Site Meter

Thursday, August 15, 2019

Comment on Drum commenting on Warren

Drum has a good skeptical post on Warren

Elizabeth Warren and the Slow Boring of Hard Boards

which includes "The story provides a pretty good look at Warren’s distinctive combination of tenaciousness, policy chops, and grassroots support, but it’s not clear to me how well her style would translate into being a good president."

"That leaves tenaciousness, which I have no argument about."

and

"For the time being, the best theory of change is the good old slow boring of hard boards."

It seems to me very clear to Drum how well her style would translate into being a good President.

My comment

Yes "theory of change" is a buzz phrase. Also just after writing that you aren't taken with obsessing over a candidate's theory of change, you show you are, in fact, so taken. The candidate isn't Warren, it is Sanders. You reject Sanders's theory of change, advocating for the alternative (previously known as Clinton's theory of change).

One very key issue. Drum theory of change

You want a real theory of change? Here it is: build up enough public support for your cause that you can win the presidency along with a 300+ majority in the House and a comfortable filibuster-proof majority in the Senate. That’s pretty much it. Tedious outrage about “incipient fascism” aside, the United States is still a democracy.

Which two words don't fit well together ? Democracy does not imply filibuster. The USA is the only Democracy in which filibusters are important. Another theory of change is presidency, 235+ in the house and 51 votes in the Senate to eliminate the filibuster. That is Warren's theory of change. It's a lot more plausible than 60 votes in the Senate. Also the 300+ in the House is just nonsense. The House made no trouble for Obama, Clinton or, even Jimmy Carter himself. The current majority is plenty. The problems are getting 1 more President, 4 more senators and convincing Democratic Senators to eliminate the filibuster. That requires a candidate determined to fight to eliminate the filibuster. We have one such candidate. One is enough.

Eliminating the filibuster is a necessary part of any change, theory of change, and practice of change. Anyone who says otherwise (see Sanders & Biden) is bullshitting.

Oddly you phrase your post as Warren skepticism (contrarian much ? I suppose there has to be at least one Warren skeptical liberal wonk -- a dirty rotten job but no one else seems willing to do it). But your point is that tenacity is required, and, lo and behold, you agree she's got it.

OK so the other two topics. I'd agree that Presidents should rely on experts. The real menaces are those who think they know more than the experts, or that knowledge doesn't matter (see Trump, Donald; Bush George W; & Reagan, Ronald). However, note that all Presidents who have actually been able to make use of experts are almost incredibly knowledgeable. At least that's the way things have been since I turned 18 (in 1978).

The problem is that one has to know a lot, and be very smart, in order to tell which of the people who claim to be experts really are useful experts. Note I snuck in "useful". Linus Pauling was very expert on physics, chemistry, and biology, but he wasn't a useful expert, because he was crazy. You want rock solid proof that HIV causes AIDS then you want to use PCR, but Casey Mullin, who developed PCS, declared that HIV didn't cause AIDS because he hadn't kept up with the literature and didn't know what he didn't know. I think one needs extraordinary knowledge and brain power in order to follow and judge debates between experts.

Let me try to name a President who did a good job without being absurdly knowledgeable and smart.

Trump: Total disaster

Obama: absurdly knowledgeable and smart

Bush Jr: totaler disaster

Clinton: Absolutely amazingly absurdly knowledgeable and smart. Has fallen for fake experts (Ira Magaziner, Dick Morris, Mark Penn)

Bush Sr: Not super smart, had huge foreign policy experience. Candidate exception. not re-elected

Reagan; I guess he is commonly presented as an example of a great President who know almost nothing, but he not, I trust, here. Laffer is the number one case of a fake expert and Laffer, Reagan, Kemp, Roth is the number one example of how dumb ignorant policymakers can make a mess of things.

Carter: very smart ultra nerd. Fell for a fake expert (Patrick Caldwell). Not reelected

Ford: Fine if you want to ally with South Africa (Kissinger policy on Angola)

Nixon: very smart, knowledgeable and evil (an extremely un-useful expert)

Johnson: Ver smart knowledgeable and overdosed on testosterone. An extremely violent expert.

Kennedy: trusted the best and the brightest. How did that work out ?

Eisenhower: Candidate for not super smart (top honors at West Point but so ?) and good at the job. Need to overlook repeated severe recessions and assault on Democracy in Iran and Guatemala but it's not as if anything has gone wrong in either country since then

Truman another candidate excellent non expert president

FDR BINGO 2nd rate intellect 1st class character and confirms your theory of change.

I'd say the lesson of the past decades is that only wonks can protect themselves against fake experts and they only have a 50 50 chance.

