David PattersonPhoto links here, here, here, here, here and here.
Fact: People believe Will Smith is the world's biggest movie star (even though he doesn't make great movies).
Fact: People believe Ryan Reynolds is a movie star (even though he isn't).
That's all you need to know about Hollywood right now.--Bill Simmons
If stimulus were to sharply boost aggregate demand it is quite likely that Congress would return the UI limit to 26 weeks, as it has during previous recoveries. For similar reasons, the real minimum wage would decline with more rapid growth in demand. Aggregate supply and demand are hopelessly entangled, a problem that many economists haven’t fully recognized. Economists aren’t even close to being able to identify the level of structural unemployment in real time. And even if we could, the Lucas Critique suggests that it is not a policy-invariant parameter. If we learned anything from the experience of the 1970s, it is that we should not base monetary policy on estimates of the level of structural and cyclical unemployment. Instead, policymakers should focus on a nominal target, such as the price level. In my view nominal GDP targeting would be better than a pure inflation target, as it would better accommodate supply shocks, and more closely correspond to the “dual mandate” of monetary policymakers in countries such as the US. By that criterion, monetary policy in the US, Europe, and Japan has been far too contractionary since late 2008.--Scott Sumner
[President Obama] is arguing we should spend to reduce our debt because of effects on future growth rates. This is all from the magic of the multiplier, where investments that would be wasteful in the private sector have a positive NPV in the public sector. This makes sense to most modern macroeconomists and they provide the intellectual cover for those who don't understand it but want it to be true. Economists have changed Adam Smith's dictum 'what is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom' to 'what is foolish for a family is wise for our government.' I regret wasting time learning the formal casuistry that rationalizes the pedestrian and perennial desire to increase redistribution and federal power under the pretext of increasing growth. I know it's a defensible statement, not logically impossible just contingent on some heroic assumptions, but when you look at how our money is actually spent, empirically absurd: defense spending, K-12 education, ethanol, light rail, Medicare, all boondoggles that have made things worse via their top down direction. Meanwhile, Japan cleans up its disasters much more efficiently than the US would have (see Katrina), and where in 1931 the US could build the Empire State Building in 400 days, the World Trade Center is at 10 years and counting. At this rate we are declining much faster than when Egypt built the monumental pyramids at Giza around 2600 BC, then the pathetic Unas 300 years later (my grandkids will probably think the Hoover dam was made by alien astronauts).--Eric Falkenstein
When I’m writing on a whiteboard, if I find myself stuck in the middle of a word I can’t spell, I just abbreviate the word wherever I am.--Jon Acuff
It's easier to get published now but harder to get read.--Jon Acuff
... while Too Big to Fail rounds off some corners, the movie gets the basic story right: the crisis resulted from serious mistakes made by many people, especially on Wall Street and in government. But these people are not portrayed as evil; they just made mistakes. Even Lehman CEO Richard Fuld, who comes off poorly in the movie for scaring away potential investors, is shown making mistakes because he so badly wants to save his firm. He did the wrong thing for the right reasons. In contrast, Inside Job is all about assigning blame. The documentary makes a moralistic case that the crisis was all the fault of Wall Street villains and their helpers. To be sure, mistakes can cross over into villainy - some creators of toxic securities must have known that they were not doing God's work. But Inside Job takes this to a populist extreme, assuming malevolent motivations and spattering blame through ambush interviews of hapless crisis participants who agreed to speak on camera (I took a pass when the filmmakers called me in the spring of 2009). The portrayal of Eliot Spitzer is especially ironic, with the former New York Governor shown as a saint commenting on all the sinners. In truth, the striking feature of the crisis was how many different people committed mistakes: banks and other firms made bad loans and packaged them into subprime securities; rating agencies rubber stamped them as AAA; pension funds bought the junk assets; government officials missed the mounting problems; and so on. But surely also at fault are the multitude of individual homebuyers who turned into mini-speculators during the housing bubble. These folks are off the hook in Inside Job.--Phillip Swagel
What Obama should do is the exact opposite of this sensible advice: he should make preparations to shut down the machines that write Social Security checks and army paychecks, lamenting that he has no choice because the US is contractually obligated to pay its other bills. The GOP is betting that Democrats will take the blame for this. I think that is a very bad bet. This is why schools and other government agencies facing budget cuts tend to immediately slash something high-profile and politically popular. That's how you get them to reverse the budget cuts. I'm sure most of us in the private sector can recount situations where this has worked in corporations as well.--Megan McArdle