Mysterious CNBC Blurb on Treasury Auction
I am not being sarcastic, I want someone to explain what the heck this means. Below is the headline and blurb on the front page of CNBC for this story:
TREASURYS HOLD GAINS AFTER
STRONG AUCTION OF 2-YEAR DEBT
US Treasury debt prices held moderately positive after a record auction of two-year notes fetched strong demand but at a higher yield than might have been expected.
Am I missing something? It sounds like they’re saying a lot of people wanted to buy Treasurys at a stable price, after the price was lowered. Am I being too cynical?
We Told You FDIC Wasn’t Really "Insurance"
I could never work for the government. Besides my feelings of guilt, I would simply lack the creativity to come up with stuff like this:
FDIC May Ask Banks for a Bailout
Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.
Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
…
“Sheila Bair would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help,” said Camden R. Fine, president of the Independent Community Bankers. “She’d do just about anything before going there.”Bankers worry that a special assessment of $5 billion to $10 billion over the next six months would crimp their profits and could push a handful of banks into deeper financial trouble or even receivership. And any new borrowing from the Treasury would be construed as a taxpayer bailout that could open the industry to a political reaction, resulting in a wave of restrictions like fresh limits on executive pay.
Any populist furor could be avoided, the thinking goes, if the government borrows instead from the banks.
So when you step back and look at it, what’s happening is that the healthiest banks are pooling their money into a common fund to rescue their weaker peers, in order to keep the public happy with the industry as a whole.
Kind of like what used to happen before the Fed was created.
Glenn Greenwald 1, Bob Murphy 0
Dang, GG put the smackdown on me in the comments of this post.
[Bob Murphy wrote:] “I am going to go out on a limb and say that Glenn Greenwald has listened to Beck’s radio program about as much as I listened to Al Franken’s.”
__________________[Glenn Greenwald answered:] This is false. Over the past 6 months, I’ve watched Glenn Beck’s show more than any other political talk show by far. That’s true for numerous reasons, including the fact that I purposely expose myself to outlets with other views and don’t make comments about things unless I’m certain I know what I’m talking about.
As for Beck’s alleged small-government and anti-corporate sentiments, he was FOR the Wall St. bailout and argued it should be larger — was FOR the Patriot Act and virtually every other policy of empire-building and civil-liberties infringement during the Bush era.
And here’s the video GG linked to. It’s pretty brutal.
I knew Beck had supported the war and Patriot Act, but I didn’t realize he had championed the TARP at the time. (I only really started listening a lot about 9 months ago, I’d say.) That almost impresses me, that he could be so audacious with such a quick flip-flop.
Mainstream Macro’s Ridiculous Apologists
I actually have a ton of “real work” today so this may be my last post (unless gold shoots up $50 or something). First, I wanted to alert you that Floyd Norris has approved a bunch of our comments; some good ones in there from all of you.
Second, Alex Tabarrok has a great post today clarifying the complaint that “economists failed to predict this crisis.” Some big guns have come out and said that not only should they be excused for failing to predict the crisis, but they should be congratulated for predicting that they would fail to predict this and all future crises. (If you think I’m exaggerating to make a joke, read it yourself.) So Tabarrok calls this move for the obvious foul that it is. (Incidentally, Tabarrok is responding to this defense of macro by David Levine. But when I get more time, I have to write a full-blown article on it, it’s so bad.)
For now, let me just alert you to some funny excerpts from a Minnesota economist’s response [.pdf] to all this. Now in contrast to Easterly, Cochrane, and Levine, this particular guy (Kocherlakota) isn’t being ridiculous; I think it’s a fair response to Krugman. However, some of the excerpts are just plain funny:
Once you start using macroeconomic models with heterogeneous agents and frictions, government intervention is almost inevitable.
…
Some macroeconomists use calibration, some use econometrics, and some use both. There’s no real methodological debate left in the field on this issue. What is true is that most people outside of macro do not like calibration. I don’t know why. I spent seven years of my life thinking about whether econometrics was better than calibration … and pretty much decided that the answer is: “it depends”.
…
Why do we have business cycles? Why do asset prices move around so much? At this stage, macroeconomics has little to offer by way of answer to these questions. The difficulty in macroeconomics is that virtually every variable is endogenous – but the macro-economy has to be hit by some kind of exogenously specified shocks if the endogenous variables are to move.
As you can gather from this candor, this particular economist (Kocherlakota) isn’t shouting the wonders of macro from the rooftops. I think he at least understands why someone could wonder if they’ve done anything useful in the last 50 years.
Murphy in Seattle, on Bickering Economists and Unemployment in the Depression
This is the 30-minute talk I gave at the Seattle Mises Circle. To understand one of the opening jokes, you need to know that before my talk, Walter Block gave his. He has distributed a small sheet of paper with a table of present-value calculations at various interest rates and maturities. (E.g. $1 delivered in 2050 would today be worth x cents at an interest rate of y%.) Block used the table to explain the Austrian theory of the business cycle, and how Greenspan’s low interest rates stimulated long-term investments like housing.
