John Quiggin

I was way behind the rest of the Interworld in catching up with the Eden Hazard ballboy kicking, but coming late has its advantages. As is presumably well known to followers of this particular competition, but not to others, the “ballboy” is a minor match official whose job it is to return the ball when it goes out of play. Traditionally, this was done by actual boys, aged in their early teens, who volunteered to help out in this way – giving out this coveted job being a minor perk for the senior officials of the club. Naturally, they were supporters of the home team, but this was unimportant.

But, now, it seems, the typical “ballboy” is a young man, under instructions to make life easy for the home side and difficult for the visitors. This is a new twist on the standard practice of grimy visitors’ dressing rooms with unreliable hot water and so on. All of this helps to create a home ground advantage.

This raises some interesting points about the business of sport.
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It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.

Another sandpit for long side discussions, idees fixes and so on – the old one is still going strong.

A crosspost from Crooked Timber, speculating (from a non-expert perspective) on the possible consequences of a referendum vote in favor of a British exit (BReakout?) from the EU. I’ll start by thinking about two polar cases.

One is the Norway/Switzerland model. Initially, the only thing that changes is that Britain gives up its political membership of the EU and institutions like the European Parliament, Council and so on. Otherwise things go on as before – Britain pays into the EU Budget, is bound by current EU regulations and subsequent changes, keeps its optouts on things like Schengen, at least initially, and maintains its current access to EU markets, free movement and so on. This seems to work well enough for Norway and Switzerland, but doesn’t seem likely to satisfy UKIP or Tory Eurosceptics. And, of course, it depends heavily on the goodwill of the EU. Britain could seek to negotiate further exemptions from EU rules, but, the EU could scale back the existing British optouts over time.

At the other extreme, Britain could unilaterally abrogate all the existing arrangements and start over from the position of, say, Russia – a major EU trading partner without any special rights or obligations other than those agreed on a case by case basis. Prima facie, that would include applicability of the standard third-country tariffs in each direction, non-tariff restrictions applicable to goods not compliant with EU (or, in the opposite direction, UK) regulations, standard visa requirements for travel, residence and work, controls on capital flows and so on. It seems clear that this would be damaging for the EU, and disastrous for the UK. Still, it also seems clear that this is what the Eurosceptics have in mind, though typically with a liberal dose of wishful thinking about how easy it will be to negotiate FTAs, visa-free travel etc.

Is there an intermediate path? I can’t immediately see one. Presumably, there is a notion that Britain would stay in while the terms of exit were negotiated. But that could last many years, and would effectively amount to the Norway/Switzerland situation in the interim.

Any other thoughts on this?

That’s the headline for my latest Crikey article, on Queensland Treasurer Tim Nicholls’ lame excuses for the rise in unemployment that inevitably followed his government’s decision to sack around 14 000 people. I’m reposting it over the fold

Update I’ve updated to take account of the fact that only 8000 of the promised 14000 sackings took place in 2012.

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Like many of us, I’m engaged in a constant struggle to maintain a healthy weight and fitness level, and being an economist, I naturally like to think about this in quantitative terms (I’m not alone in this).

The basic equation is simple[1]: Energy used – energy consumed = fat burnt. But to make sense of this equation, we need units, and that raises the immediate questions:

Calories or kilojoules? and
How much do I have to burn to lose 1kg of fat?

The short answers are: Calories and 9000 Cal[2]

More over the fold

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Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Over at Crooked Timber, I and others have been blogging about the death of the wonderful Aaron Swartz, driven to suicide by abusive prosecutors Carmen M. Ortiz and Stephen Heymann (there are petitions calling for their dismissal, which US readers are encouraged to sign, and another to pardon Swartz. Opinions differ on the last of these, but I think it should be supported).

Now we have a similar, though hopefully less tragic, case of the same mentality being applied in Australia. Last year, the University of Western Sydney tried to shut down its economics program. I was among the many who protested and the university backed down partially, agreeing to retain a major. But lots of people, including well-known macroeconomist Steve Keen decided to take the redundancy package and leave. Keen’s course was to be scrapped, and he commented to students that, in the absence of any way of retaking the course, he wouldn’t be able to fail them. Whether this was a joke, or a serious statement, it certainly pointed out the incompetence with which the shutdown was being managed. The University, possibly still smarting from its defeat, took disciplinary action against Keen and has now taken the extraordinary step of referring him to the Independent Commission Against Corruption. I’m sure that ICAC will laugh at this, but it’s the kind of threat that has to be taken seriously. I imagine Keen will face significant legal expenses as a result.

