Things to Read at Nighttime on June 20, 2014

Should-Reads:

1. Dan Hamermesh: Daniel Hamermesh on Economics is Fun: “Stop! Stop, stop, stop. The economics profession is not in disrepute. Macroeconomics is in disrepute. The micro stuff that people like myself and most of us do has contributed tremendously and continues to contribute. Our thoughts have had enormous influence. It just happens that macroeconomics, firstly, has been done terribly and, secondly, in terms of academic macroeconomics, these guys are absolutely useless, most of them. Ask your brother-in-law. I’m sure he thinks, as do 90% of us, that most of what the macro guys do in academia is just worthless rubbish. Worthless, useless, uninteresting rubbish, catering to a very few people in their own little cliques…”

2. Justin Wolfers (2005): Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-being: “High inflation and, to a greater extent, unemployment lower perceived well-being. Greater macroeconomic volatility also undermines well-being. These effects are moderate but important: eliminating unemployment volatility would raise well-being by an amount roughly equal to that from lowering the average level of unemployment by a quarter of a percentage point. The effects of inflation volatility on well-being are less easy to detect and are likely smaller…”

3. Snehal Banerjee and Brett Green (2012): Learning Whether Other Traders Are Informed: “Standard rational expectations (RE) models of financial markets assume that market participants know whether other traders are informed, and therefore know how to update their beliefs using prices. We relax this assumption to study return dynamics when investors learn how to use the information in prices. In this setting, the price is a non-linear function of the underlying signal, and, as a result, expected returns and volatility are stochastic and persistent, even when fundamental shocks are i.i.d. Moreover, the price reaction to information about dividends is asymmetric: the price reacts stronger to bad news than it does to good news. In fact, the price can even decrease following positive signals about dividends. The model also generates volatility clustering in which surprises in return realizations (or dividend realizations) are followed by higher volatility and higher expected returns…”

Should Be Aware of:

• Timesify
• Eric Lach: State Prosecutors Allege Scott Walker At Center Of ‘Criminal Scheme
• Andrew Sullivan: “I’m just glad that victory has many authors. And sad that some are so graceless and pernicious and money-grubbing and vain.”
• Tara Culprit-Ressler: Congressman Demands Pregnant Woman Explain Why Obamacare Includes Maternity Coverage
• Tim Duy: “Yellen and Co. are so committed to the 2% inflation target that they are willing to tolerate a persistently lower level of national output to maintain that target. That sounds pretty hawkish to me…”

And:

1. Jacob Heilbrun: The Neocon Surge: They are not, in fact, being greeted as liberators: “Don’t look now, but the latest installment in the decades-old neocon saga is currently taking place…. Paul Wolfowitz, Douglas Feith and a host of other neoconservatives are seizing the spotlight to conduct their own very personal war of liberation… free themselves from the rap that they got it all wrong. And so they are going into overdrive to pin the blame for the collapse of Iraq on anyone other than themselves. Only this time, the American people, unlike in 2003, seem primed to ignore them…. L. Paul Bremer III… Max Boot… Dick Cheney, emerging from his undisclosed location, teamed up with his daughter Liz… Robert Kagan…”

2. Daniel Larison: Anne-Marie Slaugher: A Warmonger By Any Other Name: “I can understand why someone wouldn’t want to be called a warmonger. Fortunately, the word still has very negative connotations. Despite the strong bias in favor of military action in our foreign policy debates, being labeled a warmonger remains a definite political liability. This is why those that have a record of advocating for military action are so displeased when the label is applied to them. If supporters of intervention are accurately called warmongers, that will tend to make it harder to get the U.S. into new wars, and that is bound to be frustrating for them. I’m just not sure why the rest of us should care.”

3. Dan Corrigan: Bring Sanity Back With Common Sense Gun Solutions: “74 different school shootings since 20 kids and six adults were slaughtered at Sandy Hook on Dec. 14, 2012. The map darkens every week with death dots, as do similar maps for shooting sprees and gun violence in the U.S. workplace…. Our U.S. Congress has been able to do NOTHING. Our state legislature has been far worse…”

Already-Noted Must-Reads:

1. Rob Stavins: What are the Benefits and Costs of EPA’s Proposed CO2 Regulation?: “There are surely ethical arguments (and possibly legal arguments) for employing a global damage estimate….I leave it to legal scholars and lawyers to debate the law, and I defer to the philosophers among us to debate the ethics, but let’s at least ask what the consequences would be for EPA’s analysis if a U.S climate benefits number were used…. The combined U.S.-only estimates of annual climate impacts of CO2 ($3 billion) and health impacts of correlated pollutants ($45 billion) greatly exceed the estimated regulatory compliance costs of $9 billion/year, for positive net benefits amounting to $39 billion/year in 2030…. If EPA’s global estimate of climate benefits ($31 billion/year) is employed instead, then, of course, the rule looks even better, with total annual benefits of $76 billion, leading to EPA’s bottom-line estimate of positive net benefits of $67 billion per year…. The Obama Administration’s proposed regulation of existing power-sector sources of CO2 has the potential to be cost-effective, and… welfare-enhancing…”

2. John Holbo: The Rhetoric of Having Been Wrong: “This is pretty simple. Either the neocons know they were wrong last time, or they don’t. If you are The Boy Who Cried Wolf, and you don’t know it, you are useless for wolf-crying purposes. If, on the other hand, you know you were wrong before, and you know everyone else knows, but you think you are right this time, and you want to warn everyone, you won’t say ‘now is not the time to re-litigate whether I was perfectly right in the past concerning each and every last wolf.’ No, you will say something reasonable, like: ‘I know you have no reason to trust me, given how wrong I was before in a case that looked an awful lot like this one. I am so sorry for the damage I have done, but I will be even sorrier if the fact that you can’t trust me means even more damage is done. That will be my fault, too, if it happens, so please…’ There is, after all, such a thing as common sense. I was wrong about Iraq. I was one of those Kenneth Pollack-reading liberal queasyhawks, to my ongoing shame…”