J. Bradford DeLong's Blog, page 1133

The New York Times Publishes Casey Mulligan as a Joke, Doesn't It?: Hoisted from the Archives

A correspondent reminds me of this from a couple of years ago, that I now hoist from the archives:

Hoisted from the Archives: The New York Times Publishes Casey Mulligan as a Joke, Doesn't It?:

Why oh why can't we have a better press corps?

This is really embarrassing, New York Times: really, really embarrassing:

The first joke comes in Casey Mulligan's first paragraph: the Fed does not lend money to banks on an overnight basis at the Federal Funds Rate. The Fed lends money to banks at an interest rate called the Discount Rate. The Federal Funds rate is the rate at which banks lend their Federal Funds--the deposits they have at the Federal Reserve--to each other. That's why it is called the Federal Funds rate.

The second joke comes in the second paragraph. Hansen and Singleton (1983) is 'new research'?

The third joke is the entire third paragraph: since the long government bond rate is made up of the sum of (a) an average of present and future short-term rates and (b) term and risk premia, if Federal Reserve policy affects short rates then--unless you want to throw every single vestige of efficient markets overboard and argue that there are huge profit opportunities left on the table by financiers in the bond market--Federal Reserve policy affects long rates as well. Note the use of the weasel word 'largely'.

The New York Times badly needs to clean house here.

There are lots of economists who would love to write for the New York Times for free, and who know the difference between the Federal Funds Rate and the Discount Rate:

Casey B. Mulligan: Who Cares About Fed Funds?: New research confirms that the Federal Reserve’s monetary policy has little effect on a number of financial markets, let alone the wider economy…. The Federal Reserve and especially its regional bank in New York are actively engaged in buying and selling Treasury securities, and the Fed lends money to banks on an overnight basis, at an interest rate called the federal funds rate….

A 1983 study by Lars Peter Hansen of the University of Chicago and Kenneth Singleton of Stanford showed that short-term rates on Treasury bills and short-term returns on stocks traded on the New York Stock Exchange had very little correlation with consumer spending….

Eugene Fama of the University of Chicago recently studied the relationship between the markets for overnight loans and the markets for long-term bonds…. Professor Fama found the yields on long-term government bonds to be largely immune from Fed policy changes…

UPDATE, October 20, 2014: Someday I would like the people responsible for Economix--cough, cough, I think that is you, Catherine Rampell--to explain to me:

Why it was that they chose Casey Mulligan rather than an intelligent conservative market-oriented economist who would do his or her homework.

Why they kept him on for 5 1/2 years.

Why they had, apparently, no concern during those 5 1/2 years for whether he was informing or misinforming the New York Times's readers.

How the bosses of the New York Times thought then and think today this sorry, sorry story contributes to the New York Times's business plan and its societal obligation plan.

Fortunately, it looks like the New York Times is no longer publishing Casey Mulligan as a columnist. The last thing burped up by the search engines--Stealth Taxes Are Still Income Taxes on April 22, 2014 is, I hope, a largely data- and logic-free fitting end to a long, sad, 5 1/2 year spectacle that appears to have started on October 9, 2008 with:

Casey Mulligan: No, Really, the Fundamentals of the Economy Are Strong: "The economy doesn’t really need saving....

...The non-financial sectors of our economy will not suffer much from even a prolonged banking crisis... the general economic importance of banks has been highly exaggerated.... The financial sector has had a long history of fluctuating without any correlated fluctuations in the rest of the economy.... Financial-sector gyrations like these are hardly connected to non-financial sector performance.... The economy outside the financial sector is healthier than it seems.... If you are not employed by the financial industry (94 percent of you are not), don’t worry. The current unemployment rate of 6.1 percent is not alarming, and we should reconsider whether it is worth it to spend $700 billion to bring it down to 5.9 percent.

Liveblogging World War I: October 20, 1914 The First Battle of Ypres

: First World War.com:

Strategically located along the roads leading to the Channel ports in Belgian Flanders, the Belgian city of Ypres had been the scene of numerous battles since the sixteenth century.  With the German failure at the Battle of the Marne in September 1914 and the subsequent Allied counter attacks, the 'Race to the Sea' began.

