Category Archives: The dismal science

Barack Obama gets it

By Edward Harrison This quote from President Obama comes via Brad DeLong: We’ve got a long- term structural deficit that is primarily being driven by health care costs, and our long-term entitlement programs. All right? So that’s the baseline. Now, if we can’t grow our economy, then it is going to be that much harder […]

“In the Eye of the Storm: Updating the Economics of Global Turbulence”

Normally I relegate items that I deem important, but to which I have comparatively little to add, to Links and label as “Today’s Must Read.” Even thought this offering falls into that general category, it is far and away the most important “Must Read” I can recall coming across, and so I am highlighting it […]

“A significant portion of policymakers are simply clueless”

Tim Duy, my favorite Fedwatcher, has a very good post up which combines a general reading on the state of the consumer and then segues to the Fed’s take on matters. The section I found particularly telling: As has already been widely noted, the minutes of the most recent FOMC meeting reiterated the Fed’s eagerness […]

“Does US need a second stimulus to create jobs?”

Reader Doug Smith was not happy with an article in the Christian Science Monitor yesterday, titled, “Does US need a second stimulus to create jobs? His remarks: Could you, Edward or someone consider reading this article and responding to it? My sense is that it perfectly captures ‘conventional wisdom’ and, in that sense, is a […]

Obama: Debt could cause a double dip recession

By Edward Harrison of Credit Writedowns Barack Obama has now come clean about his thinking on why his administration has decided to focus first on reducing the deficit and next on jobs. He fears a double-dip recession will occur if foreigners lose confidence in the U.S. dollar, causing interest rates to spike. This is nonsense […]

Swoopo and the Thrill of the Kill

I don’t know if any readers know Jay Leonhart, but his “Sometimes I Think” from Salamander Pie is my theme song. I cannot relate to a lot of behavior considered normal. So I hate to personalize this discussion, but the subject of this post involves one of those areas of human activity I find to […]

Unemployment insurance for the 21st century

By Edward Harrison of Credit Writedowns L. Randall Wray has a post up at New Deal 2.0 which puts forward an idea which is pretty innovative. I would label it a private sector replacement for unemployment insurance. It’s the kind of thinking that might bring Obama out of a policy cul-de-sac as the economy hemorrhages […]

Mishkin Defend Bubbles (and of Course, the Fed)

The press becomes more surreal with every passing day. If we didn’t all have a stake in the outcomes, this would make for great theater. First we have the absurd spectacle of bankers claiming that they are doing God’s work. Great! Then they should be willing to do it for free. I don’t recall the […]

Guest Post: Was it “Nobody Saw It Coming” or “Everybody Who Saw It Coming Was a Nobody”?

By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. A number of economists, economic policymakers, regulators, and central bankers have attempted to explain away their failure to both […]

Guest Post: Wall Street Journal Admits Economists Were Wrong, But Fails to Discuss their INCENTIVE for Being Wrong

By George Washington of Washington’s Blog. The Wall Street Journal admits this week that economists blew it: The pain of the financial crisis has economists striving to understand precisely why it happened and how to prevent a repeat… The crisis exposed the inadequacy of economists’ traditional tool kit, forcing them to revisit questions many had […]

Guest Post: On, and Beyond, Deficits

By DoctoRx, who writes at EconBlog Review:Introduction A few days ago, Naked Capitalism kicked off a series of posts on government deficits with a first-of-two posts by me. My Debate on Deficits, was followed by posts by Marshall Auerback, Rob Parenteau and Dr. Edward Harrison. My initial post was itself a response to Dr. Harrison’s […]

The choice is between increasing or decreasing aggregate demand

By Edward Harrison of Credit Writedowns. DoctoRx, Rob Parenteau and Marshall Auerback have each written articles here to bring clarity to some issues I first raised at the beginning of the month in my post, “The recession is over but the depression has just begun.” As I see it, the issue we are debating has […]

All Debt is Not Created Equal: Government Debt is NOT the Same as Private Debt

By Marshall Auerback, an investment strategist and analyst who writes for New Deal 2.0. A major shortcoming in an otherwise thoughtful post by DoctoRX on deficit spending is a traditional mistake in which analysts seek to analogise the expenditures of government with that of a private household or business. The government is sovereign. This fact […]

“Fed Self-Evaluation: Marking Monetary Policy to Model”

By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. It has been frequently charged that the Fed, under Alan Greenspan and Ben Bernanke, kept interest rates too low […]