Links 1/10/11

Thanks for the many kind notes from readers. I’m on some pretty heavy duty pain meds to contend with what is politely called a complication post some oral surgery (how can anyone get addicted to this stuff? It’s awful, but the alternative, which is taking the OTC version every hour, isn’t recommended either. And I happen to have a high pain threshold). As a result, I didn’t do much of anything at the AEA/ASSA conference except appear and I hope perform adequately at the two panels I was on (these were non-mainstream panels, by definition), and my productivity continues to stink.

German dioxin scare spreads to meat Telegraph (hat tip reader May S)

Nick Turse, The Pentagon’s Planet of Bases Tom Engelhardt

Grisly Road Death Leaves Village in Disbelief Caixin

‘Humor writer’ names Olbermann a ‘target’ after Giffords shooting Raw Story

The News Doesn’t Sleep — Except on Weekends Harry Shearer, Huffington Post

Sarah Palin’s InTrade Odds Dive In Immediate Wake Of Arizona Tragedy Clusterstock

No happy new year for the eurozoneWolfgang Munchau, Financial Times

Media creating frenzy Roger Ehrenberg

So, A Statisticatian Walks Into a Bar, And … Paul Kedrosky

The truth about tax havens: part 2 Guardian. Yours truly is blurbing this book, it’s out in the US in April.

State guilty of ‘delusional behavior’ in slow response to foreclosure chaos, critics say Palm Beach Post (hat tip Lisa Epstein)

“Zombie Economics and Just Deserts” Mark Thoma

Naked Capitalism Ben Fountain, New York Times (hat tip reader furzy mouse). Someone needs to clue in the headline writers at the Grey Lady.
Deepening crisis traps America’s have-nots Ambrose Evans-Pritchard, Telegraph

Antidote du jour:

Screen shot 2011-01-10 at 4.05.46 AM

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  1. psychohistorian


    Take lots of stool softeners and such with the narcs or you won’t like the results….speaking from experience.

    I think you are too critical of the NY Times for using “your” web site name for the title of this guys op-ed….sorry.

    You are becoming more of a full service site for me as I have already sent the statistician joke out, included the Mark Thoma/Eric Schoenberg posting in another email to my cousin who I have been having a recent discussion with about this very topic and provided me with a forum to engage with others to express emotion around the recent shootings in Arizona.

    I hope you heal and return to full strength soon. And I hope that you continue to provide this humble reader and others that seem to stop by with your incisive insights into our current political economy.

    1. ChrisTiburon

      Yves is a wonderful editor has a chance at becoming the new Huffington, which is a site that I have stopped reading out of disgust at the
      ongoing PeopleMagazination of that once potentially
      great site that is now a cavalcade of gossip, personalities, minor movie stars and intellectual fluff.

      I like the cute animals, they cause you to pause and reflect on the real things in life in contrast to the sordid ideological pit that our nation has become. Question, why is there no border on the right side of these comment windows? It’s all guesswork once the cursor goes off to the right and before it reappears. Mac with Firefox.

  2. Skippy

    Just wanted to drop a few links to the weather we are experiencing here in Queensland amends.


    My wife’s relatives have large property inland from the sunshine coast (Mount Kilcoy area), they have received over 76 inches of rain since the onset of December, with more to come.

    Skippy…on track to best the 1974 bench mark, whilst mankind makes plans, the Universe marches on…small, flexible and mobile are today’s Antidote Down Under.

        1. Skippy

          Taking my mob too higher ground, live 2 blocks from Brisbane river. Wivenhoe dam at 180%, one million mega liters per day as of the last modeling (that’s *2* Sydney harbors per day of inflows), 100+ MM of rain in 12 to 24 hour periods and king tides for the next two days. Flooding to surpass 1974 bar, very possibly by a significant margin.

          From Rockhampton to NSW their sits an inland sea, slowly moving to the coast on the east side of the divide, on the west side its weeks of flows moving south to inland NSW and Victoria.

          Skippy…3 more months of rain to come[!] w/ possible cyclone in the mix. More population, more activity, more stuff to be broken…eh.

          PS. may we all come together in this time of trial, best too all.

  3. AR

    Can a state be delusional? Or just a victim of the Bush burrowers?

    I wish someone like ProPublica would investigate the disposition of the foreclosed houses. A large number of Fannie & Freddie’s are being given away to some outfits who then flip them for $3-10,000 a pop. Of course, this is after the government had guaranteed the mortgage at par to the ‘Trustee’ bank. The criminal activity surrounding foreclosures is monumental.

  4. AR

    From Ambrose Evans-Pritchard:

    Bank failures in the Depression were in part caused by expansion of credit to struggling farmers in response to the US Populist movement.

    This sounds similar to blaming poor black folks for demanding CRA subprime loans.

    IIRC the farmers were being squeezed by low commodity prices at harvest time. They didn’t want credit so much as a fair price for their crops.

