Children’s writer Philip Pullman ranked second on US banned books list Guardian
New Profit Center For Australian McDonald’s: Fraud [Cannot Has Cheezburger] Consumerist
CHART OF THE DAY: What, You Think The Savings Rate Can’t Go Higher? Clusterstock
Krugman and the pied pipers of debt Rolfe Winkler
The Zero Hedgies Felix Salmon
World Bank to buy distressed assets Financial Times
Q&A: Andrew Ross Sorkin on Wrangling Wall Street’s C.E.O.s Vanity Fair (hat tip John D)
New credit squeeze could hit UK, warns IMF Independent
Without Construction, What of Blue-Collar Men? WSJ Economics Blog
Nike flees US Chamber of Commerce over climate debate Raw Story (hat tip reader John D)
Antidote du jour:
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On Polanski being a political bargaining chip. It was my first thought when the story broke.
Too many blogs open at once there Lex – you meant Alphaville I think.
Krugman quotes
NYT Editorial, August 2nd, 2002
To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
October 7, 2001
http://www.pkarchive.org/economy/ML071801.html
“Post-terror nerves aside, what mainly ails the U.S. economy is too much of a good thing. During the bubble years businesses overspent on capital equipment; the resulting overhang of excess capacity is a drag on investment, and hence a drag on the economy as a whole.
In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package”
Skippy…Krugman, just a monkey tied to the hurdygurdy…eh.
Few people seem to bother with reading Krugman. He took great pain to differentiate debt that is an investment for our future (infrastructure, better education etc. from the kind of debt our politicians and banksters are so fond of nowadays, namely bailout money without conditions for the financial sector.
I would totally expect Newsmax or Fix News to be organically incapable of understanding this; but, that a usually sharp and smart commentator like Rolfe miss this crucial point is disappointing to say the least.
BTW, isn’t that a lot of fun to watch the sorry spectacle of the US Chamber of Commerce’s Neanderthals trying to resist the inevitable conclusions of scientific evidence? Scientific evidence spawned the creation of entire industrial sectors; Now, it is vilified just because it forces some to change their habits and business models. Poor things! Cry me a river!
Fortunately, some of their members aren’t idiots, they know how to read and decided to do the only reasonable thing: leave.
I’m sorry, Winkler may have stumbled upon some deeper truths in his article, but after he writes a paragraph like this, “But if recessions never happen, bad businesses and unpayable debts are never washed away. They grow like cancer inside the system,” I have a difficult time taking anything else seriously. First of all, it’s just an unsubstantiated assertion thrown in mostly out of context. Second of all, it’s quite easily disproven because many bad businesses fail during booms. It’s so egregious that my jaw literally fell and I wondered, “what the hell am I doing spending my time reading this?”
Yep, the assertion “But if recessions never happen, bad businesses and unpayable debts are never washed away. They grow like cancer inside the system” is a perfectly good place to say “What?”
We need a virus to thin the herd, once in while too, I’m sure. Or a war. It cleanses a society, and I’ve been told that not being killed in one makes one stronger – though I’ve seen counter-evidence.
DownSouth reposted a link to the Colander testimony for the House Science and Technology Committee hearing on “The Risks of Financial Modeling: VaR and the Economic Meltdown” dated September 10, 2009. The testimony is mostly prefatory to the paper he co-wrote with others entitled “The Financial Crisis and the Systemic Failure of Academic
Economics.” (Sorry, saved the pdfs but not the links.)
I found this interesting:
‘”Ironically, as the crisis has unfolded, economists have had no choice but to abandon their standard models and to produce hand-waving common-sense remedies. Common-sense advice, although useful, is a poor substitute for an underlying model that can provide much-needed guidance for developing policy and regulation. It is not enough to put the existing model to one side, observing that one needs, “exceptional measures for exceptional times”. What we need are models capable of envisaging such “exceptional times”.’
We’ve gone from economics as science to economics as common sense. Everybody with an opinion is reduced to proving their common sense is better than the common sense of their common rivals -one’s common sense must be familiar, but not banal; it has to be robust, but not too complex. It has to express what both the best of minds and the most ordinary of honest minds recognize as the truth. And lastly, it must be comforting to oneself. Those who are not comforted, of course, have no common sense.
Waive them off, they’ll only get in the way.
Dave,
You say that “We’ve gone from economics as science to economics as common sense.” And indeed there is no doubt that “economics as science” has proven to be a dismal failure. But “economics as common sense” has not emerged in the place of “economics as science.” This is so because modern economists are not trained in, nor does their ideology allow, the exercise of common sense.
John Gray, who teaches at the London school of economics, has a superb little book called Al Qaeda and What it Means to be Modern that delves into this subject in some detail. According to Gray, economics has followed the path of Positivist ideology. “In positivist methodology, social science is no different from natural science,” he writes. “The model for both is mathematics. Nothing can be known unless it can be quantified.” And, he continues, “the idea that mathematics is the ideal form of human knowledge proved most powerful in economics…”
The triumph of positivism within the field of economics has resulted in “a decoupling of economics from history,” Gray tells us. And few economists “know anything of the history of thought.”
