The Econ blogs have been all aflutter the last 2 weeks since Obama first floated Larry Summers as a possible successor to Bernanke. The predominant reaction started out lukewarm and went down from there as people combed the record for Summers' prior monetary positions. Interestingly, the anti-Summers position (and its usually flip side, pro Janet Yellen) appears to cross ideological boundaries, uniting the Krugmanites with the neo-monetarists.
As far as I can tell, no one has surfaced with a full-throated defense of Summers, which I suppose not surprising given the controversy that surrounds him. Personally, I think Summers is terrific in a lot of ways, and yet I agree that he would be a much less than optimal Fed chair.
The opposition to Yellen, on the other hand, appears to arise from the following groups.
1) Goldbugs
2) Austrians
3) Ignoramuses
As an example of the latter category, take this editorial from the reliably execrable New York Sun. It is one of the worse pieces of editorial journalism I have every had the misfortune to read: http://www.nysun.com/editorials/the-female-dollar/88357/
QuoteWhat is the world to make of the fact that as America approaches the 100th anniversary of the Fed the big question is whether the next chairman will be a woman? The Times headline is, "In Tug of War Over New Fed Leader, Some Gender Undertones." It characterizes the battle to succeed Ben Bernanke, who is widely expected to depart after his current term, as being between Mrs. Yellen, a former president of the San Francisco Federal Reserve Bank, and Lawrence Summers, an acolyte of Treasury Secretary Rubin. Or, as the Times puts it, "between the California girls and the Rubin boys."
Are we entering the era of the gender-backed dollar? We don't discount the issue of discrimination against women in America or the importance of cracking the glass ceilings. Your editor has spent a career cheering on high octane women. But what good is a gender-backed dollar going to do in an era of fiat money? The debate about the next Fed chairman has been conducted absent any attention to the question of whether America, or the world, is being well-served by a system in which the nation's money is convertible into nothing other than other pieces of fiat money.
We know how we are going to measure Mr. Bernanke's performance — by the value of the dollar entrusted to his care by the Congress. He may reclaim things between now and the end of his tenure in office, but as things now stand his tenure has been a disaster. The value of the dollar, at but a 1,333rd of an ounce of gold, is substantially less than half of the 568th of an ounce of gold it was valued at on the day Mr. Bernanke acceded to the chairmanship of the Fed. Would this record have been any better were he a woman? Where does that leave Governor Yellen?
The Times characterizes her as "one of three female friends, all former or current professors at the University of California, Berkeley, who have broken into the male-dominated business of advising presidents on economic policy." The other members of the triumvirate are Christina Romer, who headed President Obama's first Council of Economic Advisers, and Laura D'Andrea Tyson, who had the same post under President Clinton. None of them, in so far as we're aware, has made it her business to plump for an end to the system of fiat money.
. . .
As the 100th anniversary of the Fed approaches the Joint Economic Committee of the Congress has been nursing a bill to establish a Centennial Monetary Commission. The idea would be to make a formal assessment of the Fed as it commences its second century. It struck us as a terrific idea, but the prognosis it is given from the Web site govtrack.us is a 14% chance of getting out of committee and a 2% chance of being enacted. Maybe the Joint Economic Committee could expand its bill to take in the question of whether the collapse of the dollar follows from the fact that it has been managed for the past century by men. It could be that Thurber was onto something.
The Sun's grotesquely patronizing and inane invocation of gender in this context does inadvertantly highlight a pertinent fact: two of the most eminently qualified candidates for the job -- Yellen and Christy Romer -- happen to women. Both more so than Summers who despite his unquestionable intelligence and broad experience is far from being an expert in monetary economics. Of course it doesn't help that the Sun begins from the obviously false premise the the purpose of the Fed is to defend the value of the currency. I suppose they are offended that a woman (of all genders) would not be as dazzled by the glint of gold as the mental midgets that populate their editorial board.
HAIL PATARICHY
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
Bernanke and Obama are praying that shit doesn't happen until after their successors take over.
Anyone could say that about anyone. Or do you have some particular "shit" in mind?
Quote from: The Minsky Moment on July 29, 2013, 06:59:40 PM
The Sun's grotesquely patronizing and inane invocation of gender in this context does inadvertantly highlight a pertinent fact: two of the most eminently qualified candidates for the job -- Yellen and Christy Romer -- happen to women. Both more so than Summers who despite his unquestionable intelligence and broad experience is far from being an expert in monetary economics. Of course it doesn't help that the Sun begins from the obviously false premise the the purpose of the Fed is to defend the value of the currency. I suppose they are offended that a woman (of all genders) would not be as dazzled by the glint of gold as the mental midgets that populate their editorial board.
But it's not a traditional gender role, MM. DERFETUS GIVES IT :thumbsup: :thumbsup:
For the longest time I thought the Federal Reserve was a federal agency... Why isn't it the case? I mean as screwed as a bureaucratic agency can be - it's always preferable to a private organization when it comes to a strategic role like monetary regulation no?
G.
Quote from: Grallon on July 29, 2013, 08:15:19 PM
For the longest time I thought the Federal Reserve was a federal agency... Why isn't it the case? I mean as screwed as a bureaucratic agency can be - it's always preferable to a private organization when it comes to a strategic role like monetary regulation no?
The Fed's not a private organization. It's a public organization with a public charter and a board appointed by the president.
It is, however, considered to be independent of the executive branch. The rationale for this is to insulate the board from short-term political pressure to inflate away unemployment and/or inflate our way to growth.
Quote from: Grallon on July 29, 2013, 08:15:19 PM
For the longest time I thought the Federal Reserve was a federal agency... Why isn't it the case? I mean as screwed as a bureaucratic agency can be - it's always preferable to a private organization when it comes to a strategic role like monetary regulation no?
G.
:unsure:
Quote from: Phillip V on July 29, 2013, 07:09:10 PM
Bernanke and Obama are praying that shit doesn't happen until after their successors take over.
