J. Bradford DeLong's Blog, page 2262

Brad DeLong and Michael Kinsley on the Short- and the Long-Term Deficit: Seeing the Light

Seeing the Light:

In June of 2009 the Congressional Budget Office estimated America's lon-run deficit problem--the 50-year fiscal gap--at 2.6% of the GDP in its "extended baseline" scenario. In June of 2010 its estimate was 0.8%. Between June of 2009 and June of 2010 three things happened to change CBO's estimates: 1. economic conditions deteriorated more than expected; 2. Congress passed and the president signed the 2010 PPACA--health care reform; 3. Congress passed and the president...

Liveblogging World War II: July 6, 1940

Britannica Online:

July 6, 1940: July 6, 1940 - Chancellor Hitler, absent from Berlin since May 10, returned to the city and is welcomed with great enthusiasm as he drove over streets covered with flowers...

Steven Horwitz: Stupidest Man Alive

Steven Horwitz writes:

Are We Suffering from Concealed Inflation?: Those of us who find the more-than-doubling of the Fed's monetary base to be highly troubling have used all kinds of metaphors to explain why it's a problem even though we haven't seen any measurable price inflation yet.... [I:]t also may be that we are suffering from inflation that is not being accurately measured.... I will call it "concealed inflation."...[T:]he Florida's Natural carton is a fraction of an inch wider.&nbsp...

Obama Needs to Clean His House...

Paul Krugman:

Confidence Fairies Have Infiltrated The White House: I was on Good Morning America this not-so-good morning, doing what I could. But I was struck by something that George Stephanopoulos said: he claimed to have been speaking to an administration official who asserted that what we need to get businesses investing is for business to know that the government has stopped — presumably, that means no new spending, no new regulation, whatever. GS is a careful guy, so this must be...

links for 2010-07-05

EG: "That does seem to be the strategy, but I think it's goofy. The average voter is most likely to have job opportunities as a ready heuristic about the state of the economy, not the manufacturing production index. For the White House to frame a fairly depressing report about people's lived experiences as a sign of "continued healing" strikes one of those dissonant notes that we thought Barack...

Karl Marx, First Real Business Cycle Theorist

We see the affinity between Karl Marx and the Pain Caucus in his notes on crises in Theories of Surplus Value. Negative supply shocks and missed collective guesses on what the extent of the market will be in the future create overaccumulation and overproduction. Marx is very clear that the monetary crisis theorists--like John Stuart Mill--must be wrong, and that the system cannot run itself without crises.

In Marx this is one of the reasons why the system is abominable and must be...

Karl Marx the Behavioral Finance Economist

Reaching for yield in a time of low interest rates. Karl Marx:

Neue Rheinische Zeitung Revue: If the new cycle of industrial development which began in 1848 takes the same course... the crisis will break out in 1852. As a symptom that the excess speculation which is caused by overproduction, and which precedes each crisis, will not be long in coming, we can quote the fact that the discount rate of the Bank of England has not risen above 3 per cent for two years....

The additional...

The World We Live in Right Now Is a Keynesian One

Paul Krugman:

Memories Of Scare Tactics Past: [T:]he spring of 2009 was also the period of the great inflation scare, in which everyone from Glenn Beck to Federal Reserve presidents was warning us that an awful surge in prices was just around the corner. Funny how that didn’t happen. Now, everyone makes wrong predictions. But this particular failure goes deeper than just not seeing what was coming. At the heart of the inflation/deflation debate was and is a debate between two visions of...

I Used to Think that Academic Economics Was a Progressive Science. I Now Think I Was Wrong...

We are live at the Economist, as issues that I thought were settled by... 1829 return to haunt us all...

John Stuart Mill warned us in 1884 that:

What was affirmed by Cicero of all things with which philosophy is conversant, may be asserted without scruple of the subject of political economy--that there is no opinion so absurd as not to have been maintained by some person of reputation. There even appears to be on this subject a peculiar tenacity of error--a perpetual principle of...

Slower Growth Forecast

From Macro Advisers:

[T:]he unemployment rate is expected to be one-tenth higher at the end of this year and two tenths next year, at 9.6% and 8.4%, respectively. Projected core PCE inflation is expected to be slightly higher than in last month’s forecast: two tenths higher this year, at 1%, and one tenth in 2011, at 0.9%...