    At least the farmers back then educated themselves and started a movement that spoke to the real causes of inequality. Must be why rural America is awash in AM hate radio today: to make sure there’s never an effective Populist movement again.

    Fanning the flames of hostility, and empowering those predisposed to violence seems to be working to assure our destruction as a civilized society capable of solving our problems.

    1. attempter

      Enhanced food production is the only legitimate basis for civilization itself (otherwise why not go back to hunting and gathering?), so it follows that the ideas and arrangements which have been proven to destroy the ability of the people to produce our own food have no legitimacy.

      Since the finance sector, since its inception, has done nothing but assault the farmer and try to murder him, that proves we must eradicate it completely.

      Since, under conditions where farmers needs credit, government refuses to support them with something like the sub-treasury plan, which would completely remove food production and distribution from the finance realm, that proves the government has no legitimacy.

      It’s clear that any property dispensation which allows farmland to sit idle or be destroyed by subdivisions is an illegitimate land dispensation. Only land usufruct based on food production or other legitimate production can ever have validity.

      And all these evils lie under the great shadow of food totalitarianism in the form of GMO seed domination. That’s the most extreme form of corporatism, and demonstrates that humanity cannot coexist with corporations.

      People better grow up and realize that “capitalism” and “property” in land were childish fantasies for which we no longer have the luxury. Our only remaining choices are to assert ourselves as adult human beings, or be permanently degraded to subhuman slaves.

      The hunter-gatherer was physically in much better shape than his agricultural worker descendant, worked less, and had far greater social and political freedom. Dispossessed bondage is the lowest and most miserable form of degradation. Now all the trendlines are taking us back to that squalid serfdom, unless we resolve to take back our land and cultivate it, not as workers, but as partners.

      Otherwise it would be better to cast off this farcical “civilization” completely. The current pseudo-civilization has no legitimacy at all: moral, rational, or practical.

    2. DownSouth

      As Eric Schoenberg points out in today’s Mark Thoma link “Zombie Economics and Just Deserts,” laissez faire capitalism is without doubt failed idealism. But it is failed realism too. And this is no epiphany: It has been known for well nigh 200 years, since Simonde de Sismondi published his Studies in Political Economy in 1818, that laissez faire capitalism fails just as miserably as realism as it does as idealism.

      Of course no one would ever know that today, because the economics profession allowed propagandists like Milton Friedman and Anna Schwartz to get away with murder. In books like A Monetary History of the United States, 1867-1960 or Friedman’s companion solo effort, Capitalism and Freedom, economists allowed Friedman and Schwartz carte blanche to rewrite history so that it conforms to the doctrine of laissez faire capitalism. What they give us is history completely divorced from factual reality, such as this fantasy from Capitalism and Freedom:

      The agitation over silver in the 1880’s, culminating in Bryan’s Cross of Gold speech which set the tone for the 1896 election, was one sign of dissatisfaction. In turn, the agitation was largely responsible for the severely depressed years in the early 1890’s. The agitation led to widespread fears that the United States would go off gold and that hence the dollar would lose value in terms of foreign currencies.

      1. DownSouth

        There is a subtext that runs like a thread through the historical revisionism of Friedman, Schwartz and Evans-Prichard, which is that everything must be blamed on the government.

        Blame the government for “forcing” bankers to give credit to people that the wise and all-knowing bankers—-who we all know were only doing God’s work—-knew were bad credit risks.

        The extent to which this fiction departs from factual reality becomes evident when one reads more historically accurate accounts of the period, such as Frederick Lewis Allen’s Only Yesterday:

        At the very outset of the decade [1920s] there had been a sensational market in farm lands, caused by the phenomenal prices brought by wheat and other crops during and immediately after the war. Prices of farm property leaped, thousands of mortgages and loans were based upon these exaggerated values, and when the bottom dropped out of the agricultural markets in 1920-21, the distress of the farmers was intensified by the fact that in innumerable cases they could not get money enough from their crops to cover the interest due at the bank or to pay the taxes which were now levied on the increased valuation. Thousands of country banks, saddled with mortgages and loans in default, ultimately went to the wall. In one of the great agricultural states, the average earnings of all the national and state banks during the years 1924-29, a time of great prosperity for the country at large, were less than 11/2 per cent; and in seven states of the country, between 40 and 50 per cent of the banks which had been in business prior to 1920 had failed before 1929. Just how many of these failures were directly attributable to the undisciplined rise and subsequent fall in real-estate prices it is, of course, impossible to say; but undoubtedly many of the little country banks which suffered so acutely would never have gone down to ruin if there had been no boom in farm lands.


        Pick up one of those graphs with which statisticians measure the economic ups and downs of the Post-war Decade. You will find that the line of business activity rises to a jagged peak in 1920, drops precipitously into a deep valley in late 1920 and 1921, climbs uncertainly upward through 1922 to another peak at the middle of 1923, dips somewhat in 1924 (but not nearly so far as in 1921), rises again in 1925 and zigzags up to a perfect Everest of prosperity in 1929-only to plunge down at last into the bottomless abyss of 1930 and 1931.


