"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen


"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister


"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont


"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister


"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Monday, August 03, 2015

the one percent

I have this quote up above:

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker
See Donald Trump. Sure there are good rich people. Of course. Conservatives and the corporate media would like you to believe they are virtuous and blessed by God. But pop culture seems to be coming around. For example:

Foxcatcher. Another Period. Season Three of Ray Donovan. Hell on Wheels. HBO's The Casual Vacancy. Mr. Robot.

Humans



attacks on Corbynomics

August 03, 2015

Sunday, August 02, 2015

Krugman on Freshwater's wrong turn

Freshwater's Wrong Turn by Krugman

Paul Romer has been writing a series of posts on the problem he calls “mathiness”, in which economists write down fairly hard-to-understand mathematical models accompanied by verbal claims that don’t actually match what’s going on in the math. Most recently, he has been recounting the pushback he’s getting fromfreshwater macro types, who seem him as allying himself with evil people like me — whereas he sees them as having turned away from science toward a legalistic, adversarial form of pleading.
You can guess where I stand on this. But in his latest, he notes some of the freshwater types appealing to their glorious past, claiming that Robert Lucas in particular has a record of intellectual transparency that should insulate him from criticism now. PR replies that Lucas once was like that, but no longer, and asks what happened.
Well, I’m pretty sure I know the answer.
First of all, it’s true about the initial transparency. In the beginning, Lucas and disciples had a very clear statement of both the problem and their solution. They took it as an observed fact that fluctuations in nominal demand were associated with fluctuations in real output, as opposed to merely affecting the price level, which shouldn’t happen if prices were flexible. But they insisted that it was illegitimate to assume sticky prices and wages, that any story you tell must be grounded in microfoundations — and not just that, in maximizing behavior.
So Lucas came up with a story: it was all about imperfect information. Faced with a shock to nominal demand, producers couldn’t tell how much was just a money fluctuation and how much a real change in demand for their particular product, to which they should respond by changing output. So they would engage in signal extraction, making the best possible estimate; this would lead in aggregate to an upward-sloping aggregate supply curve, but only because of rational confusion. And this in turn had strong policy implications: you might see a relationship between money and output, but it would disappear if you tried to use it.
It was a lovely, intellectually interesting and exciting approach. It was also quite wrong.
The wrongness took a few years to become irrefutable. By the early 1980s, however, it was overwhelmingly clear that rational confusion couldn’t explain business cycles, either empirically or theoretically — business cycles last too long, rational agents should be able to tell real from nominal shocks using information like asset prices, and more. And so you had a substantial chunk of the profession going back to sticky-price models, arguing that under imperfect competition things like menu costs or slight deviations from perfect rationality were enough to make money very non-neutral in the short run.
But Lucas and his school couldn’t do that, because they had burned their bridges. They had seized the moment when people took their models seriously to loudly and aggressively declare that Keynesianism of any form was total nonsense, that everything macroeconomists had done in the previous four decades was worthless. it would have taken a lot of intellectual integrity to admit that they might have been premature, that their models weren’t working and that maybe there was something in that Keynesian stuff after all. And that kind of integrity did not manifest itself.
Instead they went even further down the equilibrium rabbit hole, notably with real business cycle theory. And here is where the kind of willful obscurantism Romer is after became the norm. I wrote last year about the remarkable failure of RBC theorists ever to offer an intuitive explanation of how their models work, which I at least hinted was willful:
But the RBC theorists never seem to go there; it’s right into calibration and statistical moments, with never a break for intuition. And because they never do the simple version, they don’t realize (or at any rate don’t admit to themselves) how fundamentally silly the whole thing sounds, how much it’s at odds with lived experience.
What Romer is telling us, based on his discussion of growth models, is that this kind of thing is pervasive in that school. And no, everyone doesn’t do it. Read Mike Woodford or Gauti Eggertsson or Ken Rogoff when he’s doing theory: they all take pains to provide an intuition behind their models, and they don’t engage in false advertising.
So what happened to freshwater, I’d argue, is that a movement that started by doing interesting work was corrupted by its early hubris; the braggadocio and trash-talking of the 1970s left its leaders unable to confront their intellectual problems, and sent them off on the path Paul now finds so troubling.

Vangelis

Vangelis composed the musical scores to Chariots of Fire, Blade Runner and Missing among other movies.



Ian McShane joins Game of Thrones cast

Ian McShane joins Game of Thrones cast

"Pain or damage don't end the world. Or despair, or fucking beatings. The world ends when you're dead. Until then, you got more punishment in store. Stand it like a man... and give some back."


