1. More on Milton Friedman and the Great Depression.
3. I actually want one of these.
4. Most consecutive yoga positions on a motorcycle.
5. Daytime raves, the culture that is Sweden, hat tip Caleb.
An actual accounting of 7-footers, domestic or global, does not exist in any reliable form. National surveys by the Center for Disease Control list no head count or percentile at that height. (Only 5% of adult American males are 6’3″ or taller.)…
The curve shaped by the CDC’s available statistics, however, does allow one to estimate the number of American men between the ages of 20 and 40 who are 7 feet or taller: fewer than 70 in all. Which indicates, by further extrapolation, that while the probability of, say, an American between 6’6″ and 6’8″ being an NBA player today stands at a mere 0.07%, it’s a staggering 17% for someone 7 feet or taller.
There is much further discussion at the link, and many more ins and outs to ponder.
Recently accepted wage cut for new project, ngdp will go up not down. I am helping to manufacture ngdp, people get with the program.
What did *you* do for nominal gdp today? Just asking.
Non-Twitter note: If my action contributes to a downward spiral of ngdp, wages, and prices, I will be deeply sorry. Apologies in advance.
The industrial countries have a choice. They can act as if all is well except that their consumers are in a funk and so what John Maynard Keynes called “animal spirits” must be revived through stimulus measures. Or they can treat the crisis as a wake-up call and move to fix all that has been papered over in the last few decades and thus put themselves in a better position to take advantage of coming opportunities. For better or worse, the narrative that persuades these countries’ governments and publics will determine their futures—and that of the global economy.
Every paragraph of his piece is excellent, and as I like to say “We are all stagnationists now.” Hat tip goes to The Browser.
Paul Krugman’s post on the topic was revealing, compared especially to the analytic and rhetorical flourish which he applies to criticizing austerity. You can’t fault his IQ or his knowledge of the situation, there simply isn’t much convincing to put forward. Here is Ryan Avent, in a good post but I think it also fails to put forward a workable solution:
What, then, are the alternatives to austerity? Well, first up would be an integration that would help break the diabolical loop now gutting the periphery. Creating a euro-zone-wide safe asset and a euro-zone-wide set of institutions to stand behind damaged banks would help accomplish that. America doesn’t expect Delaware to shoulder the costs of failures of banks headquartered in Delaware. That’s an important contributor to the stability of the American federal system. The euro-zone must recognise that it is the failure to build appropriate euro-zone-wide institutions—equal in scope to the considerations and resources of the central bank—that is contributing to soaring yields around the periphery and creating the illusion of the need for dramatic austerity in places that could do without it.
I call this the “Germany pays for everything and accepts all the risk of moral hazard” approach. Potential German liabilities could run in the trillions of euros and the “ball and chain” lasts forever. I know all about Connecticut and Mississippi, but without a common electorate, not to mention a common national identity, I don’t see how this is possible. Keep in mind that Eurozone-wide deposit insurance in essence serves as an implicit guarantee to the parent national governments as well, for Modigliani-Miller-like reasons.
It is like doing African development policy by suggesting that America send one-third of its gross national product to Mozambique. Maybe it is moral to do so (though I doubt that), but in any case it is not really a policy proposal. Lack of a common identity is a constraint, not a policy choice, except at fairly small margins or at moments of extraordinary cultural transformation (hint: this is not one of them [video], especially when there are seventeen nations involved).
Just to (imperfectly) integrate the relatively small unit of East Germany cost West Germany almost $2 trillion dollars.
By the way, will the periphery nations give much (any?) control over their finances to Germany? Clearly not, and thus we are back to the idea being dead as a doornail.
There is no common fiscal policy without a common electorate, not for long at least.
Ryan Avent also supports looser monetary policy for the eurozone, as do I. It’s worth trying. But keep in mind, the further along is a financial crisis, the more emergency monetary policy takes on a more purely redistributive element. You end up having to stick the money somewhere quite specific and forget about ever getting it back. Nominal reflation helps with some problems when done well in advance of crunch time, but right now it is a question of solvency for many of the parties involved. It’s already ineffective for the ECB to be doing three-year loans to rotten banks at one percent, against very low value collateral, how much more of a boost are we to expect?
