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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Sunday, April 29, 2012
Sasha Said - Still Fighting
. . .I have been able to find a job. Not a good job, mind you. No, it’s another contract job. No benefits. Part-time. I’ll be lucky to pick up twenty hours a week and I’ll make less than $10 per hour. Before taxes. Speaking of which, we were able to get an extension on filing our tax returns.  . . 
We don’t make enough money to cover our rent, food, and bills, so there’s certainly nothing left over for taxes. Anyway, back to my new job. . . 
. . . The words “I really need this job” were uttered a lot this week. These are all bright, articulate, college-educated people and they’re desperate for a part-time job that pays $9.50 an hour and offers no benefits. . .  
. . .My beloved Balou is very, very sick. We didn’t expect him to make it through the night, but he’s still here. I don’t know how much longer. I hope he’s not in too much pain. I can’t allow myself to think about what’s happening to him or I’ll break down and start sobbing uncontrollably. Other than stay with him as much as possible, I’m afraid there is nothing I can do to help him now. And I have one more test to pass. Gotta stay focused. Somehow. . .  
. . .Unfortunately not too many people read this blog anymore (can’t say I blame them, given the lack of regular posts) and I realize most of you are also hurting financially in this economy. If you’re a blogger with a more sizable audience (or, for that matter, if you’re friends with such a blogger), I’d really appreciate it if you/they would mention our situation. Whatever you feel you can do to help.
Susie Madrak (Suburban Guerilla) - Oy

Juan Cole (Informed Comment)- Israeli officers speak

NYT - Syria

(Via Digby) Joe Nocera (NYT) - My Faith-Based Retirement
comment from Charlie, Indiana: "I made my first investment 47 years ago and did well until High Frequency Trading came along. So I have invested in in gold and silver companies and expect my investments to double within three years. Stay tuned."
Randy Wray (Naked Capitalism) - The Job Guarantee and Real World Experience

Noah Smith (Noahpinion) - Particle Physics & Energy Research

Mike the Mad Biologist - Models, Prediction and Throwing a Baseball

Mathbabe - Credit Union Information (#OWS)

Dani Rodrik - Ideas over Interests
. . .Interests are not fixed or predetermined. They are themselves shaped by ideas – beliefs about who we are, what we are trying to achieve, and how the world works. Our perceptions of self-interest are always filtered through the lens of ideas . . .  
. . .imagine that you are a despotic ruler in a poor country. What is the best way to maintain your power and pre-empt domestic and foreign threats? Do you build a strong, export-oriented economy? Or do you turn inward and reward your military friends and other cronies, at the expense of almost everyone else?. . .
Robert Skidelsky - Down with Debt Weight
. . .Indonesian president Susilo Bambang Yudhoyono emphasized that point earlier this month, boasting to British Prime Minister David Cameron that Indonesia’s successful recovery plan after the 1998 collapse was inspired by John Maynard Keynes. “We must ensure that the people can buy; we must ensure that industries can produce…”. . .
. . .With fiscal, monetary, and exchange-rate policies blocked, is there a way out of prolonged recession? John Geanakoplos of Yale University has been arguing for big debt write-offs. . .TALF and PPIP were in effect debt-forgiveness schemes. . .but on too small a scale. . .  
. . .In 1918, Keynes urged the cancelation of inter-Allied debts arising from World War I. “We shall never be able to move again, unless we can free our limbs from these paper shackles,” he wrote. And, in 1923, his call became a warning that today’s policymakers would do well to heed: “The absolutists of contract. . .are the real parents of revolution.”
Jeffrey Goldberg (Atlantic) - TSA to My Mother-in-Law: 'There's an Anomaly in the Crotch Area'

What is the point of freeing yourself from religious absolutism and certainty, if you merely replace it with legal or procedural or monetary or ideological or scientific absolutism and certainty?

"We have to follow the rules" "We can't break the rules" Really? Why? Are you expecting the rules to shield you from responsibility for the consequences of your actions?

Shashi Tharoor - Peace In Kashmir?
. . .Both the uprising and the Indian security forces’ response have caused widespread casualties and destruction of property, all but wrecking Kashmir’s economy, which depends largely on tourism and handicrafts. In the process, both countries have suffered enormously. . .  
. . .Meanwhile, Pakistan’s strategy of “bleeding India to death” through insurgency and terrorism has accomplished little other than to make its military enormously powerful and disproportionately wealthy. (Largely thanks to Kashmir, the Pakistani Army controls a larger share of its country’s national budget than any other army in the world.) . . .  
. . .it could well be time for India to seize the moment to build a lasting peace.
Barry Eichengreen - Tobin & the Tobin Tax
. . .I knew James Tobin; James Tobin was a friend of mine, my mentor, and, for a brief privileged period, coauthor. . . 
. . .Though no one can say for sure what Tobin would have thought of Europe’s crisis, his priority was always the pursuit of full employment. One suspects that he would have urged European policymakers to. . .repair their broken banking systems and use all monetary and fiscal means at their disposal to jump-start economic growth.
Professor against professor

Been following the Bernanke-Krugman debate with some sorrow because I do like Bernanke, who's been a great boss at the Fed, well-liked by the staff. OTOH, this was also true of McClellan. It seems to me we need U.S. Grant. On the substantive issue I agree with Dean Baker:

Dean Baker (CEPR) - Federal Reserve Board Credibility, Plus 50 Cents, Will Get You a Cup of Coffee
. . .Other things equal, it is better to have central banks that have some credibility in fighting inflation, but how does this compare against tens of millions of people in the U.S. and euro zone being unemployed? If the latter is such a small matter, would the inflation fighters volunteer to surrender their jobs so that some of the unemployed can work?. . .
US inflation, 1913-Present

Take a look at the crooked numbers in the 40's and early 50's. If that is the price of getting out of a depression, what makes the inflation hawks so sure that it is not a price worth paying? Are they really so sure that Eccles's pragmatism is inferior to inflation-hawk certainty?