Wednesday, August 07, 2019

The optics are as bad as they look

Dean "The Optics aren't as bad as they look" Baquet just confirmed that he actually doesn't do his job any more. He doesn't decide what is on the front page of the New York Times. He doesn't explain what he does (except force reporters to tone down their story on the Trump campaigns connections to Russia until it falsely asserted that the FBI had found no clear links *after* the FBI had obtained 2 FISC warrants based on probable cause to believe two Trump campaign employees (one of them campaign chairman) were foreign agents).

Look if he isn't willing to edit, maybe his job should be eliminated as he eliminated the public editor breaking a solemn promise to readers and destroying the paper's credibility which can only be restored if he is fired.

Also he presents a false dichotomy (an error of thought more common than any other error of thought or any valid method of thought). He asserts (without any evidence or logic) that the only choice of for the Times to continue to do what it has been doing or to act as the opposition to Trump.

He doesn't even consider the possiblity that it could act like a serious newspaper and not quote unreliable sources without fact checking (even if the demonstrably unreliable source happens to be President). He assumes that the most recent claims must be reported without noting the proof that they are lies. Basically his position is that the facts don't matter, or maybe that they must not be reported, because they have a liberal bias.

I think it is very important that Baquet be fired immediately.

Tuesday, August 06, 2019

Custody battles

I never expected that after the national divorce liberals would get custody of The CIA The FBI The NFL and the most profitable megacorporations. But at least the GOP has the assault rifles and the 30 to 50 feral hogs I don't even know who I should credit for the national divorce meme, but it's not original

Our purpose here is done

I think I have just found the ultimate abyss of idiocy https://twitter.com/PatrickRuffini/status/1158734571447435264?s=20 Patrick Ruffini @PatrickRuffini · 4h How many times have I gone into a bar hoping for a dependable selection of beers I can trust and instead being forced to choose this locally brewed artisanal nonsense (80% of which are IPAs which I detest) like it were Stalin’s Russia or Bernie’s America? So small profit seeking businesses stocking products which sell well and which don't fit my tastes or desire for all to consume what I like are Stalinist ? If anyone can find anything stupider ever written (in any language using any alphabet or hieroglyphs) please paste it in comments.

Saturday, August 03, 2019

nomoremisterniceblog almost states the bitter truth, but he's too nice to tell us what fools we are.

he wrote

I don't want to relitigate the McGovern and Mondale campaigns, but Dukakis? "Free everything and impossible promises" weren't what defeated him.

my comment

I want to relitigate events of 1984, which Delaney has sent down the memory hole. Mondale was not hammered because he made promises he couldn't keep. He said he was going to talk to us like grownups. He said he was going to increase taxes (but not increase taxes on families with income under $ 30000 which would be about 60000 now with inflation).

So the people of the USA had to choose between a serious guy who told us the truth and the guy who promised that lower taxes meant higher revenues. It is obvious that most voted for Reagan who made absurd promises which he obviously couldn't keep.

Now there have been Democratic candidates who promised to reduce the deficit and reduce taxes on most families -- Clinton and Obama '-- exactly the two non incumbent Democrats who won when the Income tax was constitutional and the top rate was under 55%. Obama also actually delivered (not that many people noticed) while Clinton was suddenly (not permanently) unpopular when Rubin convinced him we couldn't afford a middle class tax cut.

Unlike her husband, Hillary Clinton was honest about budgetary and political limits. Unlike his wife, Bill Clinton was elected President.

The lesson is simple. Don't treat the US public like adults. Do make promises, including some you can't keep. The data are clear. Anyone who lives in the real world knows this. Only dreamers like Delaney, Dukakis, Mondale, Gore think you can win as the speaker of inconvenient truths.

