All Things in Moderation

Morning Report 10/19/12

15 Responses

1. 

   jnc4p, on October 19, 2012 at 9:40 am said:

   It appears that Paul Krugman inadvertently validates Milton Friedman’s explanation of the Great Depression, namely that it was caused by bad monetary policy from the Federal Reserve and that contrary to his earlier claims we are not in a “depression” now.

   “But what about 1929-33? This clearly was a financial-crisis slump, and was followed by four years of fast growth. Reinhart-Rogoff are right to say that the key point should still be that unemployment remained far about pre-crisis levels. Still, why was growth fast in the aftermath of this crisis?

   Well, I have a hypothesis — not necessarily excluding other stories. Here it is: growth was fast after 1933 because policy was so bad, specifically because the banking system was allowed to implode. This set the stage for fast catch-up growth as a functioning financial system was reconstructed, although the lingering overhang of private-sector debt prevented a full recovery. But that’s the contrast with 2007-2009, where the banks were rescued, avoiding complete collapse but also and therefore obviating the possibility of a fast bounceback.

   What evidence can I present? One piece of evidence would be the old Friedman-Schwartz data on money supply, which was allowed to collapse in 1929-33 but not this time around.”

   http://krugman.blogs.nytimes.com/2012/10/19/1933-and-all-that/

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   • 

     markinaustin, on October 19, 2012 at 11:59 am said:

     What evidence can I present? One piece of evidence would be the old Friedman-Schwartz data on money supply, which was allowed to collapse in 1929-33 but not this time around.

     Advertent.

     It’s only inadvertent when he rails at his colleague Bernanke for being a Friedmanite when massive amounts of fiscal spending were called for by PK.

     Bernanke initially got that right and it averted collapse and he credited Friedman.

     Then he got into the rebubbling of real estate. God help us.

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2. 

   jnc4p, on October 19, 2012 at 9:41 am said:

   Also Brent, I believe your analysis of the Greenspan Put is dead on. In every successful policy is are the seeds of it’s own destruction.

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3. 

   jnc4p, on October 19, 2012 at 11:05 am said:

   Yes, government is the problem:

   “Free Online Education Is Now Illegal in Minnesota
   By Will Oremus
   Posted Thursday, Oct. 18, 2012, at 7:28 PM ET

   Honorable mentions go to New York City’s Taxi and Limousine Commission for driving out Uber’s online taxi-hailing service and to automobile dealers’ groups in four states for trying to have Tesla dealerships declared illegal. But the grand prize in this week’s unexpectedly heated competition for most creative use of government to stifle innovation has to go to Minnesota.

   The Chronicle of Higher Education reports that the state has decided to crack down on free education, notifying California-based startup Coursera that it is not allowed to offer its online courses to the state’s residents. Coursera, founded by Stanford computer science professors Daphne Koller and Andrew Ng, partners with top-tier universities around the world to offer certain classes online for free to anyone who wants to take them. You know, unless they happen to be from Minnesota.”

   http://www.slate.com/blogs/future_tense/2012/10/18/minnesota_bans_coursera_state_takes_bold_stand_against_free_education.html

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4. 

   Brent Nyitray, on October 19, 2012 at 11:49 am said:

   ugly stock market today

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5. 

   Mike, on October 19, 2012 at 12:05 pm said:

   the state has decided to crack down on free education

   I’d be interested to know how they plan on enforcing this law. Perhaps the state of Minnesota will partner with the NSA to monitor the internet usage of all Minnesotans.

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6. 

   jnc4p, on October 19, 2012 at 12:19 pm said:

   Looks like the CIA isn’t going to go along with the administration’s cover story about “best information available at the time” on Libya.

   “Officials: CIA report blamed militants, not mob, within 24 hours of Libya attack

   By Associated Press, Updated: Friday, October 19, 12:09 PM

   WASHINGTON — The CIA station chief in Libya reported to Washington within 24 hours of last month’s deadly attack on the U.S. Consulate that there was evidence it was carried out by militants, not a spontaneous mob upset about an American-made video ridiculing Islam’s Prophet Muhammad, U.S. officials have told The Associated Press.

   It is unclear who, if anyone, saw the cable outside the CIA at that point and how high up in the agency the information went. The Obama administration maintained publicly for a week that the attack on the diplomatic mission in Benghazi that killed U.S. Ambassador Chris Stevens and three other Americans was a result of the mobs that staged less-deadly protests across the Muslim world around the 11th anniversary of the 9/11 terror attacks on the U.S.”

   http://www.washingtonpost.com/politics/officials-cia-report-blamed-militants-not-mob-within-24-hours-of-libya-attack/2012/10/19/eb29584a-19be-11e2-ad4a-e5a958b60a1e_story.html?hpid=z3

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7. 

   Brent Nyitray, on October 19, 2012 at 12:39 pm said:

   Then he got into the rebubbling of real estate. God help us.

   And ended up bubbling Treasuries instead..

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8. 

