Wednesday, February 29, 2012

Why is this news ? On page A1 of

Iran’s underground nuclear site more vulnerable than portrayed, experts say

Joby Warrick
Bunker-busting weapons have capability to bore through up to 200 feet of dirt and rock before exploding

Notice that the word "New" does not appear before "Bunker-busting". I know that the program to produce such weapons was announced more than 23 years ago (I was in the NBER coffee room, Jim Hines read an article describing the announcement said "It's about time." (irony alert).

So why is the existence of such weapons front page news ? The real meaning of the article is that some prominent Washingtonians have decided to begin a campaign in favor of bombing Iran. The point of the article is to announce that fact. The sophisticated reader is expected to understand this. Only the naive imagine that there is anything new to report on US ability to destroy targets under 200 feet of dirt and rock.

The Washington Post serves as a notice board for semi official leaks (I'd have to read the article to even try to guess who is behind it). So why do they pretend that they are reporting technology news not participating in a political signalling game ?

Tuesday, February 28, 2012

I'm overjoyed.

It turns out that this very blog is the 5th ranked google result for

very rude comments

I always knew I would be famous for something some day.

Sunday, February 26, 2012

Does this observation tell us more about Rick Santorum or about David Fahrenthold

"Rick Santorum does not provide doughnuts."

Is the aim to convince the last 3 people who take the political press seriously that they think it is all about them ?

To be deadly serious, I think the key solution is to use the magic power of the internet, or hell how about the telephone. They don't have to ride on the bus and scrounge for doughnuts anymore. They can listen to the speaches from the comfort of their own homes, then fact check them on the web. Maybe someday hard working reporters will have as much interesting to write as lazy amateur bloggers.

But I'm not holding my breath.


"Santorum, ...

His premise is that only he — a man who lacks the logistical wherewithal to rustle up snacks —"

I could have saved Kaplan some ink and paper. "logistical wherewithal" means money. Fahrenthold's position (clearly his deeply held view) is that only candidates who have huge campaign budgets are competent leaders. Just above, he noted the collosal Romney stagecraft fail in Ford Stadium. But Romney has the right stuff to manage, to be a competent CEO -- dollars.

Now I don't like Santorum (see post below). I've always rejected his claim that US Democracies is threatened by internal enemies who are determined to make it fail. But I can't think of another explanation of the existence of this article.
Giant Flaming Asshole Award

Who will be our first winner (after the jump)

Thursday, February 23, 2012

Glenn "Pinocchio" Kessler attempts to fact check the Republican presidential debate.

On Santorum's claim that Obamacare adds to the deficit he wrote "the Congressional Budget Office calculated that it slightly reduced the deficit in the first 10 years, though much of the law was not fully implemented in the first four years. All bets are off in the next 10 years, however."

This "fact check" contains one highly misleading observation "though ... years." Since the CBO scored year by year. Kessler must know that the first four years contribute almost nothing to the total, since almost none of the new taxes are being collected.

The "All bets are off" claim, in contrast, is totally false. The CBO scored the Senate budget committee draft bill for the next ten years and reported huge gigantic massive deficit reduction. Kessler might not believe the CBO (which he cites as authoritative in the preceding sentence". He can't however argue that all bets are off because the final bill is different from the draft the CBO scored. The changes have a lot to do with the timing of new taxes (having the cadillac insurance tax start later) and so imply larger deficit reductions in the second 10 years out.

The claim that "All bets are off" could only be true if there were not extensive calculations of the numbers which Kessler denies have been calculated at all. His assertion is simply grossly false. It is also highly inflamatory and on a very important pattern.

I award Glenn Kessler four Pinocchios.

I wrote the above and went back to check more checking

“The 12 years I was in the United States Senate, we went from — the debt-to-GDP ratio, which is now over a hundred percent — when I came to the Senate, it was 68 percent of GDP. When I left the Senate, it was 64 percent of GDP. So government as a size of the economy went down when I was in the United States Senate.”

— Santorum


Santorum has spending going down as a percentage of the economy

No he doesn't you illiterate. Santorum made a claim about debt not spending. No one who confuses deficits and debt has any place attempting to check facts, but anyone who confuses debt and spending had better enroll in remedial elementary school.

