US Politics: Opening Pandora's Box

[Mudguard]

1 hour ago, OldGimletEye said:

https://www.washingtonpost.com/news/wonk/wp/2017/02/15/austerity-was-a-bigger-disaster-than-we-thought/

At this time, I'd like to give Alberto Alesina, Swabian Housewives, and the Republican Party a big round of applause.

Good one! Good one! You did a bang up job there!!

Unfortunately, the NBER working paper cited by Washington Post article is not freely available and there's no description in the WP article of how the model was constructed, so it's impossible for me to form any opinion regarding the conclusions of the paper.  There certainly isn't any consensus right now among economists that austerity under current conditions doesn't work.  I'd also point out that NBER working papers have not been peer reviewed.  Instead, they function to stimulate discussion and revisions to the paper before publication, so I'm not ready to call this matter decided yet.

[OldGimletEye]

Just now, Mudguard said:

Unfortunately, the NBER working paper cited by Washington Post article is not freely available and there's no description in the WP article of how the model was constructed, so it's impossible for me to form any opinion regarding the conclusions of the paper.  There certainly isn't any consensus right now among economists that austerity under current conditions doesn't work.  I'd also point out that NBER working papers have not been peer reviewed.  Instead, they function to stimulate discussion and revisions to the paper before publication, so I'm not ready to call this matter decided yet.

Yeah, well sure John Cochrane will probably will disagree. And so will Alberto Alesina. Most of the economist that believe in the Real Business Cycle probably don't think austerity was that harmful. But, those economist who don't use the RBC model do  think it was harmful, which I'd say is the majority.

The fact of the matter is that the RBC model makes some rather fantastic assumptions, like price flexibility , Walrasian market clearing, perfectly competitive firms, and no credit constrained consumers. Now if you want to argue that those things are actually real, go right on ahead.

Good luck though.

Also, there is plenty of evidence about fiscal multipliers out there and that they were rather high. And even the IMF has said it underestimated them. This argument has been going on for a while and there is plenty evidence out there about fiscal multipliers. And there are strong theoretical reasons to believe they are high when you hit the ZLB. Also a while back I posted a link showing evidence of hysteresis effects in Europe because of austerity. So yeah, besides this one paper, there are plenty of reasons, and other papers, to believe that austerity was an effing disaster.

ETA:

And as I pointed out in another thread, Cochrane made some blinding dumb comments when this whole debate started. And Alesina's paper which made the case for "expansionary austerity" was shown later to be flawed by the IMF.

Also the many of the same economist who preached austerity where the same ones who were going around crying about "rampant inflation just being around the corner". Except it never  happened, meaning they were using a very bad model.

But hey, you know, if you want to "teach the controversy" go ahead, I guess. Your arguments here are mainly nonsense.

[White Walker Texas Ranger]

1 hour ago, Nasty LongRider said:

Pence as POTUS is a really bad deal, different than Orange Shit Thing bad, but still bad.  Here's a post of mine from a previous US Politics thread that discusses some of his record as Gov of Indiana: 

Yeah, he's a peach

I strongly disagree with Mike Pence about almost everything, but if he were President, I at least wouldn't be worried about a nuclear war in the next 4-8 years.

[Mexal]

This gives me faith...

 

[Manhole Eunuchsbane]

1 hour ago, Altherion said:

You must live in a very sad world wherein nearly half of the country's population consists of terrible people. I don't think either Trump's opponents or his supporters are uniformly or even overwhelmingly bad -- for the most part, they are good people who were hooked by one or the other side of an intense propaganda war that the population is being subjected to right now.

Have to agree, despite my Trump hatred. This extreme partisanship and divisiveness that this country has been experiencing is obviously not working. We have to be able to communicate with one another in more civil terms. The screaming and finger pointing is getting us nowhere fast. 

[Manhole Eunuchsbane]

16 minutes ago, White Walker Texas Ranger said:

I strongly disagree with Mike Pence about almost everything, but if he were President, I at least wouldn't be worried about a nuclear war in the next 4-8 years.

BINGO. He is an order of magnitude better than Trump. At least he has a veneer of competence. Don't care for the evangelical bullshit, but I'd swap him for Trump in a New York second.

[Manhole Eunuchsbane]

18 minutes ago, Mexal said:

This gives me faith...

 

These bozos have got to be getting high off of their own farts if they think they're going to win a fight with the Intelligence Agencies. Fucking idiocy of the highest order.

