The road not taken

Delicious:

. . . this is pure Brooks, a seemingly epigrammatic heap of nonsense, structured to give him both the appearance of gnomic wisdom and plausible deniability.

For bonus snark click on over to Charlie Pierce and Driftglass.

Nice piece on Mankiw's response to his students on Econospeak

Peter Dorman at EconoSpeak makes some good points about Mankiw’s Reply to the Walk-Out. Long story short: Mankiw is respectful, but wrong on some points and unfortunately right on others. Includes link to Mankiw's op-ed.

This about sums it up

Via DeLong: Matthew Yglesias's Theory of the Obama Administration in 2010: Excessive Reliance on the Second Derivative. Long story short: the Obama administration saw that it's intervention had stopped the employment free-fall of and concluded that it would just turn itself around. Wrong. That was the point at which more help was needed to reverse the damage. I would add that the Obama administration also under-estimated the extent of the damage that was already done when they came into office.

Taibbi stumbles close to the truth

In a blog post on Rolling Stone called "Obama Doesn't Want a Progressive Deficit Deal," (go read the whole thing; it's short, I'll wait) Matt Taibbi is both right and wrong in his summary:

I simply don't believe the Democrats would really be worse off with voters if they committed themselves to putting people back to work, policing Wall Street, throwing their weight behind a real public option in health care, making hedge fund managers pay the same tax rates as ordinary people, ending the pointless wars abroad, etc. That they won't do these things because they're afraid of public criticism, and "responding to pressure," is an increasingly transparent lie. This "Please, Br'er Fox, don't throw me into dat dere briar patch" deal isn't going to work for much longer. Just about everybody knows now that they want to go into that briar patch.

I don't think the Democrats would be worse off with most voters either. Some voters will be demagogued no matter what Obama and Congressional Democrats do or don't do. And then there's racism, of course. But the Democrats haven't retreated from bread and butter issues like job creation because they're afraid of "public criticism." They may well be, of course, but they're even more afraid of losing their lifeblood: campaign contributions from Wall Street and the rest of corporate America. That is why Obama and the Democrats enact policies that are pro-rich and pro-business. This is not rocket science.

Rick Wolff on S&P in the Guardian

A familiar voice in the Guardian on S&P's judgment on US debt. He says there are "two sane responses: laughter and a yawn." My favorite is this paragraph:

The first [reasonable reaction to S&P's announcement] is sheer incredulity. S&P is famous for having issued what Senator Carl Levin (chair of the Senate investigations subcommittee) recently called "inflated credit ratings" prompted by "rampant conflicts of interest" in the US financial industry. Senator Levin named this company a "key cause" of the economic crisis. That is polite-speak for having published misleading information about credit risks and/or having shown monumentally poor judgment in assessing such risks. So, we now should take seriously what this utterly compromised company says? What?!

This nicely summarizes my own first thought when I heard that S&P was issuing a warning on U.S. debt. Please.

In which I pwn Boing Boing. (?)

This post on my beloved BoingBoing irked me:

Philip Greenspun divided the U.S. 2011 federal budget by 100,000,000 and wrote a little parable:

We have a family that is spending $38,200 per year. The family's income is $21,700 per year. The family adds $16,500 in credit card debt every year in order to pay its bills. After a long and difficult debate among family members, keeping in mind that it was not going to be possible to borrow $16,500 every year forever, the parents and children agreed that a $380/year premium cable subscription could be terminated. So now the family will have to borrow only $16,120 per year.

Understanding Congress's solution to the federal deficit problem.

Oy! This is terrible economics.

Understatement of the day, by Mark Thoma

Republicans aren't Exactly Known for Their Willingness to Cooperate:

The news people are telling me that Obama gave a bad speech -- it made Republicans so mad they'll be uncooperative. "Astute observers" are making the same claim.

And they seem to be serious.

Republicans, of course, would never engage in "aggressive partisan attacks," refuse to play unless they get their way, or use other tactics that might poison the well of cooperation.

I'll say.

Chuck Schumer has a letter for me to send to my Congressperson

Here it is:

As an American, I want my representatives in Congress to avoid a government shutdown. That means finding bipartisan compromise.

But bipartisan compromise will not be found in domestic discretionary spending cuts alone.

We need to scour all parts of the budget that contribute to the deficit, not just the parts of the budget that some of us don't like. We need to reset the budget debate to look at the changes we can make that will have the biggest impact on the deficit.

That means looking at things like military spending, agriculture subsidies, and revenue raisers.

Please, don't shut down our government because the debate over the budget got stuck in a rut. Reset it.

