What Do These People Have in Common?
This may be a bit of an inside baseball post, but my target audience reads this blog, so I’m going ahead with it…
Okay I’m not saying I’m kind of a big deal, I’m just stating the fact that I get a lot of “fan mail.” In particular, people who have hot tips on cutting-edge blog posts or news items will often send me stuff.
What is really amusing is when I’ll get something really off the wall, typically involving people of Jewish descent. Whenever I get these types of emails, they are to me and about 8 other people in the To: field. So I love to open up the address box to see, “When this nutjob decided to email me, what other people did he put in the same category?”
Do y’all know what I’m talking about? Discuss.
(BTW if you recently sent me an email that had 7 other people in the To: field, don’t panic. I get a bunch. There’s only a 12% chance that I’m talking about you.)
“Double Dip Looks Doubly Certain”
So I argue in “MarketWatch.” I’m telling you, my fellow Austro-libertarians, we have to consolidate as much as possible during the Obama Administration. Right-wingers are suddenly listening to us, when we would have been derided as black helicopter nutjobs during the Bush years. An excerpt:
The rationale for Greenspan’s easy-credit policy was to provide a “soft landing” for the economy in the wake of the dot-com crash and Sept. 11 attacks. And for a while, it seemed he had succeeded. People marveled that housing prices continued to rise, even amidst the recession of 2001. Indeed, people referred to Greenspan as “the Maestro.”
In retrospect, economists across the political spectrum recognize the role Greenspan’s Fed played in fueling the housing bubble. The more cynical analysts argue that Greenspan’s policies weren’t “easy” at all and merely postponed the inevitable day of reckoning for the economy. Rather than gritting its teeth and suffering through the necessary adjustments in the early 2000s, the nation got an injection of artificial credit that masked the underlying problems with a euphoric boom.
The housing market eventually collapsed, as all bubbles do. At this point, Ben Bernanke was at the helm of the Fed. Unfortunately, he got his policies out of Greenspan’s playbook, except Bernanke doubled down.
Rather than pushing short-term interest rates down to 1% as Greenspan did, Bernanke has pushed them down to almost zero percent. And in contrast to Greenspan’s 22% increase in the monetary base during a three-year period, Bernanke increased it by 94% in one year.
The unprecedented monetary stimulus from the Fed, in conjunction with the massive deficits of the federal government, did succeed in partially re-flating the stock market and stabilizing home prices. Time magazine named Bernanke its 2009 Person of the Year, and Obama administration officials are taking credit for nipping the Great Recession in the bud. Yet the parallels with the Greenspan episode are clear.
It makes no sense to “rescue” the economy by having politicians borrow and spend trillions of dollars. It also makes no sense to fix the horrible mistakes of the housing-bubble years by having the Fed create electronic money out of thin air to buy “toxic assets” from investment banks that would otherwise be insolvent.
The editor told the people at Pacific Research Institute that my article is the most-read today. Don’t worry, guys. When I’m sipping cocktails with Faber and hitting nightclubs with Roubini, I won’t forget those of you who were with me from the beginning.
Imagine You Were Someone in Afghanistan…
…and you saw this news story. (HT2 LRC) In addition to hating Americans for their bicameral legislature, wouldn’t this kind of thing really get your juices flowing?
(Make sure you watch the whole thing. The last part is the best.)
Krugman Back to Being My “Favorite Blogger”
[UPDATE below.]
I don’t know when I will learn… This Krugman blog post on Depression-era debt literally made my jaw drop.
After chronicling how the federal debt went up under Herbert Hoover–thus making the “Hoover was a liquidationist Hayekian” thesis a bit awkward–Krugman then said, “OK, um, I owe Bob Murphy an apology. He set me straight, thanks Bob.”
Heh heh a little joke there for you. Here’s what Krugman actually said:
Nonetheless, the fact that virtually all the deterioration in the US debt position from 1929 to 1939 took place under the tight-fisted Hoover rather than under FDR is an object lesson in the crucial importance of growth in dealing with debt. And the Hoover experience also provides a nice illustration of self-defeating austerity — not only didn’t austerity produce economic recovery, it didn’t even improve the fiscal position.
This is simply astonishing. Krugman is trying to reconcile the following propositions simultaneously:
(1) Herbert Hoover was tight-fisted.
(2) Herbert Hoover engaged in fiscal austerity.
(3) The absolute, nominal level of US debt consistently rose under Hoover.
