Nashville Broadcasters Are a Subversive Bunch
Tonight I’m going to be on FreedomWatch with Judge Napolitano. (Check your local listings!) I kid you not, when the camera guy was setting me up, he said, “I saw your YouTube on green jobs, good job.” He was excited when he learned we were doing Napolitano’s show.
Then after the segment, the guy in the control room came out to shake my hand, and the makeup lady said, “Yeah! Let’s audit them!”
That’s how satellite studios roll in Nashville.
A Vision From Krugman Column Future
Last night I heard some chains rattling and was visited by a spooky economist who spake thusly:
So a lot of the austerians are pointing with glee at the latest BLS figures, showing year/year CPI is up 9.4 percent. Does this mean the deficit hawks have been right all along? Was Dick Armey on the money when he said crowding out would wreck the recovery?
Umm, no. Everyone serious who has looked at the data agrees that this is a one-shot surge in various staples due to the panic over Japan’s reactor meltdown. Apparently the folks at the Heritage Foundation don’t understand psychology.
But as the chart below indicates, core inflation had been behaving just as we evil Keynesians had been predicting, until last April. So unless John Boehner wants to argue that Big Government leads to Big Tsunamis, there’s truly nothing here. It’s demand, stupid.
“Public” vs. Private
Someone posted this on my Facebook. I appreciate the effort, but this guy doesn’t sound anything like me.
If you want the book after hearing this excerpt, here’s the link. And note I am so lazy, I’m not even looking up my Amazon Associate link. I pass the savings on to you, or rather, Amazon.
Why Is Unemployment So High?
I offer some thoughts yesterday at Mises.org. I tried to start from scratch, if you will, and discuss unemployment from a slightly different angle. Some excerpts:
Before offering some explanations for this disturbing situation, we should first clarify what unemployment is. There are different ways of defining the condition, but we can capture the typical understanding by classifying a worker as unemployed when he or she (a) is willing to work at the going wage or salary for some categories of jobs, but (b) can’t find any employer willing to extend the same offer to this particular worker, even though (c) the employer views the worker as interchangeable with other workers already on the payroll.
This last point (c) is important, even though introductory textbooks often omit it. To see why it’s necessary, consider the market for NBA point guards. I would certainly be willing to take the job for the average player’s salary; heck I’d even do it for 10 percent less. But no economist would consider me part of the “supply curve of labor” in this specialized market, because the team owners wouldn’t view me as equivalent to other workers on the payroll. My inability to get a job starting at point guard for the Chicago Bulls is not an example of unemployment.
and
Because of the long-term nature of the employment contract, employers and workers typically spend a great deal of time researching their various options before closing a deal. Depending on the job, employers conduct a multilayered interview process, and workers may apply for dozens or even hundreds of openings.
In light of these considerations, it’s helpful to think of the labor market as analogous to the housing market, as opposed to (say) the market for apples or gasoline. At any given time, the market price doesn’t “clear” the housing market, because there are always some sellers with their houses still “on the market” waiting to find the right buyer.
In that last paragraph, I’m driving at the fact that our standard Supply and Demand models of the labor market are actually misleading. Even in “equilibrium,” there are workers looking for jobs and employers looking for workers. (And yes I know this is the “natural rate” of unemployment; I didn’t discover the concept.)
“Who Do You Say That I Am?”
A quick note to newcomers: Every Sunday I try to have a single post on religious topics. The other six days a week are devoted to secular matters.
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In church today we were going over the temptation of Jesus in the wilderness. Previously I highlighted how Jesus quoted nothing but Deuteronomy in His face-off with the devil, but the assistant pastor today made another interesting observation.
When the devil says, “If you are the Son of God, tell this stone to become bread,” he’s not saying, “Hmm, are you really the Son of God?” Rather, he is challenging him like this: “Since you are the Son of God, why don’t you tell this stone to become bread and feed Yourself?”
The pastor reminded us that elsewhere in the gospels, the people around Jesus–including His own disciples–aren’t sure who He is, and/or they are sure at some points but then falter other times.
In contrast, whenever a demon encounters Jesus, there’s no confusion about His divinity. (The best example is when Jesus sends a legion of demons into a herd of pigs.)
Another point the pastor made: In some accounts, Jesus actually tells the demons to keep quiet about His identity. I’m not sure how to interpret that, but it obviously relates to our discussions on why God doesn’t reveal Himself to us more openly. In other words, I’m saying that we don’t need to look at the physical universe or our own lives to wonder about God being somewhat mysterious in His revelation of Himself; that feature is in the gospel stories, including Pilate’s interrogation of Jesus. In fact, Jesus is so vague that a lot of non-believers claim that Jesus never claims to be God in the gospels.
Two Questions on Japan
This Bloomberg story says the G7 countries’ central banks intervened to weaken Japan’s currency. But what exactly did they do? If the BOJ wants to make the yen fall against the dollar, euro, etc., why doesn’t the BOJ just print more yen and buy more dollars, euros, etc.? I don’t understand what the other G7 banks had to do. If anything, to make it more effective, the BOJ should have told them, “You guys stay out of the currency markets, we are going to start buying your stuff and we don’t want you offsetting our actions.”
More generally, I have been trying to get the death-blow to Scott Sumner’s worldview by looking at economies following natural disasters. I had thought that they would show a drop in nominal GDP, and then I could say, “Aha! So using Sumner’s tools, he would look at these places and conclude that they needed to print more money, since it clearly wasn’t a structural supply-side problem.”
The only flaw in my brilliant plan was that (apparently) the nominal GDP of Haiti went way up after the earthquake, and even the Gross State Product of Louisiana went up after Katrina. So either I’m totally wrong in my intuition–thinking that real output drops so much following a major natural disaster, that even nominal GDP falls–or the influx of charity and the flaws in GDP accounting are masking my brilliance.
Anyway, I would love to see a Scott Sumner prediction on what happens with Japanese nominal/real GDP…
Should It Concern Me that Farrakhan Reads My Stuff?
Robert Wenzel links to this amazing speech by that guy. Of course I’m kidding in the post title; my point is that I thought the circles in which I travel had a unique angle on this stuff, but nope.
It should go without saying, but let’s not take chances: Just because I am surprised by Farrakhan’s accurate take on financial matters, doesn’t mean I endorse everything else he has to say about bankers etc.
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