Predictions for 2011

Part 1:  They told you so!

Last summer the economic recovery was clearly going nowhere.  I argued that monetary stimulus was our only hope.  In September and October there were a series of speeches by top Fed officials that made it seem increasingly likely that monetary stimulus would be forthcoming.  It didn’t happen in September, partly because two of Obama’s appointees hadn’t been seated yet.  And that was because he waited 15 months before even nominating them.  And that’s because almost no liberal politician, advisor, or pundit was telling him in early 2009 how absolutely important it was to get his own people onto the board.  And Obama doesn’t read any quasi-monetarist blogs.

The Fed didn’t do all that was needed, but what they did do had a significant effect on the markets.  And now we are already seeing the results:

Faster growth in retail sales.

Much stronger auto sales.

Much stronger service sector.

Even an uptick in construction.

Then there’s the ADP jobs number.  Last summer we were looking at 2% to 2.5% real growth in 2011.  Now I’m seeing 3.5% to 4.0% forecasts.  The Fed should have done twice as much, pushing growth up to 5.0% to 5.5%.  But this is better than nothing, and better than Dr. Doom at the NYT expected from QE2.  That’s because his model says QE2 will only work if it is believed that it will work, and there is no reason for anyone to believe anything the Fed says; after all, they are conservative central bankers.

Of course I’m exaggerating a bit, Paul Krugman did say QE2 was worth a shot, and I suppose his supporters will claim that the recent positive data reflects the afterglow of the recent fiscal stimulus announcement.   And they’d be right, as the cutting edge research in Keynesian economics suggests that the expansionary effect of fiscal stimulus comes when the policy is announced (actually expected) not when the money is actually spent.  So it could explain the stronger real economy in the last few months of 2010 (although obviously not the strongly positive response of equity markets and TIPS spreads to rumors of QE2.)

I fervently hope Krugman claims that the fiscal stimulus already started working when the deal was announced.  It would be true, and it would also blow out of the water all the excuses made for the fact that fiscal stimulus did not work in the first half of 2009.  Remember all those Keynesians saying “but the money hasn’t yet been spent.”

I’d love to say “I told you so.”  But of course I don’t do forecasts.  All I can say is “they told you so.”  The markets told us QE2 would work somewhat, but not as much as we really needed, and now it seems to be working somewhat, but not as much as we really needed.  My hunch is that the recent upswing in stocks suggests that things were already improving in December, and this will show up in future government data releases with a lag.  The market observes the world in real time; we economists see everything through government statistics with a one month lag, or even longer for GDP.

BTW, I just read that Obama is at over 50% approval.  Two year in office, millions of jobs lost, unemployment has risen from 7.8% to 9.8%, and most people still approve?  I made money betting on him in 2008, maybe I’ll make some more in 2012.  If he’s popular now, just imagine how popular he’ll be in 2012, after a few years of recovery.  Unless the GOP can re-animate the Gipper, I don’t see them having much chance.

Part 2:  Il sorpasso:  It’s closer than you think

In previous posts I’ve argued that China will catch up to the US in GDP much quicker than anyone believes.  Lester Throw says it won’t be until the 22nd century.  Some of the major private sector forecasters have been throwing out numbers like 2030 or 2040.  Recently The Economist did some calculations and came up with 2019, that’s barely 8 years away.  But keep in mind that even this forecast was based on current market prices.  In PPP terms it’s much closer than that, because most estimates show Chinese prices are only half US levels, and they seem even less than that to me.  You can eat out for a third the cost of the US, and grocery prices are also quite low.  A haircut in a nice place in Beijing is $2.25, it’s probably 25 cents in the countryside where half the people live.  If China’s NGDP reaches one half US levels their economy will probably be bigger using any sort of apples for apples comparison.

China’s a hard country to grasp, because it is so diverse.  It needs to get as rich as Mexico to surpass the US.  But Mexico is also quite diverse, so even though I’ve travelled many times to both countries, I have a hard time making mental comparisons.  The backward parts of China seem poorer than the backward parts of Mexico (although it’s been a few years, which is a generation in Chinese terms.)  The cities seem more futuristic. Consider this description of a new rail line about to open in China:

The Beijing-Shanghai High-Speed Railway, also known as the Jinghu High-Speed Railway is a 1,318 kilometres (819 mi) long high-speed railway that will connect two major economic zones in the People’s Republic of China: the Bohai Sea Rim and the Yangtze River Delta. [2] Construction began on April 18, 2008, [3] and a ceremony to mark the completion of track laying was held on November 15, 2010. [1] The line is scheduled to open in October 2011. [1]

The railway line is the first one designed for 380 km/h commercial running. Once in operation, its train services will become the world’s fastest “” the position currently occupied by the trains of the Wuhan-Guangzhou line, which opened in December 2009. The non-stop train from Beijing South to Shanghai Hongqiao is expected to finish the 1305 km journey in 3 hours, 58 minutes, [4] averaging 329 km/h.

The Beijing-Shanghai High-Speed Railway Co., Ltd. is in charge of construction. The project is expected to cost 220.9 billion yuan (about $32 billion). An estimated 220,000 passengers are expected to use the trains each day, [2] which is double the current capacity. [5] During peak hours there should be a train every five minutes. [5]1060.6 km, or 80.5% of railway will be laid bridges. There are 244 bridges along the line. The 164-km long Danyang-Kunshan Grand Bridge is the longest bridge in the world. [6], the 113.69-km long viaduct bridge between Langfang and Qingxian is the second longest in the world, and the viaduct between Beijing’s Fourth Ring Road and Langfang is the fifth longest. The line also includes 22 tunnels, totaling 16.1 km. 1196 km of the length is ballastless.

Imagine getting on a train in NYC, and just over 4 hours later arriving in Chicago for lunch.  Do some shopping, have dinner, and return on the same train.  That’s why it’s so hard to get a grasp on the Chinese economy.  Mexico doesn’t have anything like that, indeed Japan and France don’t really have anything as good.  And it’s not just Beijing and Shanghai, other lines are already open, and an entire network is being built connecting all the major cities across China.  As far as the US, we have our 60 mph Acela between NYC and Boston.  And they don’t leave every 5 minutes.

Over the next 5 years there will be a steady increase in articles claiming China is already number one, perhaps starting as soon as next year.  I’ll say 2015.

Part 3:  The coming decade of Hollywood mediocrity

The teens will produce few if any great Hollywood movies.  I know of no young directing talent that can re-energize the industry.  When I think of talented young directors I think of David Lynch, and he’s old.  In the teens no director will produce 4 masterpieces like Coppola did in the 1970s, or the amazing Kubrick films made in the 1960s, or the sublime Hitchcock films of the 50s.  The well has run dry.  Ambitious directors are always looking for new ways of expressing themselves, but the easily accessible commercial techniques have all been tried.  Great films will continue to be made in Taiwan, Thailand, and Turkey, but not in Hollywood.

I guess all art forms split at some point, with the pop art continuing to amuse the masses, and high art becoming increasing esoteric and inaccessible to the average reader/viewer/listener.  But I’m not too discouraged.  There are enough great films around to keep me amused for the rest of my life.  And as Howard Hughes discovered, even Hollywood films are better than real life.  (Anyone for Ice Station Zebra?)

Because of my blog I saw few films last year.  I seem to recall The Prophet (France), Mother (Korea) and Air Doll (Japan) as the standouts.  But no masterpieces.

