J. Bradford DeLong's Blog, page 2166

October 28, 2010

Institute for New Economic Thinking

INET Launch:

Department of Economics Calendar: : JOIN the CONVERSATION with the INSTITUTE FOR NEW ECONOMIC THINKING (INET): Changing the Paradigm:The Challenge to the Economics Profession in the Aftermath of the Crisis and the Role of the Institute for New Economic Thinking Panel Discussion | October 28 | 4-6 p.m. | 608-7 Evans Hall

Speakers: Dr. Robert Johnson, Executive Director of the Institute for New Economic Thinking, (INET); Barry Eichengreen, Christina D. Romer, Bradford DeLong.

Sponsors: Economics, Department of, INSTITUTE FOR NEW ECONOMIC THINKING (INET)

The Institute for New Economic Thinking (INET) will join a conversation with students and faculty at the University of California, Berkeley on the importance of new economic thinking in the face of global economic crisis. The session will look specifically at economics in academia, the challenges faced by the economics profession in the aftermath of the crisis, and what must be done to change the prevailing paradigms in economics.

Conversation leaders, Dr. Robert Johnson, Executive Director of INET, and Professor Barry Eichengreen, Professor of Economics and Political Science at U.C. Berkeley, will also introduce the expansion of the Berkeley Economic History Laboratory, which recently received a Task Force Grant from INET’s Inaugural Grant Program.

For more information on the Campus Outreach Program please checkout INET’s website and videos: http://ineteconomics.org/initiatives/campus-outreach

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Published on October 28, 2010 06:26

links for 2010-10-28

Global imbalances: German surplus good, Chinese surplus bad | The Economist

Sailing the Wrong Way with QE2? - NYTimes.com

iMovie '11 Video Software Review | Macworld

Railroads of the Raj: Estimating the Impact of Transportation Infrastructure

Shape-Shifting Deficit Hawks « The Baseline Scenario

Hayek Quotes of the Day « Modeled Behavior

Worthwhile Canadian Initiative: A self-contradictory communications strategy

FT.com / Comment / Op-Ed Columnists - Why US voters are suing Dr Obama

Academic prestige has some social value — Crooked Timber

David Frum: Time to put Obama to the Bush test | Full Comment | National Post

@delong The tables have been turned, what are we to do? http://bit.ly/c4xbRx

– Not_Nancy_Pelosi (N_Pelosi) http://twitter.com/N_Pelosi/status/28...

(tags: from:N_Pelosi)

Zero-dimensional chess — Crooked Timber

Obama Successes Outweighed by Job Losses - NYTimes.com

The Wrong Political Game | The American Prospect

Yglesias » Our Heated Discourse

Yglesias » The Mighty Talons of the Climate Hawks

The Ultimate in Non-Apology Apologies - Ta-Nehisi Coates - National - The Atlantic

The Worst Economist In The World, 10/27/10 - NYTimes.com

Martin Wolf On Obama - NYTimes.com

Climate change: the evidence | Bad Astronomy | Discover Magazine

The Secret Diary of Steve Jobs : What's the #1 most crazy idea Steve Ballmer has ever heard?

Male castration: The easiest way to live to 100? - The Week

Hullabaloo

Sheryl Sandberg - Wikipedia, the free encyclopedia

The Nixonian henchmen of today: at the NYT - Salon.com Mobile

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Published on October 28, 2010 06:22

Why Oh Why Can't We Have a Better Press Corps? Ed Wyatt of the New York Times FAIL Edition

Mike Konczal on the New York Times's attempted hit on Elizabeth Warren and company:

A Failed Dirt-Finding Expedition on the CFPB « Rortybomb: Today’s New York Times came out with a bizarre hit piece on the Consumer Financial Protection Bureau and the first wave of hires. They attempted to argue that there are already huge conflicts between those staffing the creation of the Bureau and those that they will be tasked to regulate.... But what’s so surprising about the article is how little they were able to find... the only thing they were able to flag was that Warren advisor Raj Date was, up until recently, a director of Prosper Marketplace Inc.... Having written a paper with Date on Glass-Steagall and the future of financial reform, as well as working with Date when he contributed to Roosevelt’s Make Markets Be Markets financial reform conference on the subject of the GSEs, I was kind of curious to see if he was actually some sort of deranged financial hit man. But if this is all the ‘dirt’, I’m almost worried for the opposite reason: that the agency will be too academic and not take advantage of people involved in the shadier side of the financial world who want to repent.

