George Soros funded mediamatters

Suddenly, the claim that George Soros funds mediamatters has changed into a fact reported by mediamatters and George Soros from an unsupported accusation transmitted by Fox News (and it's satttlelights and I'm not talking about Sky). The interesting thing is that people who have claimed for years that Soros funds mediamatters are treating this as news.

They don't say they are glad that a link which already existed is now open, they seem to have entirely forgotten their repeated claims that Soros funded mediamatters.

Rush Limbaugh, for example, basically said that he has been lying to people for years.

No one who reads this blog will be surprised that I think Limbaugh freequently lies making claims of fact with no evidence because they support his conclusions. What puzzles me is that he seems to be pretty much open about his dishonesty. It seems to me that Limbaugh listeners can not fail to notice what is going on.

Limbaugh makes a huge amount of money. Ditto heads claim to believe falsehoods and don't make a lot of money. I really don't understand at all. I don't know any ditto heads so I can't ask why they do so. Of course, if I were to talk to ditto heads, they will indignantly deny that Limbaugh lies and still more indignantly deny that they know perfectly well that Limbaugh lies. But I don't think they can really doubt it.

I think part of what is going on is that many people think it is more important to be on the right side and to be a reliable member of the team than it is to accept facts as facts. I think there is also sincere suspicion of mere "facticity" (an attempted English translation of a German word that Hegel used to express his contempt for facts). A belief that a claim of fact which supports the right conclusion is somehow essentially true even if the specific claim doesn't correspond to reality.

I am trying very hard to imagine what it is like to be a ditto head and I just can't do it.

Something in the Water

Exra Klein writes about hardball

Jonathan Bernstein thinks that the Democratic tendency to believe Republicans are far more ruthless and organized than they are is mirrored among Republicans:

[skip]

But Republicans have their own list of grievances, including the last-minute revelation of George W. Bush's driving record in 2000 and the stuff about his military service in 2004.

[skip]

Democrats embraced some legitimate, but nevertheless inventive, tactics in the push to get health-care reform through both the Senate and the House. Barack Obama decided to forgo public funding so that he could vastly outspend John McCain. Nothing there goes nearly as far as the tactics Republicans used to pass the Medicare Prescription Drug Benefit,

First, at the time, Klein did not describe any of the Democrats tactics as inventive

What reconciliation is for

One of the weirder ideas out there is that it would somehow be unorthodox to use the budget reconciliation process to smooth out the difference between two health-care reform bills that have already been passed. But as Henry Aaron points out (pdf), this is literally what the reconciliation process was created to do:

I think that this claim (which is of course completely accurate) has ceased to be operative, because of the aqua Buddha ad.

On the site I commented at some length

You and Bernstein are hinting at two contradictory claims -- that Democrats play as hard hard ball as Republicans and that Democrats are wise to not play as hard hardball as Republicans. Both can't be true.

The first claim (which neither of you quite made) is clearly false. After arguing that both sides think the other is tougher, Bernstein checks the facts and concludes that Republicans are tougher -- and that this is bad strategy in the medium run.

Your examples of Democratic hard ball prove that you just can't make one tenth of a case that there is any comparison. You note Obama declined public financing -- Four years after Bush declined public financing. You note that the Democrats used the budget reconciliation process to reconcile the budget with the budgetary resolution. For some reason you consider this "inventive." You do not defend that assertion, because you can't. There is nothing inventive about using reconciliation for reconciliation

In contrast the Republicans used the reconciliation process to cut taxes and add to the deficit. That was inventive.

Other absurd non-examples include the Republicans suspicion that the proof that Bush lied to the US public (about his most recent arrest) was provided by Democrats. This is a legitimate issue -- Republicans had made rather a large deal about Clinton lying to the public. Republicans had been claiming that Gore lied or exaggerated, typically by lying about what he said. If the Republicans unproven suspicion is correct, there is no comparison between Democratic and Republiccan tactics in 2000.

