Missing Deflation by Krugman

Three points here: 

1. This does say that there is little risk of accelerating inflation. Indeed, Hobijn and Daly suggest that there’s a “pent-up demand for wage cuts” that will probably push inflation lower even if the economy is recovering. 

2. Central banks and other policy makers will be making a terrible mistake if they look at low, stable inflation and pat themselves on the back for a job well done. Low, stable inflation, it turns out, is entirely consistent with catastrophic economic mismanagement. 

3. Notice how Keynesians responded to the partial failure of a prediction: by asking what they got wrong, and how their model of the world needed to be adjusted. This, of course, shows what fools we are: everyone on the other side of these debates knows that you respond to mistakes by never acknowledging them, and doubling down on whatever you originally claimed.

This is sort of in agreement with a point Dean Baker has been pushing over the years: low inflation is just as bad as deflation.

Its cock rages on!

AV Club reviews Spartacus series finale "Victory."

The mystery of stable prices by Ryan Avent

#slatepitch

Does Obama's Positition on Chained CPI Make Any Sense? by Yglesias

That said it's perfectly coherent to think that the Chained CPI gives a more accurate read of the actual trends in consumer prices without being enthusiastic about using it to reduce Social Security benefits. I can speak from experience since I think the CPI-W overstates inflation, but I'm not excited about switching to the C-CPI-U. That's because to say that the CPI-W slightly overstates inflation is simply to say that the real value of Social Security benefits increases slightly from year to year. But is that such a bad thing? On the contrary, I'd say it's an excellent thing.

Correction for NYT Budget Piece: Economists Do Not Believe that a Chained CPI is a More Accurate Measure of the Cost of Living for the Elderly by Dean Baker

This comment is misleading since the issue with Social Security benefits is whether the chained CPI better reflects the cost of living of the population drawing Social Security checks. That is actually distinct from the rate of growth of out of pocket health care expenses, which would show that the cost of living for seniors as they age rises much more rapidly than the CPI.

There is good reason to believe that it does not. The Bureau of Labor Statistics (BLS) has an experimental elderly index that has consistently shown that the elderly experience a rate of inflation that is somewhat higher than the CPI that currently provides the basis for the annual cost of living adjustment. The main reason is that seniors spend a larger share of their income on health care and housing than the population as whole. Since these items tend to rise more rapidly in price, their cost of living rises somewhat more rapidly than what is shown by the current CPI.

It is also not clear that seniors substitute to the same extent as is assumed by the chained CPI.

This would mean that a switch to a chained CPI would overstate the extent to which seniors benefit by substituting to goods that are rising less rapidly in price.

For this reason, many economists have advocated having the BLS construct a full elderly index which would track the rate of inflation in the specific items purchased by seniors at the stores at which they shop. This would provide a more accurate measure of the rate inflation seen by seniors. 

It would have been useful if the NYT had made this point in its budget article. The comment about the views of economists on the accuracy of the chained CPI for the general population is at best misleading. It is not an issue that is relevant for the current debate.

AV Club reviews The Americans "Only You"

Cersei is reactionary

In the third season, Cersei actually referred to Renly as a "degenerate" to Joffrey before he said it to Margaery. And she told Joffrey that Margaery's concern for the common people is "interesting." Obviously she is badmouthing Margaery because she's afraid Margaery will turn Joffrey against her. He already talks back to his mother.

Iron Lady? Rust in Peace. The Witch is Dead blogging continued

Parliament Debates Thatcher Legacy, as Vitriol Flows Online and in Streets by John Burns and Alan Cowell

Her death has been received in many quarters with a vituperation that was notably absent in the United States with the passing of former President Ronald Reagan, her ideological counterpart and cold-war wingman, and much of that criticism has played out on Britain’s streets. “Death parties” have been held in cities including London, Belfast and Glasgow, with banners reading “Rejoice, Rejoice,” graffiti declaring “Rot in Hell, Maggie” and celebrants “dancing on the grave” of the former prime minister. 

Nor has the vitriol been confined to the streets. An arch-advocate of modernizing Britain, Mrs. Thatcher has effectively been put into the stocks of the Internet age, with a blizzard of hostile Facebook posts, Twitter feeds, blogs on leftist Web sites and comments on online newspaper articles about her death. 

A Facebook campaign was under way to drive the street protesters’ anthem, “Ding Dong! The Witch Is Dead,” to No. 1 in Britain’s popular music charts.

