Not getting how Jevons applies to people. Yes, AI will become cheaper and much more used. But people aren't getting cheaper. Worried that the better analogy is to the horse, not to coal.
Fully agree with you re Giannis; hard to understand the detractors views that seem emotional, and not well thought out.
Greenspan sat by idly watching bank balance sheets balloon both directly and indirectly and did nothing. He could have and should have suggested on the QT ( if that is possible) that the over levered banks sell assets or raise equity.
I cannot stand Obama, HRC, Chuck, Warren, Mamdani, Gavin N and Kamala and i cannot stand Trump, Vance, and any number who blindly follow DT. And yes, i rarely vote due to the awful choices but at times have to which i did for Cuomo ever so reluctantly. Expression of common sense, logic and not craziness puts me in a given camp, so well be it. Little patience for the stupidly and arrogance expressed these days.
As to Social Security, there are many ways to address the issue, but politics and pandering to any number of groups for votes gets in the way. And all too often until we get to a precipice and might go off the cliff, no action will be taken; that is just human nature and appears in the private sector and not just government.
As you know Medicare has IMRAA adjustments for premiums and not sure why a system like that could not be easily implemented to adjust SS payments to high income individuals/families. And yes, its true that for high earners up to 85% of SS payments are taxed at ordinary income tax rates, so could easily just tax them at 100%. Do not have numbers so not sure how much revenue could be derived from that source.
I think you are 100% correct about Giannis. That said his skillset is pretty unique so it will take very specific team building to make things work.
Chat-GPT, Grok and several other LLMs to which I have semi-legal access say pretty much the same thing about regulators encouraging high risk loans.
"Regulators did not actively encourage banks to issue high-risk loans during the 2000s. Instead, the financial landscape was shaped by weakened lending standards and a growing demand for mortgage-backed securities. This environment led to an increase in riskier lending practices."....
"n summary, the push for high-risk loans in the 2000s was primarily driven by market forces and the financial industry's dynamics rather than direct pressure from regulators."
In short I think Lord Acton's aphorism is key.
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks"
I think you are ignoring the politics. Greenspan never did. He did a great job convincing the world that he did ignore politics. The weakening economy deprived Gore of his main campaign theme -- the one Clinton insisted against the facts that Gore run on. It opened the door to Bush "winning." There is, politically, literally nothing more important than an individual quarter of gdp growth if the quarter is the third, with the fourth a close second in importance.
If you insist: First, as the GDP See from Claude fwiw: "It's solidly documented in these sources is the shape of the year: exceptionally strong growth in the first half of 2000 and subdued growth in the second half resulted in a rise in real GDP of about 3.5 percent for the year overall, with the second half sluggish heading into the March 2001 recession. The San Francisco Fed even dates a permanent break in the trend growth rate to the second quarter of 2000. Federal Reserve." Your statement that grwoth was 1.% in q3 and q4 is an average (I assume) and the big problem politically was that q3 was probably (sources disagree) was close to zero.
Second, between June 1999 and May 2000 FOMC raised federal funds rate six times, raising benchmark rate from 4.75% to 6.50%.
Third, from March 2000 to November 2000, the NASDAQ went from 4784 to 2597, while the S& P 500 went from 1379 to 1314. In terms of running on the economy and the tech boom, Gore was denied that opportunity. Did Greenspan plan the interest rate increases to have these economic results, and did he know the probably effect the Presidential campaign? I think the answer is quite obviously yes. Moreover the mild recession that ensued gave Bush the opportunity to put income inequality-enhancing tax cuts in place, with Greenspan applauding -- another political act that was unwise.
Again, subdued growth after extremely strong growth is not in any way shape or form a weak economy. Individual quarters of GDP growth are not very meaningful; you need to look at longer periods.
And again, interest rates are not monetary policy. Monetary policy was not particularly contractionary, it was quite appropriate. Interest rates rose due to the fact that nominal GDP growth had been excessive and investment was strong.