According to fare left US News and World Report, the official documents released by the White House demonstrate that Bush did not fulfil his contractual obligations to the TANG. In contrast Clinton was called a draft dodger for briefly considering attempting to get into the national guard (and this in spite of the fact that given his birthday and the very public results of the draft lottery it would have been obvious to any responsible journalist that he wasn't drafted because his draft number was over 300 (over 330 IIRC)).

No evidence could be stronger than the utter mind boggling feebleness of the supposed examples of Democrats acting like Republicans. You aren't seriously arguing that conservatives are right about Republicans and liberals. Yet you hint and suggest something which you must know is total nonsense, before briefly admitting that it is nonsense and changing the subject.

I suggest you bring bottled water to work. There is clearly something in the Water in the Washington Post building.

Kargan just asserted that I don't believe in private property. OK I admitted, I don't believe in natural property rights -- I believe that private property is a social invention (roughly I'm with Walzer).

But I find myself indignant over the complete contempt for the useful institution of private property displayed by the editorial board of The Washington Post. They have decided that the time derivative (not the level) of house prices is more important than the principle that claims to own something should not be accepted without evidence.

They have the idea that the foreclosure mess is a bad thing and not good because it slows foreclosures (OK) and therefore we should just ignore massive widespread perjury and accept any banks claim to own a house just on their say so (and robosign so).

They assert that property titles are "antiquated." Lenin thought the same and it didn't work out so well.

All that is sacred is profaned all that is solid melts into CDOs of RMBS.

AP Edited

Poll: Many Obama 2008 supporters defecting to GOP

Poll: Obama's 2008 coalition dispirited and crumbling; GOP stands to benefit on Election Day

LIZ SIDOTI
AP News

Oct 17, 2010 08:38 EDT

[skip]

_76 percent of Obama voters say they will support the Democrat in their House district, while 8 percent plan to back the Republican and the rest are undecided.

_71 percent of McCain voters say they will vote for the Republican in their House district, while 9 percent plan to get behind Democrats and 20 percent haven't chosen a candidate.

Yes you read that correctly. The headline says Obama supporters are defecting to the GOP and the actual data from the actual poll show a larger fraction of Obama supporters intend to vote for Democrats than McCain supporters intend to vote for Republicans.

The argument is 76<71 and in fact 71 is about equal to 100.

update: Oh my Golly Gee. The bias in the article is vastly vastly more extreme than I imagined possible. "they've released the Congressional Generic ballot number. And it actually has the Dems up by 5 points."

end update.

Clearly the respondents didn't give the correct answer. Liz Sidoti just knows what the US people think and she isn't going to let some anonymous poll respondents mess up her story. I mean the ignorant buffoons haven't checked the story line. Who needs them.

The skipped part is worse than the headline. It is easy to give readers the impression that public opinion is the opposite of the opinions reported in polls, because quotes are much more interesting than numbers. Sidoti quotes two people who voted for Obama and intend to vote for Republicans. 8% of Obama voters declare an intention to vote for Republicans. The roughly 4% of total respondents who have the correct views (as judged by Sidoti) are the only ones she quotes.

The article is basically a massive lie. The headline is a false claim on a matter of fact. It should be corrected.

The actual situation is that the Republicans are going to win more seats because many people who voted for Obama won't vote in the mid terms. In large part this is due to disappointment, but it was inevitable. There hasn't been a pattern of Republicans doing much better than Democrats in mid terms, but there also hasn't been such a huge difference in political attitudes of the young and the old. It has always been true that the fraction of voters who are young is much lower in mid terms than in Presidential years. The change in partisan affiliation by age means that this mid term will be much better for Republicans than the last Presidential year. This is a separate issue from disappointment in Obama.

Also, the results of the poll absolutely scream that the disappointment will hurt Democrats by preventing people who would vote for Democrats to stay home and not by convincing them to vote Republican.

I wonder if Sidoti and the headline writer can read arabic numerals. Actually I'm pretty sure about the headline writer. I think it is clear that he or she just read the first few paragraphs which quoted Obama supporters who are defecting to Republicans and didn't read the number 8%. Thus the headline shows how successfully misleading the article is. I am assuming that all claims of fact in the article are technically true and note that someone whose job is to summarize the article clearly came away with a totally demonstrable false impression.