Saturday, July 27, 2019

Belle Waring on Autistic Perverts

Comments are closed on this post. I think it is an average Belle Waring post. I am going to comment here. But first I want to discuss the secret (perhaps harmless) invasion of privacy. When I see a young,good looking, energetic, dynamic, positive happy young couple, I often think of what a great time they must have in bed. Is that mental peeping ? Doesn't matter can't help it. But reading Crooked Timber I experience another case of possible undetectable invasion of privacy. Oh to be a fly on the wall in the Waring/Holbo residence. Just think of the conversations they have. And a pony. Anyway, the post includes a description of being stalked. The point is someone argued that an autistic man with a PhD in psychology couldn't have the mens rea to be guilty of possessing child pornography. I want to go off on mens rea (criminal intent -- I can't spell in English and my Latin spelling is correct only by pure chance). It makes a lot of sense if one things the purpose of the justice system is retribution. Some if you think of deterrence. Very little if you think of incapacitation as I do. I believe in locking people up mostly if it is the only way to prevent them from committing crimes (then staffing prisons adequately so they don't commit and be victims of crime while in prison). I consider prison to be collective self defense, not as extreme as war but justified only by need. I also think the idea of retribution is very important to most other people and shapes the justice system. "Justice was done" is a statement about proper retribution. This is highly relevant to the principle that defendents can be not guilty for reason of insanity. An violent insane person is very dangerous (and very rare -- most psychotics are not violent, quite likely to be victims of crimes and not at all likely to commit them). But not really to blame and not a proper subject for retribution. I would prefer a third verdict, guilty and insane (that is insanity as a extenuating factor implying that the proper sentence does not include prison time). I think this is important, because if insane people can't be incarcerated when they do unacceptably violent things which would be crimes with the usual mens rea, then there must be some way to incarcerate them in a residential care facility if they are a danger to themselves or others. Criminal liability makes us free. It means we can do anything which isn't clearly banned by a published law (our responsibility to do due diligence on what is legal -- ignorance of the law is no excuse). If people are protected from criminal liability, they are protected from having the right to do anything which is not specifically forbidden. It's wrong. It is different in non-anglophone countries. It should be changed. People who harm others with no ill intent are dangerous. Collective self defense may require incarceration (in a mental hospital). However, they should have the right to a trial by jury as they are human beings and have human rights. The identification of justice and retribution has made a mess of things, as usual.

Thursday, July 25, 2019

Some Atheist Theology

I hope and trust that this won't convince any religious people. I wouldn't want to do that. But I do trust it won't.

This is from a comment thread. I am responding to Dale Coberly who wrote

God may or may not exist. I have no way of knowing. But the existence of evil in the world is not evidence either way. The whole story of Jesus, I think, is meant to illustrate the point that God permits evil to happen to good people but that is not the end of the story. If nothing else, it helps people to not despair when evil happens to them. I would not take that away from them. A good deal more important to them than a rise in GDP.

I don’t want to argue with you either, but I did not mention the existence of evil. I discussed natural disasters. Augustine can argue that only agents with free will can have souls, so God must accept a world with evil. Omnipotence does not mean ability to overrule a logical contradiction. I disagree in many ways (explained below* no character limit in comment threads (or personal blogs))

But that wasn’t my argument. I was discussing natural disasters. The evil, if any, is committed by the tectonic plates which shift. Now I don’t claim this proves there is no God. I can’t help claiming that this proves there is no benevolent God.

Or take the story of Jesus (Jesus’s version). In that story, Jesus isn’t an aspect of God but a son of God (notably so is everyone else, in the gospels Jesus never hinted that he was God or a god of a new pagan faith). He must suffer horribly as a scapegoat.

If true, this story would prove that there is not a benevolent omnipotent God. Either God can’t let people into heaven unless Jesus suffers on the Cross (so He is not omnipotent) or he chooses not to (so he is not benevolent and demands suffering of the innocent). If true, the gospels would prove that there is not a benevolent omnipotent God.

Now this is all very simple. Obvious even. The fact that Christian doctrine is full of logical contradictions (I haven’t mentioned that 3>1) has been declared by extremely smart people to be proof that it is a higher more glorious truth than we mere mortals can understand. Faith can trump logic and evidence. It clearly has in this case.

Contra Augustine. I don’t believe we have souls in the sense he used the word (immortal souls) so I disagree fundamentally. But I also don’t agree that we have free will. I think our actions are determined by the laws of physics or truly random as asserted by the laws of physics. The causation can’t start with us. In any case, I don’t believe in human free will. But finally, he is talking about evil not un-necessary suffering. That wasn’t my topic at all.

Now you say that religious belief is a very good thing (even if the beliefs do not correspond to reality). I agree entirely. Not being a Christian I disagree with his claim that the truth will set us free. It’s just the truth and sometimes it’s better to believe other things. Fine. Agreed. Religion can be a very good thing and often is. Something to be cherished. But it is also false.

Monday, July 15, 2019

Milton Friedman and the Keynesians Not an Old English Folk Tale

I wrote a post with this title which is poor, solitary, nasty, and long.

the bottom line is I say Friedman was always a Keynesian except for his insistence that the effect of the nominal interest rate on money demand is more or less pretty much negligible. This means that I argue that he differed from Keynes because he was a monetarist. In the 80s the difference between monetarists and Keynesians (which always was a matter of a paremeter estimate and not any fundamental disagreement) was dwarfed by the difference between them and the fresh water new classical ratexians. But the point, if any of the rant is that Friedman is determined not to be trapped among the Keynesians and that he bases his efforts fundamentally on the importance of i.