Sorry, but this looks somewhat like motivated reasoning. Policy in the year 2000 is almost the last thing I'd ever criticize Greenspan for. It was fine. The voters are to blame for Bush, not Greenspan. If anything, Greenspan cost Bush's dad the election in 1992.
For exact;y reason 1-4 I wonder what was so great about Greenspan. He just had and incredibley easy ride: sensible low-deficit fiscal policy and no big shocks like COVID or the finanical crisis or the Trump tariffs/deportations.
Link: Philip George: “The riddle of money, finally solved”
"For nearly a century the progress of macroeconomics has been stalled by a single error, an error so silly that generations to come will scarcely believe that it could have persisted for as long as it has done. It is an error that has been committed by John Maynard Keynes and Milton Friedman, John Hicks and James Tobin, Franco Modigliani and Ludwig von Mises, Murray Rothbard and Paul Krugman, and continues to be taught to every economics undergraduate today."
"The error has blinded economists so that, like the seven men of Hindostan, they have mistaken the partial reality that has come within their groping grasp for the whole of reality. And this in turn has divided them into warring sects, looking very little like practitioners of a science and a lot like religious fundamentalists. Keynesian has poked fun at monetarist. Monetarist has ridiculed Keynesian. And both have mocked Austrian and been mocked in return..."
Link Richard Werner:
Prof. Werner brilliantly explains how the banking system and financial sector really work. – YouTube
Steve Keen was right: "Banks don’t “intermediate loans”, they “originate loans”.
The "banking system" has very little to do with macroeconomics. Almost everything in macro would continue to function essentially unchanged, in a hypothetical economy with no banks and no lending at all.
You're all lost. Greenspan was the direct cause of Black Monday. The Great Moderation was because banks don't lend deposits. And he created the housing bubble. All of this was precisely predicted by Dr. Leland James Pritchard, Ph.D. Chicago 1933, M.S. Statistics Syracuse, Phi Beta Kappa in May 1980 in IMTRAC.
I don’t think this is factually correct. Look at the GDP in the third and fourth quarters of the year 2000. Growth was extinguished. Look at the timing of the rate increases. It’s cause and effect. Then look at the Fed support of the horrendous bush tax cuts.
I have two problems with your comment. First, when you tell me something I said is not factually correct, you need to tell me which facts are false. You didn't, because my comment was factually correct. Second, you raised a new point, which was itself factually incorrect. Growth was not extinguished, it continued in Q3 and Q4 at roughly 1.4%. That's below trend, but perfectly fine for an economy that was growing at an unsustainable 7.5% in Q2. That's why unemployment didn't rise. GDP growth is always a bit noisy, quarter by quarter.
Interest rates are not monetary policy, they reflect the economy more than anything the Fed was doing. Don't engage in "reasoning from a price change".
I have no problem with your claim that in retrospect Greenspan was wrong about the danger of budget surpluses, you were completely correct about that.
"there is no reason to believe that he would have done better than Bernanke during 2008, indeed his public comments about monetary policy during 2008-09 suggest that he was just as off base as the Fed."
On August 4 2008 Greenspan cited equity prices being at 2006 levels as an indicator of emerging inflationary risks. This was a mistake. This is also an indication of greater willingness to use asset prices to infer policy stance compared to Bernanke, thus there is a chance Greenspan would have done better than Bernanke in September 2008. In any case, Greenspan changed his mind much faster than Bernanke, the key piece of evidence is August 11 2008 FT piece "Price unlikely to spike soon, says Greenspan", here is the key part:
"
Mr Greenspan said financial speculation in oil was unlikely to resume in the near term and “there is little prospect of a renewed spike in oil while cyclical weakness continues”.
If he is right, central banks around the world need not worry about the risk that oil prices might rebound in the absence of a positive surprise on global growth. All other things being equal, this would imply a looser path for monetary policy."
" if a European Bill Gates tried to give $100 billion to charities fighting disease and poverty in Africa, instead of giving the money to his spoiled kids, they’d probably put him in jail."