Does anyone have any explanation of why the AP employs Liz Sidoti ? I ask for information. I don't think the aim of top AP management is to deceive the public. If it were, their personel policy would make sense, but I just don't believe it.

"'The Economics of Interstellar Trade' a critique"

Click the link. It is not decorative. Nor is this one. Or this one. (which take you to the original article so don't click them twice -- we wouldn't want any time wasted here would we ?).

I find the analysis in "A Theory of Intersteller Trade" unconvincing. You assume that the Trantorian merchant can costlessly accompany it's cargo, however you neglect to consider the economics of interstellar tourism. Imports and exports of goods are easily managed as you demonstrate, but invisible exports are not.

WLOG (with loss of generality) I assume that agents are risk neutral make marginal utility 1) and also, as is standard, assume that they are depraved selfish swinish creatures who care only about consumption.

With these assumptions, the interest rate r must be related to the subjective rate of time preference (symbold font) r, hence r (are you sure you understand the notation).

Consider the advantages of a round trip to Trantor. One can leave invested wealth K behind. After a delay, measured in Earth's inertial frame* of T the wealth will have increased to Ke^(rT)
but the subjective delay will only be T/A where A= (square root of (1 - v'v/c^2))... how did you make actual equations without equation editor, LaTex or (shudder) Tex ? This means that the Value of K will be increased by this operation from the value in the absense of interstellar travel -- K to
K^(r(T(A-1)/A)). This operation can be performed infinitely many times so uh well seems like V is infinite.

Note the infinite benefits of interstellar travel must exist for any interest rate. If r < rho then people can be infinitely happly by borrowing infinity, consuming it then paying it back with interest by consuming - infinity at some future date).

Arbitrage implies that the K in this example is total wealth on planet, as the agent can consume - (total wealth minus its wealth to accumulate such K before leaving). Thus arbitrage proves that travel at speeds approaching the speed of light must cost the greater of the value of Trantor and the value of the Earth. Here simple economics has provided us with the answer to what appears to be a difficult problem in physics and engineering.

I have made extensive use of the simplifying approximation of risk neutrality (so did two of the guys who just won the Nobel prize by the way). Of course I also used the entirely standard assumption that economic agents are perfectly indifferent to the prospect of everyone they have ever known dying before they meet again.


(by the way, you claim not to know general relativity but assert correctly that the Earth has an approximately fixed inertial frame provided it is approximately in free fall -- of course that only holds at the center of mass of the Earth where we find ourselves to withing an interstellar scale approximation)

Unsubtle Contradictory Statements

This goes beyond "who oh why don't we have a better press corps" and "top reporters are innumerate" to "top reporters are illiterate too"

Jon Cohen and Dan Balz report on a Washington Post poll in the Washington Post.

They [most Americans] want Washington to be involved in schools and to help reduce poverty. Nearly half want the government to maintain a role in regulating health care.

If true, their claim would imply that many Americans want Washington to have no role in fighting poverty -- a very very radical position not yet advocated by any of the Republican loons running for office. It would also imply that more than half either want to eliminate the FDA or don't know if it should be eliminated.

However, their claim of fact about the Washington Post poll is false.


The actual questions are two clicks away from the "interpretation" (one has to click through a page of graphs and more analysis to get to the brute and raw plain facts of the matter).

The relevant question in the actual poll





As far as I can guess, Cohen and Balz read "Insuring access to health care" as
"regulating health care." If my guess as to what in the poll gave them that idea is correct, they are illiterate. The FDA does not "[i]nsure access to health care" but it does regulate health care.

The plain English meaning of the quoted passage from the article allegedly reporting the results of the poll is that a more than half of Americans answered "no federal governement involvement at all" or "no opinion" to the question on health care. In fact 11% answered "no federal government involvement at all" and 1% had no opinion. Cohen and Balz assert 12>50. In fact 52%, an absolute majority (52%) said they would "like to see more federal government involvement in that area" More not "maintain a role" and 52 is more than half not "almost half." The claim in the article is plainly false and should be corrected.