The failed aim was to introduce the following modified children's story in which an innocent red hen which happens to be red is rejected by red haters who can't admit that they agree with non conservatives. This post is very pointless too (Especially to people not told the story when they were children).

“Who will prime the pump?”

But Friedman said, “Not i,”

she ran about calling briskly: “Who will cut the tax?”

Friedman said, “Not i,”

“Who will press demand?”

But Freidman, with a grunt, said, “Not i,”

“Who will demand the Wheat on the market to be sold?”

Turning his back with snippy glee, Friedman said, “Not i,”

“Who will make some bread?”

Milt said "Not i"

Milton Friedman and the Keynesians

Brad DeLong noted that new Keynesians are actually Friedmanites. On all points where 1960s Keynesians disagreed with Friedman, they concede. The fusion of Keynesians and Monetarists would seem odd to anyone who can't conceive of real business cycle theory (really anyone who can't conceive of a human being taking real busines cycle theory seriously, that is, all normal human beings and most economists). Paul Krugman notes a return of Paleo Keynesians. Then discuses it more.

By the way, Krugman's link to DeLong doesn't work any more The Washington Center for Equitable Growth returns a 404 error. I went to Krugman to get the link to Brad, noted Krugman said brilliant things (no surprise) *and* that his link is rotten (that's news).

I'm going to get to the point soon but I have to discuss Krugman now.

Oh boy this introduction ran away from me. I am going to put the whole rant after the jump. the bottom line is I say Friedman was always a Keynesian except for his insistence that the effect of the nominal interest rate on money demand is more or less pretty much negligible. This means that I argue that he differed from Keynes because he was a monetarist. In the 80s the difference between monetarists and Keynesians (which always was a matter of a paremeter estimate and not any fundamental disagreement) was dwarfed by the difference between them and the fresh water new classical ratexians. But the point, if any of the rant is that Friedman is determined not to be trapped among the Keynesians and that he bases his efforts fundamentally on the importance of i.

Tuesday, June 25, 2019

Kevin Drum Talking 'bout my generation

Kevin Drum has a funny but also genuinely interesting post on how boomers are not really to blame for messing up America (he half tongue in cheek blames the silent generation). I don't think the defensiveness is entirely an act. He does concede

Now, if you want to blame boomers for welfare reform, sure. Bill Clinton was (barely) a boomer. If you want to blame boomers for the Iraq War, I guess so. George Bush was (barely) a boomer—though the real force behind it was Dick Cheney (b. 1941). If you want to blame us for screwing up Obamacare, that seems sort of churlish, but whatever. Barack Obama was (barely) a boomer—though the real roadblock to a public option was Joe Lieberman (b. 1942) and his centrist pals.

I comment

One interesting thing, you list welfare reform with invading Iraq (and also the ACA but call that churlish) and admit that it was a boomer misdeed (blaming Cheney for Iraq and Lieberman for weaknesses of the ACA which was still a great step forward). This interests me, because our one point of regular disagreement was over how horrible welfare reform is (it is current policy so the present tense is necessary).

Oddly, I learned of the association with a sharp increase in deep poverty here (I think your second post of the series in which you briefly conceded that welfare reform was severely damaging). I never understood your motivation . Now I see how important 2 years can be (also this post makes me feel young -- thanks). I was born in 1960 so late boom (or between boomer and gen X). I definitely do not consider Bill Clinton to be from my generation. Welfare reform is something old guys did to my country.

I wonder if there is actually something non-humorous and ironic on the square here. I do really find your discussion of the topic unreasonable. Here I comment that you depend on arguing that a 50% increase is negligible https://angrybearblog.com/2016/02/drum-on-drum-on-sanders-on-welfare-reform.html

I think you actually depend on our eyes perceiving 0.1*f(x) as more nearly horizontal than f(x) so they are deceived by scale. You discuss the murder rate often. Try adding percentage of Americans murdered to the graph with different definitions of "percentage of households with childred in extreme poverty" and see how invisible the changes are.

OK "churlish" triggered me (you once mentioned that you think I don't mind being churlish -- don't expect you to remember). I will try to unchurl. I think there is a very basic problem with US welfare policy. Hatred of welfare means there are some people in the USA much poorer than anyone should be. As you noted, the dollar cost of eliminating severe poverty is tiny. I am sure you believe, as I do, that the long run poverty trap culture of poverty effects are an advantage of bringing back more generous cash welfare. But we agree that "bring back old welfare" is political poison.