This so called race ended at the North Sea coast after each army attempted to outflank the other by moving north and west.  This area of Flanders, described by one historian as having the dreariest landscape in Western Europe, contained the last gap through which either side could launch a decisive thrust.

By October 1914, the Allies had reached Nieuport on the North Sea coast.  The Germans, as a prelude to General Erich von Falkenhayn's Flanders Offensive, captured Antwerp and forced its Belgian defenders back to Nieuport, near Ypres.

Under the command of Field Marshall Sir John French, the British Expeditionary Force (BEF) retreated to Ypres after Antwerp fell.  They arrived there between 8 and 19 October to bolster the Belgian and French defence.  The Allied position around Ypres took the shape of a small salient in the trench lines because it could best be defended from the low ridge of higher ground to the east, but it was vulnerable to superior German artillery.  The BEF held a thirty-five mile long line in the centre of the bulge while the French Army in the area, commanded by General Ferdinand Foch, manned the flanks to the south of the city.

At the outset of the battle, French and Foch both retained the hope of launching an offensive of their own.  They believed a coordinated attack would enable the Allies to recapture the industrial city of Lille, Belgium, followed swiftly by Brussels.  The new German Army Chief of Staff, Falkenhayn, quickly corrected their optimistic beliefs.

Falkenhayn's Flanders Offensive began on 20 October when he ordered an advance to break through the Allied line and capture the ports of Dunkirk, Calais, and Boulogne.  He struck the Belgian defences on the Yser River between Dixmude and Nieuport.

The already weakened Belgian Army fought valiantly, but the German actions forced Belgium's King Albert to open the sluices that held back the sea.  On 27 October, the Belgians flooded the land between their positions and the Germans' along the twenty-mile strip of land between Dixmude and Nieuport, creating a two-mile wide water barrier that forced Falkenhayn to halt and reconsider his plans.

The second phase of the Flanders Offensive was a series of assaults against the city of Ypres.  To seize it, Falkenhayn had at his disposal the newly assembled Fourth Army (made up of units from the siege of Antwerp and eight new divisions manned by underage recruits) commanded by the Duke of Wurttemberg, a cavalry corps, and Prince Rupprecht of Bavaria's Sixth Army.

These forces gave the Germans a considerable numerical advantage over the BEF's seven infantry divisions (one was held in reserve) and three cavalry divisions.  For replacements, General French could only count on a few divisions of Indian troops already en route as reinforcements.  The Indian units would soon prove to be outstanding fighters in both offence and defence.

In My Email Inbox This Morning, Snoozed from Six Months Ago

This: "Note to Self: CBO and Part D"

OK, self-of-six-months-ago, what about the Congressional Budget Office and Medicare Part D do you want me to note?

Should I Be Pleased or Depressed by Baen Books This Afternoon?: Live from the Roasterie

So I followed my son's friend Jennifer Allaway: #Gamergate Trolls Aren't Ethics Crusaders; They're a Hate Group into the wilds of #GamerGate; discovered among other things that in response to the misogyny there is now a Scalzi Gender; and found that Reason continues its downward spiral with some more "harassment has been a two-way street" opinions-of-shape-of-earth-differ journamalism. I then thought I owed it in order to round out my understanding the picture to see what the honchos of science fiction publishing house Baen Books had to say about #GamerGate...

Nothing:

Should I be depressed that Toni Weisskopf and others aren't willing to say that the way the #GamerGate trolls behave toward Zoe Quinn, Anita Sarkeesian, Brianna Wu, and company is shameful and contemptible?

Should I be pleased that they have apparently tried to rob #GamerGate of oxygen by prohibiting any discussion of it from their internet spaces?

Or should I be depressed by noting that they don't think their web membership can even note the existence of the #GamerGate trolls without something going horribly wrong?