64% wanted the Federal Government to be more involved in "reducing poverty" 64%. 94% wanted the Federal government to have some role. 94% is technically a majority, but so is 64%. It is not normal to describe a 94% majority just as "most Americans" and a making an extremely weak claim when one could make a vastly more informative true claim with four more letters is strange enough to be deceptive.



Clearly Jon Cohen and Dan Balz are either lying or they don't grasp the difference betweeen supporting "to be involved" and "maintain a role" on the one hand and to "more federal government involvement" and "" on the other. This is beyond innuracy. Basically it means that two top Washington Post reporters are functionally illiterate or deliberately lying.

I am going to bend over backwards to be charitable. Here I assume that
that 52 % is roughly "almost half" and that "most" is a reasonable word for 94% but not for 64% (the use of "most" had lead to many invalid arguments as to prove that something is true of most one needs to prove only that it is true of amajority, but then many go on to assume that "mos"t means "approximately all" so 50.1% is approximately all). Finally I assume tha writing "a majority" ... "more involved" which would be actually informative and plainly true for any definition of "most" was impossible because it would require 9 more keystrokes which is just too much for the subtle destinction between more effort to fight poverty and no effort to fight poverty.

With those very generous assumptions, the article still contains a falsehood. The reason is that the fraction supporting a role for the federal government in health care (and in particular in insuring access) is not "almost half" or "about half" or "slightly more than half" or "52%" but rather 88%.

My first guess was this was innumeracy so extreme that the difference between "more" and "any" is considered negligible. However, re-reading the article, I notice a huge number of quotations of people who say the federal government has recently done too much.

The conclusion of the article is "not all americans are Tea partiers," yet the case is understated to an extent which makes the article fundmamentally false. I think that the problem is that the poll results have a clear liberal bias, so describing the poll accuately would be unballanced.

However, facts are facts and the Washington Post must correct the falsehoods it published if it is to be considered a resectable newspaper.

I read the article but was not upset until the excellent Steve Benen quoted the questions as reported rather then the questions that were actually asked. Benen was not impressed by the respondents writing "There's a reason our discourse isn't more constructive."

Heh indeed. And more than one reason. Part of the problem is newspaper articles which make false assertions like this one. I think that one huge failure of US journalism is a failure to report accurately the opinions of the US public on egalitarianism, poverty, economic policy and so forth. On economic issues, the US public is way to the left of the US public as reported by the elite media.

Nicholas Kristof has forgotten the SAT.

I know he was once very familiar with it, since he is a Harvard Graduate (class of 82 just like me). But in his pop quiz on religion, some correct answers are not among the options given. Those correct answers are "all of the above." He gives multiple choice answers a,b and c. The rule is that one or three are true statements. This rule can't be deduced given the implicit "or"s for either inclusive or inclusive or.

I scored 8 out of 13 which I consider not bad (even though I am an atheist and we are supposed to know more about religion than the religious). For two of the questions which I got wrong, the correct answer was "all of the above." However, I answered "all of the above" correctly once. That was when I knew for sure that all of the above was correct. The others I assumed it couldn't be.

My guess is that answer d "all of the above" was removed to save ink and paper. A single line "in each case either only one of the answers is correct or all three are correct" would have helped without killing all that many trees.

Corriere Della Sera headline guy

L'intervista: Stieglitz, stampare denaro non serve di F. Fubini

The Stieglitz in question is Stiglitz.

My last name is usually miss-spelled. I see there is no hope. Even Nobel memorial prizists suffer the same fate.

The Daily Show is one of the few things to which I look forward. Uh Daily.

This is wonderful, but I am so far gone that I strongly object. Stewart said we gave 700,000 billion to the banksters. A loan is not a gift. They paid us back. Much of it was money for preferred shares not toxic waste.

But it's wonderful.

(although the embed HTML code seems messed up. Seems that someone didn't read the fine HTML print).