Ok this statement was clearly a joke but I have no clue how much of a joke and how much of this is some cultural commentary I don't understand. What is the meaning of this? Is it like "the french due to cultural norms don't do this" or "Historically french billionaires are more local" or "french law makes Philanthropy a bad idea" Or something else entirely that I don't understand.
Please if anyone could explain this I would appreciate it.
In many European countries, the wealthy are required by law to bequeath more than half of their estates to their children. There's been a lot of recent discussion of this odd policy, which I examined a few years ago in a blog post. Here's AI Overview:
"Prevalent in civil law jurisdictions across mainland Europe (e.g., France, Germany, Italy). The exact fraction depends on the number of children. For example, under French law, if a person leaves behind one child, half of the estate goes to the child; for two children, two-thirds; and for three or more children, three-quarters."
(BTW, I'm not as anti-European as many American pundits, for instance I view the criticism of their lack of air conditioning as rather silly. I also disagree with American criticism of their defense policies.)
Oh this was an actual literal set of laws you were actually citing. thanks for the actual update. It's hard for me to infer context and I'll read the blog post now.
Air conditioning is great idk why critiziing the lack of it is strange, it requires a tiny change to a heat pump to turn it into a dual use air conditioning system which is perfect for places where it is mostly hot year round but occasionally gets a little cold in the winter (ex spain). To me it's one of the major wonders and greatest parts of living in places that rarely go below freezing.
But a lot of american criticisms of europe are really just downstream of europe being a much poorer place than the USA.
Europoor and Amerifat are underrated terms in many ways.
Australia demonstrates that, indeed, “de-regulation” was not the problem. Australia had a more de-regulated financial system than the US and entirely avoided the GFC. The caveat here is we had sound prudential regulation, not run by our central bank but by a specific regulatory authority.
That it reached the point where the market capitalisation of Australia’s banks equalled the market capitalisation of all the Eurozone banks is a measure of Australia doing—to put it politely—better in its policy performance than the EU/ECB.
De-regulation was indeed the problem. No, by mid-1995 (a deliberate and misguided policy change by Alan Greenspan in order to jump start the economy after the July 1990 –Mar 1991 recession), legal, fractional, reserves (not prudential), ceased to be binding – as increasing levels of vault cash/larger ATM networks, retail deposit sweep programs (c. 1994), fewer applicable deposit classifications (including allocating "low-reserve tranche" & "reservable liabilities exemption amounts" c. 1982) & lower reserve ratios (requirements dropping by 40 percent c. 1990-91), & reserve simplification procedures (c. 2012), combined to remove reserve, & reserve ratio, restrictions.
This was the direct cause of the GFC, the boom/bust in real-estate as predicted by Dr. Leland Pritchard in May 1980.
Alan Greenspan as the best Fed Chair is a very strong case. I have always discounted his performance somewhat because he did not bequeath a more explicit model to his successors. In that, he compares less impressively with Bernie Fraser, who I rate the best central banker of the C20th. (I disagreed with him at the time of his tenure as RBA Governor because I was suspicious of using the inflation/unemployment trade-off as a way of avoiding accountability, but Bernie was right and I was wrong because he found a way to finesse the problem.)
Indeed, regarding many of your links, if I was to summarise the problems of the Western democracies (including the declining quality of fiscal and economic policy) I would nominate the expanding subversion of accountability by the expansion of the unaccountable classes—those paid not by performance, but for turning up.
“Broken Britain” is an extreme case, because Blair’s debauching of the British constitutional order by putting so much policy decisions in the hands of quangoes and, via human rights legislation, to judges, hugely attenuated democratic feedback leading to both systematically bad decision-making and an angry and frustrated electorate. This was aggravated by using the EU as cover for bad decision-making by the British state and influence of the BBC, given the way public broadcasting has become the media of the unaccountable classes.
Canada has gone down a similar path, if not quite as badly, with the CBC playing a similar role.