The Times article relies entirely on the implied assumption that peer-to-peer lending is some sort of shady, fly-by-night operation. In reality, it is simply an over-hyped phenomena of trying to integrate the internet with new financial institutions.... Prosper has been a useful experiment. It’s challenged thinking about information, prices, the “wisdom of crowds” versus institutional information, fringe lending, and started to find creative ways to replace the practice of low-quality high-churn payday-style lending, regardless of whether or not it is going to take off. Either way, wasn’t the problem that the CFPB was going to kill small-scale financial entrepreneurialism? So isn’t it good to include someone in the agency who has experience with it?

Even more striking is that the article fails to mention that Date and his former policy shop, Cambridge Winter, which they summarize as being “active in the Dodd-Frank debate”, were really at the cutting edge of the consumer financial protection debate. I actually wasn’t sure if the auto dealer exemption for consumer protection was something worth fighting until I read Date’s Baseline Scenario post on the topic, Auto Race to the Bottom.

Particularly pertinent was the excellent phrase:

Even by the low analytical standards applied to hastily arranged, crisis-driven corporate welfare initiatives, the exemption of auto dealers from the CFPA appears profoundly ill conceived. Exempting auto dealers would simultaneously be bad for consumers, bad for industry stability, and bad for what remaining sense of free-market integrity we still have.

Heh.

He was also active in the Volcker Rule debate, bringing sanity to the discussion of the strengths and weaknesses of resolution authority (also here), and a whole ton of other research that created markers for serious financial reform.

The case against him is so weak that even Mark Calabria, director of financial regulation studies at the Cato Institute, who loves hitting a regulatory conflict and capture slowball over the plate, seems kind of bored with it...

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Published on October 28, 2010 06:18

links for 2010-10-28

iMovie '11 Video Software Review | Macworld

Railroads of the Raj: Estimating the Impact of Transportation Infrastructure

Shape-Shifting Deficit Hawks « The Baseline Scenario

Hayek Quotes of the Day « Modeled Behavior

Worthwhile Canadian Initiative: A self-contradictory communications strategy

FT.com / Comment / Op-Ed Columnists - Why US voters are suing Dr Obama

Academic prestige has some social value — Crooked Timber

David Frum: Time to put Obama to the Bush test | Full Comment | National Post

@delong The tables have been turned, what are we to do? http://bit.ly/c4xbRx

– Not_Nancy_Pelosi (N_Pelosi) http://twitter.com/N_Pelosi/status/28...

(tags: from:N_Pelosi)

Zero-dimensional chess — Crooked Timber

Obama Successes Outweighed by Job Losses - NYTimes.com

The Wrong Political Game | The American Prospect

Yglesias » Our Heated Discourse

Yglesias » The Mighty Talons of the Climate Hawks

The Ultimate in Non-Apology Apologies - Ta-Nehisi Coates - National - The Atlantic

The Worst Economist In The World, 10/27/10 - NYTimes.com

Martin Wolf On Obama - NYTimes.com

Climate change: the evidence | Bad Astronomy | Discover Magazine

The Secret Diary of Steve Jobs : What's the #1 most crazy idea Steve Ballmer has ever heard?

Male castration: The easiest way to live to 100? - The Week

Hullabaloo

Sheryl Sandberg - Wikipedia, the free encyclopedia

The Nixonian henchmen of today: at the NYT - Salon.com Mobile

View more on J. Bradford DeLong's website »

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Published on October 28, 2010 03:51

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Published on October 28, 2010 03:41

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Published on October 28, 2010 03:11

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Published on October 28, 2010 01:03

October 27, 2010

Do I Dare Read This?

First Tom Levenson, now Henry Farrell--their tenuous hold on sanity broken, their minds cracked:

A not-so-brief history of violence: Public health warning: much much more McArdle-blogging beneath the fold. But take heart – this may possibly be my last and most definitive statement on the topic. I certainly can’t imagine that I will want to write at length about this any more...