Noted for Your Morning Procrastination for October 19, 2014

Over at Equitable Growth--The Equitablog

Nick Bunker: Weekend reading - Washington Center for Equitable Growth
Janet Yellen and the “building blocks” of opportunity - Washington Center for Equitable Growth
Lunchtime Must-Read: Mark Thoma Sends us to Melinda Pitts: Changes in Labor Force Participation - Washington Center for Equitable Growth
Morning Must-Read: Apropos of Damon Runyon: Nothing Between Humans Is More than 3-1 - Washington Center for Equitable Growth
Morning Must-Read: Jennifer Allaway: #Gamergate Trolls Aren't Ethics Crusaders; They're a Hate Group - Washington Center for Equitable Growth
Morning Must-Read: Steve Randy Waldmann: Mark Thoma Wrote the Wisest Two Paragraphs About Econometrics - Washington Center for Equitable Growth

Plus:

Things to Read on the Morning of October 19, 2014 - Washington Center for Equitable Growth

Must- and Shall-Reads:

Jason Furman: Inclusive Growth: For Once, Some Good News
Richard Pancost and Stephan Lewandowsky: Climate Uncertainty No Excuse for Inaction
Izabella Kaminska: Market economics means more than just supply and demand: Tirole won a Nobel for crucial work on market dominance
Reza Moghadam et al.: Euro Area — “Deflation” Versus “Lowflation”
Jeremy Hodges: Poker Pro Says He Didn’t Cheat in $12.4m Baccarat Haul
Jennifer Allaway: #Gamergate Trolls Aren't Ethics Crusaders; They're a Hate Group
Steve Randy Waldmann: Econometrics, Open Science, and Cryptocurrency
Mark Strauss: Bootstrapping A Solar System Civilization

And Over Here:

(Early) Monday Clifford Asness Smackdown (Brad DeLong's Grasping Reality...)
Weekend Reading: Narayana Kocherlakota: Clarifying the Objectives of Monetary Policy (Brad DeLong's Grasping Reality...)
Jennifer Allaway: #Gamergate Trolls Aren't Ethics Crusaders; They're a Hate Group: Live from the Roasterie (Brad DeLong's Grasping Reality...)
Liveblogging the American Revolution: October 18, 1776: Battle of Pell's Point (Brad DeLong's Grasping Reality...)
Weekend Must Must Reading: Janet Yellen: Perspectives on Inequality and Opportunity from the Survey of Consumer Finances (Brad DeLong's Grasping Reality...)
For the Weekend... (Brad DeLong's Grasping Reality...)
Apropos of Damon Runyon: Nothing Between Humans Is More than 3-1: Live from the Roasterie (Brad DeLong's Grasping Reality...)
Weekend Reading; Milton Friedman: A Tribute to George Stigler (Brad DeLong's Grasping Reality...)
Weekend Reading: Peer Review and Mark Granovetter (Brad DeLong's Grasping Reality...)
Lunchtime Must-Read: Mark Thoma Sends us to Melinda Pitts: Changes in Labor Force Participation (Brad DeLong's Grasping Reality...)[
Liveblogging World War II: October 19, 1944: Report of Navy Court of Inquiry (Brad DeLong's Grasping Reality...)
(Early) Monday Clifford Asness Smackdown (Brad DeLong's Grasping Reality...)

Jeremy Hodges: Poker Pro Says He Didn’t Cheat in $12.4m Baccarat Haul: "Phil Ivey... 38, won the money playing a form of Baccarat called Punto Banco... using a technique known as edge sorting, at Genting’s Crockfords casino in London, according to his lawyers. Genting refused to pay up, saying the practice is unfair. A casino ‘is a cat and mouse environment, it is an adversarial environment,’ Richard Spearman, Ivey’s lawyer said in court. ‘It doesn’t mean you have to be dishonest.’ Ivey, who sued Genting last year, argues that edge sorting isn’t dishonest and he should be paid the money.... Both sides agree that Ivey was in the casino in August 2012 and that he won the money.... Edge sorting is a way a card player can gain an advantage by working out the value of a card by spotting flaws or particular patterns on the back of certain cards.... It’s agreed ‘in the present case that there are legitimate strategies that may used by skilled players which have the purpose and effect of providing the player, rather than the casino, with the advantage on particular bets,’ Spearman said in court documents..."