Fareed Zakaria Fails to Appreciate the Fruits of Thatcherism by Dean Baker

Actually, the problems that Zakaria identifies are largely the result of Thatcherism. A main reason that workers have to struggle to keep their wages up is that central banks have deliberately raised unemployment in order to keep inflation low. This weakens the bargaining power of workers, especially those in the bottom half of the wage distribution.

The high unemployment of recent years can be attributed to a policy of financial regulation that allowed for banks to grow large with the implicit subsidy of a government granted too big to fail guarantee. It also required central banks to conduct monetary and regulatory policy without regard to asset bubbles. 

Thatcher and her kindred spirits in the United States and elsewhere worked to weaken labor unions. This has also reduced the ability of workers to secure their share of gains from productivity growth.

The split between winners and losers in the current economy does not fit Zakaria's description. The median wage for college graduates has been virtually flat since the 1990s. This group includes many people who have very high skills.

The comment about globalization is bizarre. The fact that other countries have become wealthier should help the rich countries, not hurt them. It only poses a problem in a context of bad macroeconomic policy, like having an over-valued currency. It also can be a problem with selective protectionism of the sort used in the United States. Trade policy has deliberately put less-educated workers in direct competition with low-paid workers in the developing world. By contrast, highly educated professionals like doctors and lawyers, are largely protected from such competition.

It is remarkable that Zakaria somehow fails to recognize the extent to which the factors that he identifies as problems were the direct result of Thatcherism. In many cases, such as the weakening of workers bargaining power, this was an explicitly stated goal of many of her supporters.

Matt Damon occupies the ultimate in gated communities.

The Witch is Dead Blogging

On the economic achievements and failures of Margaret Thatcher by Simon Wren-Lewis

Myths and Realities of the 1970s by Simon Wren-Lewis

The Use and Abuse of Monetary History by Barry Eichengreen

Can There Be a Left Thatcher? by Chris Dillow

Aporia blind spot

Krugman on Thatcher

He and Bartlett fail to mention why conservatives love Reagan/Thatcher. They broke the unions. Reagan broke the air traffic controllers signalling an all-out war, Thatcher broke the miners.

DeLong, Krugman, and Ygleisas are bad on the subject of unions and organized labor, a symptom of the weakness of the left which has retreated to the academy and wealthy independent thinkers on the Net.

Dean Baker and Doug Henwood are better. Thoma is in the middle wondering why politicians don't stand up for the working class.

DeLong on Hitchens

DeLong on Saddam Hussein is like Sartre, Althusser, Hobsbawm, and Perry Anderson on Joseph Stalin. And then he's partisan donkey-elephant about Afghanistan and Libya.

From Mexico, Some Lessons for Europe by Eduardo Porter

In 1990, the deal was concluded by the Mexican government of President Carlos Salinas de Gortari. Strong-armed by the Treasury Department and the monetary fund, banks swapped old Mexican debt for Brady bonds backed by United States Treasuries that offered a reduction in principal, below-market interest rates or new money. Mexico’s economy expanded by 4 percent, the strongest growth since 1981. The Brady plan became the template for debt reduction across Latin America and beyond. 

What can Europe learn from this experience? Proponents of austerity will probably note that the harsh years planted some of the seeds of Mexico’s recovery. Bankers will remark that Mexico’s absolute debt reduction package was small — much less than the 50 percent or so already granted to Greece. Economists will note that Mexico had a degree of freedom that no member of the euro area has: it could devalue its currency to gain export competitiveness. 

Nonetheless, the Brady plan was a crucial ingredient. It not only reduced Mexico’s interest costs, it also produced a jolt of confidence that pushed down domestic interest rates and buoyed the peso — reducing the burden of foreign debt. It prompted flight capital to return to the country and set off an investment boom. 

Yet perhaps the most important lesson to be had about the dynamics of economic crises and relief is about what it takes to motivate the political will to act. 

To some extent, we owe the Brady plan to the cold war. Political unrest simmered across Latin America. In 1988, Mexican voters almost ousted the party that had ruled the country since 1929. The region, Washington feared, risked falling into Soviet clutches. Arizona’s governor, Bruce Babbitt, even called Mexico “the ultimate domino.” 

Lt. Col. John C. Mangels, studying at the Air War College in 1988, caught the flavor of thinking at the time. “A financially devastated and chaotic Mexico would strongly interfere with our ability to maintain an East-West balance,” he wrote. “The long-term security threat from Mexico thus hinges on economics.”

