Links 7/18/10

Hi everyone. Yves is off in Denmark eating this. She asked me to do the links for her over the next few weeks.  I have a favor to ask of you all: please send me antidotes du jour. I need them because I just don’t have any photos which fit the bill.  E-mail your goods to

All the best.


PS – send links to me as well. I especially want some good stuff on science and technology since I’ve got the finance stuff covered.

I Would Do Anything For Stimulus, But I Won’t Do That (Wonkish) Paul Krugman (Krugman critique of MMT)

Misunderstanding Modern Monetary Theory Credit Writedowns (My response to Krugman’s post)

More On Deficit Limits Paul Krugman (Krugman’s repsonse to Jamie Galbraith)

What Germany Has Learned About Debt – Tyler Cowen

This Op-Ed in the New York Times echoes some themes I laid out in "Lessons We Can Learn On How Stimulus And Jobs Programs Failed in Eastern Germany" and deserves reading. The point is not that austerity is good but rather that "Germany has… a strategy. [It] will launch… next year (unlike most of its European peers, Germany still has an expansionary budget in 2010) with saving measures representing less than 0.5 per cent of GDP." These are the words of Germany’s finance minister. The Germans are attempting to thread the needle between austerity and stimulus during a period of slowing economic growth and a sovereign debt crisis. Will they succeed?  Time will tell. Also see Why I am siding with the Germans on fiscal consolidation from CW.

Republican Tax Nonsense Bruce Bartlett

The Politics of the Gold Standard in France, 1914-1939 Julian Jackson, MrZine

Europe freezes out Goldman Sachs The Observer

Hyperinflation David Henderson

BBC News – Big hips ‘impair’ women’s memory, a study finds BBC

Are Big Breasted Women More Intelligent? | BeyondJane BeyondJane

"Political Aspects of Full Employment" Mark Thoma

What Problems were Solved by Financial Reform Legislation? Mark Thoma

Dow index falls as big banks make money but not new loans CS Monitor

Why Facebook friends are worth keeping New Scientist

"In Finance We Distrust" Mark Thoma

PIMCO ups US govt debt weighting Business Spectator

Antidote du Jour (thanks, Tim)


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About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward


  1. Conor

    RE:Krugman’s response to Galbraith: It seems to me like a pretty wonky little quibble between Krugman and Galbraith when both are essentially on the same page. That said, what we ultimately to with a multi-trillion dollar debt staggers the imagination. I though this response to Krugman’s post by one of his blog’s readers was actually rather good (commenter #7):

    Jamie’s idea of the government simply writing checks without issuing corresponding debt is an intriguing one. Couldn’t we do what he suggests while solving your concern about printing new money by simply removing some of that trillion dollars of recently printed money from the now interest-bearing reserves on the banks’ books and putting it to the use for which it was intended, i.e., benefiting the broader economy and not just enriching the architects of this depression we’re in? In other words, why do we need to print new money when there is a bunch of it already sitting around doing nothing accept incurring more debt through interest payments on reserves?

    1. craazyman

      This is the gist of it all, from Galbraith’s letter at Credit Writedowns:

      “[Mr. Krugman’s] model . . . is driven by his monetarist (quantity-theory) simplification, that the increase in money flows directly into prices. But this is just a modeling error. In the real world, especially in broadly deflationary conditions, people — and banks — simply hang on to cash.”

      Indeed, here at the Institute for Contemporary Analysis our economic modeling recognizes the bi-directional bi-variate nature of Descartesian 2-dimensional field analysis. In other words, correlation not only is not mono-directional causation, but it masks the potentially infininte multiplicty of variables than can impact the trajection through time of either of the two variables under scrutiny. The entire population of the “variable field” is one apprehended solely through channelling, which is either induction from rational hypotheses or deduction from the study of real world forces. In either case, it’s an imaginary construct, and therefore infinite. More plainly put, there is a reciprocal causation involving not only the variables being placed on the two-dimensional cartesian field, but in any manifestation of human imagination there is causation from a potentially infinite number of exogenous variables not cataglogued on the field space. The number of varibles rises in proportion to the number of Chote du Rhone’s we drink and then falls to zero at about 4 or 5 glasses. This is the theoretical foundation of our postulate that GDP = capital + labor + nature + imagination, for which we are roundly mocked. ha ha ha hahah haha hahaha aahahah. Wonder if McNabb will lead the Redskins to a winning season. That’s the biggest question we have right now. LOL.

