Woody Allen's new movie Midnight in Paris is really good. It was easy for me to identify with Owen Wilson's character. Back in 1999 when I was 29 I went on a fund-raising cruise for The Nation magazine and had the chance to hang out with some of my favorite writers and editors at that time like Hitchens, Cockburn, Pollit, Navasky and Vanden Heuvel. It wasn't exactly like Midnight in Paris, but they were charming and friendly like Hemingway and Fitzgerald are to Wilson in the movie and I was blown away.

Krugman on Fatal Fatalism

Our current economic discourse is pervaded by fatalism. Leave aside the people who insist that somehow Obama has destroyed capitalist incentives by passing Mitt Romney’s health care plan and threatening to raise tax rates to Clinton-era levels. Even among people who should be sensible, you hear many assertions that run something like this: historically, recovery from financial crisis is usually slow, so we have to accept a slow recovery this time around too. Actually, that’s more or less what Obama has been saying.

Gavyn Davies* writes in the Financial Times about Robert Lucas and the classical view of the global recession.

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*Gavyn Davies is a macroeconomist who is now chairman of Fulcrum Asset Management and co-founder of Prisma Capital Partners. He was the head of the global economics department at Goldman Sachs from 1987-2001, and was chairman of the BBC from 2001-2004.
     He has also served as an economic policy adviser in No 10 Downing Street, an external adviser to the British Treasury, and as a visiting professor at the London School of Economics.

Ratko Mladic caught

Jared Bernstein has a blog.

Single-payer health care in Vermont

Needed: Plain Talk About the Dollar by Christina Romer

Why Greece Should Reject the Euro by Mark Weisbrot

Krugman links to the piece approvingly, but discuses how the Greek and Argentinian situations are different.

Krugman on Casey B. Mulligan an economics professor at the University of Chicago

If Mulligan wants to argue that point, fine -- but he presents as "the New Keynesian position" something that is just what he imagines, on casual reflection (or, again, maybe after talking to some guy in a bar) to be the New Keynesian position.

OK, so from now on I’ll assert that the Chicago position on unemployment is that we can cure it by sacrificing goats. Hey, I heard that somewhere -- no need to actually read anything they say, right?

The Post-Bin Laden World by Roger Cohen

Death of a Madman by Hitchens

Osama dead says Obama

Needed: A Clearer Crystal Ball by Robert J. Shiller

or "Risk Topograhy"

In fact, some people view the recent crisis as just another "black swan event," one of those outliers, as popularized by Nassim Taleb, that come out of the blue. And it’s clear that a lot of smart people simply didn’t see the housing bubble, the instability of our financial sector or the shock that came in 2007 and 2008.

But the theory of outlier events doesn’t actually say that they cannot eventually be predicted. Many of them can be, if the right questions are asked and we use new and better data. Hurricanes, for example, were once black-swan events. Now we can forecast their likely formation and path pretty well, enough to significantly reduce the loss of life.

Such predictions are a crucial challenge in economics, too, and they are why data collection need not be a dull or a routine field. If done correctly, it can be very revealing. ...

...

The Federal Reserve started work on its Flow of Funds Accounts in the Depression as well. These accounts, which go beyond G.N.P. and show the flow of funds from each kind of financial institution to another, offer a much better picture of the kinds of instabilities that led to the Depression. This innovation took a long time, too. The Fed didn’t begin publishing these accounts until 1955, backdating them to late in the Depression, in 1939. 

Eventually, these advances led to quantitative macroeconomic models with substantial predictive power -- and to a better understanding of the economy’s instabilities. It is likely that the "great moderation," the relative stability of the economy in the years before the recent crisis, owes something to better public policy informed by that data.

Since then, however, there hasn’t been a major revolution in data collection. Notably, the Flow of Funds Accounts have become less valuable. Over the last few decades, financial institutions have taken on systemic risks, using leverage and derivative instruments that don’t show up in these reports. 

Some financial economists have begun to suggest the kinds of measurements of leverage and liquidity that should be collected. We need another measurement revolution like that of G.D.P. or flow-of-funds accounting. For example, Markus Brunnermeier of Princeton, Gary Gorton of Yale and Arvind Krishnamurthy of Northwestern are developing what they call "risk topography." They explain how modern financial theory can guide the collection of new data to provide revealing views of potentially big economic problems.

Exclamation point within parantheses

Ah, Charlie Jane Anders has a website(!) and I had assumed Charlie's a he but she's not.(!)*

And she has a review of  the movie Dylan Dog over at io9,** which is currently sponsored by Dylan Dog:

We've talked a lot lately about the fact that urban fantasy and noir detective stories have been converging, and urban fantasy is where a lot of the most interesting noir writing is happening. But the danger with both those genres -- either together or separately -- is that they'll devolve into pastiche. The worst case scenario with the cliches of tormented loner detectives, and big-city vampires, is that they'll become endlessly self-referencing and fatally mindless.

If you want to see that threat made real, just watch Dylan Dog. It's either a very unfunny comedy, or a very inactive action movie, one or the other.

There's nothing in Dylan Dog that you haven't seen a million times before. Except that you've probably never seen it done this inertly.

Anders penned two of my favorite recent reviews:

5 Theories That Explain Why Avatar Was Such a Huge Hit

Michael Bay Finally Made an Art Movie

Imagine that you went back in time to the late 1960s and found Terry Gilliam, fresh from doing his weird low-fi collage/animations for Monty Python. You proceeded to inject Gilliam with so many steroids his penis shrank to the size of a hair follicle, and you smushed a dozen tabs of LSD under his tongue. And then you gave him the GDP of a few sub-Saharan countries. Gilliam might have made a movie not unlike this one.