So maybe Graeber is right and DeLong* with his red baiting is wrong. It is largely about debt and control.

Thoros of Myr played by Paul Kaye.

Jojen Reed played by Thomas Brodie-Sangster.

-------------------
From memory probably not exact.

[setting: outside Robert Baratheon's bedroom]

Jory Cassel: We met before you know. We fought side by side at the battle of Pyke.

Jamie Lannister: That's where you got the scar? 

Jory Cassel: Aye.

Jamie Lannister: That was a proper battle, wasn't it? Do you remember when Thoros of Myr charged first through the breach with his flaming sword.

Jory Cassel: I'll remember that until the day I die.

 -----------------------
[setting: traveling the countryside with Bran, Hodor, Rickon, Osha and Meera.]

Jojen Reed (to Bran): When I told my father about your father it was the first time in my life I saw him cry.

Julie Benz plays Amanda Rosewater the mayor of Defiance. I'd vote for her!

The Witch is Dead

Good photo bad piece

From Times obituary

In the summer of 1981 — the same one in which Charles, the Prince of Wales, married Lady Diana Spencer — discontent boiled over into days of rioting in the London district of Brixton; the inner cities of Liverpool, Manchester and Bristol; and many other areas. Televised reports of rioting, arson and looting shocked the nation. The prime minister, resisting advisers who counseled more social spending and jobs programs, called for greater police powers. Yet, in the face of national shame over the violence, she was forced to give way.

The Clash - Guns of Brixton from Renan Godoy on Vimeo.

Margaret Thatcher: the villain of political pop

Even before Thatcher entered Number 10 she was being personally singled out. "Maggi Tatcha on di go wid a racist show," intoned Linton Kwesi Johnson in 1978's It Dread Inna Inglan. Joe Strummer originally wanted to illustrate the Clash's The Cost of Living EP, released on election day 1979, with a collage including Thatcher's face and a swastika. Just a year into office and the Beat were singing Stand Down Margaret ("please," they added politely).

Human Rights

Thatcher's Divided Isle by A.C. Grayling

Her attitude on how people should live could be described as either Samuel Smiles (“Self-Help”) or Gordon Gekko (“greed... is good”). Despite being a woman who had shattered the political glass ceiling by becoming leader of her party and then prime minister, she did little to advance the cause of women generally, and would not publicly support the feminist movement. She was also unfriendly toward homosexuals, suggesting in her 1987 speech at the Conservative Party Conference that no one had a “right” to be gay.

Very much the Conservative mind set. Pro-greed, anti-gay and anti- human rights. Authoritarian.

The gay issue is on my mind because of the recent US Supreme Court hearings on gay marriage.

One of my favorite actresses Annasophia Robb - I know- is on a new show The Carrie Diaries which had a young man come out of the closet. (And stars my favorite Dr. Who sidekick Freema Agyeman.)

At the expert review of Game of Thrones a (gay) commenter wrote:

By the way, since i brought it up in Newbies...

WHAT THE FUCK IS WITH THE AFTERSCHOOL SPECIAL "OUTLAWING HOMOSEXUALITY IS MORALLY WRONG, BECAUSE THATS WHAT JOFFREY WOULD DO, AND EVEN THE KINGSLAYER UNDERSTANDS THAT LOVE IS BLAH BLAH BLAH....

At first glance I thought the same thing. The writers were adding something that wasn't in the books. (We have the U.S. Supreme court ruling on gay marriage and human rights in the background.)  With the Kingslayer, Jaime loves his sister, which Joffrey and many others would consider degenerate. So like Republican Senator Rob Portman, he can have evolved views because it effects him and his family.

On second consideration it works. Authoritarians are against human rights. They are countervailing force against their "natural rights," or say Joffrey's unlimited rights as a king. That's why you have conservatives like Margaret Thatcher and the Republican judges on the Supreme court coming out against human rights for gays. Joffrey believes women should know their place and homosexuality is "degenerate." It's who he is. He's certainly not dumb, constantly inveighing against peasant superstitions like the taboo about killing people on your name day or convincingly arguing that the realm needs a standing army not each lord and kingdom with its own private army. But Joffrey's an authoritarian and a sadist and sadists M.O. is to deny others their humanity as we'll see with Ramsay Snow.

AV Club review Game of Thrones “Dark Wings, Dark Words” (for newbies)

AV Club review Game of Thrones “Dark Wings, Dark Words” (for experts)

Some followups on capital taxation by Steve Randy Waldman