Game of Thrones Season 2 is this Sunday. Here is a half hour special were the makers discuss some interesting things:

Full-Length Special: You Win or You Die

Three things struck me. One is how they emphasize the feminist nature of the strong female characters, maybe because fantasy fans are typically male. Secondly, how one of the creators said he wanted it to be like past HBO shows the Sopranos and Deadwood with many characters (but no mention of the Wire.) And thirdly, one of the creators mentioned how the show entered into discussion of contemporary politics. My guess is he was referring to the way Obama was played by Republicans over, say, the debt ceiling and how Ned Stark was played by Cersei and Littlefinger. Lefty/liberal critics of Obama say he was naive to believe his opponents would negotiate in good faith. Maybe so but part of the reason Obama was elected was his appeal to patriotic, post-partisanship (neither red states nor blue states but one America, etc.) Just as Ned Stark was loved and respected as a leader, friend, husband, brother and father for his appeal to a code of honor and loyalty.

Alan Beattie, Archon of the Shrill: Selections from His "Who’s in Charge Here?" by DeLong

Book extract: Who’s in Charge Here?: The problem is not the international monetary or economic system as such. It is that economic policy was run badly within that system…. Financial regulators and central banks were far too nonchalant about the huge amount of borrowing that was going on, and the ever more exotic financial assets that were being created to facilitate it. Governments in economies such as the UK and USA watched huge housing booms take off, financed by those incomprehensible financial instruments, and cheered them on their way…. But there was nothing inevitable about making these mistakes. Nothing in the global economic system forced the USA to run a hopelessly dispersed regulatory system that allowed financial institutions to escape proper scrutiny…. No one compelled a gang of countries in Continental Europe to yoke their disparate economies together in a badly designed currency union that encouraged asset bubbles in the periphery fueled by reckless lending by banks in the centre.

Some argue that the crisis was inevitable because the big emerging markets, particularly China, by persisting in intervening in the foreign exchange markets to hold down their own currencies, were in effect shovelling huge amounts of money at the rich world…. But the mistakes of countries on the receiving end were avoidable without changing the system – indeed, some countries have largely avoided them. Countries where governments exercised proper control over their banks, such as Canada and Australia, have been much more stable. Not a single major Canadian financial institution failed during the crisis….

The current predicament of the world economy is all the more poignant because it is unnecessary. This is a political and ideological crisis, not a technocratic one. Authorities could have done, and could still do, a lot to prevent their economies sliding back into recession and financial chaos. That they are not doing so is not just because of a lack of political will. It is also because significant numbers of voters and politicians have learnt precisely the wrong lessons from previous episodes and are determined to make similar mistakes all over again.

 
Ben Bernanke's Eeyore Strategy by Yglesias

Charles Evans and friends on the Odyssean strategy

Circumstances will tempt the FOMC to renege on these promises precisely because the policy rule describes its preferred behavior. Hence this kind of forward guidance resembles Odysseus commanding his sailors to tie him to the ship's mast so that he can enjoy the Sirens' music.

And a little meta-humor in the first footnote! Very David Foster Wallacian.

Bloggers in St. Louis by Mark Thoma

Krugman Nails It! Problem Is Crony Capitalism, Not Free Market Fundamentalism by Dean Baker

Bernanke gave a talk to the National Association for Business Economists.

In addition to the heavy toll on workers and families, he noted that “Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.”
...

Mr. Bernanke said Monday that structural unemployment may have increased in recent years, but that high unemployment was mostly cyclical.

“The continued weakness in aggregate demand is likely the predominant factor,” he said. “Consequently, the Federal Reserve’s accommodative monetary policies, by providing support for demand and for the recovery, should help, over time, to reduce long-term unemployment as well.”

Mr. Bernanke outlined several reasons for this conclusion. He said that people who lost work recently had not increased their advantage in finding new jobs over the long-term unemployed, as might be expected if the latter group were languishing because they lacked relevant skills. And he noted that hiring generally remained weak across the economy, again suggesting that the lack of new hiring had broad causes rather than industry-specific roots.

Lessons from the Great Canadian Slump by Krugman

A prolonged Output Gap does not necessarily entail deflation or falling inflation/disinflation.