And the true genius of Transformers: ROTF is that Bay has put all of this excess of imagery and random ideas at the service of the most pandering movie genre there is: the summer movie. ROTF is like twenty summer movies, with unrelated storylines, smushed together into one crazy whole. You try in vain to understand how the pieces fit, you stare into the cracks between the narrative strands, until the cracks become chasms and the chasms become an abyss into which you stare until it looks deep into your own soul, and then you go insane. You. Do. Not. Leave. The Cabinet

Twitter is slowly sucking me in. I discovered Anders website, because Matt Yglesias RT/"retweeted" a tweet from Jamelle Bouie who retweeted @arjache

Why won't the President disclose the results of his Voight-Kampff test? How do we know he's not a replicant?

On arjache's twitter page, I found a "RT" from Anders, who retweeted

RT@DalekThay: THE DALEKS WOULD LIKE TO SEE THE DOCTOR'S BIRTH CERTIFICATE, BUT WE WOULD SETTLE FOR HIS DEATH CERTIFICATE.

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*Then I looked her up on Wikipedia and learned she's transgendered (!) and co-edits io9 with her partner Annalee Newitz (!)
** "Michael Moran of The Times' Eureka Zone blog, wrote, "Ostensibly a blog for science fiction enthusiasts, io9 finds space for pieces on cutting-edge technology, the wilder fringes of astronomy and the more worrying implications of grey goo."***
***Grey goo: " is a hypothetical end-of-the-world scenario involving molecular nanotechnology in which out-of-control self-replicating robots consume all matter on Earth while building more of themselves,(!) a scenario known as ecophagy ("eating the environment"). Self-replicating machines of the macroscopic variety were originally described by mathematician John von Neumann, and are sometimes referred to as von Neumann machines. The term grey goo was coined by nanotechnology pioneer Eric Drexler in his 1986 book Engines of Creation, stating that "we cannot afford certain types of accidents." In 2004 he stated "I wish I had never used the term 'grey goo'."

June 2011 and the end of QE2

Krugman quotes Flyod Norris:

Mr. Bernanke makes clear there will be no QE3. And he hopes that it will not have much impact when the purchases end: "We are just going to let the purchases end. Our view is that the end of the program is unlikely to have substantial effects on the economy or financial markets."

He bases that on the fact that all this has been well telegraphed, which is true enough, and then goes into jargon. "We subscribe to the stock view," he says.

That is not the view held by the stock market. Rather it is the size of the Fed’s portfolio -- the stock of securities held by the Fed -- that matters. And that will not change because the Fed will reinvest proceeds from maturing securities.

That’s exactly what I was saying in this post. Like Bernanke, I don’t believe that the flow of Fed purchases has been an important factor holding bond rates down, and hence don’t believe that they will jump when the purchases end.

Bill Gross of PIMCO believes otherwise, but I believe Bernanke and Krugman are correct.

Liberalism's bumper sticker problem by Jonathan Chait

The Dead Milkmen are playing tomorrow night. The Chicago Reader says:

Listening to The King in Yellow, the first album of new Dead Milkmen material since 1995's Stoney's Extra Stout, is a lot like catching up with one of your cooler, smarter, and funnier friends from high school who managed to grow up without losing all the qualities that made him your friend in the first place. Their jangled guitars, their bitingly witty lyrics, their snotty Philly accents, their playful and iconoclastic version of hardcore--a reminder of a time when it actually had a sense of humor--make it clear what you've been missing in the years since. "Don't trust the happy / The happy are insane / If you see someone smiling / Run! Get away!" advise Rodney Anonymous and Joe Jack Talcum on the chorus of "Meaningless Upbeat Happy Song," between verses about what a still-fucked-up world we're living in. The Dead Milkmen remain best known for "Punk Rock Girl"--a song that became a left-field hit during the pop nadir of the late 80s--but albums like Big Lizard in My Backyard, Eat Your Paisley, Bucky Fellini, and Beelzebubba have held up better than much of the music of that time, both over- and underground. Furthermore, I'm hard-pressed to find a song more prescient than "Right Wing Pigeons."...

Q: Who's John Galt?

A: Some asshole.

The Onion's review for the film "Atlas Shrugged: Part I":

The turgid first part of a proposed three-part adaptation of Ayn Rand's novel feels like Tucker: The Man and His Dream, written and performed by robots. Grade: D+

Writing in the New York Times, Carina Chocano didn't like it either.

Bernanke Offers Little Help On Budget Deficit by Dean Baker

In 1996, the Congressional Budget Office (CBO) projected a deficit of almost $250 billion (@ 2.6 percent of GDP) for the 2000 fiscal year. The country actually had a budget surplus of almost the same size in fiscal 2000, representing a shift from deficit to surplus in the year 2000 of more than 5 percentage points of GDP.

Congress did not approve any major tax increases in this 4-year period, nor were there any major unscheduled cuts to spending. Rather this shift from deficit to surplus of more than 5 percentage points of GDP ($750 billion in today's economy) was attributable almost entirely to better than expected economic performance.

In 1996 CBO projected that the unemployment rate would be 6.0 percent in 2000. Unemployment actually averaged just 4.0 percent. This was due to the fact that Alan Greenspan ignored the overwhelming consensus in the economics profession and allowed the unemployment rate to fall below the conventionally accepted levels of the NAIRU.

This decision, which was made over the objections of the Clinton appointees to the Fed, allowed millions of more people to get jobs than would have otherwise been the case. It also allowed strong wage growth for people at the middle and bottom of the wage distribution as their labor was then in demand. And it reduced the budget deficit. Because Bernanke offered little hope of more aggressive Fed actions to reduce unemployment, he is not offering any similar growth dividend on the budget deficit.

Jon Stewart on Obama's non-bombshell and the Trump "Egometer"

Yglesias on the 1970s and inflation