I think we can agree that welfare hatred is based on racism (racists being more open than they were 10 years ago). I think there is a political problem for how to get policy around the barrier of welfare hatred. I note that the left more candidates talk about giving to college graduates (forgiving student debt) more than about giving to children in severe poverty. I think even Sanders is afraid of welfare (and of course gun control). Finally I think all the tech bro talk of UBI and how everyone will be put out of work by the robot apocalypse so you, white man, will need welfare too is all an effort to get around welfare hatred.

It is a topic you clearly understand very well (I assume growing up in Orange county is relevant) and it is very important. I now ask for a post on welfare and welfare hatred.

Sorry to comment almost off topic and at length.

Tuesday, June 11, 2019

The Whole Trinity

Not the Father the Son and the Holy Ghost. There are other trinities in our religious tradition. One is faith hope and caring. They sure are three separate things. I care a lot but I have very little hope. Another is that God is omnipotent, benevolent and omniscient. I realize that I believe in two Gods. There are the laws of nature which are all powerful but have no mind, no understanding, no clue. There is the moral law which is benevolent but absolutely powerless. It can't make things happen. It can't even speak to us. However, there isn't pure knowledge nor could there be. The point is that I see no deep connection between what is and what should be. Hence caring with little hope.

Monday, May 27, 2019

Comment on DeLong on Buchanan

Read Brad's post.

my comment on "Milton Friedman's redefinition of "neutral monetary policy" to mean "whatever monetary policy keeps nominal GDP on its trend growth path" led people prone to motivated reasoning in a laissez-faire direction completely and horribly astray... astonishing failure to mark one's beliefs to market"

Someone should write a book "Economic Theory: What Went Wrong". You had a draft in your mind some years ago. PseudoDeLong wrote that economics had been healthy, although inevitably influenced by ideology. In the good old days, there were fruitful debates between libertarians like Friedman, Stalinists like Sweezy and everyone in between.

Then Lucas and Prescott made a mess of things, abandoning evidence for pure theory. Or rather, they made a non mess of things, focusing on their favored models and ignoring non messy reality.

This is an attractive story, but it does not correspond to the actual history of what was actually written and said. It is, roughly, salt water good, fresh water bad. Fresh water means both back engineering theory from free market policy preferences and favoring rigorous analysis of the implications of absurd assumptions both to common sense and to empirical rigor "progress don't regress" "Theory ahead of business cycle measurement".

The problems are (at least) two. First the fresh/salt division isn't identical to left/right. The terms were introduced by Hall a salty conservative. Sargent and Hansen are distilled water center-lefties.

But second, many salty lefties manage to be almost as receptive to actual evidence as Prescott. You present an example. I think Friedman is another. Actually Lucas himself is a brilliant rhetorician -- he can do it with words as well as with equations.

Notice, I classify Friedman as a salt water economist. I do insist that Friedman and Lucas are methodological opposites (it isn't merely that their statements contradict, so they can't both be right, one is the negation of the other so they can't both be wrong) http://rjwaldmann.blogspot.com/2012/03/modern-macroeconomic-methodology-modern.html

They are on the same team with teammates named Laffer, Kudlow and Moore. They are (or sadly were) geniuses, but they work back from the conclusion and are more loyal to small government ideology than to their stated methodologies. This must be true, because they consider themselves part of the same school even though they have opposite methodologies.

Saturday, May 04, 2019

G and GDP update

I think it might be time for an update on the crudest of tiny sample reduced form analysis of fiscal policy and the current recovery.

One reason for my continued interest is that there was a rather large tax cut enacted in 2017. Trump critics tend to argue that it failed to encourage investment, but did affect aggregate demand. I wonder if the noticeable increase in GDP growth is due to the tax cut or the spending increase from the 2017 omnibus spending bill.

So I look at GDP and G (government consumption plus investment) again. Both are annual changes in billions of 2012 dollars (Not logs). I subtracted 400 billion from the change in quarterly GDP (multiplied by 4 to give an annual rate). Also I multiplied G by 1.5 which is a common estimate of the multiplier (say by Blanchard and Leigh Nakamura and Steinsson). Here an effect of the tax cut would appear as an anomaly -- an increase in GDP not fit by the change in G times the multiplier (or the $ 400 Billion and year trend).

I do not see an anomaly either when the tax bill passed in 2017 or in 2018 when tax witholding changed. As I mentioned back in 2014 I don't see an anomaly in either growth or government consumption plus investment when sequestration started in 2013 q1. The anomalies are high growth from 2014 q 1 to 2015 q 1 then low growth from 2015 q1 and q2 to 2016 q1 and q2, that is a level anomaly at a time when there weren't policy shifts.