[all swedes are racist]

2 hours ago, Altherion said:

You must live in a very sad world wherein nearly half of the country's population consists of terrible people. I don't think either Trump's opponents or his supporters are uniformly or even overwhelmingly bad -- for the most part, they are good people who were hooked by one or the other side of an intense propaganda war that the population is being subjected to right now.

lol. I work in retail, and buddy, let me tell you that ratio is waaaay higher than half

[Altherion]

15 minutes ago, supernintendo chalmers said:

lol. I work in retail, and buddy, let me tell you that ratio is waaaay higher than half

This is only tangentially related to this thread, but the issue there is not that more than half of all the people you interact with at your workplace are terrible, but that people placed in a dehumanizing environment will tend to act worse than generally do. There are many such places and situations in our society and if you spend a lot of your time there, it appears that people are bad, but most of the fault lies with the social structures and not with the people who are forced to navigate them.

[Mudguard]

56 minutes ago, OldGimletEye said:

Yeah, well sure John Cochrane will probably will disagree. And so will Alberto Alesina. Most of the economist that believe in the Real Business Cycle probably don't think austerity was that harmful. But, those economist who don't use the RBC model do  think it was harmful, which I'd say is the majority.

The fact of the matter is that the RBC model makes some rather fantastic assumptions, like price flexibility , Walrasian market clearing, perfectly competitive firms, and no credit constrained consumers. Now if you want to argue that those things are actually real, go right on ahead.

Good fuckin luck though.

Also, there is plenty of evidence about fiscal multipliers out there and that they were rather high. And even the IMF has said it underestimated them. This argument has been going one for a while and there is plenty evidence out there about fiscal multipliers. And there are strong theoretical reasons to believe they are high when you hit the ZLB. Also a while back I posted a link showing evidence of hysteresis effects in Europe because of austerity. So yeah, besides this one paper, there are plenty of reasons to believe that austerity was an effing disaster.

ETA:

And as I pointed out in another thread, Cochrane made some blinding dumb comments when this whole debate started. And Alesina's paper which made the case for "expansionary austerity" was shown later to be flawed by the IMF.

Also the many of the same economist who preached austerity where the same ones who were going around crying about "rampant inflation just being around the corner". Except it never  happened, meaning they were using a very bad model.

But hey, you know, if you want to "teach the controversy" go ahead, I guess.

My post only made two points.  First, there isn't yet a consensus about austerity like there is about climate change, which your first paragraph seems to acknowledge.  If there was a consensus, why hasn't Europe given up on austerity already?

The second point was that the WP article was not useful because it barely provides any of the underlying details of the NBER working paper that supports its conclusions.  Without any details regarding the modeling, the WP article merely serves as a source of confirmation bias for people that already agree with its conclusion.  It's impossible to assess whether the NBER working paper has merit or not from the WP article.  

As to your other comments regarding various models, assumptions and fiscal multipliers, I'll just say that I view any economic prediction with a very healthy degree of skepticism precisely because so many economists make errors in assumptions, each model has its limitations, and the liberal use of fudge factors like fiscal multipliers.

[Manhole Eunuchsbane]

11 minutes ago, Altherion said:

This is only tangentially related to this thread, but the issue there is not that more than half of all the people you interact with at your workplace are terrible, but that people placed in a dehumanizing environment will tend to act worse than generally do. There are many such places and situations in our society and if you spend a lot of your time there, it appears that people are bad, but most of the fault lies with the social structures and not with the people who are forced to navigate them.

I think the key word here is terrible. I think petty, rude, self-serving, lazy, unhappy, etc would probably be more fair descriptors. Surely you wouldn't describe 50%+ of the people you deal with on a daily basis as being truly terrible.

[OldGimletEye]

Just now, Mudguard said:

My post only made two points.  First, there isn't yet a consensus about austerity like there is about climate change, which your first paragraph seems to acknowledge.  If there was a consensus, why hasn't Europe given up on austerity already?

Because some people have a strong vested ideological or political interest in pushing it. Others don't want to admit they were likely wrong. Also the Euro is a big factor too. Because policy coordination among countries would be necessary. And that is a reason why the Euro has been a disaster.

Also, if you were little better versed in history you would know the answer. The fact is that we have been thinking about climate change for awhile now. We haven't thought much about liquidity traps since the 1930s. The fact is that a large majority of the profession that they had been defeated or were just an intellectual curiousity. I mean you had people like Robert Lucas running around saying we had solved the issues of the Great Depression, until we didn't. It took awhile for some people to adjust their views, though not all did.

Just now, Mudguard said:

The second point was that the WP article was not useful because it barely provides any of the underlying details of the NBER working paper that supports its conclusions.  Without any details regarding the modeling, the WP article merely serves as a source of confirmation bias for people that already agree with its conclusion.  It's impossible to assess whether the NBER working paper has merit or not from the WP article.  