Just how much monetary policy needs to be done? At this point, we’re not talking about a move from price stability to say four percent eurozone inflation (which I would nonetheless favor, and favored all the more a year or two ago), rather much more would be required. We’re running up against the same constraints which prevent the de facto Eurobonds from taking off. Revisit the well-known point that in a financial crisis fiscal and monetary policy blur together, and we return to the notion that solutions are based on massive cross-border redistribution. On top of all that, arguably the deflationary pressures in Greece, and possibly Spain, are already past the point of control from the ECB side, given the ongoing collapse in private lending.
Here is my earlier post, Austerity as a substitute for trust. Kevin Drum adds related comment.
Here is a superb piece from Jim Hamilton, hard to excerpt so read the whole thing. Here are comments from Brad DeLong.
Employers [under ACA] save $422 billion if they dump health coverage. Will they?
From Sarah Kliff, here is an argument that the answer will be no. I am less convinced. I believe national effects will be larger than single-state effects (Massachusetts), and that employers will offer their employees some compensation for taking their chances on the subsidized exchanges. I suppose we will see, or then again maybe not.
After Milan, I will be in Bucharest for a few days. Your recommendations are most welcome and I thank you in advance.
Ryan Cooper writes to me:
Hey Tyler, possible blog post topic: I’m wondering how you would explain the situation in South Africa (or other similar countries) with stupendous persistent unemployment–SA has been above 20% since 2000: http://www.tradingeconomics.com/south-africa/unemployment-rate
A few factors I imagine are important:
1) The education system is totally broken in a lot of places. As in, 12th graders can neither read nor write in any language nor figure out 3×3 in their heads.
2) Unions are crazy strong, and have been driving up wages like gangbusters, particularly in the public sector.
3) Minimum wage laws are stringent and have actually led to worker protests: http://www.nytimes.com/2010/09/27/world/africa/27safrica.html?pagewanted=all
4) Inflation hasn’t been TOO bad recently (~6%), but has seen spikes to almost 14 percent not long ago: http://www.tradingeconomics.com/south-africa/inflation-cpi
5) There’s a highly developed sector. On average, whites are far richer than blacks.6) Crime and inequality are incredibly bad.
7) The ANC has won every election in a landslide and is strongly allied with the unions.So how does it tie together? Lots of poorly-educated ZMP layabouts? Wages too high to start sweatshop-style development? Razor wire + electric fence + security guard costs deterring investment? The results of generations of systematic oppression and denial of education? All of the above, plus some?
Just trying to iron out a coherent story. I was a Peace Corps volunteer for two years there and I’m slowly building up my economics knowledge; this question has always fascinated me.
Here is one additional account. Here is an IMF analysis. Here are some World Bank powerpoints. I told him I would try to answer the question, but after a bit of research I don’t find myself getting much further than his suggestions.
Uh-oh:
Eurozone M3 vs loans to the private sector (source: GS)
From SoberLook, here is more. One possible lesson is that the real enemy of monetary policy is collapsing credit markets, not zero short-term rates per se.
That is one of Virginia Postrel’s best books, you can now buy it on Kindle for $2.99. Mine is the second Amazon review, Jerry Brito’s is first.
1. One constructive suggestion for the eurozone; there should be more of this. This is an actual situation requiring actual solutions, not a pond for fighting ideological battles.
2. My favorite Desmond Dekker compilation, and the fiscal effects of the Federal Reserve (significant).
3. Ask Cowen anything (on food), via Andrew Sullivan.
6. The rate of U.S. household formation seems to be rising again.
7. Will this be the most debated book of the year?
ROME — Giuseppe Toniolo, a renowned late 19th and early 20th century lay Italian economist and political theorist, was beatified on Sunday in Rome’s Basilica of St. Paul Outside the Walls, the final step before a formal declaration of sainthood. Among other claims to fame, Toniolo is now the first economist ever beatified by the Catholic church.
Of course many of the early Church fathers, some of whom have become saints, also can be considered to have been economists. In any case, here is the story, and this piece sets him in the context of the German economists of the late 19th century.
For the pointer I thank Patrick Molloy. Here is my earlier blog post, Who are the Catholic Economists?
That’s Ron Paul vs. Paul Krugman, the video and transcript is here, here are a few comments under the fold… Read More →