So far, I’ve referred to the University, but obviously these decisions were made by actual people, and those at the centre appear to be:

Kerri-Lee Krause, pro vice-chancellor (education) (quoted in the Oz story)
and
Clive Smallman, Dean of Business

The vice-chancellor of UWS, Janice Reid hasn’t made any public statement as yet, AFAIK. If she has any care for the reputation of UWS, and her own, she needs to abandon this vindictive attempt at prosecution, and pull these bullying bureaucrats into line.

More at Catallaxy – on this occasion, I agree entirely.

Note – if you follow the Catallaxy link, do yourself a favor and skip the comments thread. Australia’s centre-right intelligentsia living up/down to its usual standard.

If there were still magazine stands, I’d be all over them today. Three pieces of mine have (coincidentally) come out on in the last day or so, in fairly disparate publications

* In Aeon (a new British “digital magazine of ideas and culture, publishing an original essay every weekday”), I have a followup to my first essay there, which argued the case for a Keynesian utopia, with a drastic reduction in market working hours. In my follow-up, I look at the environmental sustainability of the idea. The tagline for the essay “For the first time in history we could end poverty while protecting the global environment. But do we have the will? ”

* Continuing on the utopian theme, Jacobin magazine has published The Light on the Hill, a reply to Seth Ackerman’s piece on market socialism

* And, at The National Interest, a piece with the self-explanatory title, Will Banks Finally Be Brought to Heel?

While I’m plugging my own work, I thought some readers might be interested in this paper on financial liberalisation and asset bubbles, written in the leadup to the global financial crisis. There’s not much I would change now, and it’s still a pretty good summary of how I think about the financial bubble that created the crisis. The linked working paper version is from 2004, and it eventually appeared in the Journal of Economic Issues, the main journal of the institutionalists who carry on the tradition started by Veblen and Commons in early C20. Not surprisingly, given this obscure outlet, it hasn’t had a lot of attention.

Last time I paid attention to Opposition climate spokesman Greg Hunt, he was talking to the Oz, making absurdly inflated claims about the impact of a carbon price[1] on household electricity bills. Now he’s at it again, with a statement to Imre Salusinszky at the Oz, claiming that I endorsed Jonathan Moylan’s (reported) actions in the Whitehaven hoax, and that I supported market manipulation more generally. From that, he draws the conclusion that I have breached my legal obligation under the Public Service Act to comply with the law in all matters relating to employment, and therefore that I an not a fit and proper person to be a member of the Climate Change Authority. Here are the money paras from Salusinszky’s email to me and Hunt’s statement to the Oz

Greg Hunt says your public support for Jonathan Moylan raises a potential conflict with your role on the Climate Change Commission (sic), because the public service code of conduct deems that “an APS employee, when acting in the course of APS employment, must comply with all applicable Australian laws.” Hunt’s point is that by supporting Moylan you are implicitly endorsing stock market manipulation.

Under the Public Service Act it is clearly inappropriate and irresponsible for Statutory office holders to be supporting market manipulation and the use of false and misleading information. This raises deep questions in terms of both the Act and the public service Code and values on a number of fronts. The simple answer is that no public official should ever be endorsing the use of false and misleading information to manipulate the share market

Obviously, this is a grotesque misrepresentation. My view of Moylan’s (reported) actions was summed up by the observation “I’m not a big fan of hoaxes”[2]. My posts on the subject were not concerned with the ethics of the hoax, but with the absurdity of the reactions to it.

But the claims that I acted unlawfully under the Public Service Act take Hunt’s silliness out of the normal political category, and well into the realm of defamation. Of course, Hunt is safe enough so far. I haven’t got the time, energy or financial resources to pursue him, other than through this blog. News Limited is a different matter. Given their deep pockets and demonstrable history of malice towards me, they’ll make a tempting target if they are silly enough to publish Hunt’s libels. I don’t usually read the Oz, but I will certainly do so with care tomorrow.

Update When he was advised of my response by Imre Salusinszky, Hunt backed off, though with bad grace (he stated to me in email that it was more than he thought I deserved) and in a way that makes his claim of a breach of the Public Service Act even more nonsensical (leaving aside the fact that, at least according to Bernard Keane, I’m not covered by the Act anyway). The resulting article, in which Hunt also attacks Clive Hamilton, is here.