As opposed to the previous 42 Presidents who prayed that everything would go wrong while they were in office.
Quote from: Valmy on July 29, 2013, 10:26:00 PM
Quote from: Phillip V on July 29, 2013, 07:09:10 PM
Bernanke and Obama are praying that shit doesn't happen until after their successors take over.
As opposed to the previous 42 Presidents who prayed that everything would go wrong while they were in office.
Be more specific.
Quote from: Phillip V on July 29, 2013, 10:29:11 PM
Quote from: Valmy on July 29, 2013, 10:26:00 PM
Quote from: Phillip V on July 29, 2013, 07:09:10 PM
Bernanke and Obama are praying that shit doesn't happen until after their successors take over.
As opposed to the previous 42 Presidents who prayed that everything would go wrong while they were in office.
Be more specific.
James Buchanan prayed that everything would go wrong, but he's pretty much the only one who did.
Quote from: Razgovory on July 29, 2013, 11:20:38 PM
Quote from: Phillip V on July 29, 2013, 10:29:11 PM
Quote from: Valmy on July 29, 2013, 10:26:00 PM
Quote from: Phillip V on July 29, 2013, 07:09:10 PM
Bernanke and Obama are praying that shit doesn't happen until after their successors take over.
As opposed to the previous 42 Presidents who prayed that everything would go wrong while they were in office.
Be more specific.
James Buchanan prayed that everything would go wrong, but he's pretty much the only one who did.
There are some that disagree with that assessment Good Sir. :bowler:
http://books.google.co.kr/books?id=CHUxm1szwE0C&redir_esc=y
Did you just reference a book published in 1866?
Quote from: Valmy on July 29, 2013, 11:49:11 PM
Did you just reference a book published in 1866?
Take a look at who wrote that book. ;)
Quote from: jimmy olsen on July 30, 2013, 12:30:49 AM
Quote from: Valmy on July 29, 2013, 11:49:11 PM
Did you just reference a book published in 1866?
Take a look at who wrote that book. ;)
Ah ok :lol:
Your link had everything in Korean which confused me.
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
Quote from: DGuller on July 30, 2013, 08:26:15 AM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
I don't know, those people genuinely scare me.
One of my concerns is the devaluing of the dollar that's been going on since prior to the Obama admin. I recall concern over it during the Bush admin even when the economy was going ok. No one seems to put too much concern in that, yet we've seen in the news how there's talk of shifting away from the dollar as a result, such as from OPEC, plus inflation worries. I guess it's a wait and see, how much we get hit by inflation and what the impact will be from of the dollar's devaluation. Via his QE programs Bernanke has been pumping large sums of newly minted cash to bolster the economy for a long time now, further eroding the dollar's value. I don't know but I fear that this idea has been good short term but may cause many negatives long term. I guess what he's been doing has bolstered the snail's pace of recovery but worry about the price to pay later on.
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
Quote from: DGuller on July 30, 2013, 08:26:15 AM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
I don't know, those people genuinely scare me.
Lots of people scare me. It doesn't mean that I can just have them shot, as much as I want to (not in New Jersey anyway).
Quote from: KRonn on July 30, 2013, 08:36:00 AM
One of my concerns is the devaluing of the dollar that's been going on since prior to the Obama admin. I recall concern over it during the Bush admin even when the economy was going ok. No one seems to put too much concern in that, yet we've seen in the news how there's talk of shifting away from the dollar as a result, such as from OPEC, plus inflation worries. I guess it's a wait and see, how much we get hit by inflation and what the impact will be from of the dollar's devaluation. Via his QE programs Bernanke has been pumping large sums of newly minted cash to bolster the economy for a long time now, further eroding the dollar's value. I don't know but I fear that this idea has been good short term but may cause many negatives long term. I guess what he's been doing has bolstered the snail's pace of recovery but worry about the price to pay later on.
What is meant by "the devaluing the dollar"? The dollar/euro rate today stands at almost exactly the same level as it did on January 1, 2007. The dollar gained significantly against the pound furing the same period. It has fallen againt the Yen and the Swiss Franc but not by enormous amounts (about 20% over six years). In short, there is no reason to think the dollar has devalued. To the contary, the dollar has maintained its value as against baskets of typical consumer goods (like in the CPI) quite well. The claim of devaluation can only be sustained by comparison to highly volatile commodities like gold. And why is that comparison relevant?
As for QE, the program is not as ambitious as some of the more hysterical sectors of the press might indicate. Qe2 involved $600 billion in Treasury purchases. QE3 involved $40 billion in purchased a month. It sounds like a lot of money. But put it all together and it is just over $1 trillion over a 3 year period, as compared to GDP of over $45 trillion, and M4 (monetary aggregate) of over $17-18 trillion at any given time. In addition, it isn't really accurate to refer to QE as printing money, in the way that say Zimbabwe would just roll more bills off the printing press. What the Fed was really doing in QE2 was exchanging one kind of money (Fed reserves) for another kind of slightly less liquid money (T bills). QE3 is a little more aggressive because the Fed is buying agency bonds but in both cases the assets being acquired have some money-like characteristics in that they are commonly used as collateral to support extensions of credit and financial leverage.
In any case, the real issue of interest is the overall quantity of money, of which the Fed can only indirectly influence. The total quantity of money is not determined by the Fed, but is the product of credit decisions made in the financial sector. QE is not really designed to increase the money supply directly - even at the billions per month the Fed is spending, that would just be the a drop in the bucket. What QE is designed to do is send a signal to the private economy of the Fed's commitment to support and accomodate economic recovery. But so far, lending activity has not revivied strongly. The broad monetary aggregates remain well below trend. And therefore inflation has not materialized, and will not materialize unless US businesses begin borrowing and investing again on a pre-crisis scale.
Of course, if the economy turns a corner and there is a sudden investment boom, the Fed may have to act quickly to dampen inflation. But that isn't the horizon now. We can deal with that possibility if and when it arises.