I won’t be blogging much for the next few days.


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82 Responses to “Predictions for 2011”

  1. Gravatar of Full Employment Hawk Full Employment Hawk
    5. January 2011 at 20:22

    “that fiscal stimulus did not work in the first half of 2009”

    When Obama took office at the beginning of 2009, the bottom was falling out of the economy. Real GDP was declining at a rate of 6%. By the Summer the recession was over and real GDP was growing again. So how can you say it did not work? Certainly it was only one of three major factors that played a role in the turn around. The actions of the Fed acting in its most basic, fundamental function as lender of last resort played a major role, and so did the much reviled TARP.

    “the cutting edge research in Keynesian economics suggests that the expansionary effect of fiscal stimulus comes when the policy is announced (actually expected)”
    Since it was not clear what kind of stimulus could get past the Republican filibuster in the Senate, this, if correct, implies that the full effect was probably when it got past the Senate.

    But while the economy started growing again, it has not grown fast enough to get the unemployment rate down. This is consistent with Krugman’s argument that the stimulus was too small. It was large enough, along with the other factors, to make the economy grow again, but not large enough to make the economy grow fast enough to bring the unemployment rate down.

  2. Gravatar of Brett Brett
    5. January 2011 at 20:26

    I agree that the 2010s will probably not produce many good movies, but I attribute that to the changing nature of how we get entertainment media. Movies – and specifically theater exhibitions – just aren’t as significant as they once were, especially not in a period where we can get lots of television channels with good content for just about anybody.

  3. Gravatar of Full Employment Hawk Full Employment Hawk
    5. January 2011 at 20:30

    ” And they’d be right, as the cutting edge research in Keynesian economics suggests that the expansionary effect of fiscal stimulus comes when the policy is announced (actually expected) not when the money is actually spent.”

    While it was expected that the extension of the tax cuts for all would pass Congress, the additional stimulus items that Obama negotiated were surprises that were not anticipated until the budget compromise was announced. So they cannot get credit for the improvement in the economy before this point. All the extension of the tax cuts did was to prevent a major increase in taxes which would have had a very contractionary effect on the economy. Therefore this cannot be considered a fiscal stimulus, only a prevention of a strong anti-stimulus. Therefore quantitative easing deserves the full credit for the improvement of the economic outlook up to the point the compromise was announced.

  4. Gravatar of Full Employment Hawk Full Employment Hawk
    5. January 2011 at 20:33

    “And that’s because almost no liberal politician, advisor, or pundit was telling him in early 2009 how absolutely important it was to get his own people onto the board.”

    If there was any doubt that Larry Summers was an incompetent economic advisor for Obama, this is the smoking gun.

  5. Gravatar of Full Employment Hawk Full Employment Hawk
    5. January 2011 at 20:39

    “If there was any doubt that Larry Summers was an incompetent economic advisor for Obama, this is the smoking gun.”

    But where was Chistina Romer? She clearly understood this. Did Summers prevent her from directly communicating with Obama? Apparently, if the rumors are correct, Obama never heard of Romer’s conclusion that a 1.2 Trillion dollar stimulus was needed.

  6. Gravatar of Lorenzo from Oz Lorenzo from Oz
    5. January 2011 at 21:16

    The problem with estimating the size of the Chinese economy, is Chinese statistics, as the next Chinese PM tells us.

  7. Gravatar of Mark A. Sadowski Mark A. Sadowski
    5. January 2011 at 21:42

    Scott,
    So much to say, so little time.

    1) I really enjoyed your response to Tyler Cowen. I’ve been thinking a lot about what went wrong in late 2008 lately and “it gets me so mad” (think John Cleese).

    2) Frankly, no matter how much he claims he’s read, John Tamny is an idiot. I’m so glad that you and Bruce Bartlett are friends.

    3) According to Angus Maddison’s data (may he RIP) China probably has already surpassed the US in PPP terms. IMF data suggests that it won’t occur until 2016. Either way it’s either already occurred or will occur very soon. You’re on the Mark (pun intended).

    4) As for Hollywood: Quack, Quack, Quack!
    I already posted this but what the heck:

    http://www.dailymotion.com/video/x27b6g_groucho-marx-everyone-says-i-love-y_music

    P.S. I guess I’m one of the poor suckers. But that’s O.K. because I think you’re a lion who knows what he’s roaring for.

    P.P.S. I guess this makes me a Marxist. 😉

  8. Gravatar of Mark A. Sadowski Mark A. Sadowski
    5. January 2011 at 21:55

    For those of you who don’t get my mention of John Cleese just watch about 3:30 in (if you have problems with language spare yourselves and don’t watch):

    http://www.youtube.com/watch?v=Z9VLwV48OHs&feature=player_embedded

  9. Gravatar of Mattias Mattias
    6. January 2011 at 00:00

    Scott
    Is Krugman the new Dr Doom now? I thought it was Nouriel Roubini. I actually heard he was tired of his nick name so I suggested a new one: “The dismal one”. It didn’t catch on though.

    2015!?! Sounds great for the Swedish export sector!

    I think every art form has it’s golden age when all artist try to achieve both art and commercial success. It doesn’t matter if it grows out of simple public entertainment and tries to reach higher artistic values (like the Broadway musical in the mid 1900s or popular music in the late 60s and early 70s) or if it’s high art that finds a new audience it wants to reach (like opera in the 1800s reaching the new bourgeoisie). After a while the golden age ends when they go separate ways again. The golden age is not a result of it’s geniuses as much as the other way round.

  10. Gravatar of Mike Sandifer Mike Sandifer
    6. January 2011 at 01:52

    It’s interesting that you say you don’t make economic forecasts, yet have just made predictions that seem much more highly speculative. My guess is that it will be easier to predict where US NGDP will be at the end of the decade than the number of Hollywood directors that will make what you consider to be excellent films.

    But then, you do make economic predictions. It seems to me that your predictions for a timeline for Chinese-US economic parity is one, as well as your general approach to forward-looking economic indicators. You may say you’re only interpreting market expectations, but you do make positive statements about the future implications of monetary policy changes, for example. By saying that we needed QE2 to be twice as large, there is presumably an implicit forecast of QE2 effects, as well as the former hypothetical.

  11. Gravatar of Doc Merlin Doc Merlin
    6. January 2011 at 05:40

    The growth is still too small, more people are entering the labor market than are getting jobs still.

  12. Gravatar of Bill Gee Bill Gee
    6. January 2011 at 06:43

    It’ll be interesting to see what the Republicans are calling “a new era of austerity” will do to the overall economic recovery. State governments have already pledged to reduce their workforces by at least 5-10% in 2011 and the new Speaker has pledged to do the same at the Federal level.

  13. Gravatar of Doc Merlin Doc Merlin
    6. January 2011 at 06:54

    @Bill Gee:

    The last time we had something similar was during the early nineties and that turned out into a massive boom. Again in the early 50’s we had similar (but not exactly the same) cutbacks in government spending and we also had massive growth.

  14. Gravatar of W. Peden W. Peden
    6. January 2011 at 07:55

    Full Employment Hawk,

    No-one who was advocating the fiscal stimulus in early 2009 thought that 2009 and 2010 would have turned out they way they did if the fiscal stimulus got passed. If you can find anyone who said that “This won’t get unemployment down by the end of 2010, but it will prevent unemployment heading above 10%” then the movement of the goal-posts by Keynesians can be taken seriously.