Here in Australia, the ABC also plays a similar role and while our constitutional order works better, it has not proved immune to these problems. Hence the current turmoil in Australian politics.
The unaccountable classes use status games to defend and expand their alleged moral authority and so claims on resources. Making things work, not their problem. Hence the decline in the quality of economic and fiscal policy: both due to their status-politics and the pushback against them.
A common thread is unpopular immigration policies, with the worse the policy, the worse the political turmoil: the UK has bad policies, Canada has better but too high a rate of immigration, Australia better still but also too high a rate. The British Government managing to unite Ulster Protestants and Catholics in effective, if low-level violent, pushback was a particularly spectacular own goal, though wags have commented that we now know they could have stopped the Troubles just by dumping Muslim immigrants on Ulster.
Economists being historically illiterate and failing to grapple with the constraints on immigration are definitely a guilty party in all of this. Treating polities as if they are just arenas for transactions, so immigration at any level and any content is fine because gains from trade and “GDP go up”, has been both wrong-headed and resulted in bad policy and worse politics. Reminds me of all those economists who took support for the gold-standard as a benchmark of intellectual soundness and seriousness. That led to bad policy and worse politics too,
"...and of course there’s a theory that The Tempest was loosely based on a shipwreck in Bermuda."
A theory only an intellectual yahoo could believe. The ship is traveling from Tunisia to Naples. That route is up the west coast of Sicily, then a right turn takes it past the Aeolian Islands. Prospero's island is almost certainly Vulcano. See Richard Paul Roe's 'The Shakespeare Guide to Italy' for the details.
The sort of yahoo who thinks Homer might have based the story of "Atlantis" on massive explosion that actually occurred in the Aegean?
The sort of Yahoo that thinks Shakespeare might have changed the location of the shipwreck in his story after hearing about an actual shipwreck in Bermuda?
The sort of yahoo who believes that Shakespeare wrote Shakespeare's plays?
"The sort of Yahoo that thinks Shakespeare might have changed the location of the shipwreck in his story after hearing about an actual shipwreck in Bermuda?"
Since that line of reasoning is clearly circular, yes. A possibility; 'Shakespeare might have" is not a probability (there were hundreds of shipwrecks in the 16th century, if Shakespeare needed a spur not of his own experience). And it certainly is not an actuality. Especially Sir Philip Sidney referred to The Tempest in his, 'In Defense of Poesie', which had to have been written before he was killed fighting the Spanish in 1586. Which would have been about a quarter century before the shipwreck in Bermuda you are referencing.
"The sort of yahoo who believes that Shakespeare wrote Shakespeare's plays?"
Since, for the 'Shakespeare' of orthodox belief, we don't even have evidence he could write his own name legibly, had any education at all, could read and speak French and Italian, had traveled to Italy, knew the Earl of Southampton personally and told us in Sonnet #107 that he was near death after referring to three events that took place in 1603 (including the death of Elizabeth I), yes, that sort of yahoo.
"The wreck of the Sea Venture is believed to have inspired William Shakespeare's play The Tempest, probably written in 1610–1611. This tradition has been confirmed by a detailed comparison to survivors' narratives such as Silvester Jourdain's A Discovery of the Barmudas,[33][34] Robert Rich's "Newes from Virginia: the lost flocke triumphant", and that of historian and author William Strachey, who wrote an account of the storm entitled True Reportory of the Wrack, and Redemption of Sir Thomas Gates Knight. Though these accounts were not published until after the play's writing, their existence implies Shakespeare was likely aware of the wreck from other, similar contemporary accounts and may even have drawn upon them for inspiration"
"...Though these accounts were not published until after the play's writing, their existence implies Shakespeare was likely aware of the wreck from other, similar contemporary accounts and may even have drawn upon them for inspiration"
I can't imagine a bigger error in logic than that. Or were you trying to help me prove that most Shakespeare commentary is in fact done by intellectual yahoos?