Quote from: DGuller on July 30, 2013, 08:37:32 AM
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
Quote from: DGuller on July 30, 2013, 08:26:15 AM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
I don't know, those people genuinely scare me.
Lots of people scare me. It doesn't mean that I can just have them shot, as much as I want to (not in New Jersey anyway).
I'm not saying we should shoot them. Just put them in the same place as other people with dementia.
Is this "da Fed"?
Quote from: Razgovory on July 30, 2013, 09:43:57 AM
I'm not saying we should shoot them. Just put them in the same place as other people with dementia.
:hmm: I guess we could do that.
Quote from: Razgovory on July 30, 2013, 09:43:57 AM
Quote from: DGuller on July 30, 2013, 08:37:32 AM
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
Quote from: DGuller on July 30, 2013, 08:26:15 AM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
I don't know, those people genuinely scare me.
Lots of people scare me. It doesn't mean that I can just have them shot, as much as I want to (not in New Jersey anyway).
I'm not saying we should shoot them. Just put them in the same place as other people with dementia.
Languish is full.
:pinch: :XD: :lmfao:
Minsky, thanks for the cogent summary of things. I had been under the impression that the dollar's value was falling, and had been for some time. Been hearing such talk since Bush days. Such as the talk of OPEC using another currency, or several currencies and not just the dollar, to price oil. Maybe some of that is over-hyped.
As for the QEs, that makes better sense. I also had the thought that the amount that was being printed was relatively small compared to GDP for instance, but given the drum beats of doom and inflation it's hard to know what is what.
We'll see how the inflation goes. I've heard both ways on that, that it shouldn't really be an issue, and others saying it would be. I just remember the bad old Carter days, heavy inflation and borrowing interest rates into the mid teens. Bad old financial days and brings back some bad memories that I don't want to see repeated.
The 70s were a very different story.
In the early 70s, nominal GDP growth was running conistently at above 8.5 percent and yet the Fed remained accomodative.
In contrast, we are now entering our sixth consecutive year of nominal GDP growth at 4 percent or below.
Quote from: KRonn on July 30, 2013, 10:23:08 AM
As for the QEs, that makes better sense. I also had the thought that the amount that was being printed was relatively small compared to GDP for instance, but given the drum beats of doom and inflation it's hard to know what is what.
You have to consider the source of the drum beats of doom and inflation. It comes from people who have been wrong about pretty much every single thing since the crisis started. There is a time for considering both sides of the issue, and there is a time to realize that one of the sides can't predict when the sun will rise tomorrow.
Would the dollar falling in value be a bad thing? I'm not talking about falling into worthlessness, but losing some value compared to the Euro, Yen, and whatever the hell the Chinese have.
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
I don't know, those people genuinely scare me.
Raz: Threatened By Non-Violent Fringe Ideologies
Quote from: DGuller on July 30, 2013, 08:26:15 AM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
You can never get rid of stimulus once it starts, eh? :D
Quote from: Ideologue on July 30, 2013, 12:20:40 PM
Quote from: DGuller on July 30, 2013, 08:26:15 AM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
I disagree. The unmitigated success of that policy would justify the system of putting people into camps, and encourage its expansion.
You can never get rid of stimulus once it starts, eh? :D
:hmm: Sounds like something a hard money nut might say. You're probably not a hard money nut, but I'll keep you in mind in case I'm short of my quota.
Quote from: fhdz on July 30, 2013, 12:18:12 PM
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
I don't know, those people genuinely scare me.
Raz: Threatened By Non-Violent Fringe Ideologies
Yeah, who would have thought that a person who is legally disabled is frightened by the prospect of people wanting to create a monetary system where the government won't be able to pay for services.
Quote from: Razgovory on July 30, 2013, 05:51:36 PM
Quote from: fhdz on July 30, 2013, 12:18:12 PM
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
I don't know, those people genuinely scare me.
Raz: Threatened By Non-Violent Fringe Ideologies
Yeah, who would have thought that a person who is legally disabled is frightened by the prospect of people wanting to create a monetary system where the government won't be able to pay for services.
The point is that you might as well be "genuinely scared" by people who think the world is run by lizard people. They aren't going to gain a foothold anywhere important, ever. Life's too short to be afraid of imaginary things.
I got into this thread hoping for some House Davion bashing. :mad:
Quote from: Tonitrus on July 30, 2013, 07:18:55 PM
I got into this thread hoping for some House Davion bashing. :mad:
Clans suck.
Quote from: Tonitrus on July 30, 2013, 07:18:55 PM
I got into this thread hoping for some House Davion bashing. :mad:
Fucking Victor...
Quote from: fhdz on July 30, 2013, 05:59:59 PM
Quote from: Razgovory on July 30, 2013, 05:51:36 PM
Quote from: fhdz on July 30, 2013, 12:18:12 PM
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
I don't know, those people genuinely scare me.
Raz: Threatened By Non-Violent Fringe Ideologies
Yeah, who would have thought that a person who is legally disabled is frightened by the prospect of people wanting to create a monetary system where the government won't be able to pay for services.
The point is that you might as well be "genuinely scared" by people who think the world is run by lizard people. They aren't going to gain a foothold anywhere important, ever. Life's too short to be afraid of imaginary things.
What do you base this on?
Quote from: Razgovory on July 30, 2013, 07:38:40 PM
Quote from: fhdz on July 30, 2013, 05:59:59 PM
Quote from: Razgovory on July 30, 2013, 05:51:36 PM
Quote from: fhdz on July 30, 2013, 12:18:12 PM
Quote from: Razgovory on July 30, 2013, 08:30:36 AM
I don't know, those people genuinely scare me.
Raz: Threatened By Non-Violent Fringe Ideologies
Yeah, who would have thought that a person who is legally disabled is frightened by the prospect of people wanting to create a monetary system where the government won't be able to pay for services.
