Krugman on FRED and Eurostat

Financial Crisis Inquiry Commission's report to be published Thursday

While the panel, the Financial Crisis Inquiry Commission, accuses several financial institutions of greed, ineptitude or both, some of its gravest conclusions concern government failings, with embarrassing implications for both parties. But the panel was itself divided along partisan lines, which could blunt the impact of its findings.

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The report does knock down -- at least partly -- several early theories for the financial crisis. It says the low interest rates brought about by the Fed after the 2001 recession; Fannie Mae and Freddie Mac, the mortgage finance giants; and the "aggressive homeownership goals" set by the government as part of a "philosophy of opportunity" were not major culprits.

Britain's economy stalls under austerity measures

The War on Demand by Krugman

It’s kind of shocking if you think about it. Here we have a huge, hard-won intellectual achievement, one that accounts very well for the world we actually see, and yet it’s being thrown away because it doesn’t go along with ideological preconceptions. Once that sort of thing starts, where does it stop? The next thing you know, the theory of evolution will get the same treatment. Oh, wait.

Seriously, though, this is truly sad -- and dangerous. Demand-side understanding, in my view, played a big role in helping us avoid a full replay of the Great Depression; if enough people had shared that understanding, we might have avoided even the minor-league Depression we’re going through. But willful ignorance is on the march -- and the odds are that we’ll handle the next crisis very badly.

I doubt there will be bailouts next time, a scary thought. Anyway, Krugman's post reminded me of "Agora."

Global Savings Glut

Dean Baker:

In the Clinton years, Robert Rubin had a policy of pushing up the value of the dollar. He put muscle behind this effort through the U.S. control of the IMF at the time of the East Asian financial crisis. The conditions that the IMF imposed were so onerous that developing countries decided that they needed to accumulate massive amounts of reserves in order to avoid being put in a similar situation. This meant accumulating large amounts of dollars. They did this by keeping down the value of their currencies against the dollar (i.e. raising the value of the dollar).

It is very misleading to assert that the value of the dollar is outside of the government's control. President Obama, like his predecessors, has allowed the dollar to remain over-valued. An over-valued dollar effectively subsidizes imports and imposes a tariff on exports. There is nothing that President Obama's new competitiveness panel can realistically hope to do that would come close to offsetting the competitive disadvantage created by an over-valued dollar.

Global savings glut Wikipedia entry

Decent column by Robert J. Samuelson (yes him) but it fails to mention the East Asian financial crisis.

"The Global Saving Glut and the U.S. Current Account Deficit" given March 10, 2005 by Bernanke

"Revenge of the Glut" by Krugman

Frank Rich on True Grit and The Social Network.

More than the first "True Grit," the new one emphasizes Mattie’s precocious, almost obsessive preoccupation with the law. She is forever citing law-book principles, invoking lawyers and affidavits, and threatening to go to court. "You must pay for everything in this world one way or another," says Mattie. "There is nothing free except the grace of God."

That kind of legal and moral cost-accounting seems as distant as a tintype now. The new "True Grit" lands in an America that’s still not recovered from a crash where many of the reckless perpetrators of economic mayhem deflected any accountability and merely moved on to the next bubble, gamble or ethically dubious backroom deal. When Americans think of the law these days, they often think of a system that can easily be gamed by the rich and the powerful, starting with those who pillaged Lehman Brothers, A.I.G. and Citigroup and left taxpayers, shareholders and pensioners in the dust. A virtuous soul like Mattie would be crushed in a contemporary gold rush even if (or especially if) she fought back with the kind of civil action so prized by the 19th-century Mattie.

Talk about Two Americas. Look at "The Social Network" again after seeing "True Grit,"and you’ll see two different civilizations, as far removed from each other in ethos as Silicon Valley and Monument Valley. While "Social Network" fictionalizes Mark Zuckerberg, it mines the truth of an era -- from the ability of the powerful and privileged to manipulate the system to the collapse of loyalty as a prized American virtue at the top of that economic pyramid.

In contrast to Mattie’s dictum, no one has to pay for any transgression in the world it depicts. Zuckerberg’s antagonists, Harvard classmates who accuse him of intellectual theft, and his allies, exemplified by a predatory venture capitalist, sometimes seem more entitled and ruthless than he is.

China Goes to Nixon by Krugman

The Socialists are playing Reggie's Rock Club Saturday Night.