    Krugman doesn’t think that Japan had enough fiscal stimulus, so it’s unclear what kind of level of national debt he would think would be necessary to have an effect.

  15. Gravatar of Greg Ransom Greg Ransom
    6. January 2011 at 08:14

    Scott, you might like this:

    “Stable monetary conditions require that the stream of money expenditure is the fixed datum to which prices and wages have to adapt themselves, and not the other way around.”

    — F. A. Hayek, 1958

  16. Gravatar of JoshK JoshK
    6. January 2011 at 09:12

    Scott,

    One thing I’ve been thinking about is with quantitative easing, does it matter where the money is placed? The fed is giving that money to banks who are really just transferring that money to bond holders who seem to just be keeping that in deposits that wind up at the fed.

    Compare that to if the fed just gave every US citizen $5k (1.5t). In your mind would that function differently?

  17. Gravatar of Anonymous Anonymous
    6. January 2011 at 09:24

    Brad DeLong has posted his presentation for the AEA session. Interestingly, he has two slides where he references stabilizing NGDP in an almost Sumnerian fashion. Here is the link.
    Here is another discussion of Sumner’s ideas.

  18. Gravatar of scott sumner scott sumner
    6. January 2011 at 09:53

    Full employment hawk, You said;

    “When Obama took office at the beginning of 2009, the bottom was falling out of the economy. Real GDP was declining at a rate of 6%. By the Summer the recession was over and real GDP was growing again. So how can you say it did not work?”

    Even the supporters claimied it wasn’t working . . . at least “yet.” Their excuse was that the money hadn’t been spent yet, which is a weak excuse. Unemployment soared from about 7% in late 2008 when the markets knew Obama was going to do a big stimulus, to about 10% a year later. I’d say that’s not working. I also look at markets. The stock market in early 2009 did horribly, not what you expect if the markets thought it was going to do much.

    I think your comments about the recent stimulus are reasonable.

    In early 2009 I had a post complaining that Christy wasn’t getting through to Obama, in one of my posts I speculated that Summers was blocking access.

    Brett, I don’t think that makes that much difference. There are still hundreds of movies made for theaters, and it doesn’t cost that much to make a great movie. You need good ideas, and they don’t have any.

    Lornezo, Yes, but I visit China frequently, and it sure doesn’t look like the are exaggerating either the level or growth of Chinese GDP. It looks very impressive on the ground.

    Mark, Thanks–I am heading out to a conference, so I don’t have time to say more.

    I’ll look at the Cleese later, I love Faulty Towers.

    Mattias, Yes, Sweden will benefit. You said:

    “The golden age is not a result of it’s geniuses as much as the other way round.”

    Very shrewd comment. The painting talent on Toledo, Ohio is probably just as great as Florance Italy circa 1520. But painting is also a played-out art form.

    Mike, I was just having fun with the China prediction. But yes, I do make conditional forecasts of US GDP based on policy. I say if the Fed was more expansionary then RGDP would grow faster. I just don’t make unconditional forecasts, I let the markets do that.

    Doc Merlin, That’s right.

    Bill Gee, It will have little effect, in my view.

    W. Peden, Good point.

    Greg, Yes, he favored a stable NGDP.

    JoshK, It doesn’t matter where, but it would matter if the money was given away, rather than sold for bonds.

  19. Gravatar of scott sumner scott sumner
    6. January 2011 at 09:58

    Anonymous, Great, I’m on the same panel. I’ll try to post my PP slides after I return, to give reader a sense of what I did.

  20. Gravatar of Morgan Warstler Morgan Warstler
    6. January 2011 at 10:38

    Scott, during the panel at an opportune time…

    Stand up and stride over, grab his coffee cup, smash it on the floor, and then punch DeKrugman in the nose.

    Point at him in the resulting bloody pandemonium and say, “get the hell out of my way.”

    Perhaps at last folks will understand where you stand, and conservatives will pay more attention.

  21. Gravatar of Benjamin Cole Benjamin Cole
    6. January 2011 at 10:42

    Another insightful post by Scott Sumner.

    China is amazing…and yet, and yet. If they do not use the price system-free markets to allocate resources, is a bust possible? Or do they have so much “extra dough” as workers are underpaid and save so much, and they have export income, that the nation’s economy can grow despite poor resource allocation? (And is the USA a model, having allocated $3 trillion to Iraqistan in the last 10 years?)

    I sense Thailand will prosper being on China’s rim, and exporting commodities into the giamt maw. And in 10 years or less, manufacturers looking for low-cost platforms will migrate down into Thailand, as China has become too expensive.

    In 20 years, manufacturers may relocate to the USA as manufacturing platform–well hey, if we are going to make predictions, why not look out a few decades?

    Film: Try Kurosawa’s films, available on Netflix. Very good.

  22. Gravatar of Full Employment Hawk Full Employment Hawk
    6. January 2011 at 11:22

    “Their excuse was that the money hadn’t been spent yet, which is a weak excuse.” Agreed.

    However, Krugman argued before, during, and after the stimulus that it was too weak to do do the job. Also that the main impact of the stimulus ON THE RATE OF GROWTH of the economy, rather than on the level, was during the first half of 2009. Since I tend to follow Krugman on fiscal policy (but not on monetary policy since I do not believe that we are in a liquidity trap) I was not surprised when the unemployment rate did not experience any significant improvement.

    While it was known that Obama would do a stimulus before he was elected and it was considered likely that he would win a significant time before the election, what kind and how strong a stimulus he would propose and could get past the Republican filibuster was not certain until the bill was passed by the Senate. So any anticipations about the stimulus before that were ambiguous and uncertain.

  23. Gravatar of JoshK JoshK
    6. January 2011 at 11:42

    Scott, isn’t the QE money really being given away?

    1. US GVT buys things.
    2. US GVT issues debt.
    3. Party X buys debt.
    4. Fed gives new money to party X for the debt.

    Systematically, the Fed is giving the money to the US GVT. At the margin, they are giving the money to party X and then X is parking the money right back with the Fed.

  24. Gravatar of malavel malavel
    6. January 2011 at 12:01

    I loved The Prophet. Not a masterpiece, sure, but then I can’t really call any movie a masterpiece. It seems too pretentious, somehow.

    Another great movie was Kick-ass. Two good ones were Inception and Scott Pilgrim (this one is probably not so good unless you love to play computer games).

    Scott, if you run out of great movies to watch, why not try some of the great recent tv-shows? I wouldn’t hesitate to call Firefly a masterpiece. It only got 14 episodes before being cancelled and I would count that as the biggest travesty of all time (not counting the recent central banking failure). =)

  25. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    6. January 2011 at 12:31

    Say hello to my friend J. Bradford. Go ahead and brag that your blog is man enough to allow dissent (and if he tries weaseling, ask him how he’s getting along with Roger Pielke, Jr these days).

  26. Gravatar of Dustin Dustin
    6. January 2011 at 13:53

    Morgan, nobody is going to pay attention to Scott if he is in jail on an assault charge.

  27. Gravatar of CA CA
    6. January 2011 at 15:11

    Whenever I hear of high speed trains in China I always think; would I rather ride a fast train from Seattle to LA, or would I rather just fly.