So who is supposed to make sure that terrible bills don't sail through the Senate without debate. Uh ooohhhh don't want to look into that Angle.


The Mortgage Bankers Association isn't very good at banking, but they are comic geniuses

D'Souza's successful Fukayaming

Final Battle for the Bride of the Gallup anomaly.

I gulped when I say the TPM smoothed congressional generic ballot. The Republicans have pulled ahead again. This happened because Gallup switched on their likely voter filter. I warned in advance not to take the number too seriously.

My I've written a lot on the Gallup anomaly.

I believe that Gallup switched on the filter roughly when the biases with registered and likely voters are roughly equal, meaning both are biased in opposite directions. In particular, the Gallup likely voter filter has very different properties in late October and August (would have that is, I don't think they even ask the questions in August). One of their 7 questions is "do you know where your polling place is ?" The answer clearly conveys different information if the question is asked October 30 or October 6th. Someone who still doesn't know then is someone who is not likely to actually vote. Someone who doesn't know now is just someone who hasn't voted there before (that is another of the 7 questions).

Pollsters are judged based only on the last poll which they report. Gallups last poll is a very good predictor of electoral outcomes. Is Gallups early October poll a good predictor of Gallup's last poll ? I'm off to check. It is now 7:52 AM EST.

I have been over at www.pollingreport.com. The few numbers I looked up provide no support to my claim. I am looking at the Gallup/USA Today poll because it's what I found.

Gallup D-R

Year Last, first Oct, date Registered last first Oct
2008 12 6 10/10-12/08 15 ---
2006 7 13 10/6-8/06 11 23
(damn last in September was tied)
2004 1 -3 10/22-24 4 2
2002 -6 1 10/03-6 5 5
(ruined everything)

The likely-registered gap improves on average 0.33% for Democrats and the last poll is 0.75% better for the Republicans than the first.

I still believe what I claimed.

Rasmussen Poll shocks everyone who has no clue how Rasmussen polls

Various commentators seem surprised at the sudden change in the Rasmussen Generic Congressional Ballot poll. All through September Rasmussen reported a near constant wide Republican lead while other pollsters reported a much smaller and shrinking lead.

Now suddenly, as soon as we enter October, Rasmussen reports a Republican lead of only 3%. What could possibly have suddenly changed on October 1st ?

Rasmussen weights it's samples so that a constant fraction of weighted respondents self identify as Republicans, Democrats and Independents. The weights are based on the average response in the last month of polling. This might make some sense in polling on specific races, but there really isn't much difference between partisan identification and generic ballot voting intentions. I'm sure there are some people sho say that they are Democrats but voting for Republicans and vice versa.

Therefore the Rasmussen poll is roughly last month's self identified Republicans plus a constant near one times the fraction in the latest poll of independents who plan to vote Republican for the Republicans and a similar calculation for the Democrats. This means that the poll basically is only partially updated within a month.

Ross Douthat wrote a good column.

I could sneer and say Shorter Douthat "honymoons end." But I won't.


There is one point which bothers me, but I'm not criticizing Douthat.

"the liberal left largely accepted that it had lost Clinton-era arguments over ... welfare reform,"

I think this is just plain true. However, "largely" doesn't mean universally and I'm not going to stop arguing.

Interestingly the New York Times also published some shocking news -- months ago in April.

During the recession up till April 2010 welfare enrollment had increased less than 10% while food stamp enrollment increased more than 40%.

It seems that a welfare reform which worked OK in the late 90s (when everything economic in the USA worked wonderfully) is creating huge suffering now. In 2009, the rate of severe poverty (income less than half the poverty line) was the highest on record (records only go back to 1975).

No one could have predicted -- except the liberal left which argued that just to get rid of the word "entitlement" the welfare reformers guaranteed a crisis in a severe recession. The Federal contribution doesn't increase automatically. States are squeezed. The program isn't there when people need it.

The assumption that any single mom who doesn't find a job in 2 years is a deadbeat doesn't seem to be valid when the unemployment rate is almost 10%.