"This book challenges a longstanding and deeply ingrained belief in Shakespearean studies that The Tempest, long supposed to be Shakespeare's last play, was not written until 1611. In the course of investigating this proposition, which has rarely been questioned and has not received the critical inquiry it deserves, a number of subsidiary and closely related interpretative puzzles have come sharply into focus. These include the plays sources of New World imagery; its festival symbolism and structure; its relationship to William Strachey's True Reportory account of the 1609 Bermuda wreck of the Sea Venture (not published until 1625) and the tangled history of how and why scholars have for so long misunderstood these matters. When some preliminary elements of the case were published in leading Shakespearean journals (starting in 2007), the sometimes intemperate responses they received became part of the critical history, and some scholars supposed that we had been answered. Our reply to these criticisms is here given in full."
"When some preliminary elements of the case were published in leading Shakespearean journals (starting in 2007), the sometimes intemperate responses they received became part of the critical history, and some scholars supposed that we had been answered."
LOL, I'd love to read those "intemperate responses"
Were the authors viewed as crackpots by the experts?
I do know how to pronounce it, but I admit to being too dumb to know if this is intentional. (It seems like it must be, but I haven't followed pop culture recently. Is this sort of joke now acceptable?)
What would it feel like going there on a first date? Or is it just like "Burger King"? Reminds me of a time a truck driver was hauling grapes through CA for the first time, it's about dinner time as he is going through La Jolla and stopped at a burger joint. As he is paying for his order, he asks the checkout girl, "How do you pronounce the name of this place?" She places both hands flat on the counter, leans forward, and slowly, one letter at a time, announces "B-u-r-g-e-r...K-i-n-g."
That Burger King story reminds me of when someone at our table asked the waitress what the soup of the day was. She went back to the kitchen to check and then came back and told us that it was "du jour soup"
Re: #20 (AI job impact) — I’ve got some data comparing AI exposure, Claude usage, and employment across industries. It’s kind of a nuanced story, so I will unsatisfactorily not summarize in the comments, but I’ve got a write-up on my site: https://ratpoisonandretinol.substack.com/p/ai-exposure-and-new-business-start
Not getting how Jevons applies to people. Yes, AI will become cheaper and much more used. But people aren't getting cheaper. Worried that the better analogy is to the horse, not to coal.
Fully agree with you re Giannis; hard to understand the detractors views that seem emotional, and not well thought out.
Greenspan sat by idly watching bank balance sheets balloon both directly and indirectly and did nothing. He could have and should have suggested on the QT ( if that is possible) that the over levered banks sell assets or raise equity.
I cannot stand Obama, HRC, Chuck, Warren, Mamdani, Gavin N and Kamala and i cannot stand Trump, Vance, and any number who blindly follow DT. And yes, i rarely vote due to the awful choices but at times have to which i did for Cuomo ever so reluctantly. Expression of common sense, logic and not craziness puts me in a given camp, so well be it. Little patience for the stupidly and arrogance expressed these days.
As to Social Security, there are many ways to address the issue, but politics and pandering to any number of groups for votes gets in the way. And all too often until we get to a precipice and might go off the cliff, no action will be taken; that is just human nature and appears in the private sector and not just government.
As you know Medicare has IMRAA adjustments for premiums and not sure why a system like that could not be easily implemented to adjust SS payments to high income individuals/families. And yes, its true that for high earners up to 85% of SS payments are taxed at ordinary income tax rates, so could easily just tax them at 100%. Do not have numbers so not sure how much revenue could be derived from that source.
I think you are 100% correct about Giannis. That said his skillset is pretty unique so it will take very specific team building to make things work.
Chat-GPT, Grok and several other LLMs to which I have semi-legal access say pretty much the same thing about regulators encouraging high risk loans.
"Regulators did not actively encourage banks to issue high-risk loans during the 2000s. Instead, the financial landscape was shaped by weakened lending standards and a growing demand for mortgage-backed securities. This environment led to an increase in riskier lending practices."....
"n summary, the push for high-risk loans in the 2000s was primarily driven by market forces and the financial industry's dynamics rather than direct pressure from regulators."
