It was twenty years ago today…
[T]he [Federal Funds Interest Rate target] debate has shifted in the opposite direction as market participants weigh the possibility of a rate cut. The Fed is probably not there yet, but internally they are probably increasingly regretting the unforced error of their own – last December’s rate hike. [emphasis mine]
Now he just has to come a few steps further to realize that the major U.S. money center banks remain insolvent. But that’s outside of his purview as Watcher to Feds, so we shouldn’t expect to see that in print anytime soon.
Go to Tim Duy for the rational approach. For me, I quote the Fed
Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. [emphases mine]
check the market
and conclude that, with one exception, the only question worth asking is, “What color is the sun on the planet of the Fed Governors?”
I question Noah [Smith]’s description of the people as “brightest”. If you insist on trying to understand business cycles by requiring a single consumption Euler equation (rather than, say, risk-averse rich 70-somethings with short horizons; myopic middle-class 40-somethings, and the liquidity constrained); if you insist on trying to understand business cycles by requiring that firms engage in Calvo pricing; If you insist on trying to understand business cycles by requiring rational expectations (rather than anchored, adaptive, extrapolative, perfect-foresight, and Panglossian)–well, then you really aren’t very bright at all, are you?
Only two quibbles: Brad opens his piece by describing Noah as “smart young whippersnapper” and then eviscerates him. In Brad’s previous [immvho, failed] attempt at evisceration, Alex Seitz-Wald* was described as “a smart man.” So the quibbles are:
(1) What does Brad have against smart people?
(2) Alex is 29. I’m not certain of Noah’s age, but he (1) graduated undergraduate and spent three years in Japan and (2) received his Ph.D. in 2012 (four years ago). So my minimum guess for Noah would be:
graduated at 21 + 3 years in Japan + 3 years earning/finishing** Ph.D. + 4 years since then = 31.
And if you’re setting the morning line there, I’m taking the over.
So how is Noah a “smart young whippersnapper” and Alex a “smart man,” when the former is clearly a few years older than the latter?
*In the interest of full disclosure, I note that Alex married into my wife’s family this past Memorial Day. Also, in the interest of accuracy, I note that Brad is dead wrong in his framing of Alex’s piece. [That’s for another posting.] But, heck, even smart people like Brad make mistakes.
**This assumes some of the time in Japan was spent on work that directly contributed to completing his Ph.D. This seems an optimistic assumption.
One member of d. 2016 mentions the most recent one:
Charlie Manson remains alive.
And here’s something I put up about nine years ago; a collaboration with Liberace from a documentary about Jack Paar:
R.I.P., Muhammad Ali
Click on “Read More” to see the rest.
Cue the Fed Taking a Dump in the Empty Punch Bowl
In May, the civilian labor force participation rate decreased by 0.2 percentage
point to 62.6 percent. The rate has declined by 0.4 percentage point over the
past 2 months, offsetting gains in the first quarter.
But the headline number is “at full employment,” if you are determined to be stupid or the President of the Boston Fed (which did not used to be redundant).
The only thing that could save Janet Yellen’s reputation now would be if she became impaired or died before the 16th.
Meanwhile, the [ETA: major U.S. money-center] banks remain insolvent.
Erik Loomis at LG&M notes that Forbes is attempting to encourage age discrimination (no we’re not; wink, wink, nod, nod).
And it made me think of this post from Lance Mannion, which deserves to be read every day you can:
You get up for a stretch, wander out onto the floor to get a cup of coffee, give people the eye, remind them you’re here, still the boss. Not that they need the reminding. Good people. Hard workers. You hardly have to say a word to some of them. Work their asses off for half the money, which, you know, you’d like to pay them. Business is good, as in ok, but it’s not like you’re making the bucks so fast you can’t find space to put it all, it’s piling up so fast….
