Those Lying Taliban!
I was listening to NPR on the way to work, and in the top-of-the-hour news update they were matter-of-factly discussing a helicopter crash in Afghanistan that killed 9 Americans. Not an exact quote, but the announcer said something like this:
“The cause of the crash is unclear. Taliban spokespersons claim that they shot down the helicopter, but Pentagon officials deny that hostile actions had anything to do with the crash. Taliban spokespersons often exaggerate their claims.”
I have no problem with the above, except that to give the reader a full picture, shouldn’t she have also added, “…and Pentagon spokespeople often lie through their teeth”?
Krugman Moves Me to Comment
I very rarely post comments on Krugman’s blog, but in response to this:
A great piece about Wall Street rage by Max Abelson. Basically, they feel underappreciated. How dare Obama talk about fat cats, or suggest that runaway finance had something to do with the mess we’re in?
…
Did our nation’s elite always consist of such spoiled brats? I don’t think so. We’re in the new Gilded Age — but while the old robber barons said “The public be damned”, the new ones say “Ma! He’s looking at me funny!”
…I felt compelled to check the comments. There was nothing but 14 people giving Krugman high-fives. In righteous indignation I submitted this:
Am I the only one who finds it odd that the winner of the Nobel (Memorial) Prize, who has a regular NYT column and appears on the Sunday talk shows, and I’m guessing makes at least $400,000 a year–but I stand open to correction–is casting himself as an opponent of the “elite”?
That will teach ’em. Problem solved.
Gold At $1297…
Apparently the Fed’s announcement didn’t reassure people that dollar strength was Job 1…
Which Profession Causes More Damage, Economists or Psychologists?
I think we economists inflict more suffering when measured in total–say, damage per economist–but in terms of individually screwing with people who are completely at your mercy, it’s hard to beat psychologists/psychiatrists. How’s this (HT2 Tyler Cowen):
In an effort to dominate the [Chilean] miners, the team of psychologists led by Mr Iturra has instituted a series of prizes and punishments. When the miners behave well, they are given TV and mood music. Other treats – like images of the outside world are being held in reserve, as either a carrot or a stick should the miners become unduly feisty.
In a show of strength, the miners have at times refused to listen to the psychologists, insisting that they are well. ”When that happens, we have to say, ‘OK, you don’t want to speak with psychologists? Perfect. That day you get no TV, there is no music – because we administer these things,”’ said Dr Diaz. ”And if they want magazines? Well, then they have to speak to us. This is a daily arm wrestle.”
I know you’re probably thinking, “Is this translated from Spanish or something? What’s up with the “effort to dominate the miners”? I’d like to check the original source, because surely Bob is exaggerating something here.”
By all means, read the original.
The Inaugural Issue of the Lara-Murphy Report Is Here!
This actually turned out much cooler than I had hoped. Here’s the cover:
If you go to this site, you can click on some other samples from the issue. Order it today!
Why Brad DeLong Is More Honest Than Paul Krugman
Both of them have been mocking the self-pitying rich, which (in and of itself) is fair enough. (I.e. nobody who makes more than $400,000 should be publicly complaining about his difficult financial position, unless it’s tongue-in-cheek.)
But DeLong has the decency to say:
I know how [people in the top 1% of income earners] feel. My household income is of the same order of magnitude [as] theirs (although somewhat less [than $455,000/yr]) and we too had to juggle assets quickly when it developed that an error in Reed College’s housing system had caused them not to charge us $5,000 that we owe. We too have chosen to put our income in places (tax-favored retirement savings vehicles, building equity, housing, private college costs) where we think it is better used than $200 restaurant meals, $1000 a night resort hotel rooms, or $75,000 automobiles. But I don’t think that I am not rich.
OK, fair enough Prof. DeLong.
Now check out Krugman’s class warfare: “You see, the rich are different from you and me: they have more influence.”
It’s true, I couldn’t get an exact figure on Krugman’s income. But he must make a decent chunk of change from his NYT column, and I would be surprised if he couldn’t do a monthly let’s say every other month, after-dinner talk and charge $25,000, for an annual income of $150k right there.
Plus he’s got book royalties, and whatever Princeton pays him.
Plus, he won the Nobel (Memorial) Prize in economics a few years ago. I couldn’t figure out exactly what the cash award was, but unless he put it all in Vegas real estate, he should be drawing a nice income from that too…
Analogies for the Crash in Austrian Business Cycle Theory
Someone (who may or may not wish to reveal himself in the comments) emailed me and asked for some clarification regarding the Austrian view of the business cycle. In my sushi economy, it’s easy enough to see what the mistake is, and how the capital structure becomes misaligned during the artificial boom (provoked by advice from Paul Krugman).
But in a modern industrial economy, what exactly are the Austrians saying? That people who own trucks forget to have the oil changed? That seems nuts.
Here’s what I said (and you can tell it’s authentic since I didn’t bother with that superfluous SHIFT key):
It’s funny you mention that analogy, because that’s exactly the one I used in my biz cycle class. I said suppose there’s a guy who owns a fleet of 100 tractor trailers. normally he has 95 of them carrying loads, and 5 getting routine maintenance.
but then 5 of his best customers call him up on the same day with emergency orders, and they offer to pay him 50% premium for the short notice. so he redirects the 5 trucks that are headed to maintenance to turn around and go pick up loads.
for a few weeks he can keep this up, and the profits on his books will be astronomical, if he neglects to write down the capital value of his trucks. but of course once a truck breaks down on the road, he realizes how foolish he has been.
now you’re right, no individual trucker is going to be that stupid. but if the ABCT is right, then the economy as a whole does something like this; it’s as if the guy with the invisible hand *is* being that stupid as he guides all the individuals in the market.
i have struggled with trying to figure it out exactly, myself. it might be like a bunch of high-tech factories start gearing up, and then 3 years into it everybody realizes that the guy making ball-bearings went out of business and we just used the last ball bearings. it will take 3 months to get a new batch produced, and everybody has to stop until then.
does this help?
the other thing, with the housing boom years, i think it was more like this: the chinese were happy to crank stuff out, in exchange for a growing asset base from the us. but then when the us real estate market collapsed, the chinese regretted all the hard work and other resources they had shipped to americans, in exchange for claims on their assets and dollar flows.
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