The internet is a weird place

October 27, 2008

Librivox edition


"Reverse-John-Galt"

October 27, 2008

I always considered a reverse more likely than the original.  If someone could find a way to make it easy to "plug into the system" I think they could do an untold amount of damage to the welfare state.  Unfortunately, the Federal Bureaucracy (which includes your humble correspondent) will continue to work to ensure that it's never easy to plug in.


Democracy

October 27, 2008

Has there been a democracy in which this didn't happen over time (or a theory of Democracy that was worth it's salt that didn't predict the same outcome)?


Heh

October 26, 2008

Commie hides behind private property and some good thoughts from Professor Somin.


Unintended consequences of bailouts

October 25, 2008

See the quoted part near the bottom.  I hear Fan and Fred are having trouble hedging their books due to thin trading in the interest rate derivative market.  This inability to hedge is killing them as mortgage rates rise.


Query and reply

October 24, 2008

Ms McArdle asks:

Here’s the problem: if markets are so great, how come the entire system can be brought low by a smallish injection of short-term capital?

Here are the stats on the money supply. The Fed stopped counting M3 (I wonder why . . . ), so let’s look at M3 in solid economic times. At the beginning of 2003, M2 was 5806.1. By the end of 2007, it was 7447.1. That’s an increase of just under 30% – and the increase in M3 would probably have been much higher. Now, you can call this a lot of things, but “a smallish injection” of anything is not one of those things. This wasn’t just some dude who brought down the economy. It was a guy with the power to create money with virtually no limit at will and he did so aggressively. Is it really so hard to believe that such an ability could lead to perverse market outcomes? Further, if you include all the subsidies already working to get too many people into homes, is it really so hard to believe that we might end up with . . . too many people in home?

This is not to say that Tyler Cowen’s suggestion that increasing wealth in Asia had nothing to do with the crisis. But to write of the monetary actions of Greenspan as “smallish” is to be willfully ignorant of what the Fed was doing for the last 7 years.

Update: These charts may be better.


Democracy in action

October 24, 2008

In NY – can anyone really still defend democracy?


Tautology

October 24, 2008

Is it me, or is Professor Mankiw simply asking economists if they have engaged in the practice of popular, mainstream economics?

My fellow economists. Have you ever engaged in one of these activities?
  • Building models one does not really believe to be useful or relevant.
  • Making simplifications that obscure or omit important things.
  • Using data one does not really believe in.
  • Focusing on the statistical significance of one’s findings while quietly doubting economic significance.
  • Engaging in data mining.
  • Drawing “policy implications” that one knows are inappropriate or misleading.
  • Keeping the discourse “between the 40 yard lines” so as to avoid being outspoken; knowingly eliding fundamental issues.
  • Tilting the flavor of policy judgments to make a paper more acceptable to referees, editors, publishers, or funders.
  • Disguising one’s methodological or ideological views, such as by omitting revealing activities or publications from one’s vitae.
  • For government, institute, or corporate economists: Having to significantly play along with things one does not believe in.

Aren't these activities the cornerstone of modern, popular economics?


Greenspan finds flaw in market, not in self

October 24, 2008

That's what the headlines should have been:

We also are in a state of shocked disbelief. Or perhaps not. Instead of blaming himself for his monetary policy and admitting once and for all that central banking is not the best monetary system available (he actually admitted that the economy is too complex to be forecasted by Fed experts), he blamed it on the free market. Greenspan true mistake is to absolve himself from all responsibility by saying that he had faith in the free market system and that that system abandoned him (i.e. it had a flaw).

Review of "The Saga of Hrafnkel"

October 23, 2008

The full text and a plot summary can be found here.  I think this saga is important to people who study Icelandic Sagas.  Besides the general portrait of an atheist, I didn't find much in the story that I liked.  Again there was too little poetry and slaughter.  The legal portions of the saga were somewhat interesting, but again, I think much of this would be of interest mainly to historians of the period and the sagas.