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Gibbon
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My feeling too, at nominally zero they are still on the wrong side of the curve, raise rates economy crashes. Yet they are under a lot of pressure to get interest rates back up so the rentiers can makes some f*king money.
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0. John Cochrane falls into the trap of thinking that energy, resources, and labor flow through the economy like money does through a set of double entry ledgers.
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> His claim to be "well" was a falsehood. The denial is an acknowledgement
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I can't help but read this stuff and think that the Chicken Littles have this idea that there is some perfect monetary policy that needs to be followed at all costs. Since they have been trained to fear the inflation monster, they fear any policy that could under some future circumstance fail under inflationary pressure. Ignoring that in the face of inflation the central bank could (Bring my smelling salts, and cover your ears Martha) *change it's policy* Anothercritque I see and me answer. Q: B..Bu But what is the investors don't want to do what the central bank wants? A: The Nice Mr Central Banker being able to print at will, will totally ratf*ck you if you don't play along. 'What if I get another sax player' https://www.youtube.com/watch?v=CgfZVNv6w2E
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Please Neanderthal is a slur, the proper term is Yeti http://subgenius.wikia.com/wiki/Yeti *cough*
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There is only one set of four anti-aircraft guns in the flak tower, makes me think this is after the war.
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You really need to be able to click on those graphs to see a larger version.
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Problem with metrics, measure something and then comes the urge to control the number to three decimal places. Same prob;em with test limits, limits are 1.56 2.17, thus 2.16 is okay and 2.18 is fail. I would say disposable income is a good metric. Or savings rate.
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One of my old college professors pointed out, your average car has 100 HP worth of gas and 400 HP worth of brakes. In this case the economy is missing on a couple of cylinders and the Fed is afraid to take it's foot of the brake, cause... Actually my thought has been, if yields on new bonds ever went to 5% the 'value' of old ZIRP paper, and fixed assets like housing would plummet. If mortgage rates go from 3.5% to 7% what does that do to the asking price of a house? Ans: Price has to drop 33% to keep the same mortgage. Same time a bunch of people in variable rate mortgages become insolvent.
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My personal hunch is minimizing deviations from 2 percent and 6 percent is probably bad. As a young engineer I remember being asked repeatedly where my design parameters and test limits came from. How does the fed know that the correct numbers are 2 and 6 percent? And why is tight control of those parameters important? I remember reading old stuff from 70-50 years ago. It seemed then focus was on raw economic output, tons steel, disposable income, and the ability of workers to find well paying jobs. Not inflation and unemployment.
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The Haiti response was kinda the World Health Organizations Katrina after the aid workers from Pakistan dumped their latrines in the river thus starting huge epidemic of cholera. Followed by not owning up for it and accepting responsibility. Hint Haiti had many many problems before the earthquake but cholera wasn't one of them.
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I always think back to the letter from FDR to Stalin promising 12,000 tons of lard a month. My rough calculation is that alone was 1% of the calorific needs of the Soviet union. Assume 1lb of lard is 4000 calories. So 12,000 tons is 24,000,000 lbs. month or 800,000 lbs a day. Or 3.2 billion calories a day. Divide by what google says is the population of the soviet union 1940 191 million is 16.75 calories per day per person. Required calories is 1800/day. So 16.75/1800 is 0.0093 or about 1%. Just the lard.
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Um... err... I tried I really tried... but https://c1.staticflickr.com/7/6116/6268448400_c48ded24bb_z.jpg My attempt at a Friedmanizum, You know I've learned to be careful when trying to reason about other peoples and places. Because here in Northern California the sharp edges of suck on this have been worn smooth. So the response is 'ow quit it' In places like Iraq being to told to suck it is rough trade and results in shrapnel sent you way. I think I failed. Ow quit it: https://www.youtube.com/watch?v=CT96xH8UoeY
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The paid down by the rich isn't really true as much that the debt was inflated away over time. Both by real inflation and also because the economy grew over time. So that idea that debt can only be reduced by cutting spending or increasing taxes is false. Not to mention the falsehood that all government spending is a dead weight loss to the economy. Some is, some isn't. One notes that Conservative economisticators love 'defense spending' which often is a dead loss. Vs say science, infrastructure and education, which over long haul are highly positive. The other consideration is government debt is a form of safe and liquid paper which is good using as financial reserves. If the economy were growing faster likely we could do with less treasuries. So if you want to reduce that amount of government debt a growing economy is a good way to do it. (More growth, more income, more tax revenues and the percentage falls because the denominator gets bigger. Any event borrowing costs are extremely low. Which means it's a good time to build infrastructure, yet we aren't. Friend mentioned that the largest public infrastructure project in the US currently is the Fleamont BART extension. *boggle*
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I think the blind squirrel found a nut actually.