So in the general political debate, it is still agreed that welfare reform was a great thing and that "the liberal left" was totally wrong.

Also, among people who know what they are talking about, there doesn't seem to be much debate

Ronald T. Haskins, who helped write the 1996 law as an aide to House Republicans, said, “There’s definitely a problem.”

“Many states have been too slow to take destitute families back on the rolls,” Mr. Haskins said. “In 1996, both Republicans and Democrats assumed that welfare rolls would rise during a recession as jobs got harder to find.”

But it's just agreed that the case was closed in 2000 and must not be relitigated.

Mark Thoma asks why US citizens don't support more income redistribution.

I contest his premise in a long comment

I disagree with the premise of the quoted article and the post. I think most people in the USA support explicit leveling. In particular I think a solid majority wants the tax code to be more progressive. Search for Gallup and fair
here http://www.pollingreport.com/budget2.htm .

The majority of US adults has been convinced that the poor pay more than their fair share and the rich less than their fair share for decades.

This also shows up in polls on other topics. The only approaches to shoring up social security and paying for HCR with majority support were increasing taxes on the rich.

Many commentators noted majority opposition on extending Bush tax cuts on income over 250,000. I was surprised the majority was so small (on average between 50% and 60 % not slightly over 60% as I would have expected).

US citizens may be less egalitarian than Europeans, but they definitely want a more egalitarian policy. Yet, as in the recent case, Congress won't deliver it.

The claim of people (cough Henderson cough) in families with income over 250,000 that they are (he is) just middle class was subject to a tidal wave of ridicule. It is not surprising that there are such people. One got the sort of reception he would get in Sweden.

As far as I know, only one major politician (majority whip James E. Clyburn) proposed the obvious good policy and politics compromise of permanent extension of Bush tax cuts on income under 250,000 and temporary extension of the Obama tax cuts for 95% of working families. This is a total no brainer as the Democrats have to convince people that those Obama tax cuts exist. But it would be "class war" so it can't be debated.

I see no evidence that a party which advocated higher taxes on the rich and lower taxes on the poor and middle class would have any trouble winning elections. There is no such party in the USA.

The Democrats are convinced that US citizens reject "class war" and "demagoguery" and "left populism." Looking at the polls, I have no clear idea why this is so. The current election in which voters seem inclined to vote for Republicans because they think that Obama singed the TANF act (which they think cost $700 billion and not around zero) seems to me to be a sign not of a polity with unusual views but of a failure of political representation.

I think the answers are to be found withing the Democratic party (not registered Democrats but the people who run the party starting with an effort to figure out who they are). I guess it has to do with
1) veto points -- progressive reforms are popular if they are ever enacted but can't get through the Senate.
2) The power of money in US politics -- a winning message is no good if one can't buy TV time to get it out.
3) The power of campaign consultants who also help large firms with public relations (which means politician relations) -- that is it's Penn's fault.
4) Baby boomers convinced that McGovern was rejected for being too far left in general so that means Americans don't want more progressive taxes and guys 1972 was 38 years ago.
5) Opinion leaders all have high incomes and socialize with people with high incomes and are totally totally out of touch (I have repeatedly shocked people with the link to pollingreport in this comment).
6) Politicians are inclined to blame the voters for their general cowardice.

Ad Hominem at Crooked Timber


Matthew Yglesias wrote

Chris Bertram

[skip]

By contrast, here’s Lane Kenworthy’s chart of income growth by decile under the Tories versus Labour: [click for the graph]

You see here that New Labour had these (presumably finance-driven) gains at the tippy-top but also major progress for the bottom half of the income distribution.

and on to other issues.


Chris Bertram replies (in part -- I stopped here)

update: Bertram seems to have revised his post, making my criticisms no longer relevant. So I delete this post (which is available by e-mail on request at least if you are Chris Bertram).

Has Scott Sumner ever Read "The General Theory of Employment Interest and Money" ?


