Things to Read on the Morning of December 30, 2014
Must- and Shall-Reads:
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“The American public and its political leadership will do anything for the military except take it seriously. The result is a chickenhawk nation in which careless spending and strategic folly combine to lure America into endless wars it can’t win…” - :
“A few weeks ago I offered some calculations suggesting that lower demand for oil might account for about $20/barrel of the dramatic decline in the price of oil since last summer. Here I point to some other evidence consistent with that conclusion” - :
A Quick Note on Different Views of Potential GDP
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Falling Labor Force Participation Update:
“The top-line result is that, of the 3.1 percentage-point decline in the participation rate between March 2007 and March 2014, 1.9 p.p (three-fifths) is explained demographic change and 1.2 p.p (two-fifths) of it is unexplained by demographic change. Of the explained portion, almost all of that (1.6 p.p.) is aging…”
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How Gary Becker saw the scourge of discrimination:
“The legal remedies sought by the [civil-rights] campaigners played no significant role in his analysis. From an economic perspective, legal remedies have corrected some problems but exacerbated others…. Firms intent on discriminating in their hiring practices can move to locations without significant minority populations…. If people have a tendency to discriminate on the basis of race, legislation cannot eliminate that tendency. Politicians cannot merely legislate a new outcome, or legislate preferences away. They can only change the way discrimination manifests itself…. One obvious question begged by Becker’s work was, who benefits from discrimination? While he did not directly address this, he did suggest that one beneficiary might be labor unions, which have traditionally represented white workers…”
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Mysteries Of Deflation (2010):
“Since Friedman and Phelps laid out the natural rate hypothesis in the 60s, applied macroeconomics has relied on some kind of inflation-adjusted Phillips curve…. But here’s the thing: the [Friedman-Phelps] inflation-adjusted Phillips curve predicts not just deflation, but accelerating deflation in the face of a really prolonged economic slump…. This doesn’t happen…. So what’s going on? There’s a body of work I’m surprised we haven’t been hearing more about: the downward nominal wage rigidity literature. I learned about the concept from Pierre Fortin; Mr. Janet Yellin, aka George Akerlof, and co-authors wrote quite a lot about it…. It’s important to take account of downward rigidity so as not to get fooled into accepting a persistently depressed economy as normal…. It’s time to start focusing on downward rigidity and what it implies. After all, all indications are that we’re going to be dealing with a depressed economy for a long time to come.”
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Lyndon Johnson’s Aides Mad MLK Is Hero of Selma:
“Selma doesn’t offer a hostile portrayal of Johnson… [but] tell[s] a story in which King and his collaborators are the key actors…. Johnson[‘s]… notion of doing the War on Poverty first and voting rights second isn’t obviously wrongheaded or pernicious, but King doesn’t agree…. Johnson tries a couple of times to talk them out of it… fails… swings around to King’s viewpoint…. Certainly one could image an excellent Lincoln-esque film that primarily highlighted the legislative machinations among white politicians and cast LBJ as the hero (I would watch). But the choice to make a different film that highlights activist demands and casts MLK as the hero isn’t a form of historical inaccuracy or grounds for dismissing the movie. The idea that a film should be ruled out for having the temerity to focus on black people’s agency in securing their own liberation is completely absurd. We’ve had too few such films in American history and everyone could stand to watch some more…”
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Prosecute Torturers and Their Bosses:
“Obama… has failed to bring to justice anyone responsible for the torture of terrorism suspects…. Obama has said multiple times that ‘we need to look forward as opposed to looking backwards,’ as though the two were incompatible. They are not. The nation cannot move forward in any meaningful way without coming to terms, legally and morally, with the abhorrent acts that were authorized, given a false patina of legality, and committed by American men and women from the highest levels of government on down…. These are, simply, crimes…. No amount of legal pretzel logic can justify the behavior detailed in the report. Indeed, it is impossible to read it and conclude that no one can be held accountable. At the very least, Mr. Obama needs to authorize a full and independent criminal investigation… former Vice President Dick Cheney; Mr. Cheney’s chief of staff, David Addington; the former C.I.A. director George Tenet; and John Yoo and Jay Bybee… Jose Rodriguez Jr., the C.I.A. official who ordered the destruction of the videotapes; the psychologists who devised the torture regimen; and the C.I.A. employees who carried out that regimen…. Republicans… with one notable exception, Senator John McCain, they have either fallen silent or actively defended the indefensible…”