Unfortunately, I do not have the strength of character to refrain:

The fact that she explicitly has mixed motivations for writing the apology... needn’t concern us.... But from here on in, it starts to go downhill.

I have yet to see anyone deploy it against me who could even vaguely be accused of acting in good faith. On the other hand, there are readers in good faith who are surprised by it, and I think I owe them an explanation.

If she really did say something that she has since acknowledged was ‘creepy,’ it is an unusual run of luck indeed that everyone who has criticized her for this post has done so in bad faith....

And now we start to get to the important bits.

I shouldn’t have written it because even if whacking a rioter in the head is necessary to stop the riot, it’s not funny. It’s not funny even when the rioter is a total scumwrangler who is deliberately wreaking mayhem—any more than it is ever funny when a thoroughly repulsive criminal gets raped in prison. To the extent that either the state or private citizens are forced to use violence to prevent violence, it should always be more-in-sorrow-than-in-anger. This is not amusing.

The problem hence, is not that violence against mayhem-wreaking scumwranglers is unwarranted – it is that one shouldn’t laugh at it, but instead treat of it in grave and serious tones.... McArdle apologizes for having written it, explains that she had been in her “mid-twenties” (in fact she had just turned thirty), was exploring the new medium of blogging, and was “more than a tad overemotional at the thought of my city getting another dose of random ideological violence.” She then goes on to tell us that

But the way it’s used in the blogosphere is, for want of a better word, pathetic. Those who link it never, ever mention that it referred to violent protesters, even when they have to do some exceptionally creative editing to avoid that fairly central fact.... What does it say that the people who link it are invariably either outright lying, or deliberately misleading inflicting creative omissions on their readers?...

[S]he apologizes, apparently sincerely, for thinking that violence against mayhem-wreaking scumwranglers was funny, even though they’re scumwranglers (it’s worth drawing attention to the gradual transformation over the years of laughable “little dweebs” that you can’t even be mad at, into mayhem-wreaking “rioters” and “scumwranglers” who are self-evidently a threat to life, property and civilization; they must have been eating all their greens). She does not apologize for her belief back then that “rioters” need to be “restrained” with “violent force, if necessary,” perhaps by “whacking a rioter in the head … to stop the riot.” And she feels hard done by – none of the bloggers who link to the post ever mention that she is only referring to “violent protesters.” And if only we could read Diane E.’s post, we could see that there was “a credible belief” that we were going to see a WTO-style ”dose of random ideological violence.”

I do have good news for Ms. McArdle – the original Diane E. post that she thought was lost to posterity has been located.... There are a couple of general observations worth making. First – that Diane E., whether she was a “war-horse” or not, was clearly and emphatically a rumor-monger, contra McArdle.... Second, that Diane E.s writing in this post reaches Pam-Geller levels of batshit crazy. Myself, I would not be swift to describe a post like this as a justifiable basis for “credible belief.” But then I’m not Megan McArdle....

[W]hat evidence do we have that college student rioters are planning a “can of whup-ass on some Korean vegetable stand,” to use McArdle’s memorable description? Diddly squat. What does this tell us about rioters’ plans to … er … riot? Again. Diddly squat. The protesters plans are explicitly to “transform Feb. 15 into a carnival of peace and resistance.” There are a number of proposed actions – but the only one that can be even faintly thought of as violent, is the proposal to have snowball fights. McArdle’s source of wisdom, the indefatigable Diane E., rants that this isn’t peaceful protest. But it obviously is. All of these actions are taken from the standard repertoire of peaceful disruptive protest. Many of them are certainly massive pains in the arse. None of them would seem to me to be forms of violence that would justify pre-emptive whacks in the head...

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Published on October 27, 2010 20:06

Elizabeth Warren Is Giving a Lecture at Berkeley Thursday Night

I highly recommend going. I will be there--unless my calendar attacks me...