Jennifer Allaway: #Gamergate Trolls Aren't Ethics Crusaders; They're a Hate Group: "My name is Jennifer Allaway.... I've been working on a new study on the importance of diversity in game content to game players, and whether or not the game industry is able to predict this desire. Game developers can be hard to reach.... By September 25th, I basically had all the data I needed. And then I got this email: 'Hey diddle-doodle, Ms. Allaway! A heads-up: your project has been targeted for extensive "vote brigading" (possibly ranging into the tens of thousands of entries). Use that knowledge however you will. Cheers'.... I went into 8chan—the movement's current and primary forum for coordinating their efforts—and found a discussion on a 'secret developer survey,' referring to my questions.... In under four hours, the developer survey jumped from around 700 responses, which had been collected over the course of a month, to over 1100 responses. The responses were not... subtle.... It appeared that less than 5 percent of the new responses had actually come from developers.... Responses like this.... I set about locking down accounts, emailing professors, contacting campus safety, and calling family. It was an exhausting process, but I considered it necessary. The attack could get out of hand.... If you're even asking about equality or diversity in games, being shouted down in a traumatizing manner is now a mandatory step that you have to sit back and endure. But I don't hate #Gamergate for what they've done to me. I'm a researcher; my goal is to analyze and to understand. And after two weeks of backtracking through the way they've carried out their operations, this is the conclusion I've reached: #Gamergate, as we know it now, is a hate group..."

Mark Thoma: Economist's View: Melinda Pitts: Changes in Labor Force Participation

Steve Randy Waldmann: Econometrics, Open Science, and Cryptocurrency: "Mark Thoma wrote the wisest two paragraphs you will read about econometrics and empirical statistical research in general: 'You are testing a theory you came up with, but the data are uncooperative and say you are wrong. But instead of accepting that, you tell yourself 'My theory is right, I just haven't found the right econometric specification yet. I need to add variables, remove variables, take a log, add an interaction, square a term, do a different correction for misspecification, try a different sample period, etc., etc., etc.' Then, after finally digging out that one specification of the econometric model that confirms your hypothesis, you declare victory, write it up, and send it off (somehow never mentioning the intense specification mining that produced the result). Too much econometric work proceeds along these lines. Not quite this blatantly, but that is, in effect, what happens in too many cases. I think it is often best to think of econometric results as the best case the researcher could make for a particular theory rather than a true test of the model.'"

Mark Strauss: Bootstrapping A Solar System Civilization: "Tom Kalil... notes [that] NASA is already working on printable spacecraft, automated robotic construction using regolith and self-replicating large structures. As a stepping stone to in-space manufacturing, NASA has sent the first-ever 3D printer to the International Space Station. One day, astronauts may be able to print replacement parts on long-distance missions. And building upon the success of the Mars Curiosity rover, the next rover to Mars--currently dubbed Mars 2020--will demonstrate In-Situ Resource Utilization on the Red Planet. It will convert the carbon dioxide available in Mars' atmosphere to oxygen that could be used for fuel and air.... Launching everything we need from Earth is too expensive.... The longer term goal of what Metzger calls 'bootstrapping a solar system civilization.... Ultimately what we need to do is to evolve a complete supply chain in space, utilizing the energy and resources of space along the way.... We need to realize we live in a solar system with literally billions of times the resources we have here on Earth and if we can get beyond the barrier of Earth's deep gravity well then the civilization our children and grandchildren will build shall be as unimaginable to us as modern civilization once was to our ancestors...'"