Should Be Aware of:
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Right to Own
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An Entire YEAR of Incompetent Economic Analysis From Powerline - :
Liveblogging KitchenAid Repair - :
Consequentialist arguments for deontological claims - :
“GOP Looks To The Future, Thinks It Over, Sells Reagan/Bush T-Shirts Instead”
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EconoSpeak: More Piling On [John] Cochrane: Why He Cannot Go Back To Being Taken Seriously Even About Asset Pricing:
“Piling on John Cochrane… nearly all his claims are not only laughingly bogus, but seriously unsupported even in his own column…. suggests… Cochrane… should just go back to working on asset pricing…. Even in that arena, he… should also be ignored…. What is his problem? He… has simply ignored… ‘fat tails’…. The words ‘fat tails’ ‘kurtosis’ and ‘leptokurtosis’ simply do not appear…. Nowhere, nada, not at all…. Campbell, Lo, and MacKinlay… at least talk about this issue…. In 2008, when he was criticized for not talking about fat tails, Cochrane defended himself by noting that Eugene Fama… knew all about fat tails…. Indeed, Fama initially supported Mandelbrot’s argument that variances are asymptotically infinite, but then turned against him… although ignoring evidence that fourth moments (kurtosis) may actually be so…. Cochrane claimed… Fama… knew about asset returns having fat tails and that anybody who studied with him knew this. Maybe this is so, but there seems to be might little evidence that Cochrane has been passing this on to his students…. This makes him look pretty pathetic… even in his area of most basic research.”
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(2006):
Oxblog Volunteers to Write for the Old New Republic…: “At this point, the author pulls out a deck of cards and picks one at random. If the card is a ten or lower, the author concludes that the Democrats are right, but not for the reason given by some senator from Massachusetts. If the author draws a face card, he thinks to himself, ‘I must agree with the Republicans for no apparent reason in order to show that I’m open-minded.’ If the author draws an ace, it means that his thirtieth birthday is approaching and it’s time to either go back to grad school or work for McKinsey…”
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(2007):
Who Wrote Ron Paul’s Newsletters?:
“Ron Paul doesn’t seem to know much about his own newsletters… says he was unaware… of the bigoted rhetoric about African Americans and gays that was appearing under his name… has ‘no idea’ who might have written inflammatory comments such as ‘Order was only restored in L.A. when it came time for the blacks to pick up their welfare checks’…. A half-dozen longtime libertarian activists… all named the same man as Paul’s chief ghostwriter: Ludwig von Mises Institute founder Llewellyn Rockwell, Jr….. Rockwell, Paul’s congressional chief of staff from 1978 to 1982, was a vice president of Ron Paul & Associates…. During the period when the most incendiary items appeared… Rockwell and… Murray Rothbard championed an open strategy of exploiting racial and class resentment to build a coalition with populist ‘paleoconservatives,’ producing a flurry of articles and manifestos whose racially charged talking points and vocabulary mirrored the controversial Paul newsletters…. To this day Rockwell remains a friend and advisor to Paul…. Besides Ron Paul and Lew Rockwell, the officers of Ron Paul & Associates included Paul’s wife Carol, Paul’s daughter Lori Pyeatt, Paul staffer Penny Langford-Freeman, and longtime campaign manager Mark Elam…. The publishing operation was lucrative… $940,000 for Ron Paul & Associates…. The tenor of Paul’s newsletters changed over the years. The ones published between Paul’s return to private life after three full terms in congress (1985) and his Libertarian presidential bid (1988) notably lack inflammatory racial or anti-gay comments. The letters published between Paul’s first run for president and his return to Congress in 1996 are another story—replete with claims that Martin Luther King ‘seduced underage girls and boys,’ that black protesters should gather ‘at a food stamp bureau or a crack house’ rather than the Statue of Liberty, and that AIDS sufferers ‘enjoy the attention and pity that comes with being sick.’… Paul’s inner circle learned between his congressional stints that ‘the wilder they got, the more bombastic they got with it, the more the checks came in. You think the newsletters were bad? The fundraising letters were just insane from that period.’ Cato Institute President Ed Crane told reason he recalls a conversation from some time in the late 1980s in which Paul claimed that his best source of congressional campaign donations was the mailing list for The Spotlight, the conspiracy-mongering, anti-Semitic tabloid run by the Holocaust denier Willis Carto until it folded in 2001. The newsletters’ obsession with blacks and gays was of a piece with a conscious political strategy adopted at that same time by Lew Rockwell and Murray Rothbard…”