In short I think Lord Acton's aphorism is key.
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks"
I think you are ignoring the politics. Greenspan never did. He did a great job convincing the world that he did ignore politics. The weakening economy deprived Gore of his main campaign theme -- the one Clinton insisted against the facts that Gore run on. It opened the door to Bush "winning." There is, politically, literally nothing more important than an individual quarter of gdp growth if the quarter is the third, with the fourth a close second in importance.
If you insist: First, as the GDP See from Claude fwiw: "It's solidly documented in these sources is the shape of the year: exceptionally strong growth in the first half of 2000 and subdued growth in the second half resulted in a rise in real GDP of about 3.5 percent for the year overall, with the second half sluggish heading into the March 2001 recession. The San Francisco Fed even dates a permanent break in the trend growth rate to the second quarter of 2000. Federal Reserve." Your statement that grwoth was 1.% in q3 and q4 is an average (I assume) and the big problem politically was that q3 was probably (sources disagree) was close to zero.
Second, between June 1999 and May 2000 FOMC raised federal funds rate six times, raising benchmark rate from 4.75% to 6.50%.
Third, from March 2000 to November 2000, the NASDAQ went from 4784 to 2597, while the S& P 500 went from 1379 to 1314. In terms of running on the economy and the tech boom, Gore was denied that opportunity. Did Greenspan plan the interest rate increases to have these economic results, and did he know the probably effect the Presidential campaign? I think the answer is quite obviously yes. Moreover the mild recession that ensued gave Bush the opportunity to put income inequality-enhancing tax cuts in place, with Greenspan applauding -- another political act that was unwise.
Again, subdued growth after extremely strong growth is not in any way shape or form a weak economy. Individual quarters of GDP growth are not very meaningful; you need to look at longer periods.
And again, interest rates are not monetary policy. Monetary policy was not particularly contractionary, it was quite appropriate. Interest rates rose due to the fact that nominal GDP growth had been excessive and investment was strong.
Sorry, but this looks somewhat like motivated reasoning. Policy in the year 2000 is almost the last thing I'd ever criticize Greenspan for. It was fine. The voters are to blame for Bush, not Greenspan. If anything, Greenspan cost Bush's dad the election in 1992.
For exact;y reason 1-4 I wonder what was so great about Greenspan. He just had and incredibley easy ride: sensible low-deficit fiscal policy and no big shocks like COVID or the finanical crisis or the Trump tariffs/deportations.
"I wonder what was so great about Greenspan."
Well, he did preside over 19 years of the best monetary policy in US history, so there's that. Who was better?
Greenspan had it easy. Given the challenges, Powell, of course.
Link: Philip George: “The riddle of money, finally solved”
"For nearly a century the progress of macroeconomics has been stalled by a single error, an error so silly that generations to come will scarcely believe that it could have persisted for as long as it has done. It is an error that has been committed by John Maynard Keynes and Milton Friedman, John Hicks and James Tobin, Franco Modigliani and Ludwig von Mises, Murray Rothbard and Paul Krugman, and continues to be taught to every economics undergraduate today."
"The error has blinded economists so that, like the seven men of Hindostan, they have mistaken the partial reality that has come within their groping grasp for the whole of reality. And this in turn has divided them into warring sects, looking very little like practitioners of a science and a lot like religious fundamentalists. Keynesian has poked fun at monetarist. Monetarist has ridiculed Keynesian. And both have mocked Austrian and been mocked in return..."
Link Richard Werner:
Prof. Werner brilliantly explains how the banking system and financial sector really work. – YouTube
Steve Keen was right: "Banks don’t “intermediate loans”, they “originate loans”.
The "banking system" has very little to do with macroeconomics. Almost everything in macro would continue to function essentially unchanged, in a hypothetical economy with no banks and no lending at all.
"The only relevant test of the validity of a hypothesis is comparison of prediction with experience." – Nobel Laureate Dr. Milton Friedman
Very true. If only you had offered content like that, it would have been much more useful. But you didn't.
