Monday, December 02, 2013
Sunday, November 24, 2013
Monday, November 18, 2013
In fact I much prefer simplest new Keynesian models to standard obscure new Keynesian models. Oh hell, my damn comment was waaay too long. here it is
I understand that hoping to read my name two times on your blog in one day is too optimistic. But really, I much prefer two Keynesian models to new Keynesian models. As you mention from time to time some people think the main purpose of models is to clarify thought. I am another one of those people.
More to the point simple models make clear which assumptions are key. As you mentioned in the New Keynesian ... fiscal policy post there are two key things to say about new Keynesian model dynamics
1) it is assumed that the economy gets back to the steady state (you wrote "a steady state" but it in the work horse models there is only one steady state)
2) there is no reason to think this is realistic. In fact leading new Keynesian OJ Blanchard has written about hysteresis not so long after figuring out how to deal wtih anticipated shocks in a model with a saddle path equilibrium.
I was thinking of commenting on those two points. In (almost all of ?) contemporary macro, it is assumed that there is a unique steady state and saddle dynamics around it. This means it is assumed that, excpet for exogenous shocks, the economy is predictable. That seems to me to be a problem right there given how badly contemporary macroeconomists (including the oversigned) forecast. But it provides a key insight to policy makers (in scare quotes)
"In the long run, macro policy doesn't affect real variables. So the very serious statesman who focuses on the long run should target inflation and ignore unemployment and output. "
The problem is that this policy relevant conclusion is an arbitrary assumption. The fearful plumbing is all analysis of the short run. Since it is not assumed a priori it is complicated. Since there isn't a standard (plainly false) assumption there is a lot of controversy. Since it is fearflul plumbing it makes policy makers queesy.
I think the impact of the analysis on actual policy is all due to the assumption and not the fancy math, clever modelling innovation or well anything whcih wasn't shoved aside as something we don't have to worry about.
What's worse, while, the serious statesman ignores the Keynesian parts of new Keynesian economics, the political hack ignores all of it. The short term political effect of policy proposals is based entirely on economically illiterate conventional wisdom. The case that good policy is good politics is an argument that even politicians who care only about winning elections should consider the medium run impact of policy.
The NK case for Keynesian policy is that it will be politically costly in the short run and won't help the economy in the long run but in the in between run it would be good for the economy and the politicians who implemented it. I can't explain the failure of the not the short run, not the long run, but roughly somewhere in the middle run analysis to convince policy makers.
Thursday, November 14, 2013
Wednesday, November 13, 2013
Monday, November 04, 2013
Sunday, November 03, 2013
Saturday, November 02, 2013
Friday, November 01, 2013
in·de·fen·si·ble adjective \-ˈfen(t)-sə-bəl\ : not able to be thought of as good or acceptable : not able to be kept safe from damage or harm Full Definition of INDEFENSIBLE 1 a : incapable of being maintained as right or valid : untenable b : incapable of being justified or excused : inexcusableThe question is whterh it can't honestly be defended (ef 1) or if attempting to defend it is bad rhetorical strategy because people won't be convinced. He meant the second and I read the first. His "impossible to defend" meant "indefensible in the militray sense" not "unarguably false". Twitter restricts the text to 140 characters and the context to what shows up clicking "view converstation" and searching terms beginning with @ and #. SEcond engagement. I debate with Brad about the meaning of "you" J. Bradford DeLong @delong 30 Oct .@robertwaldmann then Obama should have said: “If U and Ur insurance company wish to keep your current plan, you can” shouldn’t he? @afrakt What do you mean by "U" White man ? I go to join my coparties. robertwaldmann @robertwaldmann 30 Oct @delong @afrakt It depends on what the definition of "you" is. In general when we say a contract is allowed by law = "if both parties agree" Expand robertwaldmann @robertwaldmann 30 Oct @afrakt @delong The statement "no one will take thy plan from thee" would be false. Now THIS is a tortured defence To go on with my "enhanced" tweeting techniques. Is it true that you can marry whichever adult you please in California ? No you can only marry people who are willing to say "I do" (plus neither can be married at the time). It goes without saying that a fixed term contract can't be unilateraly extended by one party against the will of the other. President Obama, will I be able to play the piano after the operation ?