Where to begin?

There's so much interesting stuff in this zero hedge post, that you should just go ahead and read the whole thing. I'll wait.

OK! Well, where to begin. The blurb that got me to read the whole article was this one, quoted from the State Department website (click on 'economic'):

Economic conspiracy theories are often based on the false, but popular, idea that powerful individuals are motivated overwhelmingly by their desire for wealth, rather than the wide variety of human motivations we all experience. (This one-dimensional, cartoonish view of human nature is at the heart of Marxist ideology, which once held hundreds of millions under its sway.)

I am not shocked

by the news that income inequality is worse than it's been in a looooong time.

Robert Barro's pony express to lower unemployment

In a Wall Street Journal Op-Ed (why do I read these!?), Harvard economist Robert Barro claims that "according to [his] calculations" without extended unemployment benefits the unemployment rate would now be 6.8%. What are these calculations? Glad you asked!

To get a rough quantitative estimate of the implications for the unemployment rate, suppose that the expansion of unemployment-insurance coverage to 99 weeks had not occurred and—I assume—the share of long-term unemployment had equaled the peak value of 24.5% observed in July 1983. Then, if the number of unemployed 26 weeks or less in June 2010 had still equaled the observed value of 7.9 million, the total number of unemployed would have been 10.4 million rather than 14.6 million. If the labor force still equaled the observed value (153.7 million), the unemployment rate would have been 6.8% rather than 9.5%.

See? If you assume that long-term unemployment is caused by extended unemployment insurance benefits, then removing unemployment insurance extensions solves the problem of long-term unemployment (and you get a pony!). This must be why he makes the big bucks. Magical thinking.

Suppose we make a different assumption. Let's assume that changes in consumer demand has an effect on the level of employment. If so, then the decision to not extend unemployment benefits would reduce demand for goods and services. Where will the jobs come from? Businesses are not going to expand their capacity or their workforce in the face of falling demand for their products. The only way that extending unemployment benefits could actually increase the unemployment rate above what it would otherwise be (other than just assuming it will, as Barro does) is to assume that the people receiving those benefits, rather than spending them on food and rent, use the checks to set fires to businesses that are currently employing people. This assumption has the advantage of actually leading to the conclusion that Barro reaches, without magic.

Update: cross-posted at Multiplier Effect.

In which, if you read between the lines, I foam at the mouth

Half a stimulus is better than none « Multiplier Effect

More grim warming news from NOAA

But don't worry, because it snowed in Washington D.C.: NOAA - National Oceanic and Atmospheric Administration - NOAA: June, April to June, and Year-to-Date Global Temperatures are Warmest on Record.

Daily News reports that the US is still confused about treaty obligations and tribal sovereignty

Iroquois lacrosse team banned from flying overseas: U.S. refuses to recognize tribe-issued passports. Hmm . . . What does this remind me of? Oh, Yeah! This:


Good to see we've come so far.

Onion Report: Poor People Pretty Much F@$%d

Truly, the Onion IS America's finest news source: Report: Poor People Pretty Much F@#$%^d. Warning! Naughty words!

The pain in Spain

OK, I've been watching the world cup every possible minute for the last month. Rooting for Germany, Paraguay and the US in that order. And it is with not an inconsiderable amount of sour grapes that I say: 8 goals = 1 World Cup Championship?!!!?!?!??

EPI: unemployed/job ratio is 5.6

Not great, but at least it's not growing like it did all of last year: Unemployed workers outnumber job openings 5.6-to-one in March.

How Much Would YOU Pay to Try to Save $60 million a Year and Fail?

Juan Gonzalez, (via Econospeak) tells us how much Michael Bloomberg is willing to pay, and it's not a pretty picture. $722 million and counting.

Voting and class

Another great post from Andrew Gelman on whether or not people vote against their own interests (spoiler alert: they don't). Written in reaction to this awful BBC article, it serves as a useful reminder to check the occasional fact.

Update: on a related note, this from factcheck.org, on non-elder health insurance coverage rates.

Tim Pawlenty dishes just what Tea-partiers want to hear

Bruce Bartlett has an excellent take-down of Presidential wannabe, Minnesota Governor Tim Pawlenty. I agree completely, except for the conclusion:

Tim Pawlenty is not ready for prime time. He may think he has found a clever way of appealing to the right wing tea party/Fox News crowd without having to propose any actual cuts in spending, but it isn’t going to work. It’s too transparently phony even for them.

The first sentence is fine. I don't think that last part is true: Pawlenty's reason-free rhetoric is just what many of the Tea-party types seem to want to hear.