I award Glenn Kessler a dictionary.

I am not going to debt any more of my almost valueless time reading the crap which Kessler writes. Just by reading this far, I feel I have paid my spending to society.
QOTD. In this case quoting DAY here (first comment).

DAY on February 21, 2012 12:25 PM:

Obama claims to be a Christian; and I will take him at his word.
Santorum claims to be a human, and I will take him at his word.
(Others may want to see DNA evidence)
Kids these days, they just aint got no culture
In comments to Iceland's Saga

Robert WaldmannRome Italy

I searched as you recommended and I got sent to some advertisement by the North Malden Icelandic Saga Society. So tell me, should I invest in North Malden, South Malden or East Malden ?
Feb. 22, 2012 at 6:50 p.m.

joelOakland, CA
I didn't. I got exactly the kind of list of blog entries about Iceland one would expect. Sure you were in the right box?
Feb. 22, 2012 at 7:25 p.m.RECOMMEND4

Dem VoterDallas, TX
Use the box labeled "Search This Blog" rather than the one labeled "Search All"

Uh come on you really think that Search All sends you here ?

If I thought so then I would Search All more often.

Someone is not getting the (feeble) joke. Is it me ?

Wednesday, February 15, 2012

Generic comment.
Generic comment I made on some other blog which I cut and paste here

Excellent post. I admire you very much. I do have one quibble
So the evidence tends to undermine
clearly false
reckless disregard for the truth
I never dreamed that an actual Homo sapiens could write something so stupid
might have something to do with damage from congenital syphilis since your mother is a
just want to stress again how much I admire you, like your blog and hope that this little disagreement won't make you less willing to link to mine.

Why ?

Thursday, February 09, 2012

Simon Wren-Lewis writes more on schools of thought.

I am very very rude in comments

I agree with almost everything here. I will only type about disagreements.

First note the quick mention of "behavioral ..." Then later the casual statement that there is a mainstream consensus in favor of assuming rational expectations. This is a plain contradiction. I think it is clear what is going on -- when we discuss expectations (elicited or maybe revealed in simple experiments) we admit that there are systematic predictable deviations from rationality. Also when we attempt to explain behavior, we admit that what sure looks like the combination of that irrationality and plausible preferences is probably what it seems (although it is always possible to reconcile any behavior with full rationality).

I think it is clear what is going on. Economists like models with rational expectations and all use the same "as if" excuse. Also the Phillips curve turned out not to be an economic law refuting "Keynesian" economics (and confirming Keynes's warning which was as clear as a warning could be given the disadvantage of writing long before Phillips).

Idem with consumption. It is a fact that simple intertemporal optimizing models of consumption are rejected by the data. It is also true that they appear in DSGE models (often made equally harmless and pointless by adding on liquidity constrained agents). Now one might argue that we have moved beyond Keynes by noting factors which affect consumption which he didn't consider, then modifying the model to pick up the large empirical effect of current income. But only if you ignore The General Theory ..."'s chapter on consumption which does exactly that.

Needless to say, Keynes didn't critique econometrics, since it didn't exist in the form critiqued by Lucas when Keynes wrote. However, Lucas made no claim of originality, argued that the critique was very commonly made by the econometricians he critiqued and provided ample references to prove those claims.

So what is left which is "progressive." By the way, I hate that word with which I am mainly familiar from English translations of Trotsky. It was a magic word which explained why something was good even all the evidence at hand suggested it was terrible. Is it possible to write a defense of the rational expectations revolution without using the same magic word used to justify the Bolshevik revolution ?

What claim could possibly be weaker than "if interpreted flexibly, bring net benefits. " This is what one would write about a damaging orthodoxy -- the damage need not be denied given the word "flexibly". The benefits need not be listed, because ... I mean of course everyone who matters agrees that there are benefits.

It seems to me that with great effort by many smart people Macroeconomic theory has worked back to where it was in 1975 or so. There are many models with different implications which can be fiddled until they fit the data. None gives reliably good predictions. What progress justifies your use of "progressive" what net benefits have there been ?