Should Be Aware of:

Douglas Williams: Know Your History: Lessons in organizing from the leftists and labor organizers of yore
Jessica Lahey: Professor Teaches Math To Students Who Hate It - Business Insider

 

Charlie Stross: Some Thoughts on Turning 50:: "These days I'm convinced that the reputation grumpy old men have for being grumpy (not to mention old) is a side-effect of the way chronic low-grade pain goes with the ageing process. It's a sad fact that once you pass your thirties you get increasingly creaky: and constant low-grade aches and twinges do bad things to your temper. It's another sad fact that, for better or worse, most of our world leaders are middle-aged or elderly men, who should be presumed grumpy due to low-grade pain until proven otherwise..."

Nick Rowe: Inflation derps are people from the concrete steppes: "The people from the concrete steppes see central banks print lots of money. That's a real concrete step, and real concrete steps have real concrete consequences. Printing lots of money causes lots of inflation. And the fact that lots of inflation hasn't happened yet simply means it's a lagged effect.... But if printing lots of money did cause people to spend it and cause inflation, then central banks would immediately put the printing presses into reverse.... And people expect they would do this. And no individual will spend unless he expects other individuals to spend. So nobody spends. It's a credit deadlock, created by counterfactual conditional expectations about what central banks would do if people did something that they won't do, because of those expectations.... They cannot see the thing that is causing their predictions to fail, because that thing is not a concrete thing.... A commitment by the central bank not to do what people to expect it to do, to change those counterfactual conditional expectations, would change things. Something like an NGDP level path target. 'Yes, we will let you spend that $1,000 we lent you at 0% interest'."

Liveblogging World War II: October 19, 1944: Report of Navy Court of Inquiry

Report of Navy Court of Inquiry - October 19, 1944:

The following is the Opinion of the Naval Court of Inquiry which examined whether Rear Admiral Husband E. Kimmel and General Walter C. Short were in dereliction of duty on (and before) December 7, 1941. The court took testimony, examined exhibits and allowed both officers to have counsel.  No dereliction of duty was found.

Report of Navy Court of Inquiry [October 19, 1944]: OPINION:

Based on Finding II, the Court is of the opinion that the presence of a large number of combatant vessels of the Pacific Fleet in Pearl Harbor on 7 December, 1941, was necessary, and that the information available to the Commander-in-Chief, Pacific Fleet, did not require any departure from his operating and maintenance schedules.

Based on Finding III, the Court is of the opinion that the Constitutional requirement that, prior to a declaration of war by the Congress, no blow may be struck until after a hostile attack has been delivered. Prevented the Commander-in-Chief, Pacific Fleet, from taking offensive action as a means of defense in the event of Japanese vessels or planes appearing [in] the Hawaiian area, and that it imposed upon him the responsibility of avoiding taking any action which might be construed as an overt act.
 
Based on Finding V, the Court is of the opinion that the relations between Admiral Husband E Kimmel, USN, and Lieut. General Walter C. Short, U S Army, were friendly, cordial and cooperative, that there was no lack of interest, no lack of appreciation of responsibility, and no failure to cooperate on the part of either. And that each was cognizant of the measures being undertaken by the other for the defense of the Pearl Harbor Naval Base to the degree required by the common interest.
 
Based on Finding VI, the Court is of the opinion that the deficiencies in personnel and material which existed during 1941, had a direct adverse bearing upon the effectiveness of the defense of Pearl Harbor on and prior to 7 December.

Based on Finding VII, the Court is of the opinion that the superiority of the Japanese Fleet over the U.S. Pacific Fleet during the year 1941, and the ability of Japan to obtain military and naval information gave her an initial advantage not attainable by the United States up to 7  December, 1941.
 
Based on Finding VIII, the Court is of the opinion that the defense of the Pearl Harbor Naval Base was the direct responsibility of the Army, that the Navy was to assist only with the means provided the 14th Naval District, and that the defense of the base was a joint operation only to this extent. The Court is further of the opinion that the defense should have been such as to function effectively independently of the Fleet, in view of the fundamental requirement that the strategic freedom of action of the Fleet must be assured demands that the defense of a permanent naval base be so effectively provided for and conducted as to remove any anxiety of the Fleet in regard to the security of the base, or for that of the vessels within its limits. Based on Findings IV, VIII and IX, the Court is of the opinion that the duties of Rear Admiral Claude C. Bloch,
U.S.N., in connection with the defense of Pearl Harbor, were performed satisfactorily.