    I’m assuming that rider fees come NOWHERE near paying for the the trains in China, and that they’re heavily subsidized by the government-even more than the trains here in the US. And frankly, all-in-all,I don’t think domestic air travel here in the states is all that expensive.

    High-speed rail is extremely expensive. Is high-speed rail more efficient and cheaper than a competitive private airline industry?? Anyone know of any studies comparing the two?

    I love the blog Scott, and have been reading along for quite some time. Although, as an under-grad history student, I’m reluctant to comment on the more esoteric economic issues you discuss. Keep up the good work:)

  28. Gravatar of Blackadder Blackadder
    6. January 2011 at 16:18

    I just read that Obama is at over 50% approval. Two year in office, millions of jobs lost, unemployment has risen from 7.8% to 9.8%, and most people still approve? I made money betting on him in 2008, maybe I’ll make some more in 2012. If he’s popular now, just imagine how popular he’ll be in 2012, after a few years of recovery. Unless the GOP can re-animate the Gipper, I don’t see them having much chance.

    Intrade gives Obama about a 57% chance of being re-elected; better than 50/50, but hardly a sure thing.

  29. Gravatar of Blackadder Blackadder
    6. January 2011 at 16:23

    Scott, during the panel at an opportune time… Stand up and stride over, grab his coffee cup, smash it on the floor, and then punch DeKrugman in the nose.

    You don’t want to mess with Paul Krugman. Not if you know what’s good for you.

  30. Gravatar of Dustin Dustin
    6. January 2011 at 18:35

    Oh my. I sure hope Scott doesn’t listen to Morgan.

  31. Gravatar of Full Employment Hawk Full Employment Hawk
    6. January 2011 at 20:15

    “You don’t want to mess with Paul Krugman”

    It was not Krugman that was on the same panel at the AEA, it was Brad DeLong.

  32. Gravatar of Lorenzo from Oz Lorenzo from Oz
    6. January 2011 at 20:41

    On statistics, there was a Financial Secretary of Hong Kong who discouraged the collection of statistics, on the ground that it encouraged the government To Do Things, and he felt that, beyond a certain minimum, it shouldn’t. The epitome of Lazy But Fair government. (What Martin Lee QC once said at a meeting I was at he thought ‘laissez faire’ meant when he was young.)

    But that China’s economy is booming I have no doubt. The question is how much it is like the Japanese economy before its bubble economy busted. Busted bubble economies can be painful: Australia suffered a “lost decade” from 1973 to 1983 when its late-60s-early-70s boom busted. Victoria suffered a similar “lost decade” after the collapse of the 1880s land boom. It can also lead to bad policies: the failure of Japan’s post-bubble policies has been much discussed here, but Victoria’s domination of the political processes of the new Commonwealth of Australia (Melbourne was the capital until 1928) entrenched sub-optimum policies for decades. Australia was fortunate that 1983 onwards saw economic liberalising policies for the next few decades. Our second and third longest serving PMs are both to be congratulated. The latter for doing much of the hard yards in reform and the former for our extremely favourable public debt position.

    On Obama’s prospects: a politically very savvy friend of mine opined some months ago that Obama had a much better chance of retaining his job if Pelosi lost hers. I thought he was right then and nothing that has happened since has made it noticeably less plausible a claim.

  33. Gravatar of Morgan Warstler Morgan Warstler
    6. January 2011 at 20:46

    There is only devil and we call him DeKrugman.

  34. Gravatar of anon/portly anon/portly
    7. January 2011 at 02:53

    There’s a typo in the section about movies. The Bellboy and the Playgirls, Dementia 13, You’re a Big Boy Now and The Rain People all came out during the _60’s_, not the 70’s. The 70’s were the down years, the turn to schmaltz.

  35. Gravatar of anon/portly anon/portly
    7. January 2011 at 03:38

    “In the teens no director will produce … the amazing Kubrick films made in the 1960s, or the sublime Hitchcock films of the 50s. The well has run dry.”

    “I guess all art forms split at some point, with the pop art continuing to amuse the masses, and high art becoming increasing esoteric and inaccessible to the average reader/viewer/listener.”

    I’m a little unsure about the relationship between these two comments. I think everyone agrees that Kubrick and Hitchcock (and others) made high art – but the masses loved them. Their films were and are enormously popular. And I always thought that a lot of those films (e.g. Vertigo and Rear Window) were not at all viewed as high art at the time. (Okay, except by a few clever Frenchmen). There’s just something curious about the supposed high/low split following just after the high art was doing so well at the box office.

    So rather than a split it seems more like a disappearance. We still make popular movies but somehow they don’t turn out to be great, like they so often used to. (I think this is true, but I don’t really know why).

    I guess the argument could be that high art hasn’t disappeared, it’s just being made by foreigners so no one sees it – well, aren’t the best films made in Thailand, Taiwan and Turkey popular in those countries? I would have guessed they were.

  36. Gravatar of JimP JimP
    7. January 2011 at 07:01

    Bernanke talks 1/7 – and is saying that it will be 4-5 years till unemployment falls “to normal levels.”

    That is his forecast – and he is targeting his forecast – by saying that inflation will also remain very low for the foreseeable future.

    Obama needs to fire this man.

  37. Gravatar of JimP JimP
    7. January 2011 at 08:16

    Or rather – as Scott says – fire the whole darn economics profession – and especially Larry Kudlow and the grinning deflationists. They love high unemployment and falling wages. The more the better. Fight them Obama. Fight them.

  38. Gravatar of Bill Gee Bill Gee
    7. January 2011 at 08:27

    Regarding Obama’s chances at reelection – in my opinion, pretty good if the current situation doesn’t change drastically. (I don’t give much notice to probablility tables two years before an election.)

    1) An aggressive House more interested in “political theater” and unable to get a bill past the Senate will frustrate many Tea Party people to the point of apathy.
    2) Republicans will be unable to come up with a candidate that can both satisfy the Tea Party and be able to dance with the mainstream of the electorate.
    3) The Health Care Law (which will likely win a Constitutional challenge) will gain support from those who benefit from it, the war in Afghanistan will be winding down, which will allow for drastic cuts in defense spending and the overall economy will be seeing a general recovery.

    In other words, the Republican candidate will be unable to make a convincing “change the horse mid stream” argument. If Kerry couldn’t do it in 2004, I don’t think any of the other possible candidates can either.

  39. Gravatar of Full Employment Hawk Full Employment Hawk
    7. January 2011 at 10:26

    “There is only devil and we call him DeKrugman.”

    Perhaps the most serious problem with economics at the theoretical, empirical, and policy-making level is the excessive role that ideology-based dogma plays. Turning economics issues into a morality play interferes with rational discussions of both how the economy actually functions and what policies work best. If one only talks to people who agree with you, you miss many chances to learn new things from people who do not.

    Scott has just participated on a session at the AEA with the DeLong portion of this “devil.

  40. Gravatar of Full Employment Hawk Full Employment Hawk
    7. January 2011 at 10:39

    “Obama needs to fire this man.”

    Bernanke actually deserves credit for overcoming the inflation hawks on the FOMC who oppose quantitative easing and want to raise the Fed’s federal funds rate target. He is responsible for what stimulus the Fed is providing. Otherwise the Fed’s actions would still be worse. He is limited in what he can do because a badly divided FOMC, where a significant number of members openly oppose the actions of the majority would badly unsettle the financial markets and therefore harm the recovery. And with people like real business cycle theorist Plosser on the FOMC this year, that is a real problem.