The point is that you might as well be "genuinely scared" by people who think the world is run by lizard people. They aren't going to gain a foothold anywhere important, ever. Life's too short to be afraid of imaginary things.
What do you base this on?
A modicum of common sense.
You don't have to gain power to gain influence.
GOP is seriously looking at the issue. I know the Gold standard is a plank in the platform for the Republican party in at least one state (Iowa). The idea is getting serious traction.
Quote from: Razgovory on July 30, 2013, 08:54:57 PM
GOP is seriously looking at the issue. I know the Gold standard is a plank in the platform for the Republican party in at least one state (Iowa). The idea is getting serious traction.
Okay Raz. Let me know when we've done away with the Federal Reserve and moved to an asset-based currency, will you? I'll be waiting patiently.
That would be a bit too late wouldn't it?
Quote from: Razgovory on July 30, 2013, 09:08:14 PM
That would be a bit too late wouldn't it?
I can see how this plays well into your psychoses.
Quote from: fhdz on July 30, 2013, 09:08:48 PM
Quote from: Razgovory on July 30, 2013, 09:08:14 PM
That would be a bit too late wouldn't it?
I can see how this plays well into your psychoses.
Yes, far more rational to not show concern about someone doing something extremely dangerous until he actually causes a catastrophe.
Quote from: Razgovory on July 30, 2013, 09:11:17 PM
Quote from: fhdz on July 30, 2013, 09:08:48 PM
Quote from: Razgovory on July 30, 2013, 09:08:14 PM
That would be a bit too late wouldn't it?
I can see how this plays well into your psychoses.
Yes, far more rational to not show concern about someone doing something extremely dangerous until he actually causes a catastrophe.
Good idea. Let's hear it for the Thought Police!
I've met many people who have been locked up for the way they think.
Quote from: fhdz on July 30, 2013, 09:03:54 PM
Quote from: Razgovory on July 30, 2013, 08:54:57 PM
GOP is seriously looking at the issue. I know the Gold standard is a plank in the platform for the Republican party in at least one state (Iowa). The idea is getting serious traction.
Okay Raz. Let me know when we've done away with the Federal Reserve and moved to an asset-based currency, will you? I'll be waiting patiently.
You're on the wrong side of this one, old buddy. Goldbugs--well, the entire anti-Keynesian crowd--are a serious threat to this country. Source: THE LAST FIVE FUCKING YEARS.
Yeah... I'm not sure that the argument that goldbugs, Austrian school followers, and ignoramuses won't harm the American economy because "common sense says they won't have any influence" (that's a rephrasing) is that convincing.
*shrug* I very much doubt we're switching currencies any time soon.
If you think goldbugs and inflationistas aren't highly aligned groups, if not often the same people, you're wrong.
I don't think it really matters, does it? The modern economy is built on sand and will eventually collapse, but there's no real backing for the goldbug nonsense. Just because it has to fall apart someday doesn't mean that it has to be today, and nobody has much appetite for the enormous amount of poverty and human suffering in the civilized world that would be the result of blowing up modern economics.
Quote from: Ideologue on July 30, 2013, 10:16:22 PM
You're on the wrong side of this one, old buddy. Goldbugs--well, the entire anti-Keynesian crowd--are a serious threat to this country. Source: THE LAST FIVE FUCKING YEARS.
Neo-Keynesians have lost sight of the purpose of Keynesian stimulus, and think of deficit spending in terms of borrowed consumption, rather than pump priming.
And of course in the last five years we have had monumental amounts of Keynesian deficit spending.
Have we? Where are all the Obamajobs?
And no, it's very much pump priming so that aggregate demand can get back to its proper level.
That said, there's a serious question whether Keynesian (or neo-Keynesian) economics is taking into account the structural changes; I'll cop that I mostly know the modern science of economics thru Krugman, and that guy is just in the past few months starting to grapple with some issues that seem pretty obvious to me.
Quote from: Ideologue on July 30, 2013, 11:33:31 PM
And no, it's very much pump priming so that aggregate demand can get back to its proper level.
You can't really believe that, that one day things are just going to pop back to normal. It's not going to happen. Everything is going to be shitty until the stars burn out.
Quote from: Ideologue on July 30, 2013, 11:33:31 PM
Have we?
Of course. Deficits starting out at 14% of GDP. Still running a deficit of 4.5%.
Quote from: Ideologue on July 30, 2013, 11:33:31 PM
Have we? Where are all the Obamajobs?
And no, it's very much pump priming so that aggregate demand can get back to its proper level.
That said, there's a serious question whether Keynesian (or neo-Keynesian) economics is taking into account the structural changes; I'll cop that I mostly know the modern science of economics thru Krugman, and that guy is just in the past few months starting to grapple with some issues that seem pretty obvious to me.
Only so much a government stimulus can accomplish on its own, though. Zombie Keynes himself can't force the private sector to spend the money they're hoarding; they've waited 5 years, they can wait 3 more. Or 4 after that, and another 4 after that and so on until Tag Romney finally wins the White House.
Quote from: Admiral Yi on July 30, 2013, 11:48:04 PM
Quote from: Ideologue on July 30, 2013, 11:33:31 PM
Have we?
Of course. Deficits starting out at 14% of GDP. Still running a deficit of 4.5%.
How does that compare to contraction at the state level?
Quote from: Ideologue on July 30, 2013, 11:51:03 PM
How does that compare to contraction at the state level?
Pretty sure no state is running a surplus.
No, but fed spending has increased while state spending has receded.
Additionally: the running deficit, such as it is, is in large part thanks to the collapse of the tax base during a recession, while entitlement expenditures automatically increased. I'm not sure food stamps and UI count as a deliberate "stimulus."
Quote from: Admiral Yi on July 31, 2013, 12:10:40 AM
Quote from: Ideologue on July 30, 2013, 11:51:03 PM
How does that compare to contraction at the state level?