2 : incapable of being protected against physical attack
Tuesday, October 29, 2013
Saturday, October 19, 2013
"that which the American people have been waiting for for the last 200 years, politicians listening to the people instead of the ruling class"
That would be far right tea-partier Raul Labrador (R-Idaho)
The mountain West is red. Red Staters vs the capitalist class.
In the same post Dave Weigel quoted a Texas businessman in the 1930s
“The capitalist system can be destroyed more effectively by having men of means defend it then by importing a million Reds from Moscow to attack it,”
It is true that reds from Moscow Russia are not much of a threat to the capitalists system. But red staters from places like Moscow Idaho practically destroyed it last week.
And yes, of course I found the Republican against the ruling class contrarianism in Slate. What did you expect ? The Daily Right To Worker ?
Thursday, October 17, 2013
- Income verification under the Affordable Care Act will be beefed up.
Monday, October 07, 2013
Now if it is something which amounts to nothing like the last time when it was that the Sente doesn't get paid till it passes a budget resolution, this might do the trick. Obama might sign it.
I will assume that the rules are that Boehner muust have a case that Obama caved and Obama must have a case that he signed a clean debt limit increase.
If so, I think it would be a very bad idea to pass a clean continuing resolution. This would make it very hard for any Republicans to vote for a clean debt limit increase and survive. I think the third best hoe is bill which combines continuing resolution, a debt limit increase an da fig leaf. Let's say the fig leaf is elimination of theACA tax on medical devices (no huge deal).
The Democrats in the Senate can declare victory -- the Senate buget resolution already calls for elimination of the divice tax. Obama can say that he would have signed the bill if it consisted only of a continuing resolution (CR) and the tax repeal, since he doens't care all that much about the tax (and since he hasn't been as explicit about no bargaining on the continuing resolution). Boehner will say that Obama signed an unclean debt limit after all so he won. No one will believe him, but the Republicans won't eel so disrespected that they have to inflict the gavel on someone else.
Maybe this is not acceptable to Obama (Kevin Drum thinks it isn't and shouldn't be) . So I add the rule that the debt ceiling bill must be a stand alone clean debt ceiling bill with no other provisions at all. Then the approach would be as follows. The House passes a CR with a figleaf. The House starts work on a clean debt limit increase. The Senate passes the CR with a figleaf. It goes to Obama's deks and sits there -- he doens't have to sign or veto it immediately. Boehner says they have to pass the debt limit incresae ot get Obama to sign the device tax repeal which is the best thing evarrr. Obama refuses to say why he is still thinking about whether to veto and especially whether it has anything to do with the debt limit.
The debt limit passes the House. Obama signs the CR with the dirty figleaf (and beleive me I have recently seen filthy fig leaves). Then the Senate passes the clean debt limit increase and Obama as he promised signs a clean debt limit increase.
Maybe this is not acceptable tot he Republicans so let's go Rube Goldberg. The figleaf is attached both the the CR and the debt limit increase. The CR gets to Obma's desk first. When the debt limit increase get's to Obam's desk he notes that it just raises the debt limit and eliminates a tax which he eliminated the day before yesterday. So one provision amounts to nothing at all an he consisders it a clean debt limit increase.
OK the device tax figleaf is unacceptble to someone with a veto. New figleaf is a super committee. The report of the committee can't be mended of filibustered. This is what the Republicans got in 2011 in addition to legislated cuts and sequestration. They declare complete victory and reporters manage not to laugh. TheSenate passes and Obama signs the bill. The super committee fails to issue a report (of course) and no harm is done.
