"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

Wednesday, March 28, 2012

Game of Thrones Season 2 is this Sunday. Here is a half hour special were the makers discuss some interesting things:

Three things struck me. One is how they emphasize the feminist nature of the strong female characters, maybe because fantasy fans are typically male. Secondly, how one of the creators said he wanted it to be like past HBO shows the Sopranos and Deadwood with many characters (but no mention of the Wire.) And thirdly, one of the creators mentioned how the show entered into discussion of contemporary politics. My guess is he was referring to the way Obama was played by Republicans over, say, the debt ceiling and how Ned Stark was played by Cersei and Littlefinger. Lefty/liberal critics of Obama say he was naive to believe his opponents would negotiate in good faith. Maybe so but part of the reason Obama was elected was his appeal to patriotic, post-partisanship (neither red states nor blue states but one America, etc.) Just as Ned Stark was loved and respected as a leader, friend, husband, brother and father for his appeal to a code of honor and loyalty.

Tuesday, March 27, 2012

Alan Beattie, Archon of the Shrill: Selections from His "Who’s in Charge Here?" by DeLong
Book extract: Who’s in Charge Here?: The problem is not the international monetary or economic system as such. It is that economic policy was run badly within that system…. Financial regulators and central banks were far too nonchalant about the huge amount of borrowing that was going on, and the ever more exotic financial assets that were being created to facilitate it. Governments in economies such as the UK and USA watched huge housing booms take off, financed by those incomprehensible financial instruments, and cheered them on their way…. But there was nothing inevitable about making these mistakes. Nothing in the global economic system forced the USA to run a hopelessly dispersed regulatory system that allowed financial institutions to escape proper scrutiny…. No one compelled a gang of countries in Continental Europe to yoke their disparate economies together in a badly designed currency union that encouraged asset bubbles in the periphery fueled by reckless lending by banks in the centre.
Some argue that the crisis was inevitable because the big emerging markets, particularly China, by persisting in intervening in the foreign exchange markets to hold down their own currencies, were in effect shovelling huge amounts of money at the rich world…. But the mistakes of countries on the receiving end were avoidable without changing the system – indeed, some countries have largely avoided them. Countries where governments exercised proper control over their banks, such as Canada and Australia, have been much more stable. Not a single major Canadian financial institution failed during the crisis….
The current predicament of the world economy is all the more poignant because it is unnecessary. This is a political and ideological crisis, not a technocratic one. Authorities could have done, and could still do, a lot to prevent their economies sliding back into recession and financial chaos. That they are not doing so is not just because of a lack of political will. It is also because significant numbers of voters and politicians have learnt precisely the wrong lessons from previous episodes and are determined to make similar mistakes all over again.

Monday, March 26, 2012

Ben Bernanke's Eeyore Strategy by Yglesias

Charles Evans and friends on the Odyssean strategy
Circumstances will tempt the FOMC to renege on these promises precisely because the policy rule describes its preferred behavior. Hence this kind of forward guidance resembles Odysseus commanding his sailors to tie him to the ship's mast so that he can enjoy the Sirens' music.
And a little meta-humor in the first footnote! Very David Foster Wallacian.
Bloggers in St. Louis by Mark Thoma

Krugman Nails It! Problem Is Crony Capitalism, Not Free Market Fundamentalism by Dean Baker
Bernanke gave a talk to the National Association for Business Economists.
In addition to the heavy toll on workers and families, he noted that “Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.”
Mr. Bernanke said Monday that structural unemployment may have increased in recent years, but that high unemployment was mostly cyclical.
“The continued weakness in aggregate demand is likely the predominant factor,” he said. “Consequently, the Federal Reserve’s accommodative monetary policies, by providing support for demand and for the recovery, should help, over time, to reduce long-term unemployment as well.”
Mr. Bernanke outlined several reasons for this conclusion. He said that people who lost work recently had not increased their advantage in finding new jobs over the long-term unemployed, as might be expected if the latter group were languishing because they lacked relevant skills. And he noted that hiring generally remained weak across the economy, again suggesting that the lack of new hiring had broad causes rather than industry-specific roots.

Sunday, March 25, 2012

Lessons from the Great Canadian Slump by Krugman

A prolonged Output Gap does not necessarily entail deflation or falling inflation/disinflation.

A Bailout by Another Name by Gretchen Morgenson

Morgenson discusses Peter DeMarco and principle writedowns and differs from people I usually agree with. She feels to take up a number of issues like aren't taxpayers served by an economy growing at potential with no output gap? It is giving money to banks but it is also helping people deleverage by getting out from under underwater mortgages. Perhaps there would be some way for the banks to help pay, but I doubt the Republicans who control the House would go for it.

The Age of the Shadow Bank Run by Tyler Cowen

Cowen notes the success of the post-World Years II with FDIC preventing bank runs but suggest doing something similar today would create morale hazard. Basically he's anti-regulation. Weird aporia of a liberatarian.