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"Sometimes the blunders of your enemies outweigh your own foolishness." That's my refrain when people bring up competitors at work. Sure if your competitors nail it, you're hosed. But usually they don't. Also as I point out, nothing was going to make the war in the Pacific last beyond August 1945. Though I'm betting Nimitz had no idea what the nerds at Los Alamos were up to. If I were Nimitz I might have been pissed about that.
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The Crimea seems like a geopolitical attractive nuisance to me. As I grow older I get really tired of arguments that assume leadership competence. Anyway I think what the hard power nitwits never get is soft power means not having to watch your back. where hard power reminds me of Bill Hicks talking about how he learned to tone it down. 'First joke, 90% of the audience laughs and 10% are mad. At the end of the show 10% are still laughing, 90% are mad, and there's three guys waiting for me out back." Interestingly though far as I can tell, neocons in the US, the Turks and House of Saud gambled on hard power to topple Assad and install an Wahhabi/Sunni based government in Syria an now are looking at an Iranian dominated Iraq and a Kurdish state. And Assad isn't going anywhere. Worse of the neocons and the Saud's I'm sure Obama has changed his attitude towards Iran. Not good for the Saudi's. The Cuba problem is gone. It might not take much ($$$) to solve the North Korea problem. After that the global 'problems' are Putin and the House of Saud. howard said... 'i understand that your lead is rhetorical, but it's one you use a lot, and really, for an economist' True Delong argues policy, most of the rest argue 'good for me personally'
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Why don't more people read delong that's the question. Granted 8 years ago I though he was politically naive, but he's learned.
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> The wealthy fear that "soak the rich" policies would mean ever expanding social expenditures and higher taxes on the wealthy. I don't think it's that complicated actually. Lot of wealth got that way by squeezing rents out of workers and squeezing wages (same thing). So to a certain extent it's just reflexive thinking.
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Matt is a Calvinist true believer who worships the Magic Hand. A phrase I use is, if you're honest. When you think of a theory, you'll try to 'drown your baby in the bath tub.' Actively look for data to disprove your theory and thus kill it. Matt only looks at data to confirm his morality based economic theories. You can convince him of nothing.
Toggle Commented Dec 24, 2014 on 'More Piling On Cochrane' at Economist's View
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Israel is a good mention. She has spent the last 40 years attempting to digest her conquests, one has trouble seeing how this has been at all profitable on the whole. I think at one time I estimated the cost of buying out the settlers on the west bank would be perhaps $5-10 billion. That's not a lot of money. Not to mention the cost of the Iraq occupation ran the US about $40,000 per Iraqi....
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"Okay, then. Economics missed the financial crisis, and now the economy has increased the number of undernourished young children, and it has increased the number of teenagers unable to afford college, and the few lucky ones who can afford to go to college will be saddled with so much debt that a new business start-up is almost out of the question. So, in this semester's course we will ask, "Why in god's name isn't every economist screaming from the rooftops about this?" Sigh you don't really understand. The parents of those undernourished young children have decided that it's in their best interest to take lower paying jobs and forgo feeding their children. What is important is world wide the situation of the average child has improved. And those teenagers have decided their leisure time is more valuable to them money they might earn at a job.
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""But I have the same questions you do and surprised very few economists even talk about the implications of NAFTA."" I am just a somewhat humble engineering monkey. And having driven across the bay I have a few thoughts along this line. I think a good point is, no one cares about Karl Whelan and his models and statistical analysis. It's kind of like how no one cares about string theory anymore. If you can't use the output to guide policy or design falsifiable experiments, what are you doing exactly? Not economics, not physics. Mathematics is what you are doing. So the point is, markets are something created by politics, policy, and law. A huge amount of the economic inputs to markets aren't provided by any market mechanism but by the command economy side of things. The problems we face aren't usually due to functioning markets, but to those outside contributions. It appears at least from the outside that the the influential members of the economics profession are hostile to those problems. They only want to study the market part not the overall economy. Standard response to any suggestion of collective action or policy contributions is 'that would interfere and distort the market and that would be bad' If you don't believe, there is a video of Allan Greenspan complaining about California's onerous building standards. tl;dr Earthquake safety standards distort the market and waste resources because most buildings will be torn down before an earthquake hits them. Side note: Karl Whelan thinks the reason why students complain is because economics is special. Having been an engineering student students complain and professors fret about course work that we feel is obsolete or doesn't contribute much usefulness. Especially in the last four decades the techniques used in practice have changed radically. Much fretting ensued. What is notable is outsiders are noting a rank smell emanating from the economics field.
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""I start my class with a 30-minute discussion exercise along these lines about what's involved in getting a pencil onto the store shelves, which suffices to make the point that economies are very complex systems that nobody could succeed in centrally planning. "" Oh my god....
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[what does that mean through a time when information technology is so focused on?] I'll provide an anecdote from the cesspit that is the bay area. Here is... wait for it... Anecdote: It seems to this small brained monkey (simia parum inbecilli engineerous) that huge amounts of development effort is not focused on increasing economic productivity, but instead more efficient ways extract money from the pockets of the suckers.
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