Archive for October 2009


Some legalistic quibbles

I’ve previously complained about how Krugman misrepresented my views, John Cochrane’s views and Milton Friedman’s views.  Now we can add Levitt and Dubner to the list.  That’ right, the following statement made by Krugman is pure fabrication:

The chapter opens with the “global cooling” story “” the claim that 30 years ago there was a scientific consensus that the planet was cooling, comparable to the current consensus that it’s warming.

Why does Krugman keep doing this?  Why does he continually misrepresent what others say?  My theory is that he assumes those he disagrees with are either fools or knaves.  Instead of doing a sympathetic reading, trying to discern what others are really trying to say, he looks for the “gotcha.”  I just read the chapter, and it bears little resemblance to his description.  And I have read a lot of scientific papers on geoengineering, on both sides of the issue, so I know a bit about the field. 
Den ganzen Beitrag lesen…

Let’s clean up the blogosphere (and the atmosphere too)

It has come to my attention that the standards of intellectual discourse have been slipping.   Fortunately, Paul Krugman has provided us with a set of ethical standards for blogging in a recent series of posts on global warming.  In the first post he takes Levitt and Dubner to task for their counterintuitiveness on an important issue:

At first glance, though, what it looks like is that Levitt and Dubner have fallen into the trap of counterintuitiveness. For a long time, there’s been an accepted way for commentators on politics and to some extent economics to distinguish themselves: by shocking the bourgeoisie, in ways that of course aren’t really dangerous. Ann Coulter is making sense! Bush is good for the environment! You get the idea.

Clever snark like this can get you a long way in career terms “” but the trick is knowing when to stop. It’s one thing to do this on relatively inconsequential media or cultural issues. But if you’re going to get into issues that are both important and the subject of serious study, like the fate of the planet, you’d better be very careful not to stray over the line between being counterintuitive and being just plain, unforgivably wrong.

I could not agree more.  It certainly helped the career of the snarky John Maynard Keynes.  He continually shocked the bourgeoisie with counterinituitive assertions that saving was actually harmful and that we’d all be better off if we buried bottles full of money and paid workers to dig them up.
Den ganzen Beitrag lesen…

It’s all about the Benjamins

You have to be careful when reading Tyler Cowen’s posts.  Whereas I can ramble on and on saying very little, he condenses a lot of ideas into very short posts.  When I first glanced at this post two things stuck out; Tyler didn’t understand the “helicopter drop of cash” and he confused me with Milton Friedman.  On closer examination he does understand the helicopter drop, and I have no complaint if people start associating me with ideas that Friedman actually developed.  In fact there is a long tradition of this in economics, recall the “Phillips Curve” was actually first popularized by Irving Fisher.  Here’s what Tyler has to say:

$250 for each senior or $13 billion in total.  It’s bad precedent to go around a COLA calculation, even on a one-time basis, but you can construct a partial defense of the policy (here is Matt’s semi-defense).  Think of it as a helicopter drop of money, a’la Scott Sumner.  If the helicopter drop substitutes for (part of) a second fiscal stimulus, that’s a net gain.  .  .  .   How will the expenditure be financed?  Obama was vague on that, but as usual the Fed moves both first and last in the monetary policy game.  All Obama has to do is make the second stimulus $13 billion less than it otherwise would have been, wink and nod to Ben B., and it is all (or mostly) for the better.

My first thought was that Tyler was confusing fiscal and monetary policy.  The $13 billion would not directly impact the money supply.  But in the final sentence he alludes to his assumption—a larger fiscal stimulus would lead the Fed to adopt a more accommodative monetary stance.  This raises two questions; precisely what would the Fed have to do to turn it into a helicopter drop, and how plausible is this assumption?
Den ganzen Beitrag lesen…

Now that’s price stability!

The Economist just published a piece that looks at the performance of quantitative easing (QE) in Japan from 2001 to 2006.  The article suggests that the policy failed, and provides extensive testimony from The Bank of Japan’s Governor, and one of its top economists.

THE Bank of Japan (BoJ) pioneered the process known as quantitative easing (QE) in 2001-06, when it massively boosted the reserves that commercial banks held at the central bank. Its verdict on how well QE worked then ought to interest policymakers today. It will also discomfort them. For all that it propped up Japan’s creaking banking system, QE did not really improve the economy nor end the country’s deflationary mindset (see chart).

Yes, by all means “see chart.”  In fact, take a very close look at the chart.  I don’t know about you, but to me that looks like perhaps the most successful monetary policy in all of world history.  Can you think of a central bank that did better?  So why is The Economist so pessimistic?  And for that matter why does Paul Krugman keep citing Japan as an example of why QE doesn’t work?  There are two reasons:
Den ganzen Beitrag lesen…

A few links

Update 10/15/09:  I was just interviewed by the PBS station in Denver (KGNU.)  I’ll post a link when I get one.  If any PBS listeners wander over here and are curious about my letter to Krugman, here is the link.

Update 10/16/09.  Here is the PBS interview.

I plan to take a break to recharge my batteries.  I know I have been overstressed when I tried to link to Yahoo News this morning, and accidentally stumbled onto a story at The Onion about Obama winning a Nobel Prize.  I can’t recall what field, probably chemistry or something similar.  And the next story had Somali pirates “mistakenly” attacking a French military flagship.  Yeah, I also have trouble distinguishing French naval vessels from tankers.   So I need a break.   In any case, I thought I should provide some links for those who stumble onto my blog by mistake.  I’ll start with one from the AEI’s online magazine, which just appeared this morning:

The American

Here’s my essay at Cato.  The links for the subsequent debate with Hamilton, Selgin and Hummel are in the right margin:

Cato Unbound

Here’s my essay at Vox:


Here’s my debate with Ohanian at CBS Moneywatch:

Ohanian debate

Here is my debate with John Cochrane:

Cochrane debate

Here is my debate with Mark Thoma

Thoma debate

Here is my piece at Reason magazine:


And finally, a New York Times article on this blog:

New York Times