Based on Finding IX, the Court is of the opinion that the detailed Naval Participation Air Defense plans drawn up and jointly agreed upon were complete and sound in concept, but that they contained a basic defect in that naval participation depended entirely upon the availability of aircraft belonging to and being employed by the Fleet, and that on the morning of 7 December these plans were ineffective because they necessarily were drawn on the premise that there would be advance knowledge that an attack was to be expected within narrow limits of time, which was not the case on that morning.

The Court is further of the opinion that it was not possible for the Commander-in-Chief, Pacific Fleet, to make his Fleet planes permanently available to the Naval Base Defense Officer in view of the need for their employment with the Fleet.
 
Based on Finding X, the Court is of the opinion that Admiral Kimmel's action, taken immediately after assuming command, in placing in effect comprehensive instructions for the security of the Pacific Fleet at sea and in the operating areas, is indicative of his appreciation of his responsibility for the security of the Fleet, and that the steps taken were adequate and effective.
 
Based on Finding XI, the Court is of the opinion that, by virtue of the information that Admiral Kimmel had at hand which indicated neither the probability nor the imminence of an air attack on Pearl Harbor, and bearing in mind that he had not knowledge of the State Department's note of 26 November, the Navy's condition of readiness on the morning of 7 December, 1941, which resulted in the hostile planes being brought under heavy fire of the ships' antiaircraft batteries as they came within range, was that best suited to the circumstances, although had all anti-aircraft batteries been manned in advance, the total damage inflicted on ships would have been lessened to a minor extent and to a degree which is problematical; and, that, had the Fleet patrol planes, slow and unsuited for aerial combat, been in the air, they might have escaped and the number of these planes lost might thus have been reduced.
 
The Court is of the opinion, however, that only had it been known in advance that the attack would take place on 7 December, could there now be any basis for a conclusion as to the steps that might have been taken to lessen its ill effects, and that, beyond the fact that conditions were unsettled and that, therefore, anything might happen, there was nothing to distinguish one day from another in so far as expectation of attack is concerned.
 
It has been suggested that each day all naval planes should have been in the air, all naval personnel at their stations, and all antiaircraft guns manned. The Court is of the opinion that the wisdom of this is questionable when it is considered that it could not be known when an attack would take place and that, to make sure, it would have been necessary to impose a state of tension on the personnel day after day, and to disrupt the maintenance and operating schedules of ships and planes beginning at an indefinite date between 16 October and 7 December.
 
Based on Finding XII, the Court is of the opinion that, as no information of any sort was at any time either forwarded or received from any source which would indicate that Japanese carriers or other Japanese ships were on their way to Hawaii during November or December, 1941, the attack of 7 December at Pearl Harbor, delivered under the circumstances then existing, was unpreventable and that when it would take place was unpredictable.
 
Based on Finding XIII, the Court is of the opinion that the action of the Commander-in-Chief, Pacific Fleet, in ordering that no routine, long-range reconnaissance be undertaken was sound and that the use of Fleet patrol planes for daily, long-range, all-around reconnaissance was not possible with the inadequate number of Fleet planes available, and was not justified in the absence of any information indicating that an attack was to be expected in the Hawaiian area within narrow limits of time.

Based on Finding XIV, the Court is of the opinion that the shore-based air warning system, an Army service under the direct control of the Army, was ineffective on the morning of 7 December, in that there was no provision for keeping track of planes in the air near and over Oahu, and for distinguishing between those friendly and those hostile and that, because of this deficiency, a flight of planes which appeared on the radar screen shortly after 0700 was confused with a flight of Army B-17s en route from California, and that the information obtained by Army radar was valueless as a warning, because the planes could not be identified as hostile until the Japanese markings on their wings came into view.

Based on Finding XV, the Court is of the opinion that by far the greatest portion of the damage inflicted by the Japanese on ships in Pearl Harbor was due to specially designed Japanese torpedoes, the development and existence of which was unknown to the United States.
 
