Things to Read on the Afternoon of August 1, 2014

Must- and Should-Reads:

1. Ari Phillips: Paul Ryan Says Climate Change Is An Excuse To Illegally Grow Government And Raise Taxes: “Rep. Paul Ryan (R-WI) said Wednesday that ‘climate change occurs no matter what’, but that the EPA’s recent efforts to reduce emissions from existing power plants are ‘outside of the confines of the law’, and ‘an excuse to grow government, raise taxes and slow down economic growth’…. The ‘federal government, with all its tax and regulatory schemes’ can’t do anything about climate change… and ‘end[s] up… making the U.S. economy less competitive’…. EPA chief Gina McCarthy recently said that she wouldn’t put forth a rule that ‘doesn’t respect the Clean Air Act and isn’t legally solid’, and that she is confident the regulations will survive any legal challenge…”

2. Jason Furman and John Podesta: We Can’t Wait: The Cost of Delaying Action to Stem Climate Change: “We do face significant uncertainty…. That uncertainty, however, is an argument for doing more and doing it sooner…. The costs of achieving a fixed climate change goal would be 40 percent larger if we waited a decade to take action. And those costs could grow exponentially with a longer wait…. Delay means losing years of research in effective carbon-reducing technologies, along with bigger investments in older, carbon-intensive technologies, meaning that we would have to adopt more stringent and therefore more costly measures in the future to make up for lost time…”

3. Cardiff Garcia: All those US indicators: what did we learn this week?: “We received further confirmation that the first quarter slump really was just a temporary, weather-stricken pause…. Nominal wage growth has improved, but… not nearly enough for policymakers to start worrying about its impact on inflation… higher inflationary pressures in the second quarter were concentrated mainly in April and May…. The economy has created about 230,000 jobs per month this year…. Furthermore, in June there was a rise in the labour force participation rate…. The labour market isn’t yet healthy, but it is healing. The Fed… explicitly emphasised that ‘a range of labor market indicators suggests that there remains significant underutilization of labor resources’…. Yellen’s position on labour market slack and her call that some unexpectedly high inflation readings earlier this year were ‘noise’ look pretty good right now…”

4. **Jonathan Landay and Ali WatkinsThe CIA lied: agency admits it hacked Senate computers to snoop on torture investigations: “CIA employees improperly accessed computers used by the Senate Intelligence Committee to compile a report on the agency’s now defunct detention and interrogation program, an internal CIA investigation has determined. Findings of the investigation by the CIA Inspector General’s Office ‘include a judgment that some CIA employees acted in a manner inconsistent with the common understanding reached between SSCI (Senate Select Committee on Intelligence) and the CIA in 2009’, CIA spokesman Dean Boyd said in a statement. The statement represented an admission to charges by the panel’s chairwoman, Dianne Feinstein, D-Calif., that the CIA intruded into the computers her staff used to compile the soon-to-be released report on the agency’s use of harsh interrogation methods on suspected terrorists in secret overseas prisons during the Bush administration…”

5. Adam Ozimek: Instead of Moving, Workers Are Dropping Out: “Geographic mobility has long set the U.S. apart from Europe, and its recent decline has created concerns. A new paper from the IMF suggests that one cause of this decline is a change in the way people respond to regional economic shocks…. Workers have become less likely to leave their states of residence in search of work and more likely to instead leave the labor force…. Declining geographic mobility is seen as yet another worrisome sign of a general decrease in economic dynamism. With labor force participation down more than would be expected following the last recession, the new research suggests these factors may be related…”

6. Paul Krugman: Knowledge Isn’t Power: “It usually turns out that there is much less professional controversy about an [economic] issue than the cacophony in the news media might have led you to expect…. [Asked] whether the American Recovery and Reinvestment Act–the Obama ‘stimulus’–reduced unemployment… a vote of 36 to 1. A follow-up question on whether the stimulus was worth it… 25 to 2…. Let me ask, instead, whether you knew that the pro-stimulus consensus among experts was this strong…. You certainly didn’t hear about that consensus on, say, CNBC…. More important, over the past several years policy makers across the Western world have pretty much ignored the professional consensus on government spending and everything else, placing their faith instead in doctrines most economists firmly reject…. Am I saying that the professional consensus is always right? No. But when politicians pick and choose which experts–or, in many cases, ‘experts’–to believe, the odds are that they will choose badly. Moreover, experience shows that there is no accountability…”

And:

• Luigi Pasinetti: Institutional Forces and the Discipline of Economics
• Mark Thoma: Behind the Fed’s promise about short-term rates
• Nick Bunker: A Post-War History of U.S. Economic Growth: An Examination of the Contributions to Growth of the Components of Gross Domestic Product
• Cosma Shalizi (2009): On the Certainty of the Bayesian Fortune-Teller
• Trygve Haavelmo (1944): The Probability Approach in Econometrics

Should Be Aware of:

1. Peter Dorman: Figuring out the Inflation Vigilantes: “Paranoia about inflation is a widespread, longstanding phenomenon, with immense influence over public discourse and economic policy, and out of all proportion to the actual… threat. It deserves to be studied by the normal tools of social science, the ones we devote to other significant political, religious and social ideologies…. The disinflation lobby is an important part of the political landscape…. Seeing the spending side of inflation and not the income side is Type II money illusion… actively purveyed by the media and even, on occasion, prominent members of the economics profession…”

2. J.W. Mason: The Rentier Would Prefer Not to Be Euthanized: “Here’s another one for the ‘John Bull can stand many things, but he cannot stand two percent’ files. As Krugman says, there’s an endless series of these arguments that interest rates must rise. The premises are adjusted as needed to reach the conclusion…. But what are the politics?… The rentiers would prefer not to be euthanized…. To the extent that pure money-holders facilitate production, it is because money serves as a coordination mechanism, bridging gaps–over time and especially with unknown or untrusted counterparties–that would otherwise prevent cooperation from taking place. [1] In a world where liquidity is abundant, this coordination function… can no longer be a source of authority or material rewards…. The problem is, the liquidity specialists don’t want to go away…. So we get all these arguments that boil down to: Money must be kept scarce so that the private money-sellers can stay in business…”

3. Karl Marx (1867: Cooperation: “Capitalist production only… really begins… when… the labour-process is carried on on an extensive scale and yields… large quantities…. At first… the difference is purely quantitative…[then] a modification takes place…. The simultaneous employment of a large number of labourers effects a revolution in the material conditions of the labour-process…. They are used in common, and therefore on a larger scale…. The effect is the same as if the means of production had cost less…. Just as the offensive power of a squadron of cavalry, or the defensive power of a regiment of infantry is essentially different from the sum of the offensive or defensive powers of the individual cavalry or infantry soldiers taken separately, so the sum total of the mechanical forces exerted by isolated workmen differs from the social force that is developed, when many hands take part simultaneously in one and the same undivided operation, such as raising a heavy weight, turning a winch, or removing an obstacle. In such cases the effect of the combined labour could either not be produced at all by isolated individual labour, or it could only be produced by a great expenditure of time, or on a very dwarfed scale…. We [have] here… the creation of a new power, namely, the collective power of masses…”

4. Amos Oz: “I would like to begin the interview… by presenting one or two questions…. What would you do if your neighbor across the street sits down on the balcony, puts his little boy on his lap and starts shooting machine gun fire into your nursery? What would you do if your neighbor across the street digs a tunnel from his nursery to your nursery in order to blow up your home or in order to kidnap your family? With these two questions I pass the interview to you.”