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

The Villain by Roger Lowenstein

When Populism is Sound by Simon Johnson

(via Dean Baker)

Yes the elite's lap dogs in the media try to define it as being somehow demagogic and when politicians appeal to the least common denominator.

Obama Deserves Credit for the Recovery by Dean Baker

Muddled Economic Picture Muddles The Political One, Too by David Leonhardt

Face-ripping for fun & profit by Doug Henwood

Greg Smith's open letter to Goldman Sachs

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.(links in original)

I like that he links to Matt Taibbi's Vampire Squid Rolling Stone article.

Capitalism, 2012 by Tom Friedman

We also need a grand bargain between employers, employees and government — à la Germany — where government provides the incentives for employers to hire, train and retrain labor.

We can’t have any of these bargains, though, without a more informed public debate. The “big thing that’s missing” in U.S. politics today, Bill Gates said to me in a recent interview, “is this technocratic understanding of the facts and where things are working and where they’re not working,” so the debate can be driven by data, not ideology.

Friedman makes no mention of the housing bubble fiasco. My guess is that Capitalism 2012 will bring us repeat this time without bailouts unless the Republican party truly does fall apart.

An interesting theory of asset bubbles by Noah Smith

Larry Summers: The Wrong Person of World Bank President by Dean Baker

What Greece Means by Krugman

Correcting Robert Samuelson on Japan and Deflation by Dean Baker

New Jobs Report: Can We Say “Recovery” Yet? by Jonathan Cohn

The New Republic’s New Boss by Lizzie Widdicombe

Hughes appears to be a certified liberal, much to the relief of most of the magazine’s staff, alumni, and readers. Though he has been involved in some forms of activism—he ran the social media operation for the 2008 Obama campaign, and his significant other, Sean Eldridge, is the former political director of the same-sex marriage advocacy group Freedom To Marry—his comments on the direction of the magazine have been non-ideological, heavier on tech-world jargon than political talking points. On the phone from the airport, he spoke of “meeting thoughtful, intelligent people in the media space,” “integrating platforms,” and “mission-driven startups.” His reading includes both the Huffington Post and The Economist. “I wouldn’t say I’m a political junkie in the way that some people are,” he said. “I try to read about political issues of the day, but also cultural criticism, good books, and good music.” His past year’s reading included biographies of Katharine Graham and Henry Luce.

Sterilized quantitative easing by Jim Hamilton

(via DeLong)

Recovery Winter?

Why Job Growth Is Likely to Slow by David Leonhardt

Why do economists expect growth to slow? The warm winter has probably pulled some spending forward into the last few months and will reduce spending in coming months, says Joshua Shapiro, an economist at MFR Inc. in New York. Rising oil prices also play a role. So does the continuing debt overhang, which makes a sustained recovery difficult.

None of these forecasts should be taken as gospel, of course. Maybe the gross domestic product numbers are wrong and will be revised upward in coming months, as government economists receive more data about the economy’s condition. Maybe the recent job gains will lead to a surge in confidence that lifts spending above expected levels.

But the most likely path includes a slowdown in job growth. It’s easy to forget that on a day with a jobs report as positive as this one.

My colleagues Binyamin Appelbaum and Annie Lowrey have each written recent articles with more details on the predicted slowdown.

And:

On Friday, Macroeconomic Advisers, one of the most closely watched forecasting firms, reduced its estimate of economic growth in the current quarter to an annual rate of 1.8 percent, from 2 percent. And 1.8 percent growth does not generally lead to very strong job growth. In the fourth quarter of last year, by comparison, the economy grew 3 percent.
...

Sure enough, most forecasters do expect job growth to slow. Barclays Capital expects 200,000 jobs a month for the rest of the year. IHS Global Insight forecasts a slowdown to 180,000 jobs a month. Macroeconomic Advisers says it will slow to 140,000 jobs a month in the final three quarters of this year.

“We don’t get anything like the booming labor market with 300,000 jobs,” said Laurence H. Meyer, senior managing director of Macroeconomic Advisers and former Federal Reserve governor. “It would take much stronger growth than we have to do that.”

As a benchmark, the economy needs to create roughly 125,000 jobs a month to keep up with population growth.

Calculated Risk is more upbeat:

There are reasons to expect better job growth overall this year compared to 2011. Last year was negatively impacted by the tsunami, bad weather, high oil prices and the debt ceiling debate. We can't predict the weather, and oil prices are high again - but hopefully there will be no natural disasters this year, and also no threats of defaulting on the debt.

Plus residential investment (new home sales and housing starts) has made the bottom turn, and even with a sluggish housing recovery, residential investment will add to economic growth in 2012. Also, the employment losses from state and local governments will probably end mid-year. As the BLS noted:  

Government employment was essentially unchanged in January and February. In 2011, government lost an average of 22,000 jobs per month. 

Employment growth in manufacturing will probably slow in 2012, but the overall picture is improving. Unfortunately the labor market is still very weak with 12.8 million Americans unemployed and 5.4 million unemployed for more than 6 months.

Another positive report was the ISM services survey that indicated faster expansion in February. Negatives included a larger trade deficit, an increase in initial weekly unemployment claims, and - of course - falling house prices in January.

The February job market: not bad by recent standards by Doug Henwood
 

DeLong has spoken highly of Macroeconomic Advisors, but Calculated Risk's outlook is persuasive. Although those betting on the downside have usually been right these past few years.

Consensus, Dissensus and Economic Ideas: The Rise and Fallof Keynesianism During the Economic Crisis by Henry Farrell and John Quiggin

Crooked Timber post

(via Thoma)

Keynan Socialism is Progressive.

Simon Johnson on the Cato putsch:

"In historical terms, Professors Acemoglu and Robinson see the progressive era at the beginning of the 20th century, including the development of countervailing power for the government against powerful private business interests, as an essential part of what has gone right in the United States of America."

(via Thoma)

The Fight Over the Cato Institute: Judean People's Liberation Front/People's Liberation Front of Judea Blogging by DeLong

“Who’s In Charge Here” by Alan Beattie – A Field Guide To Maynards by Daniel Davies

John Galt Wants Price Support by Krugman

Liquidity preference, loanable funds, and Niall Ferguson (wonkish) by Krugman

Do you "believe" in rational expectation (important) by Scott Sumner

Is he saying that if the Fed had lowered rates by .50 or more in December 2007 things might not have been so bad?

As Sumner points out, the January 2001 and September 2007 Fed cuts caused short term rates to decline and long term rates to rise as well as a stock market rally. In December 2007, the Fed cut rates by .25:

The fed funds futures showed a 58% chance of a 1/4 point cut and a 42% chance of a 1/2 point cut. The more than two percent fall in US equity indices after the 1/4 cut was announced implied a 5% swing in US equity prices hinged on the Fed decision. And foreign markets seemed to respond almost equally strongly–implying that the Fed’s decision destroyed well over a trillion dollars in shareholder equity worldwide.

They kept cutting after but it didn't help as Bear Stearns was bailed out in March 2008. Maybe the system was such a house of cards that it didn't matter how much the Fed cut. Maybe if they cut more and bailed out Lehman and everyone else, there wouldn't have been a panic? But we wouldn't have had Dodd-Frank.