I would make one important concession to the inflation hawks: it is very important that people who have bought long-term Treasuries not be screwed by slightly higher inflation. But this, it seems to me, can be solved by giving all holders of Treasuries the option of converting their nominal bonds into TIPS.

With that one caveat, it seems to me that 15 years of 5% inflation is a very small price to pay for a ticket into economic recovery.

Scott Sumner (TheMoneyIllusion) - What to ask Bernanke

It seems to that the chart of inflation would be more useful if it had 1) the estimate of real growth 2) The estimate of inflation 3) NGDP, placed side by side.

Ezra Klein (Wonkblog) - Money & Politics for 2012

So here's what I'm thinking for political money in 2012 (and perhaps beyond):

1) 20% for the DNC
2) 20% for OFA
3) 20% for DFA (1% for ActBlue)
4) 20% for Blue America PAC (1% for Actblue)
5) 20% for the PCCC (1% for ActBlue)

Then comes the question of: How much to spend on politics? I'm thinking 1-2% of after-tax income seems about right.

Anyone have strong opinions on why this is all wrong, both in the amount of money and the distribution of it?

It seems to me that learning something that's both difficult and unfamiliar is a deeply, deeply undignified activity. This is why, after a certain age, it can become difficult for people to learn, and difficult for people to change, because people become so obsessed with their dignity, so obsessed with keeping up appearances, that real learning, and real improvement, becomes impossible.

It seems to me you could make a really good movie about the War of the Currents. One possible ending could be of a young colleague of Tesla kidnapping Edison and forcing him to listen to the logic of AC until finally, finally, he gets it. Then Edison realizes, to his horror, that on the issue of DC versus AC, he's been the blind misleading the blind, but can't bring himself to admit it publicly. The movie ends with Tesla ruined socially and financially, and Edison ruined intellectually, leaving the viewer to decide which is worse.

I guess you could make a somewhat similar movie about Oppenheimer and Teller.

C.S. Lewis - The Problem of Pain (1940)
. . .A reaction - in itself wholesome - is now going on against purely private or domestic conceptions of morality, a reawakening of the social conscience. We feel ourselves to be involved in an iniquitous social system and to share a corporate guilt. This is very true: but the enemy can exploit even truths to our deception. Beware lest you are making use of the idea of corporate guilt to distract your attention from those humdrum, old-fashioned guilts of your own which have nothing to do with 'the system' and which can be dealt with without waiting for the millennium. For corporate guilt perhaps cannot be, and certainly is not, felt with the same force as personal guilt. For most of us, as we now are, this conception is a mere excuse for evading the real issue. When we have really learned to know our individual corruption, then indeed we can go on to think of the corporate guilt and can hardly think of it too much. But we must learn to walk before we run. . . 
. . .Are we not really an increasingly cruel age? Perhaps we are: but I think we have become so in the attempt to reduce all virtues to kindness. For Plato rightly taught that virtue is one. You cannot be kind unless you have all the other virtues. If, being cowardly, conceited and slothful, you have never yet done a fellow creature great mischief, that is only because your neighbour's welfare has not yet happened to conflict with your safety, self-approval, or ease. Every vice leads to cruelty. Even a good emotion, pity, if not controlled by charity and justice, leads through anger to cruelty. Most atrocities are stimulated by accounts of the enemy's atrocities; and pity for the oppressed classes, when separated from the moral law as a whole, leads by a very natural process to the unremitting brutalities of a reign of terror. . .
next post: 8/10/2012

UPDATE: Question for economists: Is it is possible that there are "shadow workers", "shadow capacity", "shadow potential output", in the same way that there is "shadow inventory" of unsold houses?

Deep Thought: Also, come to think of it, a "Shadow Banking System".

So I guess this is an appropriate song for the downturn:

U2 - Shadows and Tall Trees (1980)


Subscribe to The American Prospect ($20 per year)

They need $500K to keep the magazine going. If 25,000 people want it, perhaps fewer, it can happen. 25,000 people is less than 1 person per precinct, I think.

Probably one of my favorite blog posts:

Chris Andersen (Interesting Times) - Against Fear & Sugar Daddies (2004)
I am a supporter of Howard Dean, but I will be the first to admit that his critics are not entirely wrong in their criticism. . .Dems have been looking for a White Knight who's perfect resume will vanquish any smear campaign. . .The two things that have sold me on the Dean campaign more than anything else are that it understands that the best way to defeat the smear campaign is to confront it head on, not waste time looking for a mythical White Knight who's character is impeccable and that the fear of what might go wrong cannot stand in the way of the hope of what might go right.
UPDATE 3 (5/4/2012):

Changed the distribution of political donations to include OFA.

 next post: 8/10/2012

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