God help me if I start following Twitter

Tyler Cowen links to some tweets by Justin Wolfers.  Here’s one that caught my eye:

The untold story of this recession: The many false signals given by US GDP data which have given false hope, leading policy mistakes.

How can we avoid serious policy mistakes from serially correlated over-optimism?  That’s right—level targeting.

I’ve stayed away from Twitter as I’m already having a hard time keeping up.  But that got me wondering what I would say if I did do twitter.  Isn’t there a 140 character limit?

All multiplier estimates are nothing more than forecasts of central bank incompetence.

You can’t squeeze blood from a stone; you can’t squeeze consumption from Warren Buffett

If you aren’t targeting the forecast, you are expecting to fail.

The case for targeting M2 and targeting the quantity of quarters is identical.  Both are correlated with NGDP.

Imagine how money causes inflation in a country w/o banks or bonds.  That’s how it drives AD in our economy.

Hellooooo . . . NGDP crashes cause financial crises . . . almost always.

AD declines make structural problems worse.

If you suddenly start paying banks to hold on to ERs, don’t express dismay if they do.

The dual mandate:  It’s not just a good idea, it’s the law.

Sticky wages plus falling nominal income means fewer hours worked.

Interest rate targeting:  A policy that fails only when you need it most.

If you are talking about inflation, you should be talking about something else.

The tightest policy possible (deflation) looks like easy money to most economists.

Macro policies immediately fail or succeed, there is no “wait and see.”

Do or do not.  There is no try.  (Oops, stole that one from Yoda.)

If I ever get sucked into Twitter it will mean: divorce – – -> unemployment – – -> mental institution – – -> endogenous money proponent.

Just shoot me.



25 Responses to “God help me if I start following Twitter”

  1. Gravatar of Becky Hargrove Becky Hargrove
    22. November 2011 at 20:14

    I find myself glancing at the twitter comments at Modeled Behavior but have avoided signing on for the same reason!

  2. Gravatar of johnleemk johnleemk
    22. November 2011 at 20:34


    Twitter is built largely around conversations anyway, so you wouldn’t need to tweet all those thoughts right away! Wait till someone you follow posts a link which contradicts/supports one of those thoughts, and fire away 😉

  3. Gravatar of TylerG TylerG
    22. November 2011 at 20:43

    You forgot: “Income is a meaningless, misleading, and pernicious concept.” This would be especially topical in light of current protests.

  4. Gravatar of Tyler Cowen Tyler Cowen
    22. November 2011 at 20:44

    I’ve now put these on Twitter…!

  5. Gravatar of Peter N Peter N
    22. November 2011 at 20:50

    Banks have their own economics. Allowable assets are based on their capital marked to market and discounted for risk. When their tier 1 capital goes from AAA 100% value 0 .001 risk to A (maybe for now) 70% value 0.2 risk, they have to reduce assets (find somebody to buy the loans for something like the amount loaned or sell off some of the more attractive bits of the bank for cheap), raise equity at confiscatory rates (if they’re lucky) and try to stop the bleeding in their liabilities (which is getting worse).

    Why are the bonds they hold dropping? Because the banks are implicitly backed by the governments whose bonds they are.

    The governments are faced with having to buy back all their issued debt. Will they raise the money for this by issuing bonds? Since they don’t have the liquid assets to buy back the bonds, they’re insolvent. If they’re insolvent, then the bonds are worthless and the banks that hold them are insolvent, which is where we came in… round and round circling the drain.

    This is the downside of mixing banks with fiat money. You can’t let things get to this point. It’s much harder to put the worms back in the can.

    Maybe it’s time for some hocus-pocus like Rentenmarks. It worked once.

    The word of the day is DEXIA.

  6. Gravatar of Corey Corey
    22. November 2011 at 21:37

    Did you feel the same way when you started blogging?

  7. Gravatar of Greg Ransom Greg Ransom
    22. November 2011 at 21:58

    But Warren Buffett can suck endless cash out of the average American taxpayers ….

  8. Gravatar of Doc Merlin Doc Merlin
    22. November 2011 at 22:25

    Scott, what do you think about Using GNI data instead of GDP. It seems GNI shows effects faster.

    Also if this is true then doesn’t that mean that wages are less sticky than consumption?

  9. Gravatar of Donald Pretari Donald Pretari
    22. November 2011 at 23:30

    You are slowly becoming a Yoda-like figure. Nick too.

  10. Gravatar of TMI TMI
    23. November 2011 at 00:29

    Twitter is for twits.

    Why else would we have accepted the word eponymous?

  11. Gravatar of StatsGuy StatsGuy
    23. November 2011 at 04:34

    I think Twitter might be good practice for your next TV interview…

    Nice list of one liners. In a TV interview, throw out one of these, then REPEAT IT word for word or slightly paraphrasing, then say “let me explain what I mean”. Hold to this pattern. I’m not at all kidding about the repetition part.

    Yah, you’ll feel like you aren’t have an intelligent and sophisticated debate. Welcome to modern media.

