Category Archives: The dismal science

New York Times Gives Pride of Place to Economists Who Badly Misread Downturn

This is the sort of post Dean Baker often writes, “New York Times features economists who missed the housing downturn,” although this time, the subject is the outlook for 2009. Now in fairness, the author, Louis Uchitelle, puts in far more caveats than one normally sees in this sort of piece. In fact, it could […]

Disingenuous New York Times Story on Global Imbalances

Since I am endeavoring to spend some time with my family, forgive me for dispatching this New York Times story, “Dollar Shift: Chinese Pockets Filled as Americans’ Emptied.” The article buys, hook, line and sinker, then- Fed-governor Ben Bernanke’s depiction of so-called global imbalances (the US borrowing from abroad to fund overconsumption; Japan, China, Taiwan, […]

"Deflation has become inevitable"

I’m reproducing the bulk of a very good (and possibly final) post by London Banker, a former central banker and securities regulator, that takes issue with some of the conventional wisdom surrounding the efforts to remedy our economic crisis via liberal applications of monetary easing and fiscal stimulus. I happen in general to be sympathetic […]

Boston Globe Article on Econoblogs

Nice piece, “Inside the Influential World of Econobloggers,” by Steve Miln which got prominent placement in the Boston Globe Sunday Ideas section. A good piece generally, with one minor frustration: one of our posts was mentioned by title in the third paragraph, without indicating the source (the first mention of NC didn’t occur until the […]

Martin Wolf Says Big Stimulus Programs by Big Debtor Countries Will End in Tears

One thing I have found troubling is the near-unanimity in the US that we must Do Something about the burgeoning economic crisis, and that Something is big time monetary and fiscal stimulus. Near unanimity is almost never a good thing in the political and policy realm, since conditions and options are sufficiently complicated so as […]

The Reserve Bank of Zimbabwe Commends US and UK Authorities for Following Its Lead

You simply cannot make this up. I found a section of this priceless commentary from the Reserve Bank of Zimbabwe via Marc Faber’s latest newsletter (hat tip reader Dean), and had to verify it. The original provides an even richer mine of material. From the Reserve Bank of Zimbabwe (boldface theirs): As Monetary Authorities, we […]

"Taiwan to hand out shopping coupons to boost economy: PM"

Financial Times columnist Lucy Kellaway once wrote, “No management idea is too ridiculous not to be tried in practice.” That observation may apply to economic ideas as well. Just last week, when discussing economic stimulus programs, I stressed that to be effective, they needed to lead to consumption. If, as with the tax rebates of […]

"The High Priests of the Bubble Economy"

Dean Baker goes full bore after two deserving targets, Bob Rubin and Larry Summers, at TPM Cafe. Key excerpts: Along with former Federal Reserve Board chairman Alan Greenspan, Rubin and Summers compose the high priesthood of the bubble economy. Their policy of one-sided financial deregulation is responsible for the current economic catastrophe. It is important […]

Some False Hope on the Deflation Front

A Wall Street Journal article, “Japan Worries It Faces the Return of Deflation,” contained an argument I found unconvincing: In the U.S., some economists say deflation may occur if market conditions deteriorate much further and job losses proliferate. But Teizo Taya, an adviser for Daiwa Institute of Research and a former policy board member of […]

Edmund Phelps Raises Doubts About Keynesian Remedies

Edmund Phelps, a Nobel Prize winner, casts doubts on Keynesian remedies because Keynes himself came to question them. This Financial Times piece provides no answers but raises some interesting questions. But sadly, there may be no answer for the first question he asks: What theory can we use to get us out of the impending […]

Paul Krugman Receives 2008 "Nobel Prize in Economics"

Note that technically, the famed economics prize is the “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008.” From the press release (hat tip reader Jørgen): Patterns of trade and location have always been key issues in the economic debate. What are the effects of free trade and globalization? What are […]

Soros: "He Foresaw the End of an Era"

John Cassidy, in the New York Review of Books, discusses George Soros’ latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, emphasizing how the storied investor’s views differ from those of the efficient markets/rational expectations school of economics. It also weaves in a wide-ranging discussion of the […]

Troubling Signs From Fed’s Jackson Hole Conference

It’s hard to discern what took place in a closed-door session at a remove, but some of the tidbits coming from last weekend’s Federal Reserve conference at Jackson Hole were worrisome. Note I didn’t have this sense about last year’s meetings, based on a reading of Jim Hamilton’s commentary (which may simply mean Hamilton was […]

Summers: "The global consensus on trade is unravelling"

Readers may know I am not much of a fan of Larry Summers’ occasional comments in the Financial Times. He has a tendency to come forth with views of how things work that sound nice but too often are at odds with facts on the ground. His latest offering scores better than previous offerings as […]