   Kevin S. Willis, on October 19, 2012 at 1:12 pm said:

   @jnc4p: “Honorable mentions go to New York City’s Taxi and Limousine Commission for driving out Uber’s online taxi-hailing service and to automobile dealers’ groups in four states for trying to have Tesla dealerships declared illegal. But the grand prize in this week’s unexpectedly heated competition for most creative use of government to stifle innovation has to go to Minnesota.
   The Chronicle of Higher Education reports that the state has decided to crack down on free education, notifying California-based startup Coursera that it is not allowed to offer its online courses to the state’s residents. Coursera, founded by Stanford computer science professors Daphne Koller and Andrew Ng, partners with top-tier universities around the world to offer certain classes online for free to anyone who wants to take them. You know, unless they happen to be from Minnesota.”

   There ya go. Goes back to my assertion that, for the most part, only the government creates monopolies. As long as property rights and contract law is enforced, monopolies tend to require government collusion to exist. Otherwise, the free market does it’s thing, and if someone builds a better or cheaper mouse trap, people will buy it.

   If the government makes it illegal for people to use or buy a competitors product, then, viola! We have a monopoly.

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9. 

   Kevin S. Willis, on October 19, 2012 at 1:14 pm said:

   @Mike: “I’d be interested to know how they plan on enforcing this law. Perhaps the state of Minnesota will partner with the NSA to monitor the internet usage of all Minnesotans.”

   They can require the company to detect location and refuse to display in Minnesota (easily defeated by using proxy servers). They can require ISPs in the area to block certain IPs used by the organization, or block DNS resolution (again, easily defeated with proxys or using alternative DNS). It will just make it a little harder to access is all.

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10. 

    jnc4p, on October 19, 2012 at 1:27 pm said:

    “How Obama Can Smoke Out Mitt: Call for Breaking Up the Biggest Banks, and Resurrecting Glass-Steagall
    Posted: 10/18/2012 11:27 pm
    Robert Reich

    President Obama should propose that the nation’s biggest banks be broken up and their size capped, and that the Glass-Steagall Act be resurrected.

    It’s good policy, and it would smoke out Mitt Romney as being of, by, and for Wall Street — and not on the side of average Americans. ”

    http://www.huffingtonpost.com/robert-reich/obama-glass-steagall_b_1983777.html

    He must be thinking of a different President Obama than the one who decided in 2009 against doing exactly that. Presumably if Obama fails to heed this advice, it reveals that he too is “not on the side of average Americans.”

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11. 

    Mike, on October 19, 2012 at 1:56 pm said:

    KW:

    It will just make it a little harder to access is all.

    I guess that was my point — it is relatively easy to get around the restrictions through proxy servers, so you’d have to go through something more extreme to keep the courses out. I wonder what kinds of penalties they can/will levy? I’d be interested to see this litigated …

    And why would Coursera pay to register their courses when they are providing them for free?

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12. 

    jnc4p, on October 19, 2012 at 2:56 pm said:

    You have to love certain headlines:

    “Banana Boat maker recalls sunscreen brands after handful of reports of users catching on fire

    By Associated Press,
    Updated: Friday, October 19, 4:04 PM”

    http://www.washingtonpost.com/politics/banana-boat-maker-recalls-sunscreen-brands-after-handful-of-reports-of-users-catching-on-fire/2012/10/19/7318c8e2-1a1b-11e2-ad4a-e5a958b60a1e_story.html?hpid=z3

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13. 

    jnc4p, on October 20, 2012 at 12:03 pm said:

    Senator Chuck Schumer makes the anti-tax reform argument:

    “Chuck Schumer: Democrats have tax reform all wrong
    Posted by Ezra Klein on October 20, 2012 at 12:58 pm”

    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/20/chuck-schumer-democrats-have-tax-reform-all-wrong/?hpid=z2

    It’s a good interview (as all of Ezra’s are). He makes the case straight up for keeping the current system:

    “EK: A lot of tax reform advocates see cleaning up the code as the key goal in and of itself. In this telling, making the tax system less complex would be good for growth, good for the deficit, good for the country — even if it doesn’t raise much revenue. Your speech is relatively dismissive of the tax reform for tax reform’s sake idea. Putting aside the revenue question, why?

    CS: First, people have conflated loophole with tax expenditure. There are some tax expenditures that are there for very obvious and very important and very good policy reasons. Whether it’s the charitable deduction or the deduction for homes, it’s not a loophole. It’s a policy judgment we’ve made, even if you disagree with it. And most of these expenditures are of the policy variety. If you want to take those away, it’s a policy argument. “

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14. 

    jnc4p, on October 20, 2012 at 5:44 pm said:

    Steve Pearlstein: “The Glass is Half Full”

    http://www.washingtonpost.com/business/steven-pearlstein-why-the-economy-may-be-better-than-you-think/2012/10/19/f47dfdda-1881-11e2-8bfd-12e2ee90dcf2_story.html

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