Scott Sumner on What Keynes wrote about Pigou

In the General Theory, John Maynard Keynes created a crude and inaccurate caricature of “classical economics.” He argued that people like Pigou had models that simply assumed full employment. In fact, economists like Pigou, Cassel, Hawtrey, Fisher, Hayek and others, believed that wages and prices were sticky in the short run. They believed that nominal shocks (decreases in the money supply or increases in money demand) would have real effects in the short run, but merely change the price level in the long run.

What Keynes wrote about Pigou in The General Theory of Employment Interest and Money Chapter 19 Changes in Money Wages appendix On Professor Pigou's Theory of Unemployment

the following important passage in which Professor Pigou sums up his point of view: “With perfectly free competition among workpeople and labour perfectly mobile, the nature of the relation (i.e. between the real wage-rates for which people stipulate and the demand function for labour) will be very simple. There will always be at work a strong tendency for wage-rates to be so related to demand that everybody is employed. Hence, in stable conditions everyone will actually be employed. The implication is that such unemployment as exists at any time is due wholly to the fact that changes in demand conditions are continually taking place and that frictional resistances prevent the appropriate wage adjustments from being made instantaneously.

He concludes (op. cit. p. 253) that unemployment is primarily due to a wage policy which fails to adjust itself sufficiently to changes in the real Demand function for labour

Thus Professor Pigou believes that in the long run unemployment can be cured by wage adjustments;[3] whereas I maintain that the real wage (subject only to a minimum set by the marginal disutility of employment) is not primarily determined by “wage adjustments” (though these may have repercussions) but by the other forces of the system, some of which (in particular the relation between the schedule of the marginal efficiency of capital and the rate of interest) Professor Pigou has failed, if I am right, to include in his formal scheme.

Keynes concluded the appendix with this paragraph

I have criticised at length Professor Pigou's theory of unemployment not because he seems to me to be more open to criticism than other economists of the classical school; but because his is the only attempt with which I am acquainted to write down the classical theory of unemployment precisely. Thus it has been incumbent on me to raise my objections to this theory in the most formidable presentment in which it has been advanced

.

According to Krugman, Pigou's model as described above is the "classical theory of unemployment"

Has Sumner actually read the General Theory ? Did he not notice the irony that Keynes criticized Pigou for being a New Keynesian when he read it ? Did he manage to forget that odd experience (amnesia happens) ?

Did he accuse Krugman of dishonesty based on a failure to click the link which Krugman provided to make it clear to anyone who bothered to check that "what Keynes called the 'classical theory' of employment"
is neither the new classical theory of unemployment nor the "classical case" presented in today's intermediate macroeconomics textbooks?

Or maybe his case rests entirely on the fact that Krugman wrote about "what Keynes called the "classical theory" of employment" when, in fact, Keynes called it the "classical theory of unemployment."

How Sticky are Prices Right Now ?

The academic debate about macroeconomic policy is very different from what it was in the 80s. Keynesians have gone hard core, as is appropriate given safe short term nominal interest rates. Their opponents have debated their claims about nominal aggregate demand. Back then, the counter-argument was either than increased nominal demand just causes increased prices with no real effects (except when in a liquidity trap) or that expectable increases in nominal demand just caused increased prices.

A huge debate is not so much settled as forgotten. As far as I know, no one is arguming that wages and prices will adjust so as to cancel fiscal stimulus. Now there is one good Keynesian reason for this, the AD curve may be vertical so the price level has no effect on real aggregate demand. An increase in the price level reduces aggregate demand by reducing real balances (the real value of the money supply) and maybe that just doesn't matter right now when money and tbills are considered perfect substitutes. But I mean really, that sort of argument never stopped them before.

I think the reason is that firms will clearly not increase prices if their costs haven't increased and they can't sell as much as they would like. Their costs are wages and other prices. Prices won't go up much. They also don't seem to be going down. It seems clear that firms are very very reluctant to cut prices.

This means (as noted by many including, of course, Paul Krugman) that prices are extraordinarily sticky right now. Many firms seem to be at the point where they are no where near inclined to raise prices or to cut prices. Thus the pricel level is at a sticking point. Yet somehow some people fear inflation. We must tell them
"Screw your courage to the sticking point."