  12. Gravatar of Adam Ozimek Adam Ozimek
    23. November 2011 at 05:15

    Just abandon your comment section and you will have plenty of time for twitter.

  13. Gravatar of johnleemk johnleemk
    23. November 2011 at 06:05

    Second StatsGuy.

  14. Gravatar of Claudia Sahm Claudia Sahm
    23. November 2011 at 06:37

    You sound like a natural tweeter…I bet you’d end up with several followers. You don’t need to “keep up” with Twitter. It can just be another form of information entertainment. For example, I missed the President’s job speech (since I was baking cookies with my daughter) so later I “watched it” on my Twitter feed. It was really cool to read the comments from disparate tweeters. Or it can be part of a multimedia experience, I watched the live video of Chairman Bernanke’s last post-FOMC press conference on one screen and my twitter feeds on the other. Fun stuff. But to each his own.

  15. Gravatar of Cthorm Cthorm
    23. November 2011 at 07:49

    Those are all pretty witty Scott. Just keep posting them on the blog and I’m sure someone will create @FakeScottSumner and post the tweets. It really wouldn’t be all that different from what most high-profile personalities do on Twitter – they just have a surrogate (“Social Media Expert”, “Personal Assistant”, “Plagiarizer”, “Libelous Stalker”) tweet things they may or may not have said.

  16. Gravatar of Cthorm Cthorm
    23. November 2011 at 07:52

    A very small share of twitter users actually post content anyway, the majority of accounts are silent observers. I suspect a large portion use it the way I do – just a way to share links to interesting content with no one in particular. Almost all of my tweets are links to Economics blog posts (mostly you and Tyler), technology press releases, and job-related media appearances.

  17. Gravatar of wgdunn wgdunn
    23. November 2011 at 08:24

    There once was a blogger named Scott
    Who feared the Twitter a lot
    He said if he tried
    He’d likely be fried
    So instead he participated not.

  18. Gravatar of Pietro Pietro
    23. November 2011 at 08:25

    I don’t follow your blog, but would follow you on twitter.

  19. Gravatar of dirk dirk
    23. November 2011 at 09:10

    But say you could be more influential at this point on Twitter and save time overall by blogging less and not responding to all the comments on your blog?

    No need to respond to this comment.

  20. Gravatar of Turner Turner
    23. November 2011 at 09:38

    ‘mental institution – – -> endogenous money proponent.’

    Honestly endogenous money has been empirically verified so many times that I’m not sure how you can say this.

  21. Gravatar of Adam Adam
    23. November 2011 at 09:42

    These are some of your best work. As a lay-person in economics discussions, I sometimes have trouble following your more detailed posts, but the forced brevity works for you.

  22. Gravatar of ssumner ssumner
    23. November 2011 at 20:11

    Becky, Me too. I find the whole thing kind of confusing. I don’t have a mental image of the architecture, where stuff is, and how it’s interconnected. I used to be confused about who was talking, but I think I have that figured out.

    Johnleemk, That’s a good suggestion.

    TylerG, Yes, that would be another good one. Perhaps I could carry a sign at the OWS protests.

    Tyler Cowen, Thanks. But what happens next? I presume there is no comment section like with blogs. So it’s just other tweets in reply. Sort of like a cocktail party conversation–the most popular speaker gets all the attention?

    Peter, You may be right, I don’t have a good sense of how all that fits together.

    Corey, See my answer to Becky–I find blogs more intuitive. The structure is easier for me to understand.

    greg, Don’t tell me he’s a rent seeker too.

    Doc Merlin, I said a few months back that GDI is actually better than GDP.

    I don’t see a link to sticky wages, however.

    Donald, I’ll take that as a compliment–unless you mean in appearance.

    TMI, You may be right.

    Statsguy, When I watch those cable news shows I say to myself that I could never do that. The level of discussion is so low I’d feel like I was just yelling at someone in a bar.

    Adam, You said in my comment section:

    “Just abandon your comment section and you will have plenty of time for twitter.”

    If that is good advice, and if it appeared in my comment section, then isn’t it sort of self refuting? 🙂

    Johnleemk, Statsguy usually has good advice.

    Claudia, Thanks, that’s good advice.

    Cthorm, If you see someone claiming to be me, they are a fake.

    wgdunn, Well done.

    Pietro, You said;

    I don’t follow your blog, but would follow you on twitter.

    Isn’t that also self-refuting? The second such comment in this post.

    dirk, No comment.

    Turner, Are you of the Post-Keynesian persuasion?

    Thanks Adam.

  23. Gravatar of TGGP TGGP
    24. November 2011 at 21:18

    No, not twitter! Only people who have twitter accounts can respond, it is harder to write at length, and conversations disappear more easily.

  24. Gravatar of Scott Sumner Scott Sumner
    25. November 2011 at 09:57

    TGGP, No need to worry.

  25. Gravatar of TheMoneyIllusion » Woodford has something for everyone TheMoneyIllusion » Woodford has something for everyone
    18. January 2012 at 18:32

    […] provocative maxim that I repeat over and over again is: All multiplier estimates are nothing more than forecasts of […]

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