hard heads soft hearts

a scratch pad for half-formed thoughts by a liberal political junkie who's nobody special. ''Hard Heads, Soft Hearts'' is the title of a book by Princeton economist Alan Blinder, and tends to be a favorite motto of neoliberals, especially liberal economists.

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Tuesday, November 22, 2011
Arthur Silber - Rape, Harrassment, Horrible Bosses

Arthur Silber - "They Don't Represent America"? Not Quite, Mr. President. (2004)

Will Kane (SF Chronicle) - Scott Olsen, vet hurt at Occupy Oakland, discharged

(Via Atrios):

World O' Crap - If 'Are You Being Served?' is the Kind of Programming...

Sam Seder interview of Dean Baker
Dean Baker: " . . .So we had a huge fall-off in both construction & consumption, creating a shortfall in demand over a trillion dollars a year. The point is, how do you replace that demand? We have all these people in Washington saying `We want the private sector to do it'. Wonderful! I want the private sector to do it too, but it doesn't work that way, they don't increase their spending just because we have politicians who want them to. . ."

just saw the Inside Job, found it a little overwhelming, found the interview with Mishkin, who seemed a nice man (and whose textbook is indeed quite good), painful to watch. One of the baroque details I found interesting was the extraordinary lengths Richard Fuld of Lehmann went to shield himself from the details of what the Lehmann rank and file were doing (He had his own private elevator, and his driver called in to the doorman to clear the way once he had arrived, so that the journey from the car to the elevator, instead of talking 5-10 minutes, could instead be over in 30 seconds, with minimum human contact. Once in the elevator, safe from the rank and file, straight up to the privacy of the executive floor).

I perhaps have similar misanthropic tendencies, a similar occasional desire to be free from the accusing glance of others, a similar desire to be safe in a private sanctuary, but could not imagine indulging that desire to that extreme, no matter how much money I had.

In any case, 2 people in the film that I found impressive were Robert Gnaizda & Charles Morris, and wondered why they didn't seem that impressed with the Obama administration. Also wondered what Larry Summers would have had to say about his dealings with Brooksley Born.

Re: Europe, it almost defies belief, but a great and sophisticated continent is coming to grief because it has saddled itself with a central bank that does not understand central banking: namely, that every industrial economy since 1820 has needed a lender of last resort at a penalty rate, and the penalty rate should be nonzero but affordable. The alternative to the lender of last resort is 1) large amounts of capital wasted self-insuring against Knightian uncertainty 2) random, unavoidable crisis caused by self-fulfilling fears & panics. It's easy to blame the Germans, but I believe the real fault lies with elites in Greece, Ireland, Spain, Portugal, Italy, who need to gather their courage and get out of the Euro, ASAP. When the UK & Sweden exited the ERM, the results were very beneficial, and I believe the same would be true of exiting the Euro.

One idea I think would be good for US economic policy: allow every fixed Treasury bond to be freely convertible to a TIPS bond, if the bondholder wants to convert. The result would be to allow a shift of inflation risk from individual investors to the government. Hopefully, that would make the system more tolerant of moderate amounts of inflation, and therefore better protected against liquidity traps.

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