"Republicans are worried this election could be their last chance to stop history. This is fear talking. But not paranoia."

I have been avoiding reading Graber's book, since it didn't sound like it was any advance over Polanyi's (classic!) _The Great Transformation_.  But this is great, so I'm sold.

Sometimes, good taste is inappropriate.

If I had to summarize my problems with mainstream economics in two words, they would be "Gary Becker".

Now that is what I call a _compelling_ homework assignment. (So much so, in fact, that I am not altogether comfortable with the idea of giving it. But at the same time so much of the rest of what they'd be getting in their economics classes is _also_ priming/framing/forcing, in a rather more underhanded way, that this might only be fair.)

Ans.: No.

"Much has been made of the failure of modern macroeconomics to predict or understand the Great Recession of 2007–2009. In this MACRO FOCUS, our resident time-series econo- metrician, James Morley*, explains what is currently meant by “modern” macroeconomics, what is behind its failure, and what can be done to rehabilitate its reputation."

"Some numbers to make these points: at the end of 1978, consumption was 61.5% of GDP; in the second quarter of 2008, it had risen to 70.3%, or 8.8 points. Well over half that increase, 5.0 points, came from spending on medical care. The share of GDP devoted to spending on goods actually fell by 4.7 points over that 30-year period.

The pattern is preserved if you start the clock in 1997, just as the stock and housing manias were taking off. Medical spending accounted for almost a third of that rise between 1997 and 2008. Energy accounted for another third. Spending on goods accounted for just 3% of the rise, or 0.1 point. In other words, the familiar story that Americans went hogwild buying all kinds of stuff is wrong." --- Interesting if true.

"The French government currently honors a very unusual debt contract: an annuity that was issued in 1738 and currently yields E1,20 per year. I tell the story of this unique debt, which serves as an anecdotal but symbolic summary of French public finances since the 18th century." Or: That is not dead which can eternal lie, and with strange aeons even the dead can collect interest.

"To be skeptical of climate models and credulous about things like carbon-eating trees and cloudmaking machinery and hoses that shoot sulfur into the sky is to replace a faith in science with a belief in science fiction. This is the turn that “SuperFreakonomics” takes, even as its authors repeatedly extoll their hard-headedness. All of which goes to show that, while some forms of horseshit are no longer a problem, others will always be with us." --- I would like to say that this is unfair to science fiction, but that would involve some special pleading...

"The core argument of Doepke/Zilibotti turns out to be this: '... we find that international interventions weaken domestic support for child-labour restrictions because they reduce competition between children and unskilled adult workers in the labour market. Unskilled workers then have less incentive to push for child-labour regulation. When effective, trade sanctions or consumer boycotts move child workers from formal employment in the export sector to informal production, often in family-based agriculture. ... ' As it happens, I have actually conducted research into the potential competitive effects of child labor on adult markets. As far as I know, no one else has investigated this empirically. It turns out that children do not always offer higher profits to employers, but they often do, and this situation is not confined to production for export. Let’s not let a little evidence get in the way of their nice, neat theorems, however."

A new book of poetry coming from Pollitt, hurray!

Who are you, and what have you done to Martin Wolf? (And could you maybe see about replacing more business columnists with pod people?)

Of course, since this is Wired, one has to wonder whether all the quotes are just made up to be "provocative". (But Salmon is generally trustworthy, and this meshes with what I know from elsewhere.) --- Donald MacKenzie fans will note the way the formula became embedded in market practice...

This sounds exactly right. But what is _not_ worth praising is the fact that so many people are so lost, and so far up the creek, that they need someone like this.

I agree, but I don't think "the days when banking was populated by managers with degrees in History and who'd been leaders of the school debating team" had such a tremendous track-record either. The time when finance has done the least social harm, it seems to me, was _when it was most regulated_, i.e., the post-WWII "golden age of capitalism". The problem isn't the training of individual financiers, it's the institutions!

Robert Waldmann on why it does not profit a credit rating agency to be any better than average.

"a key reason for these record-beating losses is not a failure of ultra-complex financial strategies or esoteric models; instead it arose from a humongous, misplaced bet on a carry trade that was so simple that even a first-year economics student (or Financial Times journalist) could understand it". (Cf. Galbraith in _The Great Crash_.)

Call me paranoid, but the involvement of Italian intelligence makes me think of the forged Niger uranium letters, and wonder whether we were played by Italy rather than Iran...

I can't improve on DeLong's description of this - "the intellectual love child of Susan Brownmiller and Friedrich Hayek" - so I won't try.

Ezra Klein on why American political coverage is so awful.

Conditions for financial markets to be useful social decision-making mechanisms != conditions under which market participants make as much money as possible.

"No single article of clothing is as versatile as the gorilla suit. You can wear a gorilla suit to an embassy party, to a jewel heist, to a high-speed car chase, and then practice your slamdunks in it, all in a single evening."

Interesting blog from an astute historian - check out the materials in his "World History of Democracy"

Fascinating, but way beyond my competence to evaluate.

E. Derman's lectures on financial engineering.

Jensen does everything except actually provide a single substantive reason for accepting his proposal.

Blogged: http://bactra.org/weblog/561.html

Cf. my "modest proposal for the reform of corporate governance" from a few years ago

"Mussolini was called a fascist because he was a fascist, OG style, yo".

Shorter George McGovern: Impeach them. Impeach them now.

How to look like a financial genius with 60% probability by doing nothing. Too much set-up, perhaps, to really be a good exam problem in a general intro-to-prob class, but tempting.

On collateralized debt obligations and the financial crisis

approx. 5-6 IQ points between 1972 and 2002