  2. doc holiday

    Re: “According to a study carried out by a Chicago sociologist in 2003, women with big breasts had ten point higher I.Q’s. on average than their less well endowed counterparts…

    Read more:

    ==> This is obviously a correlation to derivatives and unregulated financial chaos …. sure, the women with woolly mammoth-sized teats fit the research model — just like F’ing Moody’s fit the fraudulent derivative-linked data for the models they influenced.

    It’s obvious to me, that just like the fraud-engineered rating models that Moody’s, S&P and Fitch designed, the IQ models were based on a set of values that distorted reality, hence with the massive breast size model, the rocket scientists hunted down large-sized women and apparently asked them to join them in a “special” study related to breast size and IQ — so, with out exception, every egomaniac woman with huge stuff took this chance as a means to confirm what they already knew to be the cutting-edge truth — as they pushed their F’ing bullying way into the (mindless) study, where as we all know, the results were distorted like a CDO-squared — because the guy that dream’d up this bullshit (behind the curtain) was attempting to sleep with as many of these hookers as he could get away with and take any kick-backs or pay-offs.

    The obvious connection to the banking regulation industry and the rating agency model engineering screams and moans with the same delight — as the IQ data from the largest breasts goes parabolic, just like the dervivatve-backed SHIT from wall street, went from the gutter and into pension funds, and then, after TARP, into the pockets of filty prostitute banking CEOs …. showing once and for all that data corruption and models, statistics and random bullshit are very often, no more than tea leaves at the bottom of a F’ing teacup — which is where they F’ing belong, because these little left-behind leaves are random samples that are not related, correlated or in any way part of a higher-order vision which help retards find ways to open the small worlds which they are trapped in.

    Vive seins petite!!!!! Free them now!!!

    1. bob

      Excellent points. Just like the TBTF’s want all of the money and don’t want to let anyone else have it, the big breast hoarders are keeping all of the mammaries and memories to themselves.

      Set them free.

      1. doc holiday

        bob, bob, bob,

        It’s all about supply and demand. There are some women and some men who all falsely believe that a over abundance of supply results in greater demand — WTF are those people talking about and why are they allowed to even speak, let alone, run the Treasury and Federal Reserve?

        Ben and Tim are examples of large teats that are connected to some dumbass illusion that there are inexhaustible infinite amounts of taxpayer revenue available for the wall street mafia — and some dumbass model of a F’ing helicopter with an endless supply of fuel (like the BP oil spill) that can fly in circles over banks and dump excessive shitloads of cash to the starving bankers below …. total bullshit fantasy illusions of supply and demand — totally related to the possibility that congress has the same woolly mammoth-sized teats wet dream non-stop every night. I’m sure there is a medical condition, which helps explain some Viagra-related malfunction, where chicks like Pelosi (D – CA) have non-stop multiple orgasims, while sucking on some model provided by Ben & Tim …. ahhh, where was I …. supply … yes, supply of fantasy cash to corrupt politicians and connecting to the demand they have for more supply, for money, drugs and sex — the pillars that are holding our Roman orgy together, as the fire flows from disaster to disaster, from payoff to bribe and bribe to payoff.

        Furthermore, WTF is going on with TBTF and the super-sized efforts to reward wall street crooks with vast sums of cash from Ben & Tims Too Big To Fill Pig Trough — is there a connection between congressional boobs and the condition from which Pelosi suffers, i.e., are Americans so retarded at this point that we all seemingly elect the ones in our society that have the least amount of IQ — or do we as Americans suffer from manipulation by the hands of an army of mafia shitbags that have taken over congress, the judicial system, the financial system, the media and the hearts and souls of all the people that have no F’ing clue what’s going on.

        We need a bigger supply of nipples to pacify all the retards that sit around pretending that this insanity is normal — normal like mammoth-sized teats.

        Ahhhh crap, I got off track there and wanted to go into hoarding and supply and demand, but lost it; I’m sorry ….

        See: Economically speaking, hoarding occurs due to individuals obtaining and holding assets thought to be undervalued and build up reserves of it in hopes to profit or save money later. Examples include times when price controls were in effect as in the case of Germany after World War 2, communist countries, or after natural disasters when goods are in such short supply that consumers stockpile (this is sometimes compounded by anti-price gouging laws which prevent the supply and demand curves from functioning). In these cases the hoarding disappears after the price controls are removed. *

        * The author refuses to check for spelling or grammer…

  3. Adam Schmidt

    Presumably the IQ tests were administered verbally by lonely male grad students?