Sid. Look at him. Geezus. Five years younger than you and looks like he could be your father. Ok. That’s a bit of an exaggeration. But he’s not looking too good these days, is he? Too bad. He used to be such a dynamo. Worked like a hero. Put in seven days a week if you’d let him. Best you had. Then he turned sixty-five and it was like he hit a wall. Bam. Just knocked him flat and he’s never been able to get up again, not really. Mostly, for the past year, he comes in, goes through the motions. He’s become a real drag on the business. He really should hang it up. But what’s he gonna do? You always paid him a fair chunk of change. Never was going to make him rich, but he got by pretty well. But 2007, 2008. Everybody’s 401(k) took a big hit, then his wife got sick, and their house went under water. He’s going to need to collect full benefits on his Social Security. He needs to stick it out for one more year.
Oh wait. It’s 2020 now, isn’t it? They raised the retirement age for people Sid’s age back in 2011. He can’t collect full benefits until he’s 69. So he’s going to stick around for three more years!
Think about it. His wife’s health is shaky. Sid’s is none too good. No way he can make up for the difference in medical costs for what the vouchers won’t cover. Sid needs to work here till he drops just for the medical plan, which is no great shakes, it costs you both an arm and a leg, but it’s not like it’s suddenly got cheaper to go the doctor’s. Even a simple check-up dings you, never mind if you need something big taken care of.
No, Sid’s here for life, unless…
Nah, you couldn’t do that to Sid. Not after all the years he’s put in.
There are many reasons I say people should hit his tip jar–he’s too good to be one of the people Brad DeLong but this one keeps coming back as one of the best, one of the two best posts ever on the Internet about working.* Read the whole thing. And hit his tip jar if you can.
*The other is Mark Thoma’s description of what it’s like to be downsized in a Company Town and have to look for a new job. Which, as usual, I haven’t been able to find recently.
I got hit while parking today. Driver in front of me, parked with no lights or flashers, backed her van up into my car because she wasn’t actually parking, just dropping one of her kids off at school.
For a moment, I’m all, like, WTF?
She immediately gets out of the van, comes back, apologizes, checks me and my car. No damage. (Her car was moving maybe 3-5 MPH; pulling out speed. I was parked.) I get out, make certain her car and her remaining kids are also unharmed, she goes on her way, I park.
If she had spent the next hour sitting behind the wheel of her car, acting as if she had done nothing, I might have been pissed too.
Sorry, Duncan, but you’re flat wrong on this. A five to ten-ton bus cuts off 15 stone of cyclist and he bloody well better do more than sit there acting like the asshole he is. THAT was the mistake, no matter what the idiots interviewed for your local pooper-scooper paper may claim.
I apologize for actual discussing economics and health care today, but this one I couldn’t let lie.
If reducing the value of the policies held by those who are continuously employed, either by taxing them or forcing those people to move to a less comprehensive plan than their risk-aversion preferences, is going to “reduce costly distortions in U.S. health care,” the only possible conclusion is that total health care spending is going to get costlier on average.
Yes, you might argue this will reduce “distortion.” But you would have to be an idiot—or, apparently, Alan Auerbach (Strongly) or Austan Goolsbee—to believe that is a good thing.
Note the eminently-sane, just as certain, Carolyn Hoxby’s comment:
The Cad[illac] tax is meant to counter other distortions so this is a q[uestion] of whether 4th best fixes 3rd best. An economist who says he knows is wrong.
which acknowledges that this is a distortion of a distortion and, as a first-order approximation, less ideal than the status quo.
Contrast this with the silence in the face of blithering certitude from Auerbach and Goolsbee, who are happy to reduce “distortion” without noting the concomitant reduction in overall utility.
My post of 13 days ago is now current events.
R.I.P., with a couple of reprises:
Lyle Lovett discussing and covering the first song Clark ever wrote (and never himself recorded). I don’t know if Guy Clark was ever young, but I defy anyone this side of Prince or Bruce Cockburn to figure out what things are wrong with it:
See also Loomis at LG&M, of course.
ETA: And Charles Pierce, who features several selections included by neither of us.