Close encounter with a wild hippo BBC
Consumer link to rainforest destruction Financial Times. I’m surprised that this was considered not proven.
Treasuries `Only Game in Town’ as China Boosts Holdings While Dollar Falls Bloomberg
I Am Marla’s Observations On Artificial Selection In Chrysler Dealerships Marla Singer, Zero Hedge. In case you missed this, you do need to have a look.
Reagan Did It Paul Krugman, New York Times
Black Swan Fund Makes a Big Bet on Inflation Wall Street Journal
More government borrowing doesn’t necessarily mean more total borrowing Brad Setser
Antidote du jour. From reader Robert, who says this occurred 15 miles from his house:
A family that lives on the outskirts of Milford, PA… in Pike County decided to build a sturdy, colorful playground for their 3 and 4 year old sons. They lined the bottom with smooth-stone gravel all around to avoid knee scrapes and other injuries. They finished building it one Friday evening and were very pleased with the end product.
The following morning, the mom was about to wake up the boys and have them go out to play in their new play center. This is what she saw from the upstairs window…
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Paul Krugman indulges in some pretty awful historiography in his article. A lay reader would come away thinking that the sole aim of the post-New Deal regulations and federal involvement in banking was to prevent the creation of another asset price bubble. In fact, their overarching goal was to expand the availability of credit, primarily by socializing default risk. Fannie Mae and Freddie Mac were creations of the New Deal, as was the FDIC, which has been instrumental in lulling depositors into a false sense of security with respect to the safety and liquidity of their banks. The savings and loans got into hot water in large part because populist forces prevailed in allowing them to venture into dodgy lending as a way to compete with the large commercial banks.
The “too big to fail” doctrine was already written inexorably into American banking practice long before Reagan ever took office. Had he tried to supplant it with a more laissez-faire approach by, say, letting Continental Illinois and its uninsured depositors go under, the voters would have been happy to replace him with a more credit-expansive-minded Democratic alternative.
One also feels a slight twinge of revulsion in reading Krugman praise the savings rates of the 1970s, the same period those very savings were being eroded year after year by the very Keynesian inflationary policies which Krugman now prescribes as the cure for the current crisis. It would be nice if Mr. Krugman would settle on whether the economy suffers from a “Paradox of Thrift” or a dearth of savings; or, failing that, if he could explain how the economy could have better handled a 10% savings rate in 1998-2007 than it can in the year 2009.
Jim Grant’s Money of the Mind is an excellent history for those wishing to explore how the Depression-era innovations of deposit insurance and federal mortgage credit led inexorably to the inflation of the 1970s and the debt-fueled speculative booms of the 1980s-1990s.
I don’t want to defend Krugman, but I have thought since the mid 1990s that the dearth of savings would lead to a really, really painful Paradox of Thrift some day. Got a lot wrong in that period, but this prediction seems to have been right on the money. Anyway, my point is that it’s not totally inconsistent when you analyze this issue over time (which of course you have to do, but economists almost always leave out the temporal variable in their search for “equilibrium”).
@ Krugman
Ever since the Renaissance, financialization has been one of the hallmarks of a great empire in decline. Reagan was a cheerleader of this process—the financialization of the U.S. economy–and did everything in his power to usher it in. To argue otherwise is really quite silly. A more appropriate question would be to ask if Reagan, or anyone for that matter, could have stopped it.
It is also nonsensical to argue that market absolutism, libertarianism, laissez-faire, neoclassism or whatever you want to call it, was not the operative paradigm during this period of decline. It was, just as it was during the decline of the British Empire. A more appropriate question would be to ask if some other paradigm could have arrested the decline. But one thing is sure, the bourgeoise formula for prosperity did not arrest the decline of either the Unites States or Great Britain.
Quoting Kevin Phillips from American Theocracy:
Historically, top world economic powers have found “financialization” a sign of late-stage debilitation, marked by excessive debt, great disparity between rich and poor, and unfolding economic decline…
“Financialization” can be defined as a process whereby financial services, broadly construed, take over the dominant economic, cultural, and political role in a national economy. In his book Praise of Hard Industries, British journalist Earmonn Fingleton deplores “financialism” as the increasing tendency by the financial sector to invent gratuitous work for itself that does nothing to addres society’s real needs but simply creates jobs for financial professionals.” My term describes only the broader cultural and national transformations.
do realize that there are two levels at play here. The instinctive, animal level, where we want to punish those who have done us wrong, while those who have done us wrong have done it following their animal desires. There is also the rational level, of which to I am referring to above.Realistically, I know the beast in us will take over and this will end like it did in France in the 1790’s. I will, however, not be the one holding the sword.
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Regarding the bears … more information from Snopes:
Claim: Photographs show four black bears cavorting on a backyard playset in Alaska.
Status: True.
These photographs of four black bears cavorting on a backyard playset were snapped by a resident of Anchorage, Alaska, in August 2006.
Wow, listen to this mock letter Jamie Dimon read to Timothy Geithner: “Dear Timmy, we are happy to be able to pay back the $25 billion you lent us … We hope you enjoyed the experience as much as we did.”
Talk about chutzpah. The guy’s in charge of an insolvent bank that’s still in existence only because of government guarantees on its assets, and he’s acting like they did the taxpayers a favor.
Sorry, link: http://www.bloomberg.com/apps/news?pid=20601087&sid=auPg5LveoCvI&refer=home