of the German experience and citing a paper from the Brookings Institution holds it up as a model for the United States. At CEPR we are always glad to see Brookings follow our lead so that the Post can write about a topic of importance.

Tuesday, January 17, 2012

Sunday, January 15, 2012

The Bain Bomb: A User’s Guide by John Cassidy

(via DeLong twitterstorm)
The Washington Post's Tortured Logic On the Fed's Housing Proposals by Dean Baker
The Fed deserves tons of ridicule; letting the housing bubble grow to such dangerous levels was an act of ungodly stupidity. But its laetst proposals on housing are definitely a step in the right direction. 
Spend, Spend, Spend. It’s the American Way. by Robert J. Shiller
And there was another problem. The truth is that stimulus packages never entirely lifted the economy out of the Great Depression. In the United States, unemployment didn’t drop below 12 percent until World War II changed the picture.
Wasn't World War II government spending a stimulus?