While checking on that report, I found another Hunt piece, a passionate defence of free speech against the “un-Australian” threat of litigation. Published in the Oz, of course, and only five days ago.

Finally, I should say that I don’t have any complaints about Salusinszky’s actions in this matter. He advised me of the accusations and took my response back to Hunt. The report as published is an accurate representation of what I wrote.

fn1. A policy he supported for decades, until it became necessary to oppose it.
fn2. I never mentioned Moylan by name, and I have no knowledge as to whether he acted as reported and, if so, whether this constituted manipulation of the share market. As I said on Twitter, that’s his problem, not mine.

My essay in (the new and exciting) Aeon magazine looking at Keynes’ suggestion that we could achieve decent living standards for all with an average of 15 hours a week of market work has had mostly favorable responses. But Kevin Vallier at the Bleeding Hearts Libertarian blog has now written a lengthy response and he doesn’t like it. Unfortunately, that’s about all I can say, since he throws a lot of adjectives (sectarian, morally impoverished and so on) at me without actually spelling out an objection.

Vallier’s response is in three parts. The first is a lengthy and fairly accurate, though hostile, summary of my general political position. He doesn’t offer a substantive criticism, but snipes about semantics Vallier objects, for example, to my “derisive” use of the term “market liberalism’ to describe “the sum total of pro-market economic thought that has had some influence over the last fifty years”. In fact, as I said in Zombie Economics, I picked the term precisely to avoid the pejorative connotations of the more commonly used “neoliberalism”[1]. What does Vallier propose here? I can’t spell out “the sum total of pro-market economic thought that has had some influence over the last fifty years” every time I want to refer to the ideas I’m criticising. In essence, I think he is upset that, by giving any name to the dominant ideas of recent decades, I am pointing out that they represent an ideology, with a history, rather than a set of timeless truths.

The second part of Vallier’s response is a summary of the main argument of my essay, but so brief that a reader who didn’t follow the link would have a very limited idea of what I was saying. The third part criticises me for advocating “coercion” against people who want to work hard and make money. Vallier doesn’t say what he means by this. The obvious incorrect inference, drawn by quite a few of his readers, is that I’m advocating statutory limits on hours of paid work[2]. However, he doesn’t seem to mean that. Rather, he seems to object to high income earners being required to pay taxes to support people who don’t work.

But this raises a puzzle. The only policy proposal I discuss in any detail is that for a guaranteed minimum income. But Vallier supports this – in fact, it’s pretty much the central distinction between Bleeding Heart Libertarians and the regular Republican+legal drugs kind.[3] So, is he inferring (correctly) that I’d propose a higher minimum than the BHLs? Or something else? I really don’t know.

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A new sandpit for long side discussions, idees fixes and so on.

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Many of you will have heard by now of the tragic death, by suicide, of Aaron Swartz, who was facing felony charges for an alleged attempt to distribute academic articles free of charge. It’s probably inevitable, as Henry Farrell says at Crooked Timber, that coverage of Aaron Swartz’ tragic death will focus narrowly on the story of Aaron as persecuted hacker. My main debt to him is almost entirely outside the tech sphere in which he made such big contributions. Early on in my blogging career, I came across the rightwing myth, that bans on DDT, inspired by Rachel Carson cost millions of lives. In fact, this was one of my first encounters with the rightwing parallel universe with which we are all familiar nowadays. At the time, most people hadn’t woken up to this, and the DDT myth was promulgated with great success. Tim Lambert and I spent years fighting the myth, ending up with this piece in Prospect. Along the way, we discovered the surprising fact that the myth was originally pushed by the tobacco industry, as a flank attack on public health bodies like WHO, which were trying to fight tobacco, and had (quite correctly) scaled back use of DDT, after early campaigns were defeated by the growth of resistance.

A crucial piece of the puzzle came from Aaron, who pointed out the central role of Roger Bate, an all-purpose anti-science activist based at the American Enterprise Institute (he’s largely moved on from DDT these days and is now fighting “counterfeit”, that is, unlicensed, versions of patented drugs). The DDT myth lives on in various corners of the blogosphere and still pops up from time to time in the mainstream media, but it’s now at least as easy to find refutations.