A Bailout by Another Name by Gretchen Morgenson

Morgenson discusses Peter DeMarco and principle writedowns and differs from people I usually agree with. She feels to take up a number of issues like aren't taxpayers served by an economy growing at potential with no output gap? It is giving money to banks but it is also helping people deleverage by getting out from under underwater mortgages. Perhaps there would be some way for the banks to help pay, but I doubt the Republicans who control the House would go for it.

The Age of the Shadow Bank Run by Tyler Cowen

Cowen notes the success of the post-World Years II with FDIC preventing bank runs but suggest doing something similar today would create morale hazard. Basically he's anti-regulation. Weird aporia of a liberatarian.

Macroeconomic Chutzpah by Krugman

Spain Is Not Out of the Woods Yet

Tested By A Picturesque Dystopia by Manohla Dargis

Confessed 4 Life

Bridget Regan replies to Seeker costar Craig Horner: "Sad I can't be there with you!"

Horner: "Seeker Fans, I will be visiting WonderCon in Anaheim California March 17th and 18th from 12pm till 3:30pm..."

Bernanke Denies Fed Rate Policy Caused Housing Bubble

Most evidence suggests the Federal Reserve‘s policy of low interest rates in the early 2000s didn’t cause the recent housing bubble, Chairman Ben Bernanke said Thursday in slides prepared for a college lecture.

While some have argued the Fed’s low interest rates in the early 2000s contributed to the U.S. housing collapse, international examples and the timing of the bubble show otherwise, Bernanke said Thursday in slides for the second of his four lectures at George Washington University this month.

For example, house prices rose sharply in the United Kingdom in the same time period, even though the U.K. had tighter monetary policy than the U.S., Bernanke wrote. He also noted housing prices began to pick up in the late 1990s before the Fed began cutting interest rates and rose sharply after the central bank began tightening.

Finally, Own-to-Rent by Jared Bernstein

Bernanke lecture video 2 of 4

Bernanke lecture video 1 of 4

review of Noam Scheiber's "The Escape Artists" by John Cassidy

(via Thoma)

How can debt effect GDP? by Noah Smith

(via Thoma)

Why Democrats Have a Problem With Young Voters by Rich Perlstein

My politics of optimism and hope still casts its lot with the Democrats — in the optimistic hope that the dying embers of its status as the party of our better angels, one that took risks for social justice, can still be fanned into a flame. But I'm an old man, born in 1969. I can't really blame someone born in 1991 for not buying the idea that the Democrats were once a party that often took political risks for social justice and can be again. Why should they believe me? They've never seen it in their lifetimes.

What's This "We" Jazz, White Man? Robert Samuelson Edition by Dean Baker

"Four years after the onset of the financial crisis — in March 2008 Bear Stearns was rescued from failure — we still lack a clear understanding of the underlying causes."

Wow, it sure doesn't seem very hard to me. The Reagan-Volcker policies of the early 80s broke the link between productivity growth and wage growth for ordinary workers. This meant that demand growth did not necessarily keep pace with output potential as had been true earlier in the post-war period, since higher wages would quickly translate into higher consumption. 

That created an environment which opened a door to speculative bubbles. In the 90s it was the stock bubble which drove growth, primarily by pushing saving rates to then record lows. In the last decade it was the housing bubble which drove growth, both by creating a building boom and also by pushing saving rates even lower as bubble generated home equity led to a consumption boom.
None of this story is new. I was writing about how the stock bubble was driving the economy in the 90s and how the housing bubble was driving the economy as early as 2002. And, I gave the historical picture in Plunder and Blunder: The Rise and Fall of the Bubble Economy.

But, folks like Robert Samuelson would rather pretend that the whole story is a great mystery rather than contemplate the possibility that the economic instability of the last decade had its roots in a pattern of growth that was built on redistributing income from ordinary workers to the most highly paid workers and corporate profits.

Kenyan Socialism endorses this narrative with some additions.

Robert Samuelson endorses the fatalistic, old-timey Mellon view of busts that the rottenness of economy needs to be purged.

Samuelson links to this review of 21 books on the crisis and this review of 16 scholarly papers (by Gary Gorton).

Bernanke endorsed Gorton's work on the rise of the shadow banking system.

The Baffler is back again.

Too Smart To Fail: Notes on an Age of Folly by Thomas Frank

Why Conservatives Are Still Crazy After All These Years by Rick Perlstein

(via Krugman)

On Goldman Executive Greg Smith's Brave Departure by Matt Taibbi

No Mercy for Ben Bernanke by Yglesias


Make Targets Robust to Human Error by Ryan Avent