Don't worry, I'm sure you will be able to get the paper shortly. But, even without the paper, there are strong reasons to believe that austerity was a disaster. And it's not just confirmation bias as you say.

I'm sure if your that interested in reading the paper, you do know how to bookmark things on your browser. I suggest you do it.

Also, I don't need this one paper to tell me that austerity has been a disaster. Because there are others. Though I will read the paper once it becomes free.

Also, I'm quite certain that money matters and can affect output and unemployment. And has throughout history. The question is then once interest rates hit the ZLB, then what happens? I'm pretty certain in this situation fiscal policy becomes effective. That or maybe you figure out some way to change inflation expectations.

Just now, Mudguard said:

As to your other comments regarding various models, assumptions and fiscal multipliers, I'll just say that I view any economic prediction with a very healthy degree of skepticism precisely because so many economists make errors in assumptions, each model has its limitations, and the liberal use of fudge factors like fiscal multipliers.

Well, I have no clue  by what you mean by "liberal use of fudge factors like fiscal multipliers".  

I also get that models can be mispecified. That said, it doesn't mean "golly anything goes!"

Anyway, the problem with fiscal multipliers is they are a bit difficult to estimate. A big reason is basically endogenity issues. Typically, one way of estimating them is by using Vector Auto Regressions. Now the problem with VARs is you have to make some kind of identifying assumption to estimate the model. One way is to order the variables in the VAR in a certain way. Or you might use some kind of exogenous event like military spending or maybe legislative records to identify the model.

None of these methods are as perfect as we would like. They all have varying issues. That said, there are plenty studies out there confirming that the multiplier was likely over one, particularly once interest rates can't be cut any further (or more accurately, the central bank won't raise rates to tamp down inflation). The fact that the studies aren't as perfect, as you might get collecting data from a laboratory, is just life when you are having to work with observational data, which economics often has too.

But, again, it isn't just the studies that are relevant here. Also important here is our priors about how the economy actually works. Some are theoretical matters while other are empirical matters.Is price stickiness real? Most likely. Do markets clear by Walrasian market clearing? Probably not. Does Rational Expectations hold in the real world? Probably not. Are some consumers credit constrained? Probably. Are most firms purely competitive. Probably not. 

Now if you believe:

1. Rational Expections holds in the real world;

2. Markets are Walrasian'

3. There is little price stickiness

4. Few to no consumers are credit constrained

and etc, etc, then maybe your prior is that fiscal multipliers are small. But, I think each one above is pretty hard to defend both on theoretical and empirical grounds. So there is that too.

[ThinkerX]

Got to thinking a bit about Bannon over the past couple of days, as he is a key figure in the Trump Administration with radical views.  In particular, I was wondering about the way he described himself as a 'Leninist' and 'wanted to bring down the entire system,' plus that he seems view world affairs as a 'clash of civilizations.'  This seemed familiar to me.

Then, yesterday, I finally remembered *why* it seemed familiar - that entire view is taken from the 'Turner Diaries,' the 'bible' of the White Supremacist movement.  There are also parallels to what I think of as the 'time travel hoax,' a right-wing meme that toured the internet about a dozen years ago. 

The Turner Diaries is a political manifesto disguised as a novel.  Initially, the MC seems almost sympathetic; an ordinary man, understandably bigoted, living in a version of the US not overly different from the way radical conservatives viewed Obama's reign.  The MC's 'cell' gets activated, and they begin a terror spree.  Part of this spree involves blowing up a federal building where a powerful computer dedicated to surveillance is located; an event copied by McVeigh.  At the same time, the racist movement is allying itself with 'conservative groups' (my term), though the author is clear he regards most of these people as 'useful dupes.'

Via terrorism, election (?), and war, this alliance comes to control large swaths of the country.  It is at this point the internal politicking of the 'racist alliance' (for want of a better term) come into play big time.  Large portions of this alliance are composed of 'normal conservatives' - racist. but still believing in things like elections and courts and not committed to the complete extermination of all nonwhites.  The MC's faction, though holds democracy of any sort in contempt, and supports 'rule by the party.'  Details about the party are sparse, but it seems to be on the communist model.

It is also at this stage that a truly terrifying and cowardly sequence comes into play: basically, the racist movement realizes that the vast majority of whites are against them - they will not willingly abandon democracy, nor will they accept the extermination of nonwhites.  They can't win.  But as the racist's believe themselves good people on a sort of 'divine mission,' they can't give up, either.  They consider unleashing a nuclear holocaust, but that would mean 'good people' (them) killing other 'good people' who are merely misguided.  So apart from a single nuke, they don't. Instead, they get the Russians to nuke the US on their behalf, thus transferring the guilt of genocide from themselves.