Based on Finding XVI. And particularly in view of the Chief of Naval Operations' approval of the precautions taken and the deployments made by Admiral Kimmel in accordance with the directive contained in the dispatch of 16 October, 1941, the Court is of the opinion that Admiral Kimmel's decision, made after receiving the dispatch of 24 November, to continue preparations of the Pacific Fleet for war, was sound in the light of the information then available to him.
 
Based on Finding XVII, the Court is of the opinion that, although the attack of 7 December came as a surprise, there were good grounds for the belief on the part of high officials in the State, War, and Navy Departments, and on the part of the Army and Navy in the Hawaiian area,  that hostilities would begin in the Far East rather than elsewhere, and that the same considerations which influenced the sentiment of the authorities in Washington in this respect, support the interpretation which Admiral Kimmel placed upon the 'war warning message' of 27 November, to the effect that this message directed attention away from Pearl Harbor rather than toward it.
 
Based on Findings XVIII and XIX, the Court is of the opinion that Admiral Harold R. Stark, U.S.N., Chief of Naval Operations and responsible for the operations of the Fleet, failed to display the sound judgment expected of him in that he did not transmit to Admiral Kimmel, Commander-in-Chief, Pacific fleet, during the very critical period 26 November to 7 December, important information which he had regarding the Japanese situation and, especially, in that, on the morning of 7 December, 1941, he did not transmit immediately the fact that a message had been received which appeared to indicate that a break in diplomatic relations was imminent, and that an attack in the Hawaiian area might be expected soon.
 
The Court is further of the opinion that, had this important information been conveyed to Admiral Kimmel, it is a matter of conjecture as to what action he would have taken.
 
Finally, based upon the facts established, the Court is of the opinion that no offenses have been committed nor serious blame incurred on the part of any person or persons in the naval service.

RECOMMENDATION

The Court recommends that no further proceedings be had in the matter.

ORIN G. MURFIN, Admiral, U. S. Navy (Ret.), President.

EDWARD C. KALBFUS, Admiral, U. S. Navy (Ret.), Member.

ADOLPHUS ANDREWS, Vice Admiral, U. S. Navy (Ret.), Member.

Lunchtime Must-Read: Mark Thoma Sends us to Melinda Pitts: Changes in Labor Force Participation

Mark Thoma: Economist's View: Melinda Pitts: Changes in Labor Force Participation:

Weekend Reading: Peer Review and Mark Granovetter

granovetter-rejection.pdf

Weekend Reading; Milton Friedman: A Tribute to George Stigler

Milton Friedman: A Tribute to George J. Stigler: "I cannot pretend to objectivity in writing about George Stigler...

....For sixty years, he was one of my closest friends. My debt to him, both personal and professional, is beyond measure. Despite deep sadness at his death, I cannot recall him without a smile rising to my lips. He was as quick of wit as of mind. His wit always had a point, and was never mean or nasty — though some of the objects of his wit no doubt felt its sting. His occasional humorous articles — such as “The History of Truth in Teaching” — have become classics and demonstrate that had he chosen to become a professional humorist rather than a professional economist, he would have achieved no less fame in the one field than he did in the other. His death has left the world a far less joyful place for Rose and me, as for so many others.

George was a great economist, a great teacher, a great human being with a gift for writing matched among economists in the twentieth century only by Keynes. He always pretended that he never worked — to have been playing golf or tennis or bridge — never appeared to be in a hurry. Yet this was a facade. He was an incredibly fast and hard worker, who could master complex literature and write sophisticated and elegant articles at a pace few can match. His contributions to economics cover an amazingly wide range: from his first and lasting love, the history of economic thought, to linear programming, industrial organization, the economics of information and the economic analysis of policy. And the list is far from complete. He reshaped every field he touched and left a legacy that has inspired a host of other economists to expand on his contribution.

I need not dwell on his scientific accomplishments for a Mont Pèlerin audience. You are familiar with them and have all learned from them. Instead, I shall reminisce a bit about our joint trip in 1947 to the founding meeting of our Society.