(4) The US debt situation deteriorated under Hoover but not under FDR.
(5) FDR should be praised for his free-spending ways, in contrast to Hoover.
Dr. Krugman, if you read this, please do a follow-up post in which you discuss the level of federal spending under Herbert Hoover. I really want to see how large increases in nominal spending for the first three years count as fiscal austerity. Does it have to do with the liquidity trap? Do we need to divide federal expenditures by mean global temperature, perhaps?
UPDATE: I was a bit unclear in the above. My point is that there is one way Krugman could reconcile all the propositions listed. Namely, if Hoover cut spending throughout his term, but federal revenues fell even more, thus driving up the debt, both in nominal, absolute terms and as a percentage of GDP (as the economy collapsed). That is clearly the narrative Krugman is pushing.
And yet, Hoover did no such thing, as I document in this article. Krugman keeps painting himself into a smaller and smaller corner. I imagine when people read this earlier Krugman column, for example, they would have thought the federal government ran surpluses under Hoover. Now the truth gets dribbled out. Krugman’s readers now know that the federal debt went up under Hoover, even after his “austerity” measures. So rather than saying, “Hmm, OK maybe we shouldn’t keep describing Hoover as tight-fisted after all,” Krugman takes it in stride and says, “See? Cutting spending doesn’t even reduce the deficit, so it’s a double-plus-stupid policy.”
Do the Laws of Grammar Change in a Liquidity Trap Too?
I was glancing over Brad DeLong’s post about World War I when I came across this:
It is never clear to me to what extent the fact that faithful translations from the German seem evasive of agency to nos Anglo-Saxons is an artifact of translation, a reflection of truth about German habits of thought, or an accurate view into authorial decisions. The use of the passive in the translation of Mommsen:
- “the misfortune that befell Germany and Europe…”
- “the Reich had to face a superior coalition…”
- “the war turned out to be…”
- “the catastrophic diplomatic situation that isolated Germany…”
- “It was above all the bloody reckoning…”
cannot help but strike this one forcefully…
Is it just me, or are those not (all) examples of the passive voice–including DeLong’s (apparent) attempt at a humorous conclusion?
In particular, what’s passive about, “the Reich had to face a superior coalition”? How else could that have been written? (See what I did there?)
And the last “funny” line: “Cannot help but strike this one forcefully…” Yes that’s real convoluted, but it’s not in the passive voice, is it? If it had been written, “I cannot help but be struck by this forcefully…” then that would be in the passive, right?
Disclaimer: It is past 11 my time. I hope I am not totally wrong on this. If so, it will be regretted.
Bob Murphy Does Lonnie’s
[UPDATE below.]
This was the second song I did. I am telling you, these iPhones don’t do the rendition justice. I concede that in the beginning of this clip, you might think the crowd is amused because of the bald guy with a gut who is inexplicably firing a six-shooter in his left hand. (I have no idea what the deal is with that; don’t ask me.) By the finale, you can tell–even with the iPhone recording–that I was decent. However, I am telling you that it sounded much better there, than the iPhone conveys. My evidence:
(1) Crowd goes nuts at the end; it is not a “ha ha that was entertaining because it was bad” kind of applause.
(2) You can distinctly hear the girls in the back saying, “We love you Bob M!” These were not Austrian groupies; Bob Roddis was recording this, and I’m pretty sure he and I were the only ones from the Night of Clarity still in the karaoke bar (Lonnie’s Western Room) at that late hour.
UPDATE: Actually, if you turn your speakers way up, it sounds much better. The first time I tried listening to this my wife was watching a show in the other room so I didn’t blast it, and it sounded awful. But pump up the volume and it should give you some sense of what Bob Roddis dubbed “the Music City Miracle Part II.”
Today Krugman Really Is My Favorite Blogger!
I already alluded to him blowing up James Galbraith in a really neat post. Then I scrolled up a little more–I’m way behind because of the recent Nashville conference–and find Krugman discussing a NYT op ed with which he disagreed. After quoting Tyler Cowen, Krugman writes: “This passage makes me want to stick a pencil in my eye.”
Paul, we are not so different, you and I. Perhaps in another time, under different circumstances, we could have been allies. Even friends.
Jim Grant Makes Bloomberg Interviewer Raise Her Eyebrows
The whole thing is great; HT2 the mysterious von Pepe. But at the end Grant really lets the Fed have it, and the interviewer is visibly taken aback.
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