Yours,

Brad DeLong

---------- Forwarded message ----------

From: Valerie Liang

Date: Wed, Oct 27, 2010 at 6:53 PM

Subject: Re: Elizabeth Warren Lecture

To: delong@econ.berkeley.edu

Mario Savio Memorial Lecture: with Elizabeth Warren

Lecture | October 28 | 8-9:30 p.m. | Martin Luther King Jr. Student Union, Pauley Ballroom

Speaker/Performer: Elizabeth Warren, Harvard Law School

Sponsors: Library, Goldman School of Public Policy, Graduate Assembly, Mario Savio Memorial Lecture

The 14th annual Mario Savio Memorial Lecture & Young Activist Award will feature consumer advocate Elizabeth Warren in a talk entitled "Main Street First: Fixing Broken Markets and Rebuilding the Middle Class."

The inspiration and driving force behind the new Consumer Financial Protection Bureau, Elizabeth Warren has been described as one of the "100 Most Influential People in the World" (Time), "a whipsmart consumer warrior," (S.F. Chronicle), and "a person who will stir up a lot of trouble" (Forbes). She has appeared frequently on The Daily Show with Jon Stewart, Dr. Phil, and the Rachel Maddow Show. An expert on credit and economic stress, Warren is known for her ability to simplify complex financial issues and for her fierce independence and advocacy on behalf of middle-class families. She is the Gottlieb Professor of Law at Harvard University and is the author of nine books, including, with her daughter, the best sellers All Your Worth: the Ultimate Lifetime Money Plan and The Two-Income Trap: Why Middle Class Parents Are Going Broke.

The Memorial lecture honors the memory of the late Mario Savio, a spokesperson for Berkeley's Free Speech Movement (1964), and the spirit of moral courage and vision which he and countless other activists of his generation exemplified. The evening includes a presentation of the Mario Savio Young Activist Award, which recognizes young people engaged in the struggle to build a more humane and just society. It is co-sponsored by the UC Berkeley Library, the Goldman School of Public Policy, the Free Speech Movement Cafe and the Graduate Assembly.

Tickets, which are free and are required for this event, can be obtained in the lobby of the Martin Luther King Student Union after 5 p.m. on October 28. For additional information, email savio@sonic.net or call 707-823-7293.

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Published on October 27, 2010 19:58

Milton Friedman Supports Quantitative Easing 2

David Wessel:

What Would Milton Friedman Do Now?: Enough about John Maynard Keynes.... What would Milton Friedman, the University of Chicago champion of monetary discipline, do now? What would he say—reversing the charges when he returned a reporter's call, as he always did—if asked about Federal Reserve Chairman Ben Bernanke's imminent move to print hundreds of billions of dollars to buy more U.S. Treasury bonds to put more money into the economy?... [T]his seems a ripe moment to contemplate Friedman's views and those of his disciples—though they don't agree among themselves.

Friedman believed in the power of money: the more money, the more income.... Friedman would have scoffed at the notion that the Fed is out of ammunition. He believed in the potency of "quantitative easing," or QE—printing money to buy bonds:

The Bank of Japan can buy government bonds on the open market [e wrote in 1998.]... Most of the proceeds will end up in commercial banks, adding to their reserves and enabling them to expand…loans and open-market purchases. But whether they do so or not, the money supply will increase.... Higher money supply growth would have the same effect as always. After a year or so, the economy will expand more rapidly; output will grow, and after another delay, inflation will increase moderately...

But how would he decide if the Fed should buy bonds now? He would look at the growth of the money supply, though he and his followers always had trouble identifying which measure was the right one.... He would warn, as he often did, about "erratic swings" in the money supply..... He would look at velocity, the number of times a dollar turns over in a given year, to gauge demand for money. "To keep prices stable, the Fed must see to it that the quantity of money changes in such a way to offset movements in velocity and output."... When velocity is stable, the Fed should keep money growth steady. When velocity swings widely, the Fed shouldn't be passive.... He would look at growth in income:

He considered stable nominal [unadjusted for inflation] income growth desirable because sudden swings in it (and thus in spending) cause huge macroeconomic disturbances when wages and prices fail to adjust quickly," says economist David Beckworth of Texas State University. Income is growing well below historical norms. POINT: For QE.

He would look at bond-market inflation expectations.... Markets anticipated low and falling inflation—until Mr. Bernanke began talking about QE2 in late August, a sign that markets believe Fed's bond-buying will boost inflation, as the Fed desires. POINT: For QE....

The Friedman logic, though, makes the case for QE2.

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Published on October 27, 2010 18:49

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