"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

Saturday, September 22, 2012

THE KOCHERLAKOTA SHIFT AT THE FED IS A BIG DEAL... by DeLong

Last August Kocherlakota said that NAIRU was 8.7%, using "uncertainty" and DMP. Still proud of my feral counter-post:
 http://rortybomb.wordpress.com/2011/08/11/the-fed-dissenters-or-examining-narayana-kocherlakotas-gut/
Konczal also tweeted:
WTF !!! Evans Rule endorsement rt @Noahpinion Kocherlakota flips from the Hard-Money Axis to the Pro-Easing Alliance!!

Friday, September 21, 2012

Thursday, September 20, 2012

Defections

Narayana Kocherlakota Defects to Team Doves by Yglesias

Tim Pawlenty leaves his position as a Romney campaign co-chair to be the banks' head lobbyist.


The Enterprise's Two Greatest Captains Discuss the Problem of Utility Monopolies by Yglesias





  1. John Roberts upholding Obamacare
  2. Bernanke demonstrating some "Rooseveltian resolve" and adopting a Woodford/Krugman/Evans monetary policy approach (while the Republican Party goes all in on hard money-liquidationism)
  3. Republicans nominating a Mormon vulture capitalist who enacted Obamacare and who dismisses 47 percent of Americans as welfare state dead-enders
and 2B. courtesy of DeLong:

WELL THIS IS A HUGE SWITCH!: FED HAWK MOLTS WEBLOGGING
When I consider what Kocherlakota was saying last spring to people…
Kocherlakota today embraced a proposal by Chicago Fed President Charles Evans to calibrate monetary policy based on specific economic goals. Evans advocates holding to near-zero rates until the jobless rate falls below 7 percent or inflation reaches 3 percent. 

THE DISAPPEARED: How the fatwa changed a writer’s life. BY SALMAN RUSHDIE

Charlie Rose interviews:



Wednesday, September 19, 2012

Perspectives on Current Economic Issues by Charles Evans

(via Thoma)

The Age of Niallism (emphasis added):
...The damage from the Great Recession was substantial; and to date, the recovery has been disappointing. The real value of goods and services produced in the U.S. today is probably more than 5 percent below what economists call potential — that is, the economy’s ability to produce goods and services without generating inflationary pressures. The unemployment rate has been stuck at around 8 percent for nearly a year — well above the 5 percent to 6 percent level we would see if all of our resources were fully engaged. In the absence of further monetary stimulus or fiscal repair, the outlook would be for more of the same: moderate growth that is not strong enough to generate substantial improvement in the labor market; an unemployment rate that is likely to remain above its long-run level for a long time to come; and an economy that would be vulnerable to shocks at home and abroad.

Now, I am an optimist. I think we can do better than this gloomy outlook. That is why action is important. A great deal of state-of-the-art analysis — done both inside and outside of the Fed — indicates that the severe downturn in 2008–09 was mainly the result of a large drop in aggregate demand which left the economy operating below its potential. Research also shows that better and more accommodative policies have the power to reverse these setbacks and raise employment, output and incomes.[2] In other words, more accommodative policy can deliver a stronger economy and the resiliency we are seeking. Furthermore, appropriate policy can deliver these better outcomes without generating inflation that is significantly higher than the Fed’s long-run goal of 2 percent.

There are many who believe otherwise. In their view, our current low output and high unemployment are the hallmarks of an economy that has lost its competitiveness — an economy that experienced permanent disruptions in its infrastructure, the skills base of its work force and its technological capability. In such a dismal view of the economy, monetary policy is powerless and cannot generate a stronger, more robust expansion. Any attempt to increase aggregate demand through more accommodative monetary policy would simply lead to higher inflation rather than better resource allocation.

I see little evidence to support such a pessimistic view of the world. And I refuse to be so nihilistic in the absence of strong evidence of permanent disruptions. It is very hard to believe that millions of people who were working productively just a few years ago have suddenly become unemployable. And while many of the pessimists have been predicting higher inflation for several years, it hasn’t materialized. Indeed, core inflation has been under 2 percent since the end of 2008; and except for some near-term transitory movements in food and energy prices, most forecasters do not see any major change in inflation over the next few years.

Rahmbo caves

Why Wait a Year For It To Show Up in the New York Times? by Doug Henwood

Chicago Teachers Largely Prevail In Strike—Now How Will The City Pay? by Ygelsias

We should do international comparisons and look at the success stories of other countries as we do with health care systems and monetary/fiscal policy or demand management.

Catherine Rampell and Doug Henwood (above) had good pieces on this subject. Countries that perform well like Finland have strong unions and higher pay.

Tuesday, September 18, 2012

We Voted for Obama and Got Rahmney

Rahm is suing to end the Chicago teachers’ strike. Does he have a case? by Dylan Matthews
Rahm’s case, then, is anything but a slam dunk. And even if he wins in court, that won’t change the fact that a huge majority of Chicago public school teachers voted to strike, and presumably won’t stop making trouble for him after they return to work.
(via Henwood)

As Chicago Strike Goes On, the Mayor Digs In by Monica Davey

Emanuel pushed legislation through the Illinois legislature that hiked the percentage of votes teachers in the Chicago district need to call a strike to 75 percent. And the CTU got 90 percent to call for a work stoppage. Why would any Chicago unions back Ramney?

Monday, September 17, 2012

A Future with Swords not IPhones by Alessandra Stanley

Along with George Will, Robert Samuelson is a founding member of my Rogues Gallery.

Robert Samuelson Is Tired of Stimulus by Dean Baker

Commenters at various blogs - Dan Kervick, etc. - have been echoing conservative Samuelson about monetary policy for years now. Do they have some relatively prominent blogger who shares their views or no? Naked Capitalism?

Bernanke has said unconventional monetary policy has helped create (or save?) 2 million jobs. That's not nothing. It's better than tax cuts for the rich. Where is Samuelson's evidence that this is wrong?

Recently Bernanke has made a qualitative change in policy in response to the weakness of the labor market. We'll see if it works. I'd like to think he changed his mind in part due to the tireless efforts of the community of bloggers and economists - like Krugman and Mr. Baker! - who discuss the issues day in and day out. No thanks to the naysayers like Robert Samuelson or various commenters who believe fiscal stimulus is somehow going to arrive one day flying on the back of a unicorn all rainbows and sunshine.

I'm tired of Samuelson. We should place David Brooks, George Will and Samuelson in a rocket ship and launch them into space. 


Romney Will Solve the Crisis with the Exact Same GOP Plan of 2008, 2006, 2004... by Mike Konczal

Konczal gets a nice shout-out in today's Krugman column:


Sunday, September 16, 2012

Professor Bernanke Reemerges



When the Fed Chair is an Academic by Kash Mansori
The big economic news of the week was, in fact, big economic news: the Fed's announcement of significant changes from past practice in the the quantity of its next round of large scale asset purchases ("unlimited"), and in the timing of any future reversal of this expansionary policy ("a considerable time after the economic recovery strengthens").

I view this as a pretty fundamental shift in how the Fed hopes to affect the economy.  Rather than trying to push economic activity one way or the other through its management of interest rates (which can alter economic activity through its portfolio-rebalancing and wealth effects, for example), the Fed is now quite explicitly trying to affect economic activity by altering interest rate and inflation expectations.  As Krugman has put it, the crux of the matter here is that this is pretty close to a "credible promise to be irresponsible".


Can the Chicago Teachers’ Strike Fix Democratic Education Reform? by Richard D.Kahlenberg

If Labor Dies, What's Next? by Harold Meyerson