Pretty sure no state is running a surplus.
http://www.businessinsider.com/27-states-project-budget-surplus-by-the-end-of-the-year-2012-6
There might be a few.
Quote from: Ideologue on July 31, 2013, 12:20:30 AM
No, but fed spending has increased while state spending has receded.
Additionally: the running deficit, such as it is, is in large part thanks to the collapse of the tax base during a recession, while entitlement expenditures automatically increased. I'm not sure food stamps and UI count as a deliberate "stimulus."
Keynesian theory is not dependent on the level of spending, rather on the amount of spending that is financed by borrowing. If the public sector were 80% of GDP (i.e., Cuba) one could still run at a surplus and be contractionary in Keynesian terms.
Quote from: Jacob on July 30, 2013, 10:34:52 PM
Yeah... I'm not sure that the argument that goldbugs, Austrian school followers, and ignoramuses won't harm the American economy because "common sense says they won't have any influence" (that's a rephrasing) is that convincing.
:yeah: Fahdiz is clearly picking on Raz on inertia, and not because he has a good argument.
Speaking of Silver, I've lost 10 bucks an ounce since I let a friend repay a debt in Silver. TEN BUCKS AN OUNCE. WHARGARBLL.
Quote from: garbon on July 31, 2013, 09:17:27 AM
Quote from: Ed Anger on July 31, 2013, 08:20:58 AM
since I let a friend repay a debt in Silver.
WTF?
Ed Anger, SVP, Bazaar Finance and Administration.
Quote from: garbon on July 31, 2013, 09:17:27 AM
Quote from: Ed Anger on July 31, 2013, 08:20:58 AM
since I let a friend repay a debt in Silver.
WTF?
I didn't know commodity prices were going to go into the toilet.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fwww.dreamomania.info%2Fdreamdictionary%2Fwp-content%2Fuploads%2F2012%2F02%2FShrug.jpg&hash=5d834b993893fd5a1a2761ffeb6dafbfdaf0a48a)
I did buy a shitload of ammo for a bit of it. LOL BARTER SYSTEM
Any good stuff yet from any non-crazies either in favor of or criticizing either Yellen or Summers?
John Taylor, inventor of the "Taylor Rule" for central bank management, and with impeccable conservative credentials - just expressed a preference Yellen over Summers on his blog. It was far from a full-throated endorsement for Yellen but a clear vote over Summers.
http://economicsone.com/2013/07/29/about-rules-based-monetary-policy-summers-versus-yellen/
Quote from: Ideologue on July 30, 2013, 11:33:31 PM
Have we? Where are all the Obamajobs?
They are there.
Let's say the response to 2008 had been to do all the wrong things, like we did in 1929-30. Then we could have well seen the 25% unemployment rates we say then.
Let's say we didn't do that but there was no TARP, no QEs and no stimulus. Then we would have see unemployment go well abvoe 10%, which didn't happen.
Avoiding a "worse bad" may not look spectacular but the effects are very meaningful.
Quote
"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists."
Ernest Hemingway, The Next War
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
Quote
"There are many who do not know they are fascists but will find it out when the time comes."
Ernest Hemingway, For Whom the Bell Tolls
Quote from: citizen k on July 31, 2013, 05:30:35 PM
Quote from: Ideologue on July 29, 2013, 07:05:02 PM
I'm not saying that we should put people in camps, but if we were going to start putting people into camps, a professed belief in "hard money" would be a good category to start with.
Quote
"There are many who do not know they are fascists but will find it out when the time comes."
Ernest Hemingway, For Whom the Bell Tolls
Shows what Hemingway knows. There are a lot of different kinds of authoritarians.
Finally a pro-Summers endorsement, from Keynsian Brad Delong:
http://delong.typepad.com/sdj/2013/07/a-slight-preference-for-larry-summers-to-be-federal-reserve-chair.html
However Delong also has positive things to say about Yellen and other candidates.
And his preference for Summers might have something to do with the fact that they have collaborated on papers . . .
On a light note, while checking out the Econ blogs for Fed gossip, came across this amusing passage from Noah Smith on the limited use of gold in a systemic breakdown:
QuoteFirst of all, gold has always had a lot of limitations as a medium of exchange. Most notably, it is relatively easy to steal. To realize this, all you have to do is look at games like World of Warcraft, Diablo, Dungeons and Dragons, or the original Final Fantasy. In those games, gold is the money, and you often get gold not by doing an honest day's work, but by running around and beating people up and taking their gold. In other words, the entire world of modern fantasy role-playing is a subtle joke on gold's unsuitability as a medium of exchange.
I think Smith is wrong on the broader point but that made me smile.
Quote from: Admiral Yi on July 31, 2013, 12:27:32 AM
Quote from: Ideologue on July 31, 2013, 12:20:30 AM
No, but fed spending has increased while state spending has receded.
Additionally: the running deficit, such as it is, is in large part thanks to the collapse of the tax base during a recession, while entitlement expenditures automatically increased. I'm not sure food stamps and UI count as a deliberate "stimulus."
Keynesian theory is not dependent on the level of spending, rather on the amount of spending that is financed by borrowing. If the public sector were 80% of GDP (i.e., Cuba) one could still run at a surplus and be contractionary in Keynesian terms.
My point is twofold: federal borrowing did increase, but in large part to pay for necessary but desultory efforts; and that the adequacy of federal borrowing, and even federal poverty/unemployment assistance programs that have been the bigger part of that deficit spending, has been drastically undermined by the collapse of state spending. It's been a very two steps forward, one step back approach overall. It has clearly not been enough, which is at least partly why we're still in a recession--although as I've said there may be a structural component and I'm not fully onboard the Keynesian train here.
Joan--fwiw, you're correct as usual, but don't you think that saying the U.S. succeeded in avoiding a repeat of the Great Depression is at least somewhat damning with faint praise?
