Things to Read on the Evening of December 24, 2014
Must- and Shall-Reads:
- :
Fed Watch: Asked and Answered. Mostly.) - :
The Bank [of England] currently provides a drip-feed of releases… replacing a drip feed with a deluge will make the information provided harder to digest… leave most observers less well informed… indeed, the Bank itself will no longer be able to identify the separate impact of the policy decision.. - (20040:
What Makes an Effective Executive - :
Let us enjoy the greatest human escape of all - :
Righting Rogoff on Japan’s Monetary Policy - :
A Critique of John Hussman’s Chart of Estimated Future Equity Returns - :
“John Cochrane… ‘An Autopsy for the Keynesians’… doesn’t ever define ‘Keynesian’, and because he doesn’t he’s able to engage in a series of dishonest generalizations…. I am mad at myself for even wasting the time to respond to such an obviously misleading article.”
-
(1995);
Cracked Bell:
“The same remarks apply to [Herrnstein and Murray’s Bell Curve’s] study of racial and ethnic differentials in socioeconomic outcomes…. Evidence that racial differentials weaken when ability is controlled for using regression methods does not rule out an important role for the environment…. In the presence of measurement error in the environment, the authors’ analysis will overstate the ‘true’ effect of ability on those outcomes. There are methods for addressing these problems, but Murray and Herrnstein do not use them…. By its very construction… the ‘two-standard deviation’ range in measured IQ… [covers] 95 percent of the population. A ‘two-standard deviation’ range of their family background index does not include 95 percent of the population, because that measure does not come from a bell curve…. By restricting the range of the environmental variable they understate the role of the environment in affecting outcomes relative to the role allocated to IQ…”
-
:
Recession, Recovery, and Gold:
“Dave Weigel notes that when President Obama get reelected, the usual suspects told us to run for the hills, buying gold along the way. Zimbabwe! Or, actually, not…. Gold prices are down…. Why they were high in the first place[:] Gold is not, in fact, a hedge against inflation. It’s something people buy when real returns on alternative assets are low…. Gold went up as real interest rates turned negative, thanks to a depressed economy…. As recovery has gathered strength, real rates have gone up and gold has gone down…”
-
:
Now that the Dow has hit 18,000, let us remember the worst op-ed in history:
“The stock market… isn’t the best barometer…. And the Dow isn’t even the best barometer of the stock market…. But if arbitrary round numbers are your thing, the Dow… above 18,000 for the first time. And that brings us to the worst op-ed in history. On March 6, 2009, former George W. Bush adviser Michael Boskin offered whatever the opposite of a prophecy is when he said that ‘Obama’s Radicalism Is Killing the Dow.’… Boskin… didn’t think that this once-in-three-generations financial crisis was to blame for the market meltdown. Instead, he blamed it on Obama for… talking about raising taxes? ‘It’s hard not to see the continued sell-off on Wall Street and the growing fear on Main Street,’ Boskin philosophized, ‘as a product, at least in part, of the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy.’ What followed was the usual conservative jeremiad against higher taxes on the rich, lower taxes on the poor, and deficit spending. Obama’s trying to turn us into Europe, and that’s why markets are pricing in the possibility of a Great Depression—not the dying economy he inherited. It was… extraordinarily ill-timed…. Obama’s radicalism has killed the Dow to the tune of a 171 percent return since Boskin’s op-ed.
-
:
Republicans Block Reappointment of CBO Chief Doug Elmendorf:
“Incoming Republican leaders in Congress won’t reappoint Doug Elmendorf to another term as head of the Congressional Budget Office, according to a party aide…. Elmendorf, 52, an economist with experience at the Treasury Department and the Federal Reserve, was appointed to run the CBO in 2009 when then-director Peter Orszag was picked by President Barack Obama to run the White House Office of Management and Budget. In 2011, Elmendorf won a full four-year term, after Republicans took control of the House while Democrats retained the Senate. A CBO conclusion that Obama’s signature domestic achievement — the 2010 Affordable Care Act — was cutting costs pleased Democrats, while Republicans appreciated the office’s finding that the health-care law and a proposed minimum wage increase would cost jobs…”
-
(2004):
Minitrue Sullivan:
“Not to beat a dead horse which no one much cares about anyway, but I was a bit puzzled earlier when I was having some trouble hunting down a particular story with a mention of [Andrew] Sullivan’s 5th column nonsense. A reader reminds me why–Sullivan, as he tends to do, edited the article he had publishsed in the Times of London before posting it in his ‘best of’ section on his website. On his site: ‘The decadent Left in its enclaves on the coasts is not dead–and may well mount what amounts to a fifth column…’ Original quote: ‘The decadent left in its enclaves on the coasts is not dead -and may well mount a fifth column…’ The former at least has one little toe in the land of metaphor, the latter doesn’t. Sullivan literally and explicitly suggested that the ‘decadent Left’ and their soulmates, Muslims advocating theocracy, would join hand in hand.”
Should Be Aware of:
- Salami by Creminelli
- :
Putin, Neocons and the Great Illusion
- :
The Productivity of Trust - :
“The insight that one is not obliged to enroll in a perpetual cycle of violence and reprisal is not apolitical or escapist”
-
:
The People the Wall Street Journal Put on Its Op-Ed Page… Get Less Hinged as Time Passe[s]:
“It has never been clear that Cochrane is even all that good at studying asset pricing. Even to this day, his famous grad textbook, called, well, Asset Pricing, does not have any of the following words in its index (or enywhere in the book, for that matter): kurtosis, leptokurtosis, fat tails. Nowhere, nada, even though supposedly financial traders all know that most financial returns exhibit those characteristics, which came home to roost big time in 2008. Of course at that time he publicly declared that… Fama would talk about them in his classes, having first heard of them in from Benoit Mandelbrot of all people. But, that has somehow still not gotten Cochrane to mention them himself anywhere in his supposedly wonderful textbook.”
-
:
Eschaton: Innumeracy):
“Silly [Andrew] Sully[van] is back on his Bell Curve kick because Coates wrote some hurtful things which failed to realize the overall importance of being incredibly civil in the high minded intellectual debate about whether black people are, in fact, stupid, and whether the innumerate editor of a prominent magazine might have some responsibility for catapulting racist pseudoscience he’s incapable of understanding into the discourse…. I’d often try to find an excuse to sneak a Bell Curve lecture into my courses. By the end of my teaching career none of my students had actually heard of it, which was good, but it still provided a way of teaching various lessons…. And I knew it was a zombie superhero, destined to return again and again no matter how many bullets we put into its brain.”