        Not everyone could manage to climb aboard this wagon. Mighty few farmers could get so much as a finger hold upon it. Some dairymen clung there, to be sure, and fruit-growers and truck-gardeners. For prodigious changes were taking place in the national diet as the result of the public’s discovery of the useful vitamin, the propaganda for a more varied menu, and the invention of better methods of shipping perishable foods. Between 1919 and 1926 the national production of milk and milk products jumped. Between 1919 and 1928, as families learned that there were vitamins in celery, spinach, and carrots, and became accustomed to serving fresh vegetables the year round (along with fresh fruits), the acreage of nineteen commercial truck vegetable crops nearly doubled. But the growers of staple crops such as wheat and corn and cotton were in a bad way. Their foreign markets had dwindled under competition from other countries. Women were wearing less and less cotton. Few agricultural raw materials were used in the new economy of automobiles and radios and electricity. And the more efficient the poor farmer became, the more machines he bought to increase his output and thus keep the wolf from the door, the more surely he and his fellows were faced by the specter of overproduction. The index number of all farm prices, which had coasted form 205 in 1920 to 116 in 1921-“perhaps the most terrible toboggan slide in American agricultural history,” to quote Stuart Chase again-regained only a fraction of the ground it had lost: in 1927 it stood at 131. Loudly the poor farmers complained, desperately they and their Norrises and Brookharts and Shipsteads and La Follettes campaigned for federal aid, and by the hundreds of thousands they left the farm for the cities.

      2. attempter

        As Friedman well knew, that “agitation over silver” was a modern-style misdirection campaign, just when the Greenbackers were starting to make a little headway in their educational efforts.

  5. ChrisTiburon

    The dispossessed youth graduating with student loans that will follow them to the grave and degrees that are worthless are the new farmers.

  6. Jim the Skeptic

    Ambrose Evans-Pritchard: “So we limp on, with very large numbers of people in the West trapped on the wrong side of globalization, and nobody doing much about it. Would Franklin Roosevelt have tolerated such a lamentable state of affairs, or would he have ripped up and reshaped the global system until it answered the needs of his citizens?”

    He comes to the correct conclusion about the problem but can’t bring himself to prescibe the medicine.

    Year__Tax Rate__Income_____Tax Rate___Highest Bracket
    Note: These rates did not change between the years given

    Number 1: Raising the tax rates on the richest would help to fund government.

    Number 2: It would also send a strong message to the richest the it will not be business as usual until the majority of the population has some kind of economic security!

    1. craazyman

      I think all youze guyze are bein a bit hard on AEP. At the end of his R-ti-cull he sez wat wud FDR do? Jes stan thare or do sumthin else? Y theenk he thynkes thet FDR’d du somthun L-ssss. Eye one-dur hooo kud be brawt to the Wite Hows to theenk a-bowt thyss and cum up wyth a plann of sum ceyend for R kurreent sichuation. Seems lyke wee nEd 1.

      1. Jim the Skeptic

        I am confident that you understand what you wrote, because it looks like it was written slowly.

        Geez, there’s always one! :^)

  7. C

    People have very different reaction to opiates. Some people love the way it makes them feel, and would like to pop them like candy. On the other extreme, others feel terrible while taking them: My wife gets nausea. I still notice the pain a bit, but my mind gets a bit clouded: A result that means I’d much rather take the pain as it comes than the pain killers.

    You’ll feel better in a few days.

  8. Jim the Skeptic

    I was given morphine for days after a surgery. I got an intense sense of well being, a warm fuzzy glow!

    That worried me and so a few days after the surgery I started refusing the drug. That evening I got a terrible headache. I just wanted a couple of acetaminophen but that was not on my chart, so it was out.

    The nurse did offer me a shot of morphine. I declined. :^)

  9. Jim Haygood

    A link that I highly recommend — a speech by Janet Yellen which provides major clues to what the Fedsters are plotting. Excerpt:

    A recent research paper by four Federal Reserve System economists [assumes] that the purchases of $600 billion in longer-term Treasury securities are completed within about a year, that the elevated level of securities holdings is then maintained for about two years, and that the asset position is then unwound linearly over the following five years.

    The same research paper analyzed the macroeconomic effects of the FOMC’s full program of securities purchases, including the first round of purchases that was initiated in late 2008 and early 2009, the modification of the reinvestment policy that was announced last August, and the second round of purchases that was initiated in November.

    Those simulation results indicate that by 2012, the full program of securities purchases will have raised private payroll employment by about 3 million jobs.

    So the Federal Reserve is going to create three million jobs! Doing what, we may ask? Replacing the glowing vacuum tubes in the coal-fired, steam-powered differencing engine in the basement of the Eccles Building which generates these delusional propositions?

    See ya in 2018 when QE II is finally run off — NOT!

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