I honestly can’t imagine how someone could pack so much achievement into 26 years. Aaron’s loss is a tragedy for all of us, and the vindictive campaign against him by the Massachusetts prosecutors office (whose head, Carmen M. Ortiz, is regularly mentioned as being destined for higher office) was a crime.

I’m not a big fan of hoaxes, but the Whitehaven coal hoax (or rather, the reaction to it) has certainly provided plenty of teachable moments. Media stories are still calling it a $300 million hoax (while throwing stones at online reporting H/T Megan), and suggesting that Mums and Dads are big losers. Now we have some actual data, showing that clients of Morgan Stanley and Macquarie gained from the trades made during the hoax while those of Citigroup and UBS lost. [1]

Given the claim that hoaxes like this might destroy faith in the stock market, it’s worth looking at the track record of some of these banks. Looking just at the last few months, we have:

Morgan Stanley fined over Facebook IPO, 19/12/12
Citi fined $2 mln over Facebook IPO October 2012
Deutsche Bank, UBS Convicted by Milan Judge for Fraud Role
19/12/12

UBS in particular has a rap sheet so long that Bloomberg news recently published a call for it to be shut down

By comparison with these global titans, Macquarie Bank looks pretty good, despite being well-known as a sharp-elbowed practitioner of regulatory arbitrage
Regulator eyes millionaires factory

It’s now clear that this systematic criminality is part and parcel of modern financial markets, and that nothing can or will be done about it. After HSBC got a slap on the wrist for a long-term money laundering operation on behalf of drugdealers, dictators and terrorists, the US Department of Justice openly admitted that the big banks are not only too big to fail, but too important to be subject to the law. Modest fines are just a cost of doing business, exactly as they are for other businesses that routinely operate at the edge of, or outside the law.

Perhaps the clients of these firms are unaware of these facts. If so, this event might help to inform them. If not, they can scarcely complain about something as trivial as a hoax press release.

fn1. Apparently Morgan Stanley bought about $2.6 million of shares, which would imply a profit of around $500k, a significant sum, but several orders of magnitude below the $300 million quoted

Continuing on silly claims about the Whitehaven hoax, the figure of $300 million is being bandied about as the cost to Australia’s Mums and Dads. I haven’t checked, but I assume that this is the change in market capitalization of Whitehaven from the opening to the point at which the hoax was exposed. That is, it’s the amount that would have been lost if all the shares in the company had been sold at the bottom, assuming this was feasible, which it isn’t. Of course, an equal amount would have been gained by the buyers.

But, ever vigilant on behalf of Australia’s Mums and Dads (I’d like extra bonus sympathy as a Grandad!), I thought I would check to see if any such outrages are continuing. It turns out that the All Ordinaries index has fallen 16 points, or about 0.4 per cent, since 10am. Assuming a market capitalization of 1.2 trillion, that’s nearly $5 billion ripped from our parental pockets in the course of a single morning. Almost certainly, some of this due to spurious rumors, some of which may have been deliberately spread.

Can’t something be done about this? Won’t somebody think of the children?

PS: I see in comments that Alison Parkes has made a similar point

I don’t have a strong view on the hoax announcement that ANZ had withdrawn its support for the Whitehaven coal project. However, I do have some thoughts on the widespread claim that “Mums and Dads” lost significant sums of money as a result of the short-lived fall in share prices that ensued.

First, the claim is undoubtedly true. By the time they have enough money to invest in, or speculate on, the share market, the great majority of Australians have children. Nathan Tinkler, for example, is a father of four. Gina Rinehart is, at least according to her kids, a spectacularly bad mother, but she’s a mother all the same. The unremarkable fact that most owners of shares have children does not entitle them to any particular sympathy.

More importantly, this was a zero sum event. For every Mum, Dad, or childless person who lost money by selling at the bottom, another gained by buying.

Finally, what kinds of Mums and Dads lost money on this event? Anyone who left their investment portfolio unchanged over the course of the day was unaffected. So, the losers fall into two groups
(a) Unsuccessful speculators, who might be better advised to spend more time with their kids and less time playing the market
(b) A few unlucky parents who shifted their long-term investments the right way (that is, out of coal) but at precisely the wrong time

As regards Mums and Dads in group (b), I offer the consolation that, while they didn’t get the timing precisely right, a decision to sell coal stocks will very probably turn out well in the long run. And, as far as investing is concerned, getting out of coal is certainly the best thing they could do for their children.

