Things to Read on the Afternoon of April 1, 2014

April 1, 2014

Must-Reads:

  1. Kevin Drum: Senate Report: Torture Didn’t Work and the CIA Lied About It: “The Washington Post…. It’s impossible to say if these sources are characterizing the report accurately, and their summary descriptions of the report make it very hard to judge how fair the report’s conclusions are. But with those caveats and cautions out of the way, what does the report say? This…. ‘Its most troubling sections deal… with discrepancies between the statements of senior CIA officials in Washington and the details revealed in the written communications of lower-level employees directly involved…. The CIA’s ability to obtain the most valuable intelligence against al-Qaeda–including tips that led to the killing of Osama bin Laden in 2011–had little, if anything, to do with “enhanced interrogation techniques.”… “The CIA conflated what was gotten when, which led them to misrepresent the effectiveness of the program”’…. However, for those of us who think that detainee abuse is, in fact, as important as the lies that were told about it, there’s this: ‘Classified files reviewed by committee investigators reveal internal divisions over the interrogation program, officials said, including one case in which CIA employees left the agency’s secret prison in Thailand after becoming disturbed by the brutal measures being employed there. The report also cites cases in which officials at CIA headquarters demanded the continued use of harsh interrogation techniques even after analysts were convinced that prisoners had no more information to give. The report describes previously undisclosed cases….’ So the torture was even worse than we thought; it produced very little in the way of actionable intelligence; and the CIA lied about this in order to preserve their ability to torture prisoners. Anybody who isn’t sickened by this needs to take very long, very deep look into their souls. For myself, I think I’ll go take a shower now.”

  2. Main Window Austin Frakt: Job lock: Entrepreneurship lock

  3. Eric Rauchway: Going off gold and the basis for Bretton Woods: “Experience is teaching us a counterintuitive lesson: the way to control leads away from stability. Aim at growth – moderate growth in safer quarters, even if it means a bit of inflation and debt – and we will achieve stability. It is a lesson that our predecessors learned in the Great Depression, and which led them to establish the Bretton Woods system for precisely those purposes. The essential feature of Bretton Woods was a conditional commitment to exchange stability – with conditionality as essential as stability. The commitment was predicated on the Depression-begotten recognition that monetary stability took a back seat to the promotion of widespread prosperity. When we talk about Bretton Woods, quite often we emphasize the conflict before and at the conference between the UK and the US, and generally between the persons of John Maynard Keynes and Harry Dexter White… [who] won out – not because [his plan] was intellectually superior, but because the United States had more money and power and US congressmen wanted to see a plan that looked like it was more sparing of American resources. The White plan did not survive – in 1947, the international monetary system became more Keynesian, with the Marshall Plan, and in 1969 more Keynesian still, with the introduction of Special Drawing Rights as a reserve asset. Despite this early and lasting convergence on a Keynesian consensus, scholarly discussion of Bretton Woods generally focuses on the initial conflict and its detrimental impact specifically on Britain. Focusing on this conflict is misleading and I believe impoverishes our understanding of the fundamental, shared ideas underlying Bretton Woods…”

Should-Reads:

  1. Carlos Carrillo-Tudela et al.: Career Changes Decline during Recessions: “Some types of jobs lost during recessions are never recovered, which suggests some unemployed workers must change careers. However, data on hiring during recessions shows the fraction of unemployed workers who change their industry or occupation declines rather than increases. This reflects in part that, when unemployment is high, employers can find applicants with qualifications that closely match job openings. Thus, the rate of overall job growth affects the pace of job market recoveries more than the need for workers to reallocate across sectors.”

  2. Paul Krugman: Permahawkery: “Martin Feldstein warns us that the Fed isn’t taking the risk of rapidly rising inflation seriously enough. Certainly nobody can accuse him of that failing: he’s been warning about looming inflation for four years, eleven months,and two weeks, and hasn’t let the fact that inflation has kept falling below target alter his concerns in the slightest. In fact, Marty’s new column is almost identical in its argument to what he wrote in April 2009: he warns that the Fed won’t pull back the liquidity it created when the economy recovers, and inflation will soar. What’s interesting now is that he freely admits that the Fed does, in fact, have multiple instruments with which to pull back liquidity and forestall inflation… he worries that it won’t do these things because it will be embarrassed if it finds itself paying more in interest than it is earning on its portfolio. Might we suggest that the answer here is, don’t be embarrassed? We’re talking about trivial sums…. This has to be one of the weakest policy arguments I’ve ever seen: Arguing that the Fed should shy away from doing all it can to create jobs because you’re afraid that at some point in the future Fed officials will be insufficiently hawkish because they’re afraid that people will make fun of them.”