    We had this problem while interviewing new hires in Silicon Valley. Interviewers were all single male employees in their 20s, only dimly unaware of their own measurement bias. Fortunately our director of marketing was female and could control for it.

  4. Nick B in DC

    Paul Krugman has a response on his blog to Tyler Cowen’s op-ed that makes some good distinctions between Germany’s past situation and our current one in regards to the argument for fiscal stimulus.

    1. Conor

      (heh,heh,heh)…I’m sure the Krupp family’s economy wasn’t hurting too badly – at least not with that particular war.

      Inflation has a really nifty, magical way of lifting the big ships and not the little boats. Fancy that!!

  5. doc holiday

    “Fortunately our director of marketing was female and could control for it.”

    ==> Was she driven by self-interest or a higher power? I assume the models at Moody’s, S&P & Fitch were also controlled to allow for deviations and hormonal imbalances, but in retrospect, it seems that all we end up with are nepotistic results that are biased. The Larger Bra Model (LBM) metaphorically hits the head on the nail (or table) and suggests that when too much skin is in the game, results will be droopy and saggy — and distorted to such a level of stupidity that anyone with a brain can see that something fishy is going on. As an example, the woman with the largest teats should have had the largest IQ in the room, but logically, one then should question how her involvement in the model might be somewhat biased — and thus we look at the same kind of model for Citi, BAC Wells Fargo, Lehman, Goldman and wonder why the CEO with the biggest bulge in his pants ends up having the biggest bulge in his wallet …. but wait, these big guys did end up with the most cash, and people like Paulson that had skin in the game, did win the IQ model, because obviously they are a shitload smarter than the entire collective regulation and legal entities, like DOJ, FBI, Homeland Security …. where was I … something about Paulson being a smart crook, or flawed data, corruption, bias, smelly fish, boobs …. never mind!

    1. LeeAnne

      Just wait’ll Yves gets home. She’s gonna spank you. Maybe let you get away with it and spank Ed instead for putting you up to it.

        1. bob

          Perhaps I should have been more direct. The study is ridiculous. The definition of that word from

          causing or worthy of ridicule or derision; absurd; preposterous; laughable

          I was merely doing what was called for and keeping with the subject matter of the blog.

          I am still a fan of mammaries, although not big ones oddly enough. Please note that I am not suggesting that this makes me a fan of intelligent women. It’s more about the form.

          Your seeming attempted questioning of my underlying “motivation” is cause for me to question your motivation. Looking through your work there is not one phallus anywhere, even where one might expect to find one. Given the style of your work this could say a lot. I could then suggest that maybe you have read to much Andrea Dworkin, but that might be considered snide.

          Norman Mailer was right, liberals have the worst sense of humor.

          I do like your work, it just needs more dick.

  6. craazyman

    @Europe Freezes out Goldman

    this is a good start and good to see. But ultimately these sorts of services are delivered in a socially optimal way through what Yves and others refer to as “utility banking”.

    Actually, electric utilities do very well under their regulatory compact, and deliver generally excellent products and services by any reasonable societal standard.

    There is no reason that basic banking and capital financing could not be done in a similar way — depriving the looters of at least a few of their more prosperous avenues of self-enrichment at society’s expense and ultimate downfall, as the looters eat away the spirit-soul-money-wealth of society like the mythical Saturn eats his children in Roman mythology, or like fish eat their own children, or like the Cartheginians threw their babies into the pit to appease the Gods. It’s all connected at an archetypical level. See if they can teach that at Harvard MBA or MIT or someplace where they prepare young minds for worldly endeavors. See if they can teach that in Church. See if they can teach it anywhere at all, except when you walk in the woods alone and listen to what the trees tell you with their branches and their leaves in your mind in the wind. See. See. See. Fuck You Goldman Sachs and all your sanctimonious bullshit.

  7. Edward Harrison Post author

    By the way, I’m not sure if any of you caught this yet, but the article on breasts was a plant. It is from 3 years ago and has been uncovered as a hoax. This story has been in the media for at least 3 years now. Notice the date of that original story.

    I am going to ask in th links tomorrow what the moral of the story is. I say it’s “always remain sceptical.” It’s hard to do that. But the story has a number of strange twists.

    What caught my eye was that the woman relaying the story went into explanatory detail about it using it to say in effect “don’t judge a book by its cover.” A reader tipped me off to a story which claims the hoax is even older than I thought and goes back to 2003 and apparently this hoax is all over the internet and in newspapers.

    So, my question is “what can you believe?” and “how do you verify your information?”

    How/Why do stories like this get currency?

    Any thoughts?

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