I notice again that theory and data both suggest that changes in G are more important than changes in taxes. Nonetheless the practice is to measure the fiscal stance with the full employment budget deficit, that is, to assume that the balanced budget multiplier is zero.

Sunday, April 28, 2019

Barry Barry Ritholtz asks how the New York Times got 2 very different figures from the same data

Barry Ritholtz has doubts about data presentation at the New York Times

His commentary is very brief "What is this about? Is it guilty conscience, or something else?"

The graphs are strikingly different

and

Alberto Cairo explains

I have a guess about what happened. I guess the second figure is a regression with counties weighted by population and the first is unweighted. I consider both semi reasonable things to do, but weighting to be better (it is also the second to be produced if I understand correctly)

First the fact that the size of the circles depends on total votes in the second figure suggests that the regression was weighted by total votes. Second it is clear that the big blue counties pull the line more in the second figure. I note that the estimated effect of government assistance on the Trump vote is greater in the second figure.

Others have another guess -- that the first line was hand drawn after eyeballing and isn't a regression line. That seems unlikely to me. Someone tweeted that it is clearly not an OLS regression. I suspect that the eye is even more influenced by outliers than OLS is. The dense cloud of many fairly similar observations does not impress us as much as it impresses a computer running OLS

I think I'm going to give a hostage to fortune and guess that, if someone sends me the raw data, I can run an unweighted OLS regression and get figure 1. I feel pretty safe, because I am pretty sure few people will read this and none will download and e-mail the data to robert.waldmann@gmail.com

Reply to PGL comment on Brad DeLong Post on Stealing Candy From Fish in a Barrel

This is a comment on a comment and is here only because I can't insert a figure in a comment section. Click the link. Good point. Also the GOP supply side story is about non residential fixed investment. They have been promising for 39 years that their tax cuts will cause a huge increase in business investment and that Democrats' tax increases will cause it to collapse.

Also there has been a very clear pattern, which happens to be the exact opposite. The ratio of non residential fixed investment to GDP is high when a Democrat is in the White House (especially if he is a peanut farmer from Georgia) and collapses when a supply-sider is in the White House.

The pattern is so clear that it is hard to avoid seeing it. The incentives to claim to have managed not to see it are clearly very strong.

Also Brad why real/real. Two famous economists have stressed that the causes of high investment cause high nominal/nominal while effects are due to real/real so one can test causation using relative prices. One of them is named DeLong. The tax bill doesn't affect the relative price of capital goods, I think it is best to look at dollars/dollars and leave price indices out of it.

Thursday, April 25, 2019

Houston Houston can you read me giving a hostage to fortune

Who told Kay Steiger that I don't read Raccoona Sheldon AKA James J Tiptree Jr I-m not actually sure that's who she accused her readers (including me) of overlooking. I just have this
OK so now I click Bingo "Sheldon primarily wrote under a male pseudonym — James Tiptree Jr."

Tuesday, March 05, 2019

St Leo the Great in Chalcedon

Pope Leo I had an interesting career involving some difficult negotiations. He reasond with Attila about the wisdom of invading Italy and convinced Attila that he should settle for marrying Honoria (sister of the emperor who appears from her correspondence with Attila to have preferred the prospect of marriage with Attila to forced celibacy). He also negotiated with Genseric who had an army while Leo did not. They reached agreement on ground rules for the second sack of Rome.

But then he ran into real trouble. He was named chairman of the council of Chalcedon to preside over the debate between Nestorius and Eutycheus over whether the divine and human aspects of Christ were separate or united. He did try to convince his fellow bishops that problems with Huns and Vandals and such might be considered almost as important as theological disputes.

The Council did decide that Jesus Christ is one being with two natures (current Catholic and Orthodox doctrine) rejecting the Nestorian doctrine (accepted by the Assyrian Church) and the Eutychian doctrine (accepted by the Armenian Church).

The furious theological dispute was especially frustrating for Leo I because he did not speak Greek. He only spoke Latin. He had to ask for translations of the furious disputes about whether this or that Greek word described Jesus. This was challenging especially when the furious dispute was over two Greek words which had the same Latin translation.

All in all, the months of arguing about words while Rome burned must have been frustrating.

But at least he never had to discuss Modern Monetary Theory.

Thoughts and Priors : on the limits of Bayesian Reasoning

Don't you hate it when you have a good title and no post to go after it ?

Monday, March 04, 2019

Scott Fullwiler

I have to write this. It isn't worth tweeting or posting at Angrybear. It's about me and no one should care.

I am having a problem with Scott Fullwiler @stf18

Actually many problems.

1) I tweeted a lot of silly stuff yesterday. I want to explain it. I know no one is interested so I will explain it here.