Quote from: Admiral Yi on July 31, 2013, 12:27:32 AM
Keynesian theory is not dependent on the level of spending, rather on the amount of spending that is financed by borrowing. If the public sector were 80% of GDP (i.e., Cuba) one could still run at a surplus and be contractionary in Keynesian terms.
Could you unpack this for me?
Also in the US and the UK hasn't the majority of stimulus efforts been through monetary policy?
Quote from: Ideologue on July 31, 2013, 06:58:42 PM
My point is twofold: federal borrowing did increase, but in large part to pay for necessary but desultory efforts; and that the adequacy of federal borrowing, and even federal poverty/unemployment assistance programs that have been the bigger part of that deficit spending, has been drastically undermined by the collapse of state spending. It's been a very two steps forward, one step back approach overall. It has clearly not been enough, which is at least partly why we're still in a recession--although as I've said there may be a structural component and I'm not fully onboard the Keynesian train here.
You keep going back to the income maintenance argument. This has very little to do with the pump priming theory at the heart of Keynesianism. The pump priming theory runs that government deficit spending will increase overall demand, which in turn will lead to increased business investment to meet the new demand. Which, most would agree, has failed to happen, or at least sufficiently to bring back full employment.
Now one could argue that several years of Greek level deficits were just not enough to prime the pump, what we need are truly Krugmanesque deficits to get the motor running again. What that exposes is that there is a level of faith based thinking underlying the pump priming theory. Why hasn't it worked yet? Because it wasn't big enough. How big does it have to be? We'll know when we get there. How do we know that pump priming works? Because Keynes said so.
Obama's advisors tried to treat pump priming as a scientific principle. Derive the fall in aggregate demand, take an estimate of the multiplier, pump enough Obamastimulus into the economy to replace lost demand. Clunk. Time to go back to academia.
Quote from: Sheilbh on July 31, 2013, 07:11:44 PM
Could you unpack this for me?
Ide was confusing the size of the public sector relative to the economy with the magnitude of Keynesian stimulus, i.e. the deficit relative to the economy.
QuoteAlso in the US and the UK hasn't the majority of stimulus efforts been through monetary policy?
You're comparing trillions of apples vs. trillions of oranges.
Quote from: Admiral Yi on July 31, 2013, 07:34:43 PM
You're comparing trillions of apples vs. trillions of oranges.
How so?
QuoteIde was confusing the size of the public sector relative to the economy with the magnitude of Keynesian stimulus, i.e. the deficit relative to the economy.
What's the relation of Keynesian stimulus and deficit? I don't quite understand.
You're right that Keynesianism isn't the safety net/welfare state element that's something totally different. But that's precisely the criticism that I was making of the stimulus: it should probably be bigger and it should be more focused on useful tax cuts or spending, not unemployment support or aid to the states.
QuoteNow one could argue that several years of Greek level deficits were just not enough to prime the pump, what we need are truly Krugmanesque deficits to get the motor running again. What that exposes is that there is a level of faith based thinking underlying the pump priming theory. Why hasn't it worked yet? Because it wasn't big enough. How big does it have to be? We'll know when we get there. How do we know that pump priming works? Because Keynes said so.
I want a bit more on pump priming.
But it did work. The US and Germany were the countries that passed the biggest stimulus measures and they enjoyed the quickest recoveries. The UK was on that trend too, having posted some solid growth figures, until the coalition government cut all the wrong spending (like the mirror of the US stimulus). Without stimulus I think we'd have been at Great Depression levels of trouble.
Quote from: Ideologue on July 31, 2013, 06:58:42 PM
Joan--fwiw, you're correct as usual, but don't you think that saying the U.S. succeeded in avoiding a repeat of the Great Depression is at least somewhat damning with faint praise?
It's also too easy. It can't be proven wrong. It's like insisting god exists because nobody can prove he doesn't. It's probably true, but it's not a good argument.
Quote from: MadImmortalMan on July 31, 2013, 08:13:06 PMIt's also too easy. It can't be proven wrong. It's like insisting god exists because nobody can prove he doesn't. It's probably true, but it's not a good argument.
Not really. It's like saying certain security policies prevent terrorist attacks, as is demonstrated by the lack of terrorist attacks. Which seems reasonable to me. The major exception is we don't always know about the plots that are prevented. We've a very good idea of the economic situation before TARP, stimulus and QE.
four thoughts applicable to Yi:
1. Keynesianism doesn't advocate running deficits all the time, only in certain circumstances. In other circumstances it advocates running surpluses or at least balance.
2. Related to 1, Greek fiscal policy had nothing to with Keynsianism.
3. Merely being in deficit is not necessarily expansionary. Cutting spending into the throat of a recession is likely to result in continuing deficits because revenues can tank faster than the budget hawks can cut. I.e. Osbornism in the UK is not Keynsianism.
4. Pretty much all macro is faith based in the sense you claim. The Lucas critique cuts in all directions. It is extremely difficult to design and implement a proper controlled experiment to test any broad macro theory.
Quote from: MadImmortalMan on July 31, 2013, 08:13:06 PM
It's also too easy. It can't be proven wrong. It's like insisting god exists because nobody can prove he doesn't. It's probably true, but it's not a good argument.
See 4 in my post above. We can't prove it like the hard sciences but that doesn't put it at the level of theology. There is factual evidence. We can for example compare the results of the economies that did use stimulus against those that didn't are used less and it turns out there is good correlation. We can also do historical comparisons. Of course there are confounding variables, correlation is not causation, etc. But not the same as raw ipse dixit.
Quote from: Sheilbh on July 31, 2013, 07:43:57 PM
How so?
One is dollars of money supply, the other is dollars of GDP.
QuoteWhat's the relation of Keynesian stimulus and deficit? I don't quite understand.
My understanding is that a Keynesian stimulus is a deficit who's stated purpose is to revive business investment. This is clearly different from Joan's understanding, in which the move from a giant deficit to a big deficit is contractionary. I agree that it is contractionary in the sense of income maintenance: a dollar less deficit spending means a dollar less in the pockets of consumers. However the merely big deficit is still aggregate demand (ostensibly spurring on investment) which would not exist in the absence of the deficit.