    In any case, Bernanke has been appointed for a 4 year term as head of the Fed and Obama cannot fire him. What Obama needs to do is get the remaining vacancy on the BOG filled as soon as possible.

  41. Gravatar of Full Employment Hawk Full Employment Hawk
    7. January 2011 at 10:44

    “And with people like real business cycle theorist Plosser on the FOMC this year, that is a real problem.”

    Since the Presidents of the individual Federal Reserve Banks are largely elected by bankers, they should not be allowed to have a vote on the FOMC. There is no reason why bankers should have a larger voice in making monetary policy than anyone else, and that is what the current set up gives them. Having an independent central bank requires that the people running it are ultimately responsible to the elected representatives of the people. Letting bankers have an inordinate voice in making economic policy is undemocratic.

  42. Gravatar of rob rob
    7. January 2011 at 11:16

    “The well has run dry. Ambitious directors are always looking for new ways of expressing themselves, but the easily accessible commercial techniques have all been tried.”

    I’d credit the changed economics of Hollywood and horrible legislation over your peak-artistry theory. Hollywood can’t afford to take risks anymore and would rather finance Transformers 8 than take a chance on something very original. But then we had this great opportunity: the Hollywood Stock Exchange. Money could have been raised from the public investment community, who COULD afford to take a risk on something original. Risky bio-tech stocks with no revenue get financed all the time. Why not movies? Then Hollywood lobbyists backed the legislation to ban stock trading in movies as part of “financial regulation”, to prevent competition.

    Congress killed the future of great movies in this country. Seems like as a libertarian who loves movies and frequently derides the recent phony financial regulation legislation, you’d take a few pot shots at this.

  43. Gravatar of marcus nunes marcus nunes
    7. January 2011 at 12:27

    According to this, Central banks should be “killed” (before they induce more killing and poverty:
    http://mpra.ub.uni-muenchen.de/27719/1/MPRA_paper_27719.pdf
    “Essentially all the approaches are going against central banks. They are all powerful, they will kill you. President Abraham Lincoln wanted to print money (Donald, 1995, p. 352) to finance the civil war. President Kennedy created an executive order (Woolley, ND) to print money. Many say they were assassinated because they went against the central bank. If the central bank senses that you are threatening them then you will be gone too. They have the guns, and we do not. Note that we have central banks in almost all countries now”.
    Sometimes its refreshing to be able to laugh while reading an econ artcle!

  44. Gravatar of anon/portly anon/portly
    7. January 2011 at 12:28

    “Hollywood can’t afford to take risks anymore and would rather finance Transformers 8 than take a chance on something very original.”

    But if you consider the cases of the three directors SS sites, Hollywood wasn’t so much taking risks as acceding clout to Known Quantities (with the obvious exception of The Godfather). The question that I think he raises is why do no Hitchcocks or Kubricks appear any more. And it’s not like Hollywood isn’t constantly betting on self-consciously arty directors like Kaufman, Van Sant, Aronofsky, Solondz, Anderson, Jonze, etc. I can’t keep them all straight.

    I think we all need a Scott Sumner against-the-grain mini-essay that provides some deep insight on this, like his EMH musings. I.e. why is he so sure no Hitchcock or Kubrick can show up. “[T]he easily accessible commercial techniques have all been tried” seems like a week reed to me – tragedy and comedy are millenia old. And there’s those foreigners – if they can do it, why not us? And so much of what made the likes of at least Hitchcock and (say) Hawks great also made them popular – I think that’s clear. Anyway no rush, he can take his time….

  45. Gravatar of Richard A. Richard A.
    7. January 2011 at 12:37

    Yes, the markets are reacting positively to QE2 expectation–but where is QE2? I don’t see it.

    http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=BASE&s%5B1%5D%5Brange%5D=1yr

  46. Gravatar of Richard A. Richard A.
    7. January 2011 at 12:46

    The link I provided doesn’t work. Here is the correct link.
    http://tinyurl.com/2c4alvf

  47. Gravatar of rob rob
    7. January 2011 at 13:40

    @anon/portly — Agreed it would be cool to see Scott write a bit more on this subject.

    My belief is that the auteur/cultish directors such as you mention are still getting produced because they have been around a few decades and Hollywood is willing to bet on their momentum, but that today if a young Anderson or Kaufman appeared they’d have much more trouble getting produced. Things have changed a lot in two decades.

    And despite the auteur niche today, directors of movies with artistic ambitions (as opposed to stunning special-effects ambitions) have lost a ton of power if you were to measure it on artistic ambition per dollar of financing basis industry-wide — and it’s not like film theaters are on the rise and the number of big-budget movies is growing (the number of screens have been about flat since 1999). The odds are simply much worse for a Hitchock or Kubrick to appear on the big screen these days.

  48. Gravatar of Brett Brett
    7. January 2011 at 14:40

    So rather than a split it seems more like a disappearance. We still make popular movies but somehow they don’t turn out to be great, like they so often used to. (I think this is true, but I don’t really know why).

    It’s because we have more entertainment options. When Kubrick made “2001” back in 1968, cable was in its infancy, and television was still dominated by a tiny number of networks. It was either watch your movies, or go watch some crappy television.

  49. Gravatar of rob rob
    7. January 2011 at 16:11

    What do you think of Cowen’s “zero marginal product workers” argument? I don’t buy his assertion that businesses are “almost back to normal”. Their current output may resemble normalcy, but if you consider the *level* of the stock-market compared to a couple years ago, it appears corporate America’s expected discounted future earnings stream is not back to where it was 2 years ago. Therefore we might not be nearly as far along in this recovery as current earnings numbers might suggest. (Aren’t future expected earnings more important than current earnings?)

    For that matter, what has happened in previous periods when the stock market is below its 11 year ago highs? We are definitely in an era of broken expectations. Seems an odd time to go looking for new theories of unemployment.

  50. Gravatar of dtoh dtoh
    7. January 2011 at 16:20

    Il Sorpasso – High speeds trains are a bad example. They’re all about unusual population density and distribution, e.g. Shanghai-Beijing or Tokyo-Osaka. The U.S. economy could be growing at 10% pa and the Boston-NYC-D.C. corridor would still be hugely uneconomical.

  51. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    7. January 2011 at 18:15

    Update. Scott can ask DeLong how he’s getting along with Mickey Kaus:

    http://bloggingheads.tv/diavlogs/33282

  52. Gravatar of Paul Paul
    8. January 2011 at 03:23

    I thought that you might find this amusing: http://www.huffingtonpost.com/2011/01/07/virginia-delegate-wants-t_n_806089.html

  53. Gravatar of Doc Merlin Doc Merlin
    8. January 2011 at 05:24

    @rob:
    ‘What do you think of Cowen’s “zero marginal product workers” argument? ‘

    It is just microeconomics in pure competition with a heterogenous workforce.

  54. Gravatar of rob rob
    8. January 2011 at 13:33

    RE “I guess all art forms split at some point, with the pop art continuing to amuse the masses, and high art becoming increasing esoteric and inaccessible to the average reader/viewer/listener.”

    I couldn’t help but make this list for various art genres and the periods they seemed to remain great, commercial and innovative. Approximate dates:

    Modern painting: 1860 to 1970.

    Rock-n-roll: 1955 to 1980.

    Jazz: 1910 to 1970.

