Monthly Archives: May 2013

Music Monday: Burning DOWN the House-TWICE!

 

The Oklahoma Tornado Seen From Space (Video)

 

When severe weather conditions developed over Oklahoma on May 20, NOAA’s GOES-13 satellite was switched to capture an image every 5 minutes as opposed to the normal interval of 30 minutes. The result is this amazing NOAAVisualizations high speed animation. “The added frequency greatly assists …
Read More

The Oklahoma Tornado Seen From Space (Video)
Big Think Editors
Wed, 22 May 2013 16:29:46 GMT

Epstein on the IRS and more

The larger answer here seems pretty clear to me too. Why do we have tax-exempt status for any political groups? Actually, why do we have tax-exempt status for any groups at all? It’s easy to be a non-profit — just don’t make any money.  When you look at what a lot of “non-profits” do, how efficiently their money is used, the idea that we should be subsidizing most of them seems pretty silly. If we chucked out the whole tax-exempt business entirely, and allowed people to give money to any group they feel like giving it to without tax preference one way or another, the whole temptation for the IRS to hand out this subsidy in nefarious ways would vanish.

Epstein on the IRS and more
John H. Cochrane
Wed, 22 May 2013 16:44:00 GMT

Music Mondays: The Platters–The Great Pretender

Public Opinion and Syria

While Assad is terrible and many of his neighboring nations and citizens want him gone, they also don’t want outsiders involved.  US or European involvement won’t accomplish anything good.

Marc Lynch recently cited some interesting results from a Pew survey of public opinion on Syria in many countries:

In the most recent Pew survey, for instance, most Arabs expressed disdain for Assad — but large majorities opposed Western arming of Syrian rebels in every country polled except Jordan.

That finding suggests that outside interference is strongly opposed regardless of which party to an ongoing conflict might benefit from it. Most people in other Arab countries don’t want Western governments to provide weapons to the opposition:

SYRIA04

Opposition to arming Syrian rebels remains strong no matter where the aid comes from. One might think that aiding an insurgency against Assad would be a popular option in some Arab countries when the aid is coming from Arab governments, but in fact the opposite is true. Arab government support for the Syrian opposition  isn’t much more popular than Western support:

SYRIA03

This is consistent with past surveys of regional opinion, which found little support for Arab-led interventions and even less support for Western intervention. Public opinion in the U.S., Europe, and Turkey is likewise heavily against arming the Syrian opposition:

SYRIA02

The results from Turkey may be the most significant. While Syria hawks in the U.S. want to cite U.S. interests in allied security as a reason to intervene, a policy of backing the Syrian opposition militarily continues to be overwhelmingly unpopular in Turkey. Since most Turks are against having outside governments interfering in Syria, and previous surveys have shown strong opposition to Turkish involvement in the conflict, that makes it very unlikely that the Turkish government will endorse more aggressive policies in Syria. Greater U.S. involvement in Syria would be as deeply unpopular in Turkey as the Iraq war was, and the unpopularity of a Syrian war in Turkey would make it politically difficult for Erdogan to participate in such a war.

Public Opinion and Syria
Daniel Larison
Wed, 08 May 2013 19:08:44 GMT

Music Monday: REM Shiny Happy People (1991)

How the Keynesians miss the bigger picture

 

Another day, another data point suggesting a zero fiscal multiplier:

The number of Americans filing new claims for unemployment benefits dropped to its lowest level in nearly 5-1/2 years last week, signaling labor market resilience in the face of fiscal austerity.

On the other hand, Matt Yglesias points out that most pragmatic economists are at least partly Keynesian:

A meta-point that is a little underappreciated here is that private sector macroeconomists all use models that embed broadly “Keynesian” assumptions about the behavior of the economy. Government economists at the OMB and CBO do it too, but they’re really just following the lead of what you would find at any bank or consultancy. Obviously that doesn’t prove that these models are correct—in fact that record of forecasting accuracy isn’t stellar—but I don’t hear much from anti-Keynesian types about why their preferred models have failed the market test.

If I were going to treat Yglesias the way he recently treated Alex Tabarrok, I’d say he’s attacking a strawman.  But Yglesias (and Tabarrok) obviously understand the opposing argument.  Nonetheless I find many people do misunderstand what “monetary offset” is all about.

It’s quite possible to write down a model where, ceteris paribus, fiscal austerity reduces output, and monetary stimulus (such as the recent actions of the Fed) raise output.  You can call that model “Keynesian,” and attach a positive multiplier to fiscal policy if it makes you feel good.  But what matters are counterfactuals.  And if more fiscal stimulus leads to less monetary stimulus (as the Fed claims!), then the fiscal multiplier estimates will be nearly worthless.  This is a subtle game theory problem, which as far as I can tell hasn’t even been considered by many Keynesian economists.

One can talk all one wants about Keynesian forecasters predicting that fiscal austerity would have a sharp contractionary impact in 2013.  But the fact of the matter is that the consensus forecast for 2013 from all these supposedly Keynesian economists was about the same as for 2012, despite a much higher level of fiscal austerity in 2013.

By the way, the real “market test” isn’t what forecasters think, it’s what markets think.  And as I’ve pointed out numerous times, the markets are market monetarist.

PS.  Here’s the sort of slowdown expected by The Economist:

Screen Shot 2013-03-13 at 8.52.49 PM

Yes, this could still happen.  Market monetarism says fiscal stimulus estimates are nothing more than estimates of central bank incompetence.  And central banks are far from perfect.  But I continue to believe that 2% RGDP growth should be the baseline forecast for 2013.  Now we’ll just have to wait and see just how incompetent the Fed actually is.

How the Keynesians miss the bigger picture
ssumner
Thu, 09 May 2013 16:56:43 GMT

A tale of two business cycles: 1981-86 & 2007-13

 

A friend and reader wrote to me:

You may already have done this, but if not, I desperately need a visual way to show people what a V-shaped recession looks like in terms of the L-shaped depression/recession we’re in.

And I sent her the panel below. I hope she finds it useful!


Tale of two cycles

A tale of two business cycles: 1981-86 & 2007-13
Marcus Nunes
Sat, 04 May 2013 13:34:56 GMT

Music Mondays: Dire Straits–Sultans of Swing

Wesley Mouch Update

Obama’s energy policy is not going to be good part of his legacy.  Too much resistance to fraking and too much support for alternative energy.

Veronique de Rugy writes,

In 2009, Fisker received a $529 million federal loan from the Department of Energy’s ATVM program. According to the New York Times, two years after receiving the loans, the company repeatedly missed production targets and other deadlines. They’ve now fired 75 percent of their workforce and hired bankruptcy advisers. It has not built a car since July 2012. That lead the DOE to suspend their support, after having guaranteed $192 million of the $529 million loan. Like Solyndra, taxpayers will foot that bill, minus the $21 million that the government managed to seize from the company’s cash reserves.

At the time that the loan was made, I hailed it.

Forget a carbon tax. Forget cap and trade. Steven Chu is going straight to picking winners and losers.

Two months later, I was still ecstatic.

The American people are being forced to participate in a venture capital fling in which they take most of the down side and none of the up side. And it is not being debated. Nobody has to come before the public and explain themselves. If you call yourself a progressive, are you proud of this?

If there were any justice in the world Steven Chu would be occupying a cell with Bernie Madoff.

Wesley Mouch Update
Arnold Kling
Sun, 28 Apr 2013 23:20:30 GMT