And of course without history, there can be no common sense.
Most succinctly, the idea is put forth in 1984: “Who controls the past controls the future; who controls the present controls the past.”
Hannah Arendt elaborates in The Promise of Politics:
Historically, common sense is as much Roman in origin as tradition. Not that the Greeks and Hebrews lacked common sense, but only the Romans developed it until it became the highest criterion in the management of public-political affairs. With the Romans, remembering the past became a matter of tradition, and it is in the sense of tradition that the development of common sense found its politically most important expression.
Adding to the cacophony and the reason we have entered into this free-for-all in which we have, as you put it, been “reduced to proving their common sense is better than the common sense of their common rivals,” is the fact that there are so many competing versions of history.
For instance, Ronald Reagan, Richard Neuhaus, Bill Bennett and the religious right rewrote American history to portray the United States as a “Christian nation” (David Little, “Religion and Civil Virtue in America”).
The European Union is promulgating a “new vision of the end of the ancient world” wherein “the Roman empire is not ‘assassinated’ by Germanic invaders; rather, Romans and Germans together carry forward much that was Roman, into a new Roman-Germanic world” (Bryan Ward-Perkins, The Fall of Rome and the End of Civilization)
Stalin and his son-in-law Andrei Zhdanov created “truth and historical correctness” by commissioning and overseeing a new history of the Revolution in which Stalin was Lenin’s sole companion and heir (Victor Arwas, “The Great Russian Utopia”)
Hitler continually stressed the link with the past… Everything that smacked of Germanic or Nordic values was dragged out and used in the rewriting of history. The wars of the Nibelungen, the Holy Wars, the Reformation, were all battles for the German spirit, and Hitler saw himself as the standard bearer of the present crusade. Durer and Holbein, old folk dances and customs, were incorporated into their cultural vocabulary. The appropriation of the great names of the past played an important role in National Socialist doctrine. They guaranteed continuity and made the regime legitimate.
–Peter Adam, Art of the Third Reich
I think what Colander is calling for is some hybrid of “economics as science” and “economics as common sense.” However, it looks to me like both are mine fields. There are no definitive solutions.
It is anecdote, not antidote.
You misunderstand the usage here. It’s intended to be an antidote to the daily grind of dreary economic news; to make you smile amid the darkness of these days.
A good article by Alice Shroeder on Bloomberg:
Gold Tells You U.S. Bubble Hasn’t Popped Yet: Alice Schroeder
http://www.bloomberg.com/apps/news?pid=20601039&sid=ajPCIYcGX8t4
Fortunately, some of their members aren’t idiots, they know how to read and decided to do the only reasonable thing: leave.
“Leave” is right. You mean the ones like Nike who already moved all their factories to countries like China? You know, the industrial countries that have erected a big middle finger at the disguised tax increase/securitized theft of the Millenium? I’m sorry. I meant “public private partnership”.
I always so enjoy reading the rants of Globo-warming cultists. It reminds me of the citizens from Idiocracy: “Brawndo- It’s Got ‘Lectrolytes”.
Few people seem to bother with reading Krugman.
The density of Idiocrats isn’t quite as great yet as in the movie.
As the Sept 30 deadline for Yves rolls by and she steps back onto the blogging stage, I am reminded of that quaint little tv series of yesteryear “Welcome Back Kotter”
On behalf of all your Sweathogs,
Welcome Back Yves! :-)
I’m late to this, but had to post a comment on the original ZH article; text of which is below.
“Felix, I think I can provide some perspective here. I am a regular reader of ZH, but am also an ‘industry insider’, on the regulatory side, where I have the ability to verify much of the information on ZH. Tyler does in fact post relevant and useful information, and is often the first to major stories. ZH has been an important source in our regulatory efforts (ref. high frequency trading), and while Tyler and Marla and co. aren’t always right, they are well-informed enough that they are worth listening to.
“As opposed to the ZH commenters. A more emotionally unstable and ill-informed crowd you will have a difficult time finding on the internet. Next to them, the BusinessInsider/Clusterstock crowd looks positively intelligent; even the Dealbreaker crowd looks good by comparison (and it’s telling that the Dealbreaker minions, who constitute real industry insiders, have nothing but contempt for the ZHers.)
“I have made efforts to have an intelligent dialog with the ZH crowd (excluding Tyler and the other principals), and it’s a losing battle. It’s nothing but hysterics, and it’s painfully clear that only a handful have relevant experience and useful insights. As such, I stick to just the posts from the ZH principals, and skip the comments entirely. At least the DB comments can be entertaining; the ZH comments don’t even have that going for them. I don’t think I’m alone, and my suspicion is that ZH is read by a great number of industry people, but most of them, like myself, waste no time in the comments section.”