    Theater: 500 BCE to 390 BCE, then again from 1590 to about 1960.

    The Modern Novel: 1600 to 1985.

    American Film: 1915 to 1980?

    Why does everything commercial seem to start to suck only a few decades ago?

  55. Gravatar of rob rob
    8. January 2011 at 13:36

    Almost forgot:

    Classical music: 1400 – 1920.

  56. Gravatar of JimP JimP
    8. January 2011 at 18:33

    This is interesting:

    http://newmonetarism.blogspot.com/2011/01/what-is-treasury-up-to.html

  57. Gravatar of malavel malavel
    9. January 2011 at 13:17

    Interesting finds about predictions:

    http://www.boston.com/bostonglobe/ideas/articles/2011/01/09/that_guy_who_called_the_big_one_dont_listen_to_him/?page=full

    “To find the answer, Denrell and Fang took predictions from July 2002 to July 2005, and calculated which economists had the best record of correctly predicting “extreme” outcomes, defined for the study as either 20 percent higher or 20 percent lower than the average prediction. They compared those to figures on the economists’ overall accuracy. What they found was striking. Economists who had a better record at calling extreme events had a worse record in general. “The analyst with the largest number as well as the highest proportion of accurate and extreme forecasts,” they wrote, “had, by far, the worst forecasting record.””

  58. Gravatar of Lorenzo from Oz Lorenzo from Oz
    9. January 2011 at 18:24

    Malavel: thanks for the link. I am sure Mr EMH would enjoy it 🙂

  59. Gravatar of Tom Grey Tom Grey
    10. January 2011 at 04:15

    DeLong’s take on the TARP bailout also has the AIG bailout in order to save Goldman, and now the ex-head of AIG is pushing to get more details about how the gov’t decided to save Goldman completely, “nationalize” AIG (at a big profit?), yet let (Goldman competitor) Lehman die.
    This is, obviously, unequal treatment to various shareholders.
    It should be illegal.
    The morality is based on the fear-mongering that, without immediate huge amounts of taxpayer cash (for rich surviving banker bonuses!), “civilization as we know it” would be doomed, despite the existence of FDIC to protect depositors in the case of bank failure.

    I don’t believe the fear mongering (Tyler does, 25% unemployment; ha!) — there were, and still are, too many overpaid bankers for the total social benefit of capital allocation to productive firms and people.
    The worst of the super-rich were going to lose a huge amount due to their irresponsible rocket-science AAA junk financial products.

    This looming loss was the cause of the Dem majority & Bush elite rich panic to bailout the careless rich.

  60. Gravatar of Doc Merlin Doc Merlin
    10. January 2011 at 17:35

    @ Tom Grey
    “and now the ex-head of AIG is pushing to get more details about how the gov’t decided to save Goldman completely, “nationalize” AIG (at a big profit?), yet let (Goldman competitor) Lehman die.”

    This is the sort of thing that will inevitably happen if the rulers are allowed the power to pick winners and losers.

  61. Gravatar of scott sumner scott sumner
    10. January 2011 at 18:19

    Morgan, Too late, I already presented. And in any case I don’t want to encourage any more loonies to go out an shoot moderate Congresswomen.

    Benjamin, I presume China will continue to reform. If not, they will run into problems at some point.

    I agree about Kurosawa films, indeed I like lots of other Japanese directors as well.

    Full Employment Hawk, Good point, although I’d add that one thing that changed was the expected severity of the recession. Early on, Obama didn’t seem to think it’d be that serious (God knows why.)

    JoshK. I still don’t see the money being given away. Who is getting it for free?

    malavel, I agree that Inception was a very entertaining film. I didn’t see the others. I’m told there is good stuff on TV, but I never seem to see it. My TV favorites were Twin Peaks and Faulty Towers. Haven’t seen much since.

    I suppose ‘masterpiece’ sound pretentious, and it is overused, but film was arguably the most important art form of the past 90 years.

    Patrick, Brad let me use his computer, so I wasn’t really in a position to take shots.

    CA, You said;

    “Whenever I hear of high speed trains in China I always think; would I rather ride a fast train from Seattle to LA, or would I rather just fly.”

    A few responses:

    1. I am definitely not advocating high speed rail in the US–it wouldn’t work here.

    2. I’d much rather take a train over Chinese-distances (typically well under 1000 miles) than fly the same distance. Flying has become extremely annoying.

    3. I don’t know how heavily subsidized the service is, it might be less than you think. The Chinese can produce goods and services at amazingly low prices–even when in the US. There are Chinese bus companies serving Boston-NYC for $15 dollars.

    Blackadder, You said;

    “Intrade gives Obama about a 57% chance of being re-elected; better than 50/50, but hardly a sure thing.”

    That’s exactly where it was in 2008 when I bet on him.

    Lorenzo, I agree about Obama and Pelosi. China is nothing like Japan in 1990. That’s not to say it won’t bust, but it is nothing at all like 1990 Japan. China is poor, Japan was rich.

    anon/portly, I think you missed my point. I agree those films were popular, and if someone could make something similar I’m sure it would also be popular. But they can’t. I have no doubt that if someone could produce symphonies like Beethovan and Mozart did, they would also be popular. But no one can, the well has run dry. Great art can only be produced by great artists, and great artists have no interest in copying the styles of others.

    No, the great films being made in Turkey, Thailand, and Taiwan are mostly unpopular in their own country.

    JimP, I feel your pain.

    Bill Gee. I agree.

    rob. But Hollywood makes 100s of films every year, and many don’t do well. If it was just money, surely an occasional masterpiece would slip through.

    marcus, That’s funny, who published it?

    anon/portly, You said;

    “And it’s not like Hollywood isn’t constantly betting on self-consciously arty directors like Kaufman, Van Sant, Aronofsky, Solondz, Anderson, Jonze, etc. I can’t keep them all straight.

    I think we all need a Scott Sumner against-the-grain mini-essay that provides some deep insight on this, like his EMH musings. I.e. why is he so sure no Hitchcock or Kubrick can show up. “[T]he easily accessible commercial techniques have all been tried” seems like a week reed to me – tragedy and comedy are millenia old.”

    Your first paragraph is exactly right, and explains why I don’t agree with rob. Yes tragedy and comedy have been around for ever, but the number of accessible styles is finite. Artists are great because they invent their own styles. Once invented, it can’t be re-invented, only copied. I don’t think I have anything original to say here, it’s just the “anxiety of influence” that lots of essayists have discussed.

    The more exotic styles come to the fore because they haven’t been done. But they are also less accessible. It happens in every art form. Abstract painting, atonal music (or Radiohead in pop music.) Post-modern novels, etc.

    Richard, As long as we have the QE2 expectations, who needs QE2?

    rob, I think far more “artsy” directors are being funded these days. And of course Hitchcock was viewed as “commercial,” not artsy, until he was discovered by the French.

    I don’t see why firms would hire workers with zero marginal product, or why that would change dramatically over time if it did occur. Let’s take restaurants, for instance, which is a huge industry. Is the marginal product of restaurant workers much different from a few years ago? Maybe, but I just don’t see it.

    Brett, Are there great TV producers? Who are they?

    dtoh, You misunderstood me, I am not recommending high speed rail in the US.

    Patrick, So Mickey and I have something in common, we’ve both had comments deleted by DeLong. Mickey and Robert have always been my favorite bloggingheads.