At the recent American Economic Association meeting in San Diego, Brad DeLong chaired a panel on ” Stimulus or Stymied?: The Macroeconomics of Recessions“, and has posted a transcript. Paul Krugman was there and picked up my claim that macroeconomics has, on balance, gone backwards since 1958. I’ve extracted his section here. Lots of useful stuff, but I’d stress this:

the whole basis on which we constructed monetary policy during the Great Moderation, which is that stabilizing inflation and stabilizing output are the same thing, is all wrong: you can have a sustained period of low but not negative inflation consistent with an economy operating far below its potential productive capacity. That is what I believe is happening now. If so, we are failing dismally in responding to this economic crisis. This is in contrast to what some central bankers are saying—that we have done well because inflation has stayed relatively stable.

To push this a bit further, I’d argue that there will be no real recovery as long as central banks continue to treat the inflation-targeting polices of the (spurious) Great Moderation as the pre-crisis normal to which we should strive to return

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… if their a**e was on fire. That’s just about literally true of Australia’s climate delusionists. As the hottest temperatures on record set off the predictable (and predicted) bushfires, they keep on with the same old stuff. This Catallaxy thread has it all, if you can stomach it – bogus statistical claims from fools too ignorant to estimate a trend line and too lazy to learn how, silly IPCC and BOM conspiracy theories, absurd economic alarmism about the allegedly catastrophic effects of the carbon price, CO2 as plant food, and so on. Catallaxy’s main rival in the lunar right stakes, the Oz, chimes in with an editorial snarking about Al Gore. Meanwhile, Christopher Monckton has teamed up with pastor, creationist and bigot Danny Nalliah, who blames the bushfires on God’s wrath, to promote an Australian version of the UK Independence Party.

There is no possible evidence or argument that can shift these guys. The only consolation is that, while ignorance is strength in the short run, a political movement that relies on delusion will fail in the end. The US Republicans, and their supporting apparatus of thinktanks, media outlets and blogs have found that out, having lost both elections and credibility. The same is happening here, particularly with respect to alarmist claims about the devastating effects of pricing carbon.

Meanwhile, back in the real world, I’m starting a long-postponed project on bushfires and climate change with a former postdoc of mine who’s been working in the US for some years and is back for a long visit, having arrived just as the Tasmanian fires started it.

Roger Farmer, professor of economics at UCLA, has sent a response to my post on the fiscal multiplier, which is over the fold. I’ll make some substantive points in comments, but I’d like to start by saying that this is a good example of a discussion to which blogs are ideally suited. Contributions from people like Roger who have something important to say, but not the time or inclination for a regular blog, make it even better.

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A new sandpit for long side discussions, idees fixes and so on.

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Much of the recent discussion in the “state of macroeconomics” has concerned the question

* Is macroeconomics making progress?
* If not, when did it stop?

I’m not going to survey the whole debate, but I will point to a good contribution from Robert Gordon (linked by JW Mason in comments to a previous post). Gordon argues that 1978-era New Keynesian macro is better than the DSGE approach dominant today. That implies 30 years of retrogression.

My own view is even more pessimistic. On balance, I think macroeconomics has gone backwards since the discovery of the Phillips curve in 1958 [1][2]. The subsequent 50+ years has been a history of mistakes, overcorrection and partial countercorrections. To be sure, quite a lot has been learned, but as far as policy is concerned, even more has been forgotten. The result is that lots of economists are now making claims that would have been considered absurd, even by pre-Keynesian economists like Irving Fisher.

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The biggest theoretical issue in macroeconomics is “what causes unemployment”. As discussed in the last post, the classical answer, that unemployment is caused by problems in labor markets, is obviously wrong as an explanation of the simultaneous emergence of sustained high unemployment in many different countries. Unemployment is a macroeconomic problem.

The central macroeconomic policy issue, then, is “what, if anything, can macroeconomic policy do to move the economy back to full employment”. If you accept that, under current conditions of zero interest rates, there’s not much positive that can be done with monetary policy[1], and you stay within the bounds of mainstream policy debate, this question can be restated as “how effective is expansionary fiscal policy” or, in Keynesian terms, “how large is the fiscal multiplier in a depression”.