  3. Paul Krugman: Jobs and Skills and Zombies: “The one piece of evidence you might cite in favor of the skills-gap story is the sharp rise in long-term unemployment, which could be evidence that many workers don’t have what employers want. But it isn’t. At this point, we know a lot about the long-term unemployed, and they’re pretty much indistinguishable in skills from laid-off workers who quickly find new jobs. So what’s their problem? It’s the very fact of being out of work, which makes employers unwilling even to look at their qualifications.”

Should Be Aware of:

  1. Ted Kaufmann: Prosecuting mortgage fraud not a priority: “A couple of weeks ago, most often buried on the inside pages, newspapers ran stories about a Justice Department inspector general’s audit of the department’s efforts to address mortgage fraud…. A better headline might have been ‘Justice Department Acknowledges that Rich Bankers Who Committed Fraud Won’t Go to Jail.’ Angry? You bet I am. Even more angry than I was back in 2009 when, as a U.S. senator, I saw shocking paper trails that I believed would have convinced juries to convict some crooked CEOs if there were aggressive efforts to prosecute them. That’s why I worked hard for and co-sponsored the Fraud Enforcement and Recovery Act, which in May 2009, gave an extra $55 million to the Justice Department over the next two years – over and above the Department’s normal appropriation. This money was specifically granted to bring to justice top executives who had engaged in fraud leading up to the financial meltdown…”

  2. Paul Krugman: The ACA Surge Blackout: “Update: And the 4th-ranking Republican in the Senate is already accusing the administration of cooking the books. I really think the possibility that the ACA might actually work never occurred to them. It’s not in itself that big a deal, but I’m somewhat amazed by what amounts to a de facto blackout by major news media on a developing story… a huge surge in Obamacare enrollments in the final days of the signup period. The print sources I read are still putting out basically downbeat reports about the ACA, with maybe a mention 10 paragraphs in that exchange enrollments passed the 6 million mark last week. I don’t watch cable news, but from what I hear it’s all still Malaysian airways…. The final number for year 1… looks likely to be very close to the original 7 million projection…. You wonder why news media that are happy to speculate about the 2016 election aren’t interested in at least putting out a heads-up about the strong possibility of a bombshell number next week. And where I think this does matter is that it shows a persistent slant in much reporting toward emphasizing the negatives about health reform. The website woes were, and deserved to be, a big story; the quite amazing comeback somehow doesn’t fit the preferred narrative…”

  3. Paul Krugman: Austerity Memories: “The austerity debate of 2010-2012, which was simultaneously exhilarating and deeply depressing. On one side, the critique of austerity was a classic example of high-quality, relevant economic research done in real time to respond to important issues…. Before the debate, it was possible to say that we had little evidence for the Keynesian proposition that increases (decreases) changes in government spending and/or deficits lead, other things equal, to short run increases (decreases) in output and employment. The problem was that other things are rarely equal…. We now have overwhelming evidence for the Keynesian proposition, and very strong evidence that when monetary policy can’t lean against fiscal policy–when you either have a fixed exchange rate or are in a liquidity trap–the multiplier is greater than one. The efficacy of fiscal policy in the short run is now as well-established a concept, as grounded in empirical evidence, as the efficacy of monetary policy…. But again, the course of policy… was something else…. People who had no idea what the data or the history looked like, who had no idea of what was involved in attempts to tease out the effect of fiscal policy from the noise, jumped on Alesina/Ardagna as refuting everything anyone else had said on the subject…. Oh, and of course, nobody except the IMF–which was much closer to being right than other key players–has admitted having been wrong about anything.”

And:

April 1, 2014

Connect with us!

Explore the Equitable Growth network of experts around the country and get answers to today's most pressing questions!

Get in Touch