Aaron Director (Rose’s brother), George, and I went together. It was George’s and my first trip outside of North America. Aaron, some ten years older, had been to Europe before the war, had met Hayek at the London School of Economics, and played a major role in persuading the University of Chicago Press to publish The Road to Serfdom. Like George, he was a disciple of Frank Knight’s. Aaron and Knight were responsible for our being invited (the two of us and Maurice Allais of Paris were the youngest active participants).

We went over on Cunard’s Queen Elizabeth (the first, of course, not the elegant QEII), refitted from its wartime service. (That was long before trans-Atlantic travel by air had become commonplace though George did return by plane.) We disembarked at Southampton and proceeded to London where we stayed for several days. Britain was still in a sad way two years after the war. Food was rationed and poor (when George gave some paid lectures at the London School of Economics a year later, he commented in a letter, “So here I am losing weight and gaining pounds”). Price, wage, and exchange controls were extensive and rigid, and appeared to be widely accepted and respected. There doubtless were black markets but they were small and well hidden.

The situation was very different in Paris, our next stop. The food was incomparably better and while wartime destruction was plainly evident there was a feeling of vigor and movement absent in Britain. George loved to tell the story, as he did in his Memoirs:

of approaching the clerk at the Grand Hotel, where we were staying, ‘Could you direct me to the closest outlet for the black market in currency?’ I asked. ‘Go no further, gentlemen,’ was the response as he extracted a wallet from his jacket.

As we left Paris, George summarized his impressions: “I now know the difference between Britain, France, and the United States. The British obey all laws, the French obey no laws, the Americans obey only the good laws.” This was his succinct summary of our having observed Britain being strangled by law obedience (remember this was forty-five years ago; the British have since learned better or degenerated — take your choice), while France was being saved by the black market.

Interesting as George and I found our first sight of Europe, the real payoff was Mont Pèlerin — as I wrote to Rose, “the place is unbelievably wonderful.” As to the conference, “we’ve been meeting three times a day —morning, afternoon, and night.... It’s pretty wearing, but also very stimulating.” Here we were, young naive provincial Americans, meeting people from all over the world, all dedicated to the same liberal principles as we were; all beleaguered in their own countries, yet among them scholars, some already internationally famous, others destined to be; making friendships which were to enrich our lives and last a lifetime; and participating in founding a society destined to play a major role in preserving and strengthening liberal ideas. And also learning how much people with the same basic philosophy can differ about its implementation. One incident above all impressed George and me. In the course of a spirited discussion of policies about the distribution of income among a group that included Hayek, Machlup, Knight, Robbins, and Jewkes among others, Ludwig von Mises suddenly rose to his feet, remarked, “You’re all a bunch of socialists,” and stomped out of the room.

Neither George nor I ever recovered from our introduction to so rich and varied a world.

Apropos of Damon Runyon: Nothing Between Humans Is More than 3-1: Live from the Roasterie

Jeremy Hodges reports:

Jeremy Hodges: Poker Pro Says He Didn’t Cheat in $12.4m Baccarat Haul: "Phil Ivey... 38, won the money playing a form of Baccarat called Punto Banco...

using a technique known as edge sorting, at Genting’s Crockfords casino in London, according to his lawyers. Genting refused to pay up, saying the practice is unfair. A casino ‘is a cat and mouse environment, it is an adversarial environment,’ Richard Spearman, Ivey’s lawyer said in court. ‘It doesn’t mean you have to be dishonest.’ Ivey, who sued Genting last year, argues that edge sorting isn’t dishonest and he should be paid the money.... Both sides agree that Ivey was in the casino in August 2012 and that he won the money.... Edge sorting is a way a card player can gain an advantage by working out the value of a card by spotting flaws or particular patterns on the back of certain cards.... It’s agreed ‘in the present case that there are legitimate strategies that may used by skilled players which have the purpose and effect of providing the player, rather than the casino, with the advantage on particular bets,’ Spearman said in court documents...