J. Bradford DeLong's Blog, page 2233

And It Is Not 2.71%, It Is 2.68% Now...

Paul Krugman: The Meaning Of 2.71%

Paul:

The Meaning Of 2.71 - : As of right now, the 10-year bond rate is 2.71 percent. As you can see from the chart above, this puts it back where it was in the early spring of 2009 — higher than it was during the Oh-my-God-we’re-all-gonna-die period of winter 2008-2009, but lower than anything else we’ve seen for decades.

As it happens, interest rates are also now lower than they were when the big debate over fiscal policy and its interest-rate effects began. For those who don’t...

How Soon Will We Face Deflation?

In the post-WWII United States, the rate of inflation has a very clear tendency to fall whenever the unemployment rate rises above 7%:

When the unemployment rate has been above 8%, the average fall in the annual CPI inflation rate over the next two years has been 4.5 percentage points.

Our current annual inflation rate is about 1%:

Does this mean that two years from now we can expect our annual inflation rate to be -3.5%--that we can expect fairly rapid deflation? The odds...

in Which Tyler Cowen Calls, I Think Wrongly, for Deflation

Tyler:

Marginal Revolution: What's the actual problem in the labor market?: Yet I have seen not one such post to the unemployed: "Hey guys, lower your wage demands!  It's good for you!  You'll get a job and avoid the soul-sucking ravages of idleness.  It's good for the country!  It's good for Bernanke, you'll get those regional Fed presidents off his back!  Why not?  The best you can hope for is to get tricked by money illusion anyway!  Show up those elites and get to that equilibrium on...

Andrew Hall: Robert E. Lee's Civil War Army of Northern Virginia as a Slave-Raiding Enterprise

Andrew Hall:

'We Have Received Provocation Enough': On the first day of July 1863, Confederate Lieutenant General James Longstreet (left), writing through his adjutant, ordered General George Pickett to bring up his corps from the rear to reinforce the main body of the Army of Northern Virginia. The lead elements of the armies of Robert E. Lee and George Meade had come together outside a small Pennsylvania market town called Gettysburg. The clash there would become the most famous battle...

Department of "Huh?!": I Think David Leonhardt May Have Gotten One Wrong

The excellent, hard-working, and intelligent David Leonhardt writes:

or Those With Jobs, a Recession With Some Benefits - NYTimes.com: One of the distinctive features of the Great Recession has been the enormous number of people who have been out of work for months on end. Almost 45 percent of today’s unemployed workers have been without a job for at least 27 weeks. In no other downturn since World War II did the share exceed 26 percent. For many of these long-term unemployed, the...

links for 2010-08-10

Mark Kleiman: Shorter Ross Douthat

Mark Kleiman: Shorter Ross Douthat: http://www.samefacts.com/2010/08/watc... #worthreading: "Since monogamous heterosexual marriage is a deeply unnatural institution, representing an ideal that contemporary straight Americans can't, or don't want to, live up to, we should express our regret about that failing by keeping gays from getting married at all."





...

Michael Reich Is Correct: Meg Whitman Looks to Be a Very Bad Idea

So I was happy to sign on to his letter.

Seema Mehta:

Election 2010: Economists see flaws in Whitman's plan to turn California around: Meg Whitman's economic policies are based on a flawed understanding of the challenges California faces, and the Republican gubernatorial nominee's proposals would make the state's troubles worse, according to an open letter to Californians signed by a group of mostly Democratic economists from throughout the state. "The evidence and theory that Whitman...

The Invisible Bond Market Vigilantes Are Here!

If fear of large future government deficits is undermining market confidence--as it is in Greece right now--interest rates on government debt are high and rising. That is not the case right now. If there are massive amounts of unemployed resources and if expected deficits are not undermining confidence, then there is a very strong case for making today's spending level higher and today's tax levels lower in order to create jobs and put the unemployed to work.

So I don't think Bob...

Congratulations to the Obama Economic Policy Team!

Robert Schroder:

House sends $26 billion state aid bill to Obama: WASHINGTON (MarketWatch) -- House lawmakers voted to approve $26 billion in aid to states on Tuesday during a rare one-day summer session called by Democratic leaders. The vote was 247-161...

An impressive accomplishment: Sisyphus has succeeded...