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

Paul Krugman is Very, Very Wrong

by Mike Kimel Update …Since this post has gotten a lot of attention, jump here for myfinal word on this topic. I’m sure I’m missing something here, because Paul Krugman is so often extremely perceptive, but I think here he is very, very wrong. He writes: The naive (or deliberately misleading) version of Fed policy […]

About That, er, Monetary Expansion…

Brad DeLong has a spat with Scott Sumner: The IS-LM model led economic historians to argue money was easy in 1929-30, because rates fell sharply. It led modern Keynesians to assume that money was easy in 2008, because rates fell sharply… Well, I would say that not just “modern Keynesians” but a lot of people […]

Why There’s Little Inflation, In One Easy Graphic

Ex-food and energy, inflation is at 0.9% for the past twelvemonth. Even if you include those in the longer measure, annual inflation has been 1.7%. (Recall that we paid an average of more than $3.00/gallon for most of the Spring of 2010, for instance.) There is a simple reason “everyone” expected higher numbers: they were […]

Keynes and Picasso: Stimulative Conspicuous Consumption?

by Bruce Webb Digby points us to the following NYT piece: At $106.5 Million, a Picasso Sets an Auction Record with what is in one sense an understandable bitter comment “Hey, dead artists need work too.” And as a comment on the odd priorities of our plutocracy a reasonable moral judgement, but as an economic […]

When S != I

As Brad DeLong has noted, Tim Geithner believes it is time for “the economy has now recovered sufficiently for government to begin to make way for private business investment.”  In short, he expects “the private sector” to do the heavy lifting in these joyous times of economic recovery. Cynics among us—why, yes, that might well […]

Catch-Up Links

I have been a Bad Blogger this week. (As opposed to my usual practice, which seems to be described as Blogging Badly.) While I intend to continue the New Tradition (think of me as Waylon, without the speed), following are Snow Day Links: D-Squared was on fire on Wednesday: both Bank Lending Channel and The […]

Lender of Only Resort?

Ken Houghton, having realized there is still a Commercial Paper market, looks at one implication of it. One of the things that gets ignored in all the fussing about government debt is how small it is by comparison to corporate debt. The shortest-term debt, Commercial Paper, can be very interesting. With a maturity that is […]

Perception v. Reality

Perception, per the NYT: Fed Leaves Key Rate Steady as It Worries About Growth Reality: TSLF (Mar 11), PDCF (Mar 16), expanded acceptable collateral pool (multiple times, most recently Monday), loans to the parent from the subsidiaries to cover capital needs.* And it may not be enough. (Of course it’s an AIG link.) There’s more […]

A Quick One: Inflationary Credit Recession Strategies

Tom’s doing some heavy lifting, PGL is in form, Bruce has started SocSec 101, and the entire economics blogsphere is having so many conniptions over Hillary that you’d think the CEA was actually the Shadow Government. So I just want start easy, and take a look at three easy-to-compare data points:First, the Federal Funds target […]