QuoteI want a bit more on pump priming.
I don't have any more to give you.
QuoteBut it did work. The US and Germany were the countries that passed the biggest stimulus measures and they enjoyed the quickest recoveries. The UK was on that trend too, having posted some solid growth figures, until the coalition government cut all the wrong spending (like the mirror of the US stimulus). Without stimulus I think we'd have been at Great Depression levels of trouble.
If it "did work" then we would be on a self-sustaining full-employment path. What we have is not an example of successful pump priming but rather counter-cyclicle income maintenance.
Quote from: Admiral Yi on July 31, 2013, 08:56:04 PM
If it "did work" then we would be on a self-sustaining full-employment path.
Here terminology rears its head. There are some economists in the broad Keynsian school that might talk about self-sustaining path. But it very concept goes against what Keynes wrote. He rejected the concept of equilibrium and self sustaining paths.
Quote from: The Minsky Moment on July 31, 2013, 09:01:20 PM
Here terminology rears its head. There are some economists in the broad Keynsian school that might talk about self-sustaining path. But it very concept goes against what Keynes wrote. He rejected the concept of equilibrium and self sustaining paths.
He didn't even mention it once in
A General Equilibrium?
Quote from: Sheilbh on July 31, 2013, 08:19:28 PM
Not really. It's like saying certain security policies prevent terrorist attacks, as is demonstrated by the lack of terrorist attacks. Which seems reasonable to me.
QuoteHomer: Not a bear in sight. The Bear Patrol must be working like a charm.
Lisa: That's spacious reasoning, Dad.
Homer: Thank you, dear.
Lisa: By your logic I could claim that this rock keeps tigers away.
Homer: Oh, how does it work?
Lisa: It doesn't work.
Homer: Uh-huh.
Lisa: It's just a stupid rock.
Homer: Uh-huh.
Lisa: But I don't see any tigers around, do you?
Homer: Lisa, I want to buy your rock.
Quote from: Admiral Yi on July 31, 2013, 09:09:34 PM
He didn't even mention it once in A General Equilibrium?
?
General Theory?
Walras and Arrow were the general equilibrium guys,
My bad.
Summers withdrew.
It is sad in a sense as I think he is an impressive person. However, the campaign for him revealed 2 things: the usual ineffectiveness of this WH in building support for appointees, and the fact the Summers himself lacks any real support base either inside or outside Washington.
In this case, IMO it is a good result as the Fed job was not really a good fit for him.
He's an... abrasive person. :)
Quote from: The Minsky Moment on September 17, 2013, 09:09:29 AM
Summers withdrew.
It is sad in a sense as I think he is an impressive person. However, the campaign for him revealed 2 things: the usual ineffectiveness of this WH in building support for appointees, and the fact the Summers himself lacks any real support base either inside or outside Washington.
In this case, IMO it is a good result as the Fed job was not really a good fit for him.
So it'll be Yellen, right? I've trusted to Paul Krugman that she was always the right technocrat for the job.
Quote from: Ideologue on September 17, 2013, 09:34:43 AM
So it'll be Yellen, right?
She is on the inside track. Her only problem is lack of any personal contacts at the WH. A bunch of other former vice-chairs - Blinder, Kohn, Ferguson - are also in play.
I think Summers is a cautionary tale for really intelligent people like me. He shows that even very intelligent people can fuck things up big time if they lack humility or appreciation for the limits of their intelligence.
Quote from: DGuller on September 17, 2013, 09:57:02 AM
I think Summers is a cautionary tale for really intelligent people like me. He shows that even very intelligent people can fuck things up big time if they lack humility or appreciation for the limits of their intelligence.
Humility, thy name is DGuller.
AFAIK, Yellen hadn't even been vetted yet. So Summers withdrawal might have been a great big monkeywrench in the original plan.
Quote
"For my own part," Ms. Yellen said, "I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.'s — I didn't see any of that coming until it happened."
So she's honest. PAUL KRUGMAN SAID GIVE HER THE FUCKING JOB.
Klugman eats feces
KRUGMAN YOU STUPID AUTOCORRECT
:lol:
Does it even matter? Wall Street's going to call the shots anyway.
Might as well appoint a monarch or other useless figurehead.
:lol:
How would the Fed operate if all they cared about was Teh People, Seedy? What would they do differently?
I wouldnt know, I dont do bullshit exercises in rhetoric.
Quote from: CountDeMoney on September 17, 2013, 01:29:18 PM
I wouldnt know, I dont do bullshit exercises in rhetoric.
You don't know what a "properly" operating Fed would look like, but you know they're doing it wrong now. Totally ossum.
I just dont put any stock in it, like you guys who seem to think it even matters.
And people say Liberal Arts students are useless. Aint got shit on Economics types.
Quote from: CountDeMoney on September 17, 2013, 01:40:08 PM
I just dont put any stock in it
I don't know what this means, and you're not going to tell me.
It's like Tamas arguing about religion.. You True Believers are going to keep believing in your little magic show.
That's it. :lol:
Quote from: Ed Anger on September 17, 2013, 09:58:46 AM
Quote from: DGuller on September 17, 2013, 09:57:02 AM
I think Summers is a cautionary tale for really intelligent people like me. He shows that even very intelligent people can fuck things up big time if they lack humility or appreciation for the limits of their intelligence.
Humility, thy name is DGuller.
Dorsey has a lot to be humble about. Remember that time he tried to scam himself into hispanicdom, or tried to run over his own foot for some weird scammy reason?
Quote from: Neil on September 17, 2013, 07:04:23 PM
Quote from: Ed Anger on September 17, 2013, 09:58:46 AM
Quote from: DGuller on September 17, 2013, 09:57:02 AM
I think Summers is a cautionary tale for really intelligent people like me. He shows that even very intelligent people can fuck things up big time if they lack humility or appreciation for the limits of their intelligence.
