Relevant and even prescient commentary on news, politics and the economy.

NBER generally gets it right

Brad DeLong suggested a bit before the U.S. election that there was virtually no non-political reason for NBER not to admit the United States was in a recession.*

A little late, but they generally got it right. As Floyd Norris notes:

The National Bureau of Economic Research said today that the current recession began a year ago, in December 2007.

I’ve been arguing for some time that the recession started around then (between October 2007 and January 2008), but for much of that time it was a lonely vigil, with few economists in agreement until things fell apart in September.

I would still argue for October 2007;the “peak” in December was related more to a Certain Holiday than anything real. (It’s not called “Black Friday” in honor of workers who get trampled.) But at least they called it, which will make it more difficult to argue that “the recession started on Obama’s watch.”

Sorry, New Economist.

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Now for something completely different

Kevin Drum incidentally mentioned the Nov 1940 collapse of ‘Galloping Gertie’, otherwise known as the Tacoma Narrows Bridge, in a post about a new technique about generating electricity from river or ocean currents. Which led me to pull up some footage and figure out how to embed it. (No it is not hard. But Old Dog/New Trick). I had not previously seen a color version. The whole thing is 5:56.
Update: Originally I thought this had nothing to do with economics but then realized it is not a bad visual metaphor for the current economic (hopefully only near) collapse. Hoocoodanode? Everybody knew the bridge swayed in high winds, hence the nickname. But no one it seems imagined it would literally encounter the perfect storm and shake itself to bits. RE speculators in Vegas and Riverside stirred up a storm that ended up freezing markets around the world. Hoocoodanode indeed.

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What Brad DeLong Said: Rest in Peace Doris Dungey, "Tanta"

UPDATE: For those who read here and not at CR, a link for Donations.

We knew she was home with her family, but it was over the U.S. Thanksgiving holiday…

Calculated Risk:

Sad News: Tanta Passes Away: My dear friend and co-blogger Doris “Tanta” Dungey passed away early this morning. I would like to express my deepest condolences to her family and friends…

Tanta was one of the people—along with CR, PGL, DeLong, and Mark Thoma (and probably a few others I’ve overlooked, such as Max Sawicky**)—who proved early on that long, informative blog posts about issues that might be considered arcane* could find an audience.*** Including people who knew what you were talking about and could provide complementary insights and information.

Via CR, David Streitfeld sums it up:

Thanks in large part to Tanta’s contributions, Calculated Risk became a crucial source of prescient analysis as the housing market at first faltered, then collapsed and finally spawned a full-blown credit crisis.

Tanta used her extensive knowledge of the loan industry to comment, castigate and above all instruct. Her fans ranged from the Nobel laureate Paul Krugman, an Op-Ed columnist for The New York Times who cited her in his blog, to analysts at the Federal Reserve, who cited her in a paper on “Understanding the Securitization of Subprime Mortgage Credit.”

There are a lot of people out there who are saying now that “we all knew there would be a crisis.” Tanta is one of the main reasons for that.

She will be is missed.

*Robert Waldmann’s investigative series on Credit Products is a current AB example.

**The lack of conservative economists on the list is not my fault; the Mankiws and Tyler Cowens of the world rarely if ever go into detail about the system or the implications surrounding their statements.

***UPDATE: See the Ubernerd posts, collected here.

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Inflation, Deflation …

by cactus

Inflation, Deflation… Where The Heck Are We Going?

Some folks are telling we are going to have deflation, what with the economy contracting and the vast disappearance of tons of cash through the implosion in value of assets that weren’t really worth what Goldman, Welfare, Queen & Sachs and the rest of ’em told us they were worth. Some folks tell us we’re gonna have inflation – after all, the Fed is printing money like mad and the Federal Government is handing out bail-outs to those who got us into this mess like there is no tomorrow.

I’ve been too swamped with my day job to have a chance to work through this myself, but it seems to me that falling prices are coming to some sectors of the economy, and the loot is going to other sectors of the economy. Perhaps the end result of this is going to be merely one big redistribution, with the change in CPI remaining within a range (say, -1% to 5%) that is not outlandish by US standards and which certainly doesn’t qualify as a problem when viewed from the perspective of countries that have faced hyperinflation or massive deflation. In other words, we may not see a monetary phenomenon (at least not until significant parts of the debt eventually become hard to service, which is not a matter of months) but rather a furthering of our travels down the road as a kleptocracy.

Like I said, I haven’t had the chance to work this out. Where do you think we’re going?
by cactus

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A new whittle or two

a whittle by ilsm

National Security pork!

I came across this at a National Security blog:

In this case congress is directing that Air Force buy long lead parts to build 20 more F-22 than defense wants. Certainly the fighter mob in Air Force wants more toys, and the industry wants more revenue.

This sets the administration up to wasting the money when the unneeded 20 are not bought. The paradigm in national security is to spend good after bad despite the extension of the losses.
But DoD strategy says there are better things to do than keep a plant profitable for a fighter that is too expensive and has no threat to overcome.

A $200 million super fighter for the war on bin Ladin.

This national security preference to pork and corporate welfare over better uses of the wealth is rather common.

Here is a point of change needed in the new administration, maybe a line item veto. by ilsm

Rdan here:

I would add this NYT picture and article of one man’s journey through the revolving door of our protectors.

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