"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, June 15, 2013

Kathleen Hanna of Bikini Kill fame and Kim Gordon of Sonic Youth fame played the Northside Festival in Brooklyn.

Hanna's new band is The Julie Ruin. Gordon's new band is Body/Head. She and Thurston Moore are divorcing.

From Wikipedia:
Gordon revealed details about the decision in April 2013: She first confronted Moore about a text message that she discovered from an unnamed woman; this was followed by counselling sessions; the separation then occurred as a result of Moore's inability to cease his extra-marital relationship—Gordon explained that her ex-husband was "like a lost soul."
Although she did so unintentionally, Hanna came up with the name for Nirvana's 1991 breakthrough single, "Smells Like Teen Spirit", when she wrote "Kurt Smells Like Teen Spirit" on Kurt Cobain's wall. At the time, Kurt was unaware that Kathleen was referring to a deodorant marketed specifically to young women, and thought that besides having a nice ring to it, the phrase also helped to succinctly summarize, organize and unify the then-nascent song's seemingly-disparate lyrical content into a theme  
On the Fourth of July, 1995— while watching Sonic Youth play at the Lollapalooza Music Festival, Courtney Love punched Hanna in the face, after pelting her with candy and holding a lit cigarette next to her face. This is also referenced in the below-mentioned NOFX song "Kill Rock Stars" with the lines "I wish I could have seen Courtney/demonstrate some real misogyny."
Film director Sofia Coppola and musician Kathleen Hanna have openly praised Gordon for the influence that she has exerted on their own art. Hanna explained in 2013:
     She was a forerunner, musically. Just knowing a woman was in a band trading lead vocals, playing bass, and being a visual artist at the same time made me feel less alone. As a radical feminist singer, I wasn’t particularly 
well liked. I was in a punk underground scene dominated by hardcore dudes who yelled mean shit at me every night, and journalists routinely called my voice shrill, unlistenable. Kim made me feel accepted in a way I hadn’t before. Fucking Kim Gordon thought I was on the right track, haters be damned. It made the bullshit easier to take, knowing she was in my corner.
Hanna started dating Ad-Rock from Beastie Boys in 1997. They got married in 2006. 
In the early 1990s, Gordon co-directed The Breeders' "Cannonball" music video with Spike Jonze. Over a decade later, Gordon appeared in Gus Van Sant's 2005 fictionalized biopic of Kurt Cobain Last Days (Cobain was a close friend).  

Canadian Housing Bubble

Worthwhile Canadian Comparison by Krugman

How Do You Say "Housing Bubble" In Canadian? by Dean Baker

Yes but the Stimulati were not running things.

After 1997, Asian economies wanted to run big current account surpluses, either as a policy of export-led growth or in order to rebuild reserves depleted by the 97 crisis. By definition, this meant they were net savers, which put incipient downward pressure upon global interest rates. In a parallel universe, these high savings might have financed a boom in real capital spending in the west. But because firms couldn't see good investment opportunities, this didn't happen.Instead, the lower interest rates fuelled a housing boom and the hunt for yield led to strong demand for mortgage derivatives. These bubbles in housing and derivatives then burst, giving us the crisis. 
In this way, we've seen what Marx saw in the 19th century - that a lack of profitable opportunities in the real economy pushes people down "the adventurous road of speculation, credit frauds, stock swindles, and crises." 
I say all this as a corrective to a common view on the non-Marxist left - that our economic problems are due to greedy bankers and to austerity. But this is nothing like the whole story. This has been a crisis of real, and not just financial, capitalism - which is why it is so intractable

IMF Urges Repeal of 'Ill-Designed' Spending Cuts by Mark Thoma

In case you missed this, the IMF estimates that economic growth would be nearly double what it is now without the "excessively rapid and ill-designed" government spending cuts:
IMF Urges Washington to Repeal ‘Ill-Designed’ Spending Cuts, Reuters: The International Monetary Fund urged the United States on Friday to repeal sweeping government spending cuts and recommended that the Federal Reserve continue a bond-buying program through at least the end of the year. 
In its annual check of the health of the U.S. economy, the IMF forecast economic growth would be a sluggish 1.9 percent this year. The IMF estimates growth would be as much as 1.75 percentage points higher if not for a rush to cut the government's budget deficit. ... 
"The deficit reduction in 2013 has been excessively rapid and ill-designed," the IMF said. "These cuts should be replaced with a back-loaded mix of entitlement savings and new revenues." 
The IMF warned cuts to education, science and infrastructure spending could reduce potential growth. ... 
The Fund recommended that the U.S. Federal Reserve keep up its massive asset purchases at least through the end of the year to support the U.S. recovery, but should also prepare for a pull-back in the future. ...
The recovery of output and employment didn't have to be so slow. I'm not saying that reversing these policies (or replacing them with more aggressive fiscal policy measures) would have brought miracles, it was going to be a difficult recovery no matter what polices we pursued. But we certainly could have done better than we did, particularly on the fiscal policy front.