    Paul, Yes, that was pretty funny.

    rob, Modern times gave a huge number of humans the opportunity to express themselves. This rapidly exhausted the novel and accessible forms of expression. Hence, not much new after the 1970s (except in cultures where people hadn’t yet had the opportunity to express themselves.

    malavel, Thanks, it not surprising that those who call the big ones are usually wrong on other predictions. You don’t get a great reputation unless you make really stupid predictions (i.e predictions the markets don’t expect) AND you happen to be right because something really unexpected happens.

    Tom Grey, I agree that the risk was greatly exaggerated by the government.

  62. Gravatar of dtoh dtoh
    10. January 2011 at 23:59

    Scott,
    You should right a separate post on high speed rail. It’s an interesting subject. I didn’t think you were arguing for HST in the U.S., I think the point you were making was that it was evidence of the strength of China’s economy…. which I don’t think it is. It’s just a reflection of unusual bi-polar population density/distribution. To put it another way, if they had similar population distribution in Iceland or Mali, you would have good HST in those countries as well.

  63. Gravatar of Full Employment Hawk Full Employment Hawk
    11. January 2011 at 05:34

    “Early on, Obama didn’t seem to think it’d be that serious (God knows why.)”

    Obama’s area of expertise is constitutional law, not economics. The explanation has to be bad advice from his economic advisors. That puts the blame squarely on Larry Summers. But I cannot understand the failure of Christina Romer, who should have understood how serious it was, to get that message to Obama.

  64. Gravatar of malavel malavel
    11. January 2011 at 08:15

    Scott, You shouldn’t watch TV-shows on TV unless you have some kind of automatic recorder. Buy them on DVD instead.

    Joss Whedon is the best when it comes to TV. He did one amazing low budget thing that he released on the internet for free: Dr. Horrible’s sing along blog. It’s available on DVD and itunes, or you can watch a low quality version on youtube: http://www.youtube.com/watch?v=apEZpYnN_1g&feature=autoplay&list=PL1F23610000D473C2&index=1&playnext=1

    Or you could watch this hilarious live amateur version: http://www.youtube.com/watch?v=MY8O6LYol-w&feature=related

    Whedon has done Firefly, Buffy the Vampire Slayer, Angel, and Dollhouse.

  65. Gravatar of marcus nunes marcus nunes
    11. January 2011 at 13:19

    David Rosenberg predicts… US=Japan:
    http://www.scribd.com/doc/46666805/Sushi-with-Dave-Dave-Rosenberg-Jan-11

  66. Gravatar of scott sumner scott sumner
    12. January 2011 at 09:28

    dtoh, I don’t agree. A dense Iceland is England, and they have little high speed rail. A dense Mali is India, and they have no high speed rail. Of course in terms of income China is more like India than England.

    You are right that by itself it means little, but when combined with all the other impressive infrastructure investment it hints at government competence, which bodes well for the future development of China.

    Full Employment Hawk, I agree, and indeed did a post in early 2009 asking Obama to “Talk to Christy.”

    malavel, Thanks. In case I have time to watch one, which of the 4 listed shows is best?

    Marcus, Yes, those are worrisome similarities. Still our much higher NGDP growth rate should eventually get us above the zero bound (I hope.) Japan has near zero NGDP growth since 1994.

  67. Gravatar of malavel malavel
    12. January 2011 at 11:12

    Angel is a spin-off from Buffy, so ignore that one unless you watch and love Buffy. Dollhouse is the least good one, only great instead of amazing. So that leaves Buffy and Firefly.

    Buffy seems very childish and stupid at a first glance. And it might take some time to get into it and realise how amazing it is. It’s 7 seasons and it’s not until the second half of season two that it really starts to shine. So maybe you should leave it unless you have lots of time to kill or you have seen one of the other shows. Buffy is my favourite though. The story is about a high school girl who learns that she is the chosen one, a vampire slayer.

    Firefly is probably the best bet. I love it almost as much as Buffy and it’s only 14 episodes. It’s sci-fi with a western style. And they curse in Chinese! =)

  68. Gravatar of ssumner ssumner
    12. January 2011 at 14:52

    Thanks, Is Buffy appropriate for my 11 year old daughter?

  69. Gravatar of malavel malavel
    12. January 2011 at 15:59

    The ratings range from 12 to 15 (Singapore has the last two seasons at 18). I suspect most episodes will be ok. They tend to get scarier in later seasons.

    There are lots of vampires and other monsters though. One of the worst scenes, the only one that made me feel uneasy, was with a monster that paralysed the victim and then peeled off skin and ate it. It’s in Season 7, Episode 3.

    I watched all seasons with my niece. But she might have been a year or two older at the time. She didn’t have any problems, but I skipped over the skin-eating scene since she doesn’t like scary stuff.

    You can see the monster eating skin in this 20 second promo:
    http://www.youtube.com/watch?v=3VNR5oEmID8

    Here’s a 6 minute video with all the promos for the first season: http://www.youtube.com/watch?v=2rIH15UzYf0

  70. Gravatar of malavel malavel
    12. January 2011 at 16:12

    That last 6 minute video is actually extremely bad. I wonder how they could get any viewers with crappy promos like that. Here’s a fan made trailer for season one that’s a lot better. Only 3 minutes long.

    http://www.youtube.com/watch?v=-1v_q6TWAL4

  71. Gravatar of Lorenzo from Oz Lorenzo from Oz
    12. January 2011 at 18:15

    The other reason to watch Firefly is then you can watch the film Serenity. Best critique of utopianism done in a long time.

    But everything Joss Whedon does is worth watching. Such as his Equality Now speech.

  72. Gravatar of dtoh dtoh
    13. January 2011 at 15:55

    Scott,
    You are wrong on rail. England is like Iceland (extremely sparsely populated) when measured by the yardstick of HSR economic viability. The only way HSR works is if you have extremely (i.e. not anything like England or the U.S.) high bi-polar population distributions that are 250 to 1000km apart. Think Beijing-Shanghai and Tokyo-Osaka. The trunk line on the latter moves 15,000 people an hour in each direction at peak times. In contrast Boston-NYC-DC total potential demand is maybe 1000 to 2000.

  73. Gravatar of scott sumner scott sumner
    14. January 2011 at 05:34

    Thanks malavel, The 3 minute video is much better.

    Lorenzo, That’s a funny speech.

    dtoh, I’m not sure why you think I’m wrong on rail. You seem to argue that high speed rail won’t attract many customers in the US, and I agree.

    If demand for DC-NYC is only one tenth Tokyo-Osaka, it has nothing to do with distance or population, it’s all about density. The population of the NE corridor is modestly lower than the Japanese corridor, but not one tenth, the problem is lower density; it’s harder for Americans to get to and from train stations.

    I don’t see where London to Glasgow/Edinburgh would be much different than Paris-Lyon.

  74. Gravatar of dtoh dtoh
    14. January 2011 at 13:03

    I agree with you on rail. I’m just saying it works in China and Japan because of very specific population density/distribution….not because China has a great economy run by by a bunch of post-communist Mandarins. You would probably get HSR service in China (e.g. Shanghai Beijing) because of the very unusual population distribution (and its not just density) regardless of the economy or the government.

  75. Gravatar of ssumner ssumner
    14. January 2011 at 18:58

    dtoh, Well I suppose we aren’t far apart, but I am impressed with the speed and effectiveness that China builds infrastructure. Obviously there are reasons for any pattern, if you look close enough. But at first glance it does seem to show more ability to manage infrastructure in China than India, which has a similar population distribution to the eastern third of China.