2) I have been trying to find a tweet of his with a useful quote from 2002 from the person who actually handled open market operations in New York. For one thing, I forget her name. But I can't find it because looking through his tweets enrages me.

I will start with

2)The tweet includes a very intersting quote by the woman who actually did it. The point is that even back in 2002 an announcement of a new target was, on average, roughly enough to achieve the new target FF rate. There was not a clear correlation between changes in the target rate and the sign of open market operations. That's interesting. Now one problem is that Fullwiler summarized the quote leaving out "roughl" and "correlation" and wrote something which, if taken literally, implies that there were no open market operations at all. I mean that is exactly what he typed. My extensive efforts to explain that the quoted passage was a statement about the expected sign and the magnitude but not the existence of open market operations were not successful. Also he said he would bet me $$ that I couldnĂ t tell him what he claimed. I agreed to a $100 bet, because all I have to do to win it is cut and paste what he wrote. I mean he is willing to bet me that I don't know and can't find out what he tweeted. He placed no limit on the $$, so I believe he owes me $100 because "Fed hasn't actively changed the monetary base when it changes the interest rate target since maybe pre-1994,". I don't expect to collect, because I'm sure he is a welcher.

But the problem is that I can't find the valuable quote, because I can not stand his twitter thread.

OK the embarrassing (to me) twitter flame war explained

1) It began with someone who tweets as @fiat_money . I don't know this person's name in real life. I would tend to guess that he or she might be a Ron Paul type gold bug. I have no reason to think this person has any interest in MMT. Also he or she was blocked by Brad DeLong.

After I tweeted many silly things, I wrote a thread explaining what I should have said

https://twitter.com/robertwaldmann/status/1102112291745685504

I cut and paste

Robert Waldmann

‏ @robertwaldmann 24h24 hours ago

I am discussing this claim "Fed makes sure T-bonds are instantly convertible to USD, so printing treasuries is equivalent to printing dollars." do you agree that printing treasuries is equivalent to printing dollars ?"

The Fed does no such thing. There is a very thick secondary market for t-bills, so they can be converted to USD instantly (at a market price which varies).

The Fed does buy and sell t-bills for reserves with open market operations but it doesn't make the market. It doesn't make sure t-bills are liquid. The private secture sure does, but that's not the Fed's job.

Since the Fed absolutely does not act as a t-bill/USD market maker, issuing them is not at all like printing money. It is very possible that the Fed's reaction to increased deficits is to sell t-bills contracting the supply of reserves. The FOMC does what it chooses to do.

It is absolutely not true at all that increased deficits automatically cause increased reserves. If the FOMC just sits there (no open market operations) then there is no change in reserves. The MMT position is nonsense.

The fact that MMTers contested my criticism of "printing treasuries is equivalent to printing dollars" lowers my opinion of them (which before today was vague as I had not thought about them much).

Embarrassingly, before tweeting the thread copied and pasted above, I replied to replies to my ciriticsm of the quoted claim. In the resulting twitter flame war, I asked Scott Fullwiler who is very expert on how monetary policy is actually implemented whether he knew what an open market operation is. He does. He knows quite a lot about open market operations and how they are currently almost irrelevant (a claim I started making in 2010 https://angrybearblog.com/2011/05/qe-ii-mmmclxxvi.html)

I feel the need to explain what happened. I criticized the claim "Fed makes sure T-bonds are instantly convertible to USD, so printing treasuries is equivalent to printing dollars." saying that T-bonds and USD are not perfect substitutes (note unlike T-bills and notes T-bonds mature after 30 years, they are quite different from dollars). Someone replied to me arguing that t-bills are used by financial firms as a means of payment (true as I have noted from time to time). I proved that t-bills and USD are not perfect substitutes by graphing the t-bill interest rate. I think this proves @fiat_money was wrong. Scott Fullwiler jumped in laughing at me.

Now I knew that MMTers assert that deficit spending automatically causes an increase in reserves. I didn't know why they say that (it absolutely isn't true if the standard definitions of "deficit spending" and "reserves" are used). Foolishly I guessed they were using an eccentric definition of reserves and claiming that t-bills and dollars are perfect substitutes (always and not just now (approximatel) in the liquidity trap). If this were true, then open market operations would have no effect, hence my question.

But now I know that they use an eccentric definition of deficit spending. They define it as spending financed by money creation. Then the actual process of spending financed by the auctioning of Treasury securities, they describe as 2 events -- deficit spending and bond sales. This *should* be a harmless eccentricity. The disagrement is purely 100% semantic. There is no disagreemnt if NMTers vs other economists about the policy options open to the US Federal Government. It is very bad to insist on using terms with definitions other than the standard definition. Typically the only result is confusion. But in this case it is much worse because MMTers insist that the purely semantic distinction is substantive and very important. I think this demonstrates that they have nothing useful to contribute to any discussion. But it sure doesn't mean they don't know what open market operations are.