Later in his talk, Block was ridiculing the theory that “greed” caused the recent financial crash. He said that greed has always been with us, and also pointed out that “greed is good,” correctly interpreted. Then he said something like, “I mean, we all remember being a little kid and wanting stuff, and I was 6 years old learning about how much money I could have if I would just invest it.”
So with that background, you can enjoy the opening jokes:
And for what it’s worth, this guy thought it was funny.
Frank Rich on Glenn Beck
Apropos of my recent email exchange with Glenn Greenwald, I found this paragraph from a Frank Rich column (HT2LRC) interesting:
“Wall Street owns our government,” Beck declared in one rant this July. “Our government and these gigantic corporations have merged.” He drew a chart to dramatize the revolving door between Washington and Goldman Sachs in both the Hank Paulson and Timothy Geithner Treasury departments. A couple of weeks later, Beck mockingly replaced the stars on the American flag with the logos of corporate giants like G.E., General Motors, Wal-Mart and Citigroup (as well as the right’s usual nemesis, the Service Employees International Union). Little of it would be out of place in a Matt Taibbi article in Rolling Stone. Or, we can assume, in Michael Moore’s coming film, “Capitalism: A Love Story,” which reportedly takes on Goldman and the Obama economic team along with conservative targets.
Rich’s discussion is particularly ironic, since Greenwald had quoted Matt Taibbi himself, explaining why all the tea party and town hall protesters were morons for ignoring the big-business influence in DC.
I am going to go out on a limb and say that Glenn Greenwald has listened to Beck’s radio program about as much as I listened to Al Franken’s. I know some of you are astounded that I even listen to Beck, because you’ve sampled Sean Hannity or Rush Limbaugh, and thinks it’s the same thing.
But no, it really isn’t. Now as I finally admitted to myself by this post, it’s all an act. (Or let’s say, 98.6% an act.) But the act is pretty interesting, for such a mainstream program. Yes, Beck spends a lot of time ranting about ACORN. But how GG can refer to it as the “ACORN ‘scandal'” (i.e. with “scandal” in quotation marks) is beyond me; have you actually seen the video?! It’s unbelievable. It’s like when people flipped out about tax dollars funding that “art” of a crucifix submerged in urine. It’s true, that artist didn’t get as much money as defense contractors. But you can understand why taxpayers would flip out about that, and it would be ridiculous to accuse them of hypocrisy for doing so.
Back to Beck: Yes, he spends a lot of time ripping ACORN, and part of the reason (besides the comedy) is that ACORN is quite obviously an organization that will mobilize to elect Democrats in 2010–and Beck quite proudly says he opposes their agenda. (In other words, Beck’s not making a secret of taking measures on his show to prevent the advancement of the Democratic leadership’s agenda. Nothing hidden on that front.)
But Beck also spends a ton of time ripping Goldman Sachs (remember this?) and General Electric. In fact, anytime he mentions GE, they play a jingle that says, “GE…we bring e-vil to light.”
And yes, GE owns Fox’s competitors, duh. But Greenwald and Taibbi simply do not know what they’re talking about, when they say Glenn Beck focuses his listeners’ ire at poor minorities instead of big corporations.
Last point: What do I mean when I say Glenn Beck is not Sean Hannity + self-deprecating humor? Well, recently Glenn Beck was telling his listeners that it was getting close to the time when they should seriously consider engaging in mass civil disobedience, to go in the streets to protest the takeover of their government by special interests (which included big money guys like Soros, it wasn’t a “codeword for black people”), but that it was essential they do it peacefully like Gandhi. Now OF COURSE you can say, “Oh he’s just saying that for ratings.” Right. But isn’t it interesting that that’s the way he is trying to get ratings, by telling people there comes a point at which they need to start breaking laws? This isn’t the Excellence in Broadcasting Network.
Caplan on Cowen
Bryan Caplan explains that a certain position is held by almost all GMU economists, and 75% of the analysts at Cato. Then he says:
It is not Tyler’s take, as far as I can gather, because as usual Tyler rejects the standard libertarian view in favor of a complex, pluralistic story that satisfies no one but himself. It’s not fair to think that libertarians share Tyler’s view – or vice versa.
God the Father
I think I’ve blogged about this before, but it bears repeating: I understand our relationship to God a lot better, now that I have a child myself.
The most striking example is obedience. I get really frustrated when my son insists on doing something his way, even after I’ve just told him not to. The thing that’s so annoying is that (of course) the reason I warned him about whatever he’s planning on doing, is to help him avoid some calamity he doesn’t anticipate. (It could be something serious, like me telling him to stop jumping in the bathtub, or something trivial, like me telling him we should put the electric toothbrush in his mouth before turning it on.)
Naturally, my son gets really mad at me and thinks I’m drunk on a power trip, issuing completely arbitrary commands. As a matter of principle, he goes ahead and does it his way, and suffers the outcome I had warned about. And obviously, I physically intervene to prevent him from “learning the hard way” about something really bad, like running in the street.
I think the connection between these points and our relationship with the God of the Bible is clear enough that I don’t have to spell it out.
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