Saturday, July 08, 2017
Socialize Finance by J.W. Mason
Socialize Finance by J.W. Mason
"We already live in a planned economy. Why not make it a democratic one?"
Thursday, July 06, 2017
David Frum interviews Edward Luce
“Western liberalism is under siege”
Frum:
Frum:
Let's talk about some of the drivers of the changing of society. I see three. You talk a lot about two, and less about the third.
The first is this giant question about the future of work — what is happening to the economic situation of people who don't own capital or have internationally traded skills.What an odd way of putting it. Isn't it the job of the Fed to keep unemployment low?
Wednesday, July 05, 2017
Franc thoughts on Bond Vigilantes by Krugman
Franc Thoughts on Bond Vigilantes
by Paul Krugman
NOVEMBER 23, 2012 12:48 PM
Suzy Khimm writes about the contrast between what financial industry honchos say worries them and what financial markets seem to be saying. The honchos declare that failure to reach a Grand Bargain would
spark a damaging loss of confidence in the U.S. government’s fiscal prospects, a run on Treasury bonds, and a spike in interest rates.
But the bond markets are saying what me worry, with long-term rates at near-record lows.
What Khimm doesn’t note, however, is that the problem with bond vigilante scare tactics runs even deeper than that — because it’s actually quite hard to tell a story in which a loss of confidence in U.S. bonds hurts the real economy. Why wouldn’t it just drive down the dollar, and thereby have an expansionary effect?
Yes, I know, Greece — but Greece doesn’t have its own currency. What’s the model under which a country that does have its own currency and borrows in that currency can experience a slump due to an attack by bond vigilantes? Or failing that, where are the historical examples?
The closest I can come to anything resembling the danger supposedly lurking for America is the tale of France in the 1920s, which emerged from World War I burdened by large debt, and which did in fact face an attack by speculators as a result. Yet the French story does not, if you look at it closely, offer any support to the deficit scare talk we keep hearing.
So, France did indeed have a big debt problem. Here’s debt as a percentage of GDP, from the IMF debt database:
[graph]
How did France achieve that big drop in debt after 1925? Basically by inflating it away.
And markets sort of saw that coming. This study (pdf) by the Bank of France show medium-term interest rates (black line) rising substantially for much of the 1920s, before dropping off sharply:
[graph]
It’s important to note, however, that France wasn’t a depressed economy in the 1920s, and therefore didn’t look much like America today:
[chart]
Meanwhile, the really big effect was a sharp depreciation of the franc, which made France highly competitive and strengthened the economy:
[chart]
But what about the brief but nasty slump in 1927? That wasn’t caused by spiking interest rates; it was, instead, caused by fiscal austerity, by the measures taken to stabilize the franc.
So even when we look at the closest thing I can find to the scenario the deficit scolds want us to fear, it doesn’t play out at all as described.
It’s quite remarkable: our policy discourse remains largely dominated by fears of an event that the fear-mongers can’t explain in theory, and for which they can offer no historical examples in practice.
by Paul Krugman
NOVEMBER 23, 2012 12:48 PM
Suzy Khimm writes about the contrast between what financial industry honchos say worries them and what financial markets seem to be saying. The honchos declare that failure to reach a Grand Bargain would
spark a damaging loss of confidence in the U.S. government’s fiscal prospects, a run on Treasury bonds, and a spike in interest rates.
But the bond markets are saying what me worry, with long-term rates at near-record lows.
What Khimm doesn’t note, however, is that the problem with bond vigilante scare tactics runs even deeper than that — because it’s actually quite hard to tell a story in which a loss of confidence in U.S. bonds hurts the real economy. Why wouldn’t it just drive down the dollar, and thereby have an expansionary effect?
Yes, I know, Greece — but Greece doesn’t have its own currency. What’s the model under which a country that does have its own currency and borrows in that currency can experience a slump due to an attack by bond vigilantes? Or failing that, where are the historical examples?
The closest I can come to anything resembling the danger supposedly lurking for America is the tale of France in the 1920s, which emerged from World War I burdened by large debt, and which did in fact face an attack by speculators as a result. Yet the French story does not, if you look at it closely, offer any support to the deficit scare talk we keep hearing.