Thursday, July 30, 2015

Best Coast - California Nights




Jeremy Corbyn and Chris Dillow

ON CORBYNOMICS

by Chris Dillow
Jeremy Corbyn's economic policy deserves more attention than it's getting.
It seems to me that this comprises two necessarily related elements. One is higher corporate taxes: he wants to "strip out some of the huge tax reliefs and subsidies on offer to the corporate sector" - which he claims to be £93bn a year. This would depress investment, by depriving firms of some of the means and motive to invest. However, this would be offset by "people's quantitative easing" - a money-financed fiscal expansion:
The Bank of England must be given a new mandate to upgrade our economy to invest in new large scale housing, energy, transport and digital projects.
This amounts to what Keynes called a "socialisation of investment":
It seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself to determine an optimum rate of investment. I conceive, therefore, that a somewhat comprehensive socialisation of investment will prove the only means of securing an approximation to full employment; though this need not exclude all manner of compromises and of devices by which public authority will co-operate with private initiative. (General Theory, ch 24)
This is a response to a genuine problem - low capital spending. The share of business investment in GDP has (in nominal terms) been trending downwards since the mid-70s.

Sunday, July 26, 2015

AV Club reviews Rectify: "Sown with Salt"



"“I’m Forrest.” “I’m Trees,” she says without missing a beat." Reminds me of Lorrie Moore.

AV Club reviews Rectify: “Sown With Salt”


Saturday, July 25, 2015

central banks, inflation and the value of money

Neo-Fisherism and All That by David Glasner

But the problem for monetary theory is that without a real-value equivalent to assign to money, the value of money in our macroeconomic models became theoretically indeterminate. If the value of money is theoretically indeterminate, so, too, is the rate of inflation. The value of money and the rate of inflation are simply, as Fischer Black understood, whatever people in the aggregate expect them to be. Nevertheless, our basic mental processes for understanding how central banks can use an interest-rate instrument to control the value of money are carryovers from an earlier epoch when the value of money was determined, most of the time and in most places, by convertibility, either actual or expected, into gold or silver. The interest-rate instrument of central banks was not primarily designed as a method for controlling the value of money; it was the mechanism by which the central bank could control the amount of reserves on its balance sheet and the amount of gold or silver in its vaults. There was only an indirect connection – at least until the 1920s — between a central bank setting its interest-rate instrument to control its balance sheet and the effect on prices and inflation. The rules of monetary policy developed under a gold standard are not necessarily applicable to an economic system in which the value of money is fundamentally indeterminate.
Viewed from this perspective, the Neo-Fisherian Revolution appears as a kind of reductio ad absurdum of the present confused state of monetary theory in which the price level and the rate of inflation are entirely subjective and determined totally by expectations.

Friday, July 24, 2015

Germany and Europe

The Return of the Ugly German by Joschka Fischer

Depression’s Advocates by J. Bradford DeLong


Sunday, July 19, 2015

Greece

Greece, Europe, and the United States by James K. Galbraith

Friday, July 17, 2015

Draghi, Greece, Marx, Lenin and Spain

Draghi Makes His Case by J.W. Mason

Greece’s Surrender: A Return to 1919, or to 1905? by John Cassidy

In the Marxist intellectual tradition, from which many senior members of Syriza hail, progress comes about gradually. To overthrow the existing order, you have to first mobilize the masses by stripping back the democratic veil and showing the real workings of the system: only then will the “objective conditions” be ripe for revolutionary change. Tsipras and Syriza didn’t create the conditions for change. But in bringing Greece to the brink, and demonstrating that its creditors were willing to see it collapse if it didn’t buckle to their demands, they did, arguably, succeed in showing up the eurozone as a deflationary straightjacket dominated by creditors. And they did this with all of the world watching. “One must know who the enemy is, in order to fight the enemy,” Alex Andreou, a Greek blogger who is sympathetic to Tsipras, wrote last week. “Syriza has achieved that. Now, it is over to you, Spain. Take what we’ve learned and apply it wisely.” 
Under this analysis, Syriza’s surrender wasn’t necessarily an ignominious one. As Lenin commented of the failed 1905 revolution in Russia, it was a retreat for a new attack, which ultimately proved successful. “I’m not going to sugarcoat this and pass it off as a success story,” Tsipras said to parliament on Wednesday, prior to the vote, acknowledging that the spending cuts and tax increases contained in the agreement would deal another blow to the Greek economy. However, that wasn’t the full story, Tsipras insisted. “We have left a heritage of dignity and democracy to Europe,” he said. “This fight will bear fruit.” 
Only time will tell if that was wishful thinking.

The Stanford Prison Experiment

Germany and Greece.

The trailer.