    BTW, I am not as big a sino-phile as I may seem. Many of the negatives about China reported in our press are fairly accurate.

  76. Gravatar of anon/portly anon/portly
    15. January 2011 at 13:28

    “Artists are great because they invent their own styles. Once invented, it can’t be re-invented, only copied. …. The more exotic styles come to the fore because they haven’t been done. But they are also less accessible. It happens in every art form. Abstract painting, atonal music (or Radiohead in pop music.) Post-modern novels, etc.”

    Responding belatedly and probably inanely and unobservedly, I’d just like to emphasize how your own examples undermine your own point. Hitchcock and Kubrick, if they were great, weren’t great because “invent[ed] their own styles.” For example Kubrick didn’t have a style; he adopted a different style for each film. If we were to use “Kubrick” as an adjective, as in “director X’s adaptation of novel Y is Kubrickesque,” what would that mean?

    As for Hitchcock, an artist needs to have a story to tell, something to say. Suppose some modern director sets out to copy the best of Hitchcock’s style – to create “thrillers” that are actually comedy-romances (RW or NxNW) or tragedies (Vertigo). If he or she can pull it off – with all the bells and whistles and nuances – we should be so lucky! Is the fact that Hitchcock did the same sort of thing before truly an obstacle to the achievement of artistic greatness in this vein? Maybe artists turning to “less accessible” styles are just weaker artists.

    As a side note, trying to think of something recent and at least vaguely Hitchcock-ish, I don’t know if Out of Sight is a great film, but if it is the most derivative of Soderbergh’s films, that doesn’t mean it’s not also his best film.

    My argument or hunch or stupid idea is that the factors governing the evolution of style are just as difficult to know or forecast as the ones that determine the “fundamental price.” Artists like everyone else have to deal with market structures and bureaucracies. If a composer of orchestral music or a painter or a film director comes up with a new and accessible style, that doesn’t mean that you and I are guaranteed access to it. Or that it will be feasible for them to pursue it.

    I think it’s difficult to tell whether styles become “more exotic” and “less accessible” over time or whether it just looks that way from the vantage point of the present. Impressionism I think has gone from being an exotic style to the most accessible of styles. Charlie Chaplin from accessible to exotic. I would not want to bet my life against 20th-century classical music eventually becoming more popular than the 19th-century stuff that dominates now. Note that the “postmodern novel” is partly or largely just a return to the older styles pre-1800.

    Why did The Who play the Super Bowl halftime show in 2009, playing 35-year old tunes, when (if alive) Glen Miller or Count Basie playing the halftime show in 1979 would have been bizarre and unthinkable? Maybe it’s because swing music is inherently less accessible or artistically successful, or maybe it’s because The Who came along at the right time. I think the bands of the 1970-1975 era got a lot of breaks. There’s the right time to leave college, there’s the right time to start blogging, and there’s the right time to release music that goes well with laser light shows and odd-smelling cigarettes. Is The Who (circa 1975) more accessible than Radiohead? Perhaps I over-estimate the taste of the public, or am naive, but I think if Radiohead had gotten the access or push or exposure The Who (circa 1975) got, they’d be far more popular. I actually believe The Who (circa 1967) should be more popular than The Who (circa 1975), and after about another 10 years of heavy exposure of the public to advertisements using The Ramones, The Who in their 2019 Super Bowl appearance might be asked to play more of the old stuff….

    Ok, I’ve gotten silly[er], but my argument (which I’m not sure I buy myself) is there’s no grand pattern to the evolution of Art, it’s like the evolution of prices and preferences, it’s all contingent. But with the added difficulty that you not only don’t know where it’s going, you don’t even really know where it is now. And I think the specific case of film directors, entrepreneurs who must find words and construct visuals and manage personnel and get financing – difficulties in inventing a personal style seem pretty far down the list of obvious explanations for why they appear to be falling short.

  77. Gravatar of ssumner ssumner
    15. January 2011 at 18:07

    anon/portly, Nice comment.

    Kubrick must have had some sort of style, as other directors sometimes remind me of Kubrick. (For example, The Korean director Park in the film “Oldboy.”) No one has ever reminded me of Soderbergh, and no one ever will. (BTW, I also liked Out of Sight, and The Limey, and several other of his films.)

    None of the films that critics have labeled “Hitchcockian” have resembled his style in the slightest.

    I was thinking of the post-2000 Radiohead, which seems less accessible than the earlier stuff. But I don’t know enough about music to offer an intelligent opinion.

    I seem to recall a theory that the public will put up with inaccessible art that can be consumed quickly (abstract painting) but not inaccessible art that takes a long time to consume (music, novels, films.) Maybe that’s why even post-modern novels are fairly accessible (with a few obvious exceptions.)

    As far as The Who coming along at the right time, I completely agree. As an analogy, there are lots of “explorers,” who are just as talented as Columbus, but there’s no America for them to discover. I seem to recall that Kurt Cobain complained he was born 30 years to late.

    If you wanted to be a great painter, you had a much greater chance if you happened to live in Florence in the early 1500s, and if you wanted to be a great rock star it helped in you lived in England in 1965.

    I also like the early Who better, the Ramones comparison is an interesting one.

  78. Gravatar of Morgan Warstler Morgan Warstler
    15. January 2011 at 18:15

    Lorenzo, check the torrents for a BBC series called Sherlock.

    There are three – they are a modern re-make of Sherlock Holmes and really very good.

  79. Gravatar of malavel malavel
    18. January 2011 at 07:42

    I just wanted to make one more push for Dr Horrible’s sing-along blog. I promise I’ll try to contain my Whedon obsession from now on. =)

    It’s low budget and only 45 minutes, but I wouldn’t hesitate to call it a master piece (like most things Whedon have made). It’s safe for kids, almost no violence, no nudity, and only two verbal sex jokes (in case that matters). Dr Horrible is a super villain with a video blog, and it’s a musical. I usually hate musicals, but this one is totally amazing. It’s a romantic comedy. Here’s a quote from the beginning of the movie:

    [responding to e-mails] Here’s one from our good friend, Johnny Snow: “Dr. Horrible, I see you are once again afraid to do battle with your arch nemesis! I waited at Dooley Park for forty-five minutes…” Ok, *dude*, you are *not* my nemesis! My nemesis is Captain Hammer. Captain Hammer, corporate tool!… dislocated my shoulder… *again*… last week… Look, I’m just trying to change the world, ok? I don’t have time for a grudge match with every poser in a parka! Besides, there’s kids in that park, so…

    Neil Patrick Harris does a great job as Dr Horrible. So buy the DVD and watch it with your daughter! And then start blogging about how amazing Joss Whedon is! This monetary policy stuff can wait for the next century.

  80. Gravatar of ssumner ssumner
    18. January 2011 at 15:44

    Mattias, Thanks, but when will I have time for movies?

  81. Gravatar of malavel malavel
    19. January 2011 at 01:17

    Maybe after the Fed has been replaced by a computer that does OMOs based on an NGDP futures market? =)

    Mattias is some other commenter. My real middle name actually is Mathias. But I doubt you knew that.

  82. Gravatar of ssumner ssumner
    20. January 2011 at 14:34

    malavel, Yes, senility is setting in.

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