So, France did indeed have a big debt problem. Here’s debt as a percentage of GDP, from the IMF debt database:
[graph]
How did France achieve that big drop in debt after 1925? Basically by inflating it away.
And markets sort of saw that coming. This study (pdf) by the Bank of France show medium-term interest rates (black line) rising substantially for much of the 1920s, before dropping off sharply:
[graph]
It’s important to note, however, that France wasn’t a depressed economy in the 1920s, and therefore didn’t look much like America today:
[chart]
Meanwhile, the really big effect was a sharp depreciation of the franc, which made France highly competitive and strengthened the economy:
[chart]
But what about the brief but nasty slump in 1927? That wasn’t caused by spiking interest rates; it was, instead, caused by fiscal austerity, by the measures taken to stabilize the franc.
So even when we look at the closest thing I can find to the scenario the deficit scolds want us to fear, it doesn’t play out at all as described.
It’s quite remarkable: our policy discourse remains largely dominated by fears of an event that the fear-mongers can’t explain in theory, and for which they can offer no historical examples in practice.
Tuesday, July 04, 2017
Marc Maron and Bill Hicks
Not being a comedy geek, I never put the two together until now.
video of a bit
Marc Maron Opens Up About Friend and Comedian Bill Hicks
video of a bit
Marc Maron Opens Up About Friend and Comedian Bill Hicks
Arguably, what stands out most in Maron's description of his old friend is how, unlike most comics, Hicks wasn't desperately eager to please the audience. In fact, he didn't seem to care whether they were pleased. And if you watch old clips on YouTube, you can see that sometimes they weren't. "Bill was very much in his own time zone," Maron says. "He went through his entire presentation, whether people were responding or not. There are a few guys who took his approach to details and description, but not many. It's hard. The stuff Bill wrote is positively Rabelaisian.
"If I could say anything about Hicks, it's that he was doing his best to destroy anything he perceived as hypocrisy," Maron concludes. "While also revealing stuff that was overly embraced by moralizers. He was a misanthropic moralist, who did his best to get to the bottom of religious hypocrisy, moral hypocrisy, and societal hypocrisy. But he also made you laugh when he did it. That's a tough trick. But it's what Bill did."
Sunday, July 02, 2017
moral consequences of economic growth
Vox interview with Benjamin Friedman
Will Wilkinson CATO review
Gregg Easterbrook New York Times review
Economist review
Brad DeLong's review
Krugman and Beauchamp are wrong:
No easy answers: why left-wing economics is not the answer to right-wing populism by Zack Beauchamp Mar 13, 2017
The Case for Countering Right-Wing Populism With ‘Left-Wing Economics’ by Eric Levitz
Populism and the Politics of Health by Paul Krugman March 14, 2017 1:43 PM
Why Zack Beauchamp’s piece arguing otherwise is wrong by eshhou
No Easy Answers, Just Bad History by Marshall Steinbaum
Will Wilkinson CATO review
Gregg Easterbrook New York Times review
Economist review
Brad DeLong's review
Krugman and Beauchamp are wrong:
No easy answers: why left-wing economics is not the answer to right-wing populism by Zack Beauchamp Mar 13, 2017
And yet, and yet: Trump did in fact win over white working-class voters, who thought they were voting for a populist; Democrats, who did a lot for those voters, got no credit — rural whites, in particular, who were huge beneficiaries of the ACA, overwhelmingly supported the man who may destroy their healthcare.
This ties in with an important recent piece by Zack Beauchamp on the striking degree to which left-wing economics fails, in practice, to counter right-wing populism; basically, Sandersism has failed everywhere it has been tried. Why?
The answer, presumably, is that what we call populism is really in large degree white identity politics, which can’t be addressed by promising universal benefits. Among other things, these “populist” voters now live in a media bubble, getting their news from sources that play to their identity-politics desires, which means that even if you offer them a better deal, they won’t hear about it or believe it if told. For sure many if not most of those who gained health coverage thanks to Obamacare have no idea that’s what happened.Any answer to right-wing populism requires left-wing economics:
Why Zack Beauchamp’s piece arguing otherwise is wrong by eshhou
No Easy Answers, Just Bad History by Marshall Steinbaum
Liberals and diversity by Matt Bruenig
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