Friday, June 14, 2013

Eye on Emmy: Orphan Black Star Tatiana Maslany Surveys the 'Most Intense' Acting Gig of Her Life

After Patent Ruling, Availability of Gene Tests Could Broaden
Almost immediately after the Supreme Court ruled that human genes could not be patented, several laboratories announced they, too, would begin offering genetic testing for breast cancer risk, making it likely that that test and others could become more affordable and more widely available. 
The ruling in effect ends a nearly two-decade monopoly by Myriad Genetics, the company at the center of the case. 
“It levels the playing field; we can all go out and compete,” said Sherri Bale, managing director of GeneDx, a testing company, which plans to offer a test for breast cancer risk. “This is going to make a lot more genetic tests available, especially for rare diseases.” 

The Stimulati

Fiscalists vs market monetarists, a bloggy taxonomy by Cardiff Garcia

Fiscalists, Monetarists, Credibility, and Turf by Krugman

Wednesday, June 12, 2013

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. It is an exercise which always involves a certain number of internal contradictions and even a few absurdities. The conspicuously wealthy turn up urging the character-building value of privation for the poor.
John Kenneth Galbraith.
From the link:
 John Kenneth Galbraith (1908-2006) Canadian-American economist, diplomat, author“Stop the Madness,” Interview with Rupert Cornwell, Toronto Globe and Mail (6 Jul 2002)
The above citation is no longer online. A number of books cite this as a 2002 utterance, but the quote can be found in Peter Lawrence, Peter's Quotations (1993). 
In Max Perultz, I Wish I’d Made You Angry Earlier (1998), he quotes a variant: "The modern conservative is in fact, not especially modern. He is engaged, on the contrary, in one of man’s oldest pursuits, best financed and most applauded and, on the whole least successful exercises in moral philosophy. This is the search for a truly superior moral justification for selfishness."

Tuesday, June 11, 2013

Unemployment insurance beneficiaries believe that they paid for their benefits, and they are right. Social Security beneficiaries believe that they paid for their benefits, and they are more than three-quarters right. Medicare beneficiaries believe that they paid for their Medicare, and they are more than half right. Farm subsidy recipients believe that the market is stacked against them, that what they do is a special and noble profession deserving greater rewards than a rapacious world market would offer, and that their farm subsidies are only raising their incomes back to what would be fair--and they have a case. Recipients of the Earned Income and Child Tax Credits see themselves as working very hard for very little money, and performing a truly important service for America's next generation by bringing their children up right--and they are correct. None of these groups ever imagines that they might be Moochers. And since they do not imagine that they might be Moochers, how can the fact that they regard themselves as Moochers harm their self-esteem and poison their work ethic?
What about the moochers of the financial sector which receives massive subsidies and is in effect an arm of the Federal government? Or the healthcare industry which is managed in such a way to provide rents to corporations? 

And most of all, the demand management policies (a combination of trade, monetary and fiscal policies) which maintain high unemployment and a loose labor market. This keeps wage inflation down and profits up for corporations.

Monday, June 10, 2013

The greatest show that ever was or will be

AV Club: Nikolaj Coster-Waldau, a.k.a. Jaime Lannister, talks his big Game Of Thrones season

in which he mistakenly disagrees with Krugman

Moreover, to the extent Abenomics succeeds in boosting the economy's risk tolerance, the wedge between the private and public real interest rates will fall. Thus Paul might be completely correct in his belief that Abenomics will lower the real interest rate--but which real interest rate? The real interest rate it lowers might be the private rate, and that could be accompanied by a collapse in spreads that would raise the JGB interest rate and make the debt unsustainable. 
Do I think that these are worries that should keep Japan from undertaking Abenomics? I say: Clearly and definitely not. Do I think that these are things that we should worry about and keep a weather eye out as we watch for them? I say: Clearly and definitely yes. Do I think these are things that might actually happen? I say: maybe.
I think it was a mistake for the Clinton Treasury where DeLong worked to worry about Greenspan raising rates at the slightest pretext. Clinton should not have bent the knee to an Ayn Rand disciple. 

non-stable elasticities

Brad DeLong Says We Can't Do Anything to Raise Employment Because Billionaire Wall Street Bankers Are Still Too Dumb to Breathe by Dean Baker

DeLong doesn't mention the Fed's interest on excess reserves. The question is whether the banks will unload the trillions on reserve into the economy once the economy picks up. We'll get inflation. We'll get bubbles. But the Fed has said they will raise the IOER to prevent this. The IOER will also shore up the banks' balance sheets.