Odd. Very odd. I agree with all every word in an article about Israel and the Palistinians published in The New Republic.

Also there seems to have been a reasonable polite respectful debate on the topic ... on the internet.

Everything solid melts into air.

The Washington Post Libels ACORN Twice.

"James O'Keefe, the same guy who famously dressed up as a pimp to interview members of ACORN." This claim damaged ACORN. It has been proven false. Only reckless disregard for the truth can explain why the false claim was made again by The Washington Post.

Unfortunately Atrios linked to MediaMatters where Eric Boehlert linked to the Bradblog where Brad of the BradBlog linked to the libelous post.



So to inform the Post of their tort I had to click many links.

http://voices.washingtonpost.com/reliable-source/2010/09/rs-_okeefe.html

O'Keefe: He's the activist who launched into national politics with an undercover video indicting community organization ACORN (he was dressed like a pimp)

This is false. He made an undercover video and he dressed like a pimp, but he was not dressed like a pimp when he was undercover as asserted (it depends on what the meaning of "was" is and this is not ambiguous in context as shown above).

I assume that the facts are correctly reported at unreliable sources.

I think it important that a demonstrated error be followed by an avalanche of criticism.

For Skeptical Sam Contra Nate Silver

I am going to contest a claim about statistics made by Nate Silver. I am commenting on this post (read it).

My comment.

This post seems to be especially excellent even by your standards which is saying a lot. The very simple calculation has the advantage of being very easy to understand and the fact that the probability estimate is close to the one that comes out of your complicated model is very impressive.

There is, of course, a confidence interval on the estimated probabilities. If we stick to the very simple calculation (and assume gubernatorials are not like senatorials) then the 7-0 record (6-9 ahead) rejects the null that the probability of the underdog winning is 20% at the 20.9% level (I really honestly guessed that it would be around 5%). Taking a 7th root, I get that one can't reject the null that the true probability of the underdog winning is 34% at the 5% level one tailed). The 95% confidence interval on the probability (ignoring gubernatorials and with the simple calculation) is (0,40.9%). You have looked at the point estimate of the conditional probability but not a confidence interval.

With gubernatorials there is a larger sample, but 2 came from behind. I won't try the calculations (no problem for you or me either when sober).

I was planning to critique the sophisticated model. I think I will, since the simple calculation is not decisive given the sample size. OK so the critique is, what about those AAA rated CDO tranches ? Those were sophisticated models too and the calculated probabilities were totally wrong. Here one key issue is the nonlinearity of the link function (I assume a cumulative normal). If, given parameter estimates including estimated polling error (larger than pure sampling error) and estimated variance of true changes, you conclude that a Sestak win is a 1.7 or more standard deviation event, then it is not reasonable to estimate the probability of a Sestak win as 4.5%. This calculation would be correct if you knew that the parameter estimates were exact. If you integrate over a posterior over the parameters, the probability will be closer to 0.5. That's the way the cumulative normal works. Or think of macroeconomic forecasting with VARs. They have very fancy models. They don't give 95% intervals -- they give 50% intervals. Dealing with uncertainty about the parameters in a probability model eliminates extremely low probabilities.

Finally the asterix. The whole research program assumes that this time it isn't different (as it must). But it seems to be different. Already the pollster used by Kos (until you warned him off) has reported numbers which must have been cooked. That hasn't happened before. Of course I am thinking of Rasmussen. They have a huge pollster effect this cycle. They didn't before. Either they are biased or everyone else is (I am paraphrasing you). You think those are the only two possibilities. I think you should calculate probabilities by guessing the probabiliity that Rasmussen is blowing it, then adding that prob times predictions without Rasmussen + (1-that prob) times predictions using only Rasmussen.

If you are confident that either Rasmussen or everyone else is blowing it (and you wrote that with no qualifiers IIRC).then you should use that confident belief when calcuating probabilities. Anything else would be (gasp) unbayesian.