Humility, thy name is DGuller.
Dorsey has a lot to be humble about. Remember that time he tried to scam himself into hispanicdom, or tried to run over his own foot for some weird scammy reason?
:lol:
I miss Dorsey.
Yellen Has No Clue How to Run Fed: Stockman
http://www.bloomberg.com/video/yellen-has-no-clue-how-to-run-fed-stockman-RnqlDaA3Rm~G4IkxbFwmFA.html#ooid=w4MmdvZTrv3YYtHTiImeN7yaiRS46EY4 (http://www.bloomberg.com/video/yellen-has-no-clue-how-to-run-fed-stockman-RnqlDaA3Rm~G4IkxbFwmFA.html#ooid=w4MmdvZTrv3YYtHTiImeN7yaiRS46EY4)
I guess Bozo wasn't available for comment, so Bloomberg had to settle for David Stockman.
David Stockman is the only man in the US who stood up to Ronald Reagan about his deficits. The man is a profile in courage.
David Stockman caused those deficits. He is at worse a profile in gross hypocrisy, at best a profile in general cluelessness.
That's ridiculous. The deficit is set jointly by the Congress and the president, not by the director of the OMB.
Who wrote Reagan's budget proposals? Not Ronald himself.
The available evidence suggests his Budget Director had a big role . . .
He had a big and widely publicized role in trying to persuade Ronnie to trim his deficits.
Quote from: Admiral Yi on September 23, 2013, 03:00:34 PM
He had a big and widely publicized role in trying to persuade Ronnie to trim his deficits.
Deficits went up under Reagan because defense spending when up and because tax revenue went down after the 81 cuts. Those were budgets developed and proposed by Stockman's OMB.
Like Augustine, Stockman waited to get religion until after sinning.
Death by 81 cuts?
He "proposed" those budgets insofar as he signed off on the official document that the White House presented to Congress. What I'm looking at is the role he took in the internal debates about the budget. It's a matter of public record that he sought to convince Reagan to reduce deficits. If you have some evidence that he had previously argued internally for expanding them, feel free to share.
I don't dispute that within the administration, Stockman argued for additional spending cuts that had no chance of being enacted by Congress or even supported by the administration. I understand he now explains this as the consequence of political naivete or simple incompetence (not understanding the complexities of the budget). That is not a profile in courage to me. The fact is that he stuck around for fourt years, and put his name on budget proposals that expanded the deficits.
The question is this thread is whether his views on monetary policy should be respected. Nothing in his OMB experience or his resignation suggests that. OTOH Stockman is one of the higher profile advocates of a return to the pre-1933 gold standard.
He is a crank.
Quote from: The Minsky Moment on September 23, 2013, 05:15:41 PM
That is not a profile in courage to me.
To argue for doing the right thing, with no support, to the displeasure of your boss, is the quintessence of courage.
Quote from: Admiral Yi on September 23, 2013, 06:32:46 PM
Quote from: The Minsky Moment on September 23, 2013, 05:15:41 PM
That is not a profile in courage to me.
To argue for doing the right thing, with no support, to the displeasure of your boss, is the quintessence of courage.
I once got fired for something like that. I am a profile of courage. :D
Good for you. :cheers:
What was the job?
Quote from: Admiral Yi on September 23, 2013, 07:45:04 PM
Good for you. :cheers:
What was the job?
Burger flipper. Though in retrospect it might have had more to do with the fact I slammed a co-worker's face onto the griddle. In my defense, it wasn't on and he kept calling me "goober".
Quote from: Admiral Yi on September 23, 2013, 06:32:46 PM
To argue for doing the right thing, with no support, to the displeasure of your boss, is the quintessence of courage.
Stockman didn't give a crap about deficits, he wanted to cut spending for its own sake. He was one of the original "starve the beast" theorists. He supported the Kemp-Roth cuts, because in his own words "The plan was to have a strategic deficit that would give you an argument for cutting back the programs that weren't desired." He succeeded in created the "strategic deficit" but despite all his contacts in the House, he failed to convince Congress to restrain spending. That was a fool's errand anyways, because the President he served for was committed to a big ramp up in defense spending, a fact Stockman knew when he took the job. His response to his failure was to use a Washington Post reporter to leak damaging information and attack the Cabinet. Was Reagan displeased? Absolutely. Was there any adverse consequence to Stockman? No. Because Reagan was loyal to him even if he wasn't loyal to Reagan.
There was nothing courageous in the episode. It was the typical spectacle of a Washington player working the system in pursuit of the agenda; the only distinction is that Stockman, secure in the warm glow of Reagan's affection, felt sufficiently confident to backstab his colleagues openly.
Following his famous "education," Stockman served another four years at OMB, each year proposing a budget that increased deficits. I would not say he supported the right thing internally either. The administration was committed to the defense buildup, and with hindsight, that was the right decision. Even without the benefit of hindsight, Stockman knew coming in that defense spending was non-negotiable. So once he was "educated" into learning that supply side budgeting wouldn't work a la Laffer, he should have reversed positions on tax cuts. Of course, he never did so, and the very useful reform of the tax system didn't happen until after he left.
He resgined to take a lucrative job at Salomon and trade in on his government experience and contacts, and so he could make even more money publishing a book attacking the administration from the safety his new private sector sinecure.
I think our definitions of courage may differ.
Heh, I remember Stockman. One of the more fun messes in the Reagan Administration. Went from one of the original Reaganauts to Traitor in a flash, especially when his first book was published.
Joan:
You may be right about Stockman's agenda but that's not how it was generally reported in the media at the time of the woodshed incident, and some time ago he wrote an op-ed for the NYT castigating current Republicans for their addiction to low tax Keynesian stimulus. That definitely is not the position of a starve the beast trickster.
Yellen gets the nod tomorrow.