Or finally, and I am asking for information and launching a challenge, what has been added to "The General Theory of Employment Interest and Money" ? I claim that any alleged new insight is either agreed to be false (but hey all models are false and the fact that RBC and New Keynesian models are false doesn't mean they aren't useful blah blah blah) or is in the book (I will provide page references).
Mark Thoma explains the very basics of New Keynesian economics and I am very rude.

I came here clicking a link in a post where you indignantly deny that you are an old Keynesian. I ask what has been added by the very simple inter-temporal optimization ?

It seems to me that New Keynesian macro consists (as here) in writing models with optimizing agents which behave the way old Keynesian models behave. I ask why not cut out the middle man ?

The model as written has implications other than that there is something like an IS curve. As you note, the true expected value (that is rationally expected) of future GDP affects current GDP. Also the real interest rate affects the rate of growth of consumption.

The problem is that, to the extent new Keynessian models differ from old Keynesian models, the data are not kind to the new models. It is a fact that estimates of 1/theta made using aggregate data are tiny -- typically around 0.1. Such low intertemporal elasticities can be reconciled with the long term average rate of growth of consumption only by assuming Beta>1 which is crazy. It is also a fact that the scatter of growth of consumption on the econometricians forecast of r look a lot like scatters of independent variables. Also excess sensitivity is not in the model.
That which has been added is false and has been known to be false for decades.

Now, of course, there are more complicated new Keynesian models which also fit those facts. Like RBC new Keynesian economics can fit any summary statistic with just one arbitrary new variable for summary statistic.

The newness is all about intertemporal optimization without liquidity constraints. It clearly gives false implications. So the model is modified so that it acts just like an old Keynesian model. How is this a worthwhile activity ?

Notably, the micro foundations are not justified on the assumption that people really intertemporally optimize with rational expectations. The argument is that the economy could behave as if they did. If so, the case that it is better for macro models to have micro foundations is based on nothing at all. Anything might work. There is no reason to believe that the definitely false assumptions that new Keynesians like to make are better than any other definitely false assumptions.

What is wrong with Keynes or, for that matter, Hicks ? One might argue that it is unwise to treat a Phillips curve as an economic law holding in all times and places. This is, historically, the fact which convinced macro-economists to work on micro foundations. It was also argued by Keynes in spite of the disadvantage of writing before Phillips. What, of any value, have macroeconomists added to Keynes ? (note I am counting Hicks -- the move from LM to MP is a move from Hicks back to Keynes).

I close this long and very rude comment with the usual on methodology (for no particular reason).

Modern macro rests on the twin methodological pillars of "The Methodology of Positive Economics" and "Econometric Policy Evaluation: A Critique," but a better title for the second paper would be ""The Methodology of Positive Economics: A Critique," since it argues (correctly and as was well known at the time) that even if we don't care if a model is approximately true but only if it gives useful predictions, we must care if a model is approximately true. The model you present here definitely isn't.

Wednesday, February 08, 2012

Front Door view update.

I'm pretty sure my neighbors are getting irritated about the trees on the good fences which make good neighbors. I will do something about them when the snow melts.

I have to admit that I haven't been here. We also rent a little apartment near Monte Testaccio and we've been tehre.

Our house is a very very nice house
with two trees on the roof
and dozens on the yard
now everything is snowy
what a view.

Saturday, February 04, 2012

My front door update

Mitt Romney got confused on the campaign trail. He kissed a football and threw a baby. OK I admit that is an old SNL joke about Ford, but I have two illustrations.

Friday, February 03, 2012

The View from my front Door

It snowed about a foot in the suburbs of Rome (I live where the Etruscans who were stopped by Horatio at the bridge lived). The problem is that the pines of Rome are not able to support much more than their twigs. So many branches broke. Last night I was serenaded by loud thumps and today I opened my front door and saw this

Oh just heard another thump (really honest). Yep new rather small branch on our porch.

I am sure that I will be able to drive somewhere sometime, but, since there are about three snow plows in the Rome metropolitan area, I'm not holding my breath.

I'm fine so long as I have internet access. I was alarmed when I lost power (a pine of Rome pining for the fjords on a power line I'd guess). I am impressed that ENEL got it back on in a few hours Nnothing like Pepco -- the US corporation with the lowest approval rating. This was way back when Washington was gridlocked on health care reform, but they have had another epic fail since then).

Another view out of focus but showing the door