New Parenting Book Sparks Outrage

Last week, Penguin Press published Amy Chua's book Battle Hymn Of The Tiger Mother, which criticizes "Western" parenting and advocates an "Asian" approach that includes forbidding playdates and being highly critical of children in order to make them more successful. Here are some other tips from the book:

• Take your children to Chuck E. Cheese's and let them play any game they choose, then make them watch as you burn their tickets
• Ice cream is a great motivator for kids; promise them that if they do everything you ask, they can have some when they turn 18
• Inform your child that televisions receive all of their power from flawless renditions of Brahms' Violin Concerto in D
• Only let your children have a pet dog if they can tame the most rabid dog at the pound
• Should your child express interest in spending more time with his or her friends, simply pack up and move several hundred miles away
• To ensure academic excellence, inform your children that there is a mark higher than an A-plus and then shame them for failing to attain it
• Replace their frail little limbs with less fragile prosthetics
• Remember, you may have to put up with one or two suicides before you finally craft that perfect child you've always wanted

What Have We Unlearned from Our Great Recession? by DeLong

In Wreckage of Lost Jobs, Lost Power by David Leonhardt

The column of the year so far. It hits on the issue. What he doesn't mention is that Bernanke and the Federal Reserve Bank are failing miserably at their mission.  They have gone above and beyond, but it hasn't been enough.

The unemployment rate is higher in this country than in Britain or Russia and much higher than in Germany or Japan, according to a study of worldwide job markets that Gallup will release on Wednesday. The American jobless rate is also higher than China’s, Gallup found. The European countries with worse unemployment than the United States tend to be those still mired in crisis, like Greece, Ireland and Spain.

Economists are now engaged in a spirited debate, much of it conducted on popular blogs like Marginal Revolution, about the causes of the American jobs slump. Lawrence Katz, a Harvard labor economist, calls the full picture "genuinely puzzling."

Tyler Cowen at Marginal Revolution and libertarians of his type leach politics out of their discussion. What would he think of Leonhardt's pitch-perfect column?

Why? One obvious possibility is the balance of power between employers and employees.

Relative to the situation in most other countries -- or in this country for most of the last century -- American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up.  

Just consider the main measure of corporate health: profits. In Canada, Japan and most of Europe, corporate profits have still not recovered to precrisis levels. In the United States, profits have more than recovered, rising 12 percent since late 2007.

For corporate America, the Great Recession is over. For the American work force, it’s not.

Yglesias had a post on this subject yesterday, where he linked to Krugman's speculations on "postmodern" recessions, that is ones not caused by the Fed hiking interest rates.

Leonhardt:

Germany’s job-sharing program -- known as "Kurzarbeit," or short work -- has won praise from both conservative and liberal economists. Senator Jack Reed, Democrat of Rhode Island, has offered a bill that would encourage similar programs. So far, though, the White House has not pursued it aggressively. Perhaps Gene Sperling, the new director of the National Economic Council, can put it back on the agenda.

Restoring some balance to the relationship between employers and employees will be more difficult. One problem is that too many labor unions, like the auto industry’s, have been poorly run, hurting companies and, ultimately, workers. Of course, many other companies -- AT&T, General Electric, Southwest Airlines -- have thrived with unionized workers, and study after study has shown that unions usually do benefit workers. As one bumper sticker says, "Unions: The folks who brought you the weekend."

Today, unions are clearly playing on an uneven field. Companies pay minimal penalties for illegally trying to bar unions and have become expert at doing so, legally and otherwise. For all their shortcomings, unions remain many workers’ best hope for some bargaining power.

Dean Baker gives the column a thumbs-up.

Why Jobs Haven't Come Back

Verizon Deal May Expose iPhone Flaws by Joe Nocera

Rebekah Frumkin writes about David Foster Wallace

Amy Poehler on sad movies.

You Can Count on Me was sad. Saddest movie of all time is The Sweet Hereafter.

The Beatings Will Continue Until Morale Improves

Can Europe Be Saved? by Krugman

Send Huck Finn to College by Lorrie Moore

I didn't imagine Mark Wahlberg's The Fighter would be so funny. A great cast including Christian Bale, Amy Adams, Melissa Leo and many others. Jamming soundtrack too!

I really, really liked The Fighter, The Social Network and True Grit. King's Speech was good also. As Daniel Davies wrote, The Black Swan was nothing like the book.

Battle Is Set as Verizon Adds iPhone by Jenna Wortham

Should I Buy a Verizon iPhone? by Farhad Manjoo

Insanely Savvy: Why Verizon's decision to pass on the iPhone six years ago is looking better and better by Annie Lowrey

The Politicized Mind by David Brooks

Good piece by Brooks but I would just say that Brooks's championing of the establisment's program of "socialism for the rich, austerity for the rest" falls very hard on the seriously mentally ill and their families. He should take a serious look at that and his deficit hawkery.

Reflections on Political Violence by Hitchens

Q & A with Gary Gorton

(via Yglesias)

Who Wants a 30-Year Mortgage? by Bethany McLean

I've been reading the book she wrote with Joe Nocera. Also about the housing market:

Postcrisis, A Struggle Over Mortgage Bond Ratings by Jesse Eisinger

Overweight, Out of Work at Rail Yard by Kari Lydersen

Resolved: Fix the Filibuster by Walter Mondale

When Harvey Met Bob