Here are some interesting recent posts:
David Henderson finds another gem from Krugman:
Finally, it’s nice, although a little late in the game, to see Krugman explicitly say that only “a small piece” of the Bush tax cuts was for high-income people. It’s at about the 7:05 point of this video.
As usual, I eagerly await the creative and amusing explanations from his fans.
And speaking of Mr. Krugman, here he hints at the next transformation; Krugman 3.0 for the 2010s:
I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didn’t seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism — which shouldn’t be a reason to ignore facts, but too often is. And it has really uncomfortable implications.
Just reading that is making me uncomfortable.
Garett Jones on how the GOP continues it’s suicidal death march:
Derek Khanna, the author of the important policy brief on the excesses of copyright law, has been fired by the Republican Study Committee. The brief, which the RSC pulled from their website, is here. From the Examiner:
“The staffer who wrote the memo, an ambitious 24-year-old named Derek Khanna, was fired — even before the RSC had decided on other staffing changes for the upcoming Congress. The copyright memo was a main reason.”David Brooks wrote about Khanna two weeks ago:
“Rising star Derek Khanna wrote a heralded paper on intellectual property rights for the House Republican Study Committee that was withdrawn by higher-ups in the party, presumably because it differed from the usual lobbyist-driven position.”
“Since Nov. 6, the G.O.P. has experienced an epidemic of open-mindedness. The party may evolve quickly. If so, it’ll be powerfully influenced by people with names like Reihan, Ramesh, Yuval and Derek Khanna.”
Looks like the epidemic is being contained. Whew!
Lars Christensen on how Singapore solved the zero lower bound problem:
So in that sense MAS is a flexible inflation targeter in the same ways as for example the Swedish Riksbank or the Australian Reserve Bank. But contrary to most central banks – including the Icelandic central bank Sedlabanki – which use interest rates to hit the inflation target – MAS instead uses the exchange rate.
I see two very clear advantages to this operational set-up compared to “interest rate targeting”. First, there will never be a problem with a lower zero bound.
Matt Yglesias on the “staggering incompetence” of the ECB:
It gets boring to write this kind of stuff every month or so, but it really is worth taking note of the stunning ineptitude of the European Central Bank. Earlier this week they published new forecasts revising their projections for growth and inflation downward but taking no action on interest rates “because of concerns about the negative signal a cut might send.”
Imagine you’re piloting a ship. You think you’re in good shape. But it turns out you misestimated the currents and now with your revised estimate you see you’re going a bit further north than you’d thought and are probably going to arrive late. Then you decide torefuse to change the heading of the ship because steering would send a bad signal about your likely trajectory. But then you publish the revised estimates anyway. And then leak that you’re refusing to steer because you don’t want to send a negative signal.
It’s bizarre. It’s insane.
And it’s very funny.
Here’s Yglesias on the $1,000,000,000,000 platinum coin:
The administration officials to whom I’ve raised this point generally respond by chuckling. Kevin Drum offers what amounts to an incredulous stare argument that this is undoable, “no way an actual president would ever try anything so obviously childish . . . so wildly contrary to the intent of the law . . . banana republic territory.”
I’ve got news for Kevin Drum. The Congressional fights over the debt ceiling already put us squarely into banana republic territory. It’s a question of whether Obama has the guts to fight fire with fire. FDR did, I say Obama doesn’t.
It’s interesting that Nick Rowe and David Glasner have completely different definitions of Cantillon effects than me, and also completely different from each other. I look at the “who gets the money” question. Rowe looks at the impact on fiscal policy. Glasner looks at the impact on relative prices. Bill Woolsey has a couple very good posts as well (here and here.) I pretty much agree with everything in the 4 posts.