Made me think of what Bernstein was saying about non-stable elasticities. 

What the banks do with their reserves is one of those elasticities which could jump.

AV Club review of "Mhysa" from Game of Thrones (for experts)

AV Club review of "Mhysa" from Game of Thrones (for newbies)

I was surprised by Sansa and Tyrion's easy banter. And Yara going after Theon. 

Tyrion to Podrick Payne: "If it were easy, everyone would do it."

Sunday, June 09, 2013

Weekend Papers: Parts I and II (skittish bond markets and phone records) by Jared Bernstein
More on Skittish Markets: Check out the figures in this piece on another dimension of skittish markets as per my commentary earlier in the week: tanking bond prices. As bond yields begin to rise—because the must, they should, and they will—their price moves inversely. But it’s striking how sharply they’ve turned. 
The broader economic lesson here is one of my favorites because it’s one of the most interesting aspects of relationships between economic variables: non-stable elasticities. 
Economists often cite elasticities–how one variable moves relative to another–as if they’re etched in stone: an A% increase in unemployment leads to a B% decrease in inflation; an X% increase in the minimum wage leads to a Y% change in employment (with “Y” tiny, but that’s another story); a R% increase in bond yields triggers an S% decline in bond prices. But B, Y, and S are not fixed! The change with underlying conditions, demographics, policy, and more. 
The large elasticity documented in the article—the movement in bond prices with respect their yields—is especially large at turning points, and is even further amped up by the length of time that bond rates have been so historically low. 
So I humbly submit that you keep this lesson in mind: if a price or an interest rate or some other important economic variable has been where it is for a long time—and in financial markets a long time isn’t necessarily that long—and it starts to change course, or even people think it’s about to change course, be prepared for a much larger response in related variables than you were expecting.

I have to say it is admirable the way DeLong admits how he was wrong and how he goes through his thinking about the data and history of recent macroeconomics, his field of focus.

He forgets to mention that the Fed is paying the banks IOER, so I don't fear a financial crisis there. The bank system is essentially a quasi-public-private venture like Fannie/Freddie. Obama should do what he did with the auto companies and sort them out. He should privatize Citigroup, but then he just nominated a guy from Citigroup to be US Trade Representative. I wouldn't be surprised to learn that Citi is an arm of the CIA like USAID.

The Confidence Fairy, The Expectations Imp, and the Rate-Hike Obsession by Krugman

Tipping point and equilibrium

Low Inflation Is the Same Sort of Problem as Deflation by Dean Baker

Crisis Withdrawal Syndrome by Krugman
Oh, since I’m praising Dean, let me say that while it’s true that he has for a long time been making the case that low inflation is a problem even if it’s not actual deflation, his implication that I’m saying this for the first time is a bit unfair. In the European context, in particular, I’ve been beating this drum for a while.
 Krugman has emphasized deflation and the liquidity trap and the press have echoed what the Fed and Bernanke say about deflation being a bad thing. Baker has made the fair point that sup-par inflation is just as bad as deflation.

We'll see if Japan can get out of deflation and if the U.S. or Europe can get out of low inflation.

More Thoughts on Job Creation in the Recovery by Dean Baker
That being said, as the NYT points out, other countries have done better. Germany stands out in this respect, having seen a sharp rise in its employment to population ratio since the beginning of the downturn, and a decline in its unemployment rate of 5.4 percent, in spite of a recovery that has been no stronger than in the United States. 
Part of Germany's story is a slower rate of growth of its labor force, but the main part of the story is work sharing and other policies that encourage employers to keep workers on the payroll, even if they work fewer hours. These policies have been remarkably successful in shielding German workers from the worst effects of the downturn. 
So to sum up, the main reason that so many people are unemployed four years into the recovery is weak GDP growth. This was predictable given the nature of the downturn. Given the weakness of this growth, the U.S. has done a pretty good job creating jobs. However other countries, most notably Germany, have done much better in translating weak GDP growth into jobs and they provide important lessons to the United States.