The claim that deficitm spending implies an increase in reserves is based on the definition of "deficit spending" as meaning what 99% of economists mean by "deficit spending and open market operations so that the balance of bonds outstanding does not change and the supply of high powered money increases by an amount equal to the deficit". On the other hand, they use the word "reserves" with its standard definition.

There was a twitter flame war during which I did not manage to communicate that my objection was with the claim that bonds and USD are perfect substitutes (I did type that this was my point (if any) many times).

I have sincere advice for MMTers. If they want others to consider them anything other than a cult of flakes, they should use standard definitions of words. If,for some deep psychological reason, they must use there own eccentric definitions, they should say so in every document they write using the eccentric definitions (which means ever tweet). Jargon is useful for excluding people, but a tiny bunch of people do not gain by excluding everyone else.

I fear that the problem with this is that, aside from the eccentric terminology and ignorance about residential investment and open economies, they have nothing original to contribute. They certainly haven't presented any argument that they have something useful to add to the discussion that has convinced more than a tiny number of outsiders.

OK

Sunday, February 10, 2019

The Empty Quarter, Greenwich and the Mason Dixon Line

I recall being surprised to learn that I was born, bred and then living South of the Mason Dixon line. I considered the border between North and South to be the Patomac river (honestly felt I was entering enemy territory when I entered Northern Virginia -- this was very long ago). My dad explained it was the border between Pennsylvania (North) and Maryland (South). My 91 year old mother recently confessed that she had some doubts about moving South of the Mason Dixon line to live with my Dad. The border is now roughly where 270 shrinks into a normal sized highway. The line is arbitrary.

I thought of it when I saw the very common figure showing the empty quadrant of US public opinion. A solid majority is more egalitarian than the center and more socially conservative than the center.

What the hell is this center ? The question is made more difficult by the fact that the two dimensions are indices constructed combining answers to many questions. I am fairly sure that historically the "economic dimension" is the first principle component of the cloud of answers and the "social/identity dimension" is the second. But I am talking about the placement of the axes. It is that arbitrary, unmotivated and unexplained choice which causes the South East quadrant to be empty. One natural placement is that the division between left and right on the economic dimension is the median level of the economic index and the division between socially conservative and socially liberal is the median level of social/identity index. This is clearly not the choice made by *all* political scientists, sociologist and survey researchers. It is clear that the median US adult has left of center views on economic issues and more conservative than centrist views on social/identity issues.

I assert that there is some elitist nonsense going on here. I haven't looked very hard, but I also haven't found any definition of what makes some point (0,0). So I speculate.

Everything is relative, so to the standard statement that public opinion is skewed conservative populist, I assert thatelite opinion is skewed libertarian -- it's that the axes are oddly placed given the data points, not that the datapoints are oddly placed given the axes.

Of course it isn't simply a matter of eliminating a central claim of US political science by adding a constant to the economic index scores and subtracting one from the social/identity index scores. The cloud would look strange because it would end abruptly at the values which are now econmic ultraleft -1 and ultra social conservative +1. The issue isn't just the processing of the answers to questions which are the raw data -- it is also the questions. A large number of people (including some Trump voters) give the left more answer to every economic question and a smaller but still large number give the most conservative answer to every social/identity question. This shows the elite libertarianish skew of the people who chose the questions.

If the economic question is "should the rich be lined up and shot after all their wealth is confiscated or is making them poor punishment enough" then almost all US adults would agree on something with a libertarian. If the social/identity question is "was Moses right that gay sex should be punished with death" again a substantial majority would side with libertarians. But those questions are considered absurd, because they are outside of the range of elite opinion. (indeed as a child of the elite I absolutely oppose killing rich people, killing gay people and oppose killing rich gay people). The point is just that the questions matter. Most of the 10% most egalitarian Americans are to the right of Mao Tse Tung. The most socially conservative are to the left of Cotton Mather (haven't heard much agitation for witch trials lately).

So what is this elite ? My guess is that it would be political scientists, sociologists, and survey researchers. But it could be members of congress. I haven't read the questions, but they might be issues on the Federal Government agenda -- nothing so far left as a top income tax rate of 70% until roughly last week. Or it could be pundits, columnists, "sophisters, economists, and calculators". In any case, the figure tells us as much about the people who chose the questions as about those who chose the answers. !"