OK maybe this outcome is not acceptable to Obama as the principal that caucuses get nothing nothing at all for threatening the full faith and credit of the US Treasury. So the next day he gives a speach in which he notes that the report of teh committee can't be filibusterer or amended but it will be vetoed if it contains any provision he doesn't support on its own merits. Any provision at all. In particular if a dime is cut form Medicaid, Social Security or Medicare or if a dime is added to the taxes of any couple whcih makes under $250,000/yr or any individual who makes over $2000,000/yr he will veto the bill. To the committee he says "my way or the highway. And rather than waste your time why don't you take the highway and disolve. Then I will be willing to negotiate just as if the whole sorry debt limit impasse never occurred. I have nothing against super committees and I would even be willing to negotiate possibly setting up a new one untainted by debt limit extortion, but I will not compromise at all with a committee set up using debt limit extortion."
So the Republicans end up with exactly nothing. Obama wins. Boehner doesn't read this bog so he didn't see it coming.
Friday, October 04, 2013
A rational Democrat who hoped to help the party would leave it at that. If that's what you want, you are at the wrong blog. I assume almost no one reads this so I can look a gift horse in the mouth. Hastert adds some Ballance here " “I didn’t have to deal with Barack Obama. I dealt with Bill Clinton, and he came to the table and negotiated.”
He told a little anecdote
Clinton asked, “What can I do for you?” “A haircut across the board,” Hastert replied. “I would suggest a 1 percent cut.” Can’t take that, Clinton said, offering all the reasons why that wouldn’t work. “What do you suggest?” Hastert asked him. A quarter of 1 percent, Clinton replied. “We dickered back and forth and settled on .86 percent, not because it was a magic number,” said Hastert. “But the moral of the story is Clinton would come to the table. . I’m not going to go into the science of negotiating, but you can put one thing on the table and end up with something entirely different, but you’ve got to talk.”
He neglected to mention that Obama negotiated at length with Boehner in 2011 then Boehner suspended the discussion, because his caucus wouldn't support anything like the possible grand compromise under discussion. Nor does he mention that Boehner has promised not to negotiate privately with Obama. Finally, he doesn't note that Reid negotiated with Boehner and they reached an agreement. That agreement is the Senate continuing resolution on which Boehner won't allow a vote. Democrats are refusing to offer further concessions after a deal was negotated and then the House Republicans decided to treat it as the Democrats opening offer. I trust Reid on this, because the clean continuing resolution was proposed by Boehner to his conference and he argued for it at length. Also it is the only explanation of why the Senate passed a sequestration level continuing resolution (that is they kept their word even though Boehner broke his).
So here is my updated modernized version of the story
Clinton asked, “What can I do for you?” “A haircut across the board,” Hastert replied. “I would suggest a 1 percent cut.” Can’t take that, Clinton said, offering all the reasons why that wouldn’t work. “What do you suggest?” Hastert asked him. A quarter of 1 percent, Clinton replied. “We dickered back and forth and settled on 1 percent. Then I presented the agreement to my conference and they practically lynched me and passed a bill (with the votes of 2 Democrats) which cut spending across the board by 1% except for SCHIP which it cut by 100%. Then I spent weeks saying that Clinton was totally unreasonable, wouldn't negotiate and demanded 100% of what he wanted, because he didn't agree to cut SCHIP by 50%
The claim that the Democrats won't negotiate is simply false. They negotiated, they basically caved, they made a deal and then then stuck with it.
I don't know much about the science of negotiation, but coming to the table with people whose promises are worthless is stupid.
Monday, September 30, 2013
In the New York times Jeremy W. Peters and Jonathan FBD Weisman write.
"All Mr. Reid needs are 51 Democrats to vote with him — not the usual 60-vote threshold required for most Senate business "
Evidently, filibusters are usual, part of normal order. The strange fact that 51 senators count for more than 49 senatorls is not usual. It wasn't always this way. I'm old enough to remember when filibusters were rare and the norm that Senators only filibustered bills related to issues on which they cared passionately. The new normal is that anything but naming post offices requires 60 votes.
The secret (aside from Jonathan FBD Weisman being hired by the New York Times) is that the House Republican Caucus is so extreme they make the Senate Republican caucus look like statesmen.