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Following up my previous post, I want to look at the main areas of disagreement in macroeconomics. As well as trying to cover the issues, I’ll be making the point that the (mainstream) economics profession is so radically divided on these issues that any idea of a consensus, or even of disagreement within a broadly accepted analytical framework, is nonsense. The fact that, despite these radical disagreements, many specialists in macroeconomics don’t see a problem is, itself, part of the problem.

I’ll start with the central issue of macroeconomics, unemployment. It’s the central issue because macroeconomics begins with Keynes’ claim that a market economy can stay for substantial periods, in a situation of high unemployment and excess supply in all markets. If this claim is false, as argued by both classical and New Classical economists, then there is no need for a separate field of macroeconomics – everything can and should be derived from (standard neoclassical) microeconomics.

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Jenny Macklin is still dealing with the response to her terse answer “I could” to the question of whether she could live on unemployment benefit. But the policy shift that led her in front of the cameras is the product of a complicated history that might be worth explanation. I’m going to go from memory, and invite commenters to supply links or corrections for my recollecitons.

The story starts in the 1960s, at a time when unemployment was very low, and spells of unemployment very short. Whether in fact or reality, the archetypal single parent was a widow. The vast majority of income support took the form of age pensions, which were means-tested and set at a very low level. Around this time Ronald Henderson estimated a poverty line at 25 per cent of average weekly earnings (AWE), well above the basic pension.

Over the late 1960s and early 1970s, pensions were increased to approximately the Henderson poverty line. In combination with some additional concessions and the introduction of Medicare, these changes virtually eliminated poverty among the old.

The changes to the value of the old age pension, relative to weekly earnings have been sustained.[1] Initially, unemployment benefits and supporting parents benefits (which replaced the former widows pension, IIRC) rose in line with the old age pension. Both were indexed to the CPI, but ad hoc adjustments kept them broadly in line with AWE. But the Howard government replaced CPI adjustment with AWE adjustment for pensions, while retaining indexation to the CPI for unemployment benefits. The result has been that the value of UB (now Newstart or some similarly Orwellian name) has fallen relative to both pensions and incomes generally.

Around 2006, the Howard government turned its attention to supporting parents, introducing a rule that recipients would go on to UB when their youngest child turned 8. At the time, the measure was strongly attacked by Labor. Here’s Penny Wong. Existing recipients were exempted (the term “grandfathered” does not seem apposite here), with the implicit promise that they would remain under the old rules. In the search for a surplus, the Gillard government decided to abandon that promise and push existing recipients with children over 8 onto UB. The question that got Macklin into trouble was about that decision.

There is a defensible case for setting the old age pension higher than UB, particularly if the government pursues active labour market policies to help the long-term unemployed find jobs. The pension needs to be enough to live on for decades, over which time household goods have to be replaced, and other long-term expenses addressed. Most spells of unemployment last only a few months, so various kinds of expenditure can be deferred. But the gap that has emerged over the past 15 years is much larger than can be justified in this way, particularly in the case of supporting parents, who are more likely to spend long periods out of employment. Instead of completing the Howard agenda, the Gillard government ought to be looking at increasing the real value of benefits, allowing the unemployed to share in some of the growth in incomes for the community as a whole.

fn1. In other respect, showever, the generosity of the pension system peaked around 1980. Means tests, which were eliminated in the 1970s, were reintroduced in the 1980s, and the pension age has gradually increased.

She says “I could”, but you watch the video, Jenny Macklin’s answer here is very odd. She ducks the question once, has it put again, and is asked “Could you live on the dole”. She says “I could”, without any elaboration then goes straight back to spin. Her office then tries to delete it from the transcript.

It’s such a spectacular screwup, I think she must have imagined she was saying something different. But, whether or not that’s right, she, and the government, deserve all the pain they get for this piece of nastiness.

When econbloggers aren’t arguing about cyborgs, they spend a fair bit of time arguing about the state of macroeconomics[1], that is, the analysis of aggregate employment and unemployment, inflation and economic growth. Noah Smith has a summary of what’s been said, which I won’t recapitulate. Instead, I’ll give my take on some of the issues that have been raised (what follows is inevitably monkish wonkish)

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A quick post to wish my readers all the best for 2013. I’ll put up some substantive posts and open threads soon, but in the meantime, feel free to express your wishes for 2013. Just for this post, I’d like everyone to accentuate the positive and avoid conflict with other commenters. Normal service will resume soon.