Think about it.  Decades ago (the Turner Diaries date from the late 1970's - early 80's - not sure, been a while) the white supremacist movement in the US saw the then USSR as a potential ally in achieving its goals.  In broad outline, the whole thing seems to match Bannon's positions, which is frightening.

 

  

 

 

[Martell Spy]

Fear of Muslims can melt your brain, people.

Quote

 

Does the extent of the leaks worry you? People are using phrases like deep-state coup.

I find those fears overblown. This is a unique case in which someone at the level of the national security adviser was saying things that were not true about his conversations with the government of one of the United States’ two leading adversaries in the world. The fact that people within the bureaucracy wanted to come out—I don’t see that as all that worrisome. I certainly don’t see it as something like a deep-state coup, in your words.

How likely is it that Trump will make a major effort to staff multiple levels of the bureaucracy with allies, and how possible is that for him to pull off?

I think he is going to try. I think that is possible, if he is willing to find people who are willing to deal with Congress and the press and other governments in something other than an angry and conspiratorial way. Anything lower down requires experience with policy areas, whether it’s a country or region or an area like proliferation or counterterrorism. Most of the people in those policy areas have a body of knowledge, which Trump seems to mistrust. If there is a resentment of all expertise, then it is hard to get experts.

Why can’t he staff these positions with Stephen Miller and Steve Bannon types?

The problem is that those nonexperts are going to have trouble winning support from the congressional committees, which know a little bit about the areas they are working on; from foreign governments that may know about the Middle East or Asia a little more; from journalists who cover particular areas. You won’t have a policy if you don’t have people who can draw up a policy.

 

http://www.slate.com/articles/news_and_politics/interrogation/2017/02/james_mann_on_why_michael_flynn_flamed_out_faster_than_expected.html

What Made Michael Flynn Different

With his narrow experience and overt hostilities, Trump’s national security adviser was doomed to fail, says James Mann.

[Martell Spy]

Quote

Another problem for Puzder was Senate Republicans' mounting exasperation with the daily fiascoes emanating from the Trump White House. "They're about out of political capital," one Senate GOP staffer said of the White House. "Every day, they seem to be making it harder for us. They're in a spot where they have to pick their battles."

http://www.politico.com/story/2017/02/how-puzder-fell-235078

How Puzder fell
The labor nominee was hurt by a lack of support from some of the president's top advisers.

Quote

 

To that end, an advocacy group called Free Speech for People (FSFP) has asked New York Attorney General Eric Schneiderman to investigate whether to revoke the charter of The Trump Organization, Inc., due to the president’s ownership stake in the corporation and its alleged history of illegal activity.

The 24-page letter is less interested in new legal arguments, or even in arcane questions of standing, than existing evidence that Trump’s corporate entities are being used to funnel illegal emoluments to Trump. The group’s claims run the gamut from allegations of discriminatory housing practices in the 1970s through last year’s claims against Trump University. In addition to getting around the standing problem, the initiative also sidesteps the need to rope in Congress, the Justice Department, or any other entity disinclined to investigate or question Trump conflicts.

 

http://www.slate.com/articles/news_and_politics/jurisprudence/2017/02/how_state_attorneys_general_could_take_down_trump_over_emoluments.html

This Emoluments Thing Isn’t Going Away

How state attorneys general could take down Trump.

 

“We should not — and cannot — trust this man." A CIA vet on Trump's feud with US spies.
“We’re facing the gravest threat to our institutions and our government since 1861."

http://www.vox.com/conversations/2017/2/15/14623636/donald-trump-michael-flynn-russia-putin-cia-white-house

[ThinkerX]

I find myself doubting the Republicans will take serious measures against the Intelligence Community.  After all, they are quite fond of controlling peoples lives.

But, if they do, perhaps these organizations will finally be restrained and properly reformed.

[DunderMifflin]

Aren't all politicians and their supporters fond of controlling people's lives? Otherwise what's the point of government.

[DireWolfSpirit]

"IVANKA!" LMAO-  

View image on Twitter

 

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Ryan Adams @filmystic

Ivanka you need to stop.@JustinTrudeau @IvankaTrump

6:56 PM - 13 Feb 2017

[DunderMifflin]

President Backstreet Boy's looks and coolness are highly overrated.

ppl act like he's a Kit Harrington when clearly he's not even Richard Madden league 

[DireWolfSpirit]

Its about Effing time!

Apparently Producers on MSNBC and CNN are refusing to book Kelly Ann Conway on their shows due to her repeated falsehoods and misinformation. They are calling her a non credible source.