Also note that bloggers need to learn about civility from respectable journalists like Weisman.
Wednesday, September 25, 2013
Meredith Shiner and Niels Lesniewski at Roll Call explain that Cruz proposed faster approval of the bill, because he cares more about ratings than legislature.
Though it is unclear whether leaders will accept Cruz’s offers, the fact that Cruz moved at all from his original position that the Senate should take up full debate time to Sunday could mark progress toward avoiding a shutdown. Many, including most Senate Republicans, view government shutdown as an unavoidable outcome unless the GOP cedes debate time. On Wednesday morning, Cruz offered to open debate on the House-approved continuing resolution by unanimous consent as long as the majority agreed to hold the vote to cut off debate on Friday, so more people might pay attention to it.
Tuesday, September 24, 2013
The latest news on Taegan Goddard's Political Wire
via Doug Milhous
"A ...* academic paper digging into presidential betting in the final
weeks of the 2012 election finds that a single trader lost between $4 million and $7 million placing a flurry of Intrade bets on Mitt Romney -- perhaps to make the Republican nominee's chance of victory appear brighter," the Wall Street Journal reports.
aha just as I suspected.
"The anonymous trader placed 1.2 million pro-Romney contracts, some of which were actually in the form of bets against a Barack Obama victory. The most plausible reason for the betting, the authors conclude, is that 'this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.'"
Mark Kleiman asked "Wha' Happened"
and I commented
* mandatory "fair" use ellipses.
**I tries to conjugate and not add incorrect s's, but sometimes I just can't helps myself.
Saturday, September 21, 2013
Despite rising health care and education prices, we don't have fewer people going to college or seeing the doctor and we do have bigger houses, more and better cars, better food, and much better gadgets and entertainment.
Your case is very strong. The point is that neither the BLS nor the Bureau of the Census consider the increase in living standards due to new cool gadgets at all. See DeLong on Baker arguing this is no big deal for the median consumer http://delong.typepad.com/sdj/2006/09/the_meaning_of_.html
When a new good is introduced, it is as if the price declines from infinity (you just can't buy it because it doesn't exist is just the same as you can buy it for infinity dollars because it doesn't exist). But the price indices assume that the introduction of a brand new good makes no difference. Effectively they assume that there is an old good which is a perfect substitute for the new good so people are indifferent between buying the old good or the new good for it's new price.
Now it is possible to semi deal with this bias. The price of really fundamentally new goods which have just been introduced is so high that very few people buy them (what milage does your Tesla Roadster get ?) . Yes some people are better off, but they are few and very rich and who cares. Then the price declines rapidly. However, the weird new rarely bought goods are not included in the baskets used to construct the indices. This means that by waiting until the super cool but super expensive phase is over, the BLS and the Census accept a bias. The new good has caused a non negligible change in living standards before the BLS notices it.
Baker shot himself in the foot. He considered the case of cell phones (I'm as old as Baker and remember when they were silly status symbols for rich conspicuous consumers -- I even remember the fake cell phones with nothing inside bought by the pathetic wannabe rich as conspicuous fake consumption).
"I once debated an economist... asked him how much this oversight led to an overstatement in the cost of living for the half of the population that still didn't own a cell phone.... [R]emembering economic theory, he gave the correct answer "zero.""
Ah but is that exactly half ? If 51% don't own a cell phone *and* cell phone ownership is perfectly perfectly correlated with income, then the oversight had zero effect on the cost of living for median income consumers (and therefore on median real income). if 49% don't own a cell phone, then the oversight must cause an underestimate of median real income. Since no correlation is perfect, Baker's argument that the oversight has no effect on estimates of median real income is undoubtably incorrect.
Now cell phone ownership has changed. There are many 3rd world people who own cell phones who don't have electric current (so there are cell phone charging stations). Figuring out a way to, say, bank with a cell phone is figuring out a way to extend services to the poor http://www.cgap.org/about. There are many people excluded from what we consider the modern economy who have cell phones. The price of cell phones is relevant to world median income not just US median income. Baker chose a very poor example.