You're all lost. Greenspan was the direct cause of Black Monday. The Great Moderation was because banks don't lend deposits. And he created the housing bubble. All of this was precisely predicted by Dr. Leland James Pritchard, Ph.D. Chicago 1933, M.S. Statistics Syracuse, Phi Beta Kappa in May 1980 in IMTRAC.
"Greenspan was the direct cause of Black Monday." Even if true, why would anyone care? There was no recession and the market recovered quite nicely.
If only Powell knew about to execute the Greenspan put. Greenspan largely relied on RPDs.
I don’t think this is factually correct. Look at the GDP in the third and fourth quarters of the year 2000. Growth was extinguished. Look at the timing of the rate increases. It’s cause and effect. Then look at the Fed support of the horrendous bush tax cuts.
I have two problems with your comment. First, when you tell me something I said is not factually correct, you need to tell me which facts are false. You didn't, because my comment was factually correct. Second, you raised a new point, which was itself factually incorrect. Growth was not extinguished, it continued in Q3 and Q4 at roughly 1.4%. That's below trend, but perfectly fine for an economy that was growing at an unsustainable 7.5% in Q2. That's why unemployment didn't rise. GDP growth is always a bit noisy, quarter by quarter.
Interest rates are not monetary policy, they reflect the economy more than anything the Fed was doing. Don't engage in "reasoning from a price change".
I have no problem with your claim that in retrospect Greenspan was wrong about the danger of budget surpluses, you were completely correct about that.
Yes, his political meddling (and in the wrong way) in the Bush deficit creation acts is inexcusable.
"there is no reason to believe that he would have done better than Bernanke during 2008, indeed his public comments about monetary policy during 2008-09 suggest that he was just as off base as the Fed."
On August 4 2008 Greenspan cited equity prices being at 2006 levels as an indicator of emerging inflationary risks. This was a mistake. This is also an indication of greater willingness to use asset prices to infer policy stance compared to Bernanke, thus there is a chance Greenspan would have done better than Bernanke in September 2008. In any case, Greenspan changed his mind much faster than Bernanke, the key piece of evidence is August 11 2008 FT piece "Price unlikely to spike soon, says Greenspan", here is the key part:
"
Mr Greenspan said financial speculation in oil was unlikely to resume in the near term and “there is little prospect of a renewed spike in oil while cyclical weakness continues”.
If he is right, central banks around the world need not worry about the risk that oil prices might rebound in the absence of a positive surprise on global growth. All other things being equal, this would imply a looser path for monetary policy."
Fair point, but how decisive? He was also more hawkish that Bernanke during 2009, so I'm skeptical he would have done better.
Better monetary policy in September 2008 and 1987/98 playbook regarding financial stability would have mattered
We'll never know, but I lean toward the view that policy would have been worse, especially in 2009.
Yes the idea is a milder downturn, not a faster recovery with Greenspan
" if a European Bill Gates tried to give $100 billion to charities fighting disease and poverty in Africa, instead of giving the money to his spoiled kids, they’d probably put him in jail."
Ok this statement was clearly a joke but I have no clue how much of a joke and how much of this is some cultural commentary I don't understand. What is the meaning of this? Is it like "the french due to cultural norms don't do this" or "Historically french billionaires are more local" or "french law makes Philanthropy a bad idea" Or something else entirely that I don't understand.
Please if anyone could explain this I would appreciate it.
In many European countries, the wealthy are required by law to bequeath more than half of their estates to their children. There's been a lot of recent discussion of this odd policy, which I examined a few years ago in a blog post. Here's AI Overview:
"Prevalent in civil law jurisdictions across mainland Europe (e.g., France, Germany, Italy). The exact fraction depends on the number of children. For example, under French law, if a person leaves behind one child, half of the estate goes to the child; for two children, two-thirds; and for three or more children, three-quarters."
(BTW, I'm not as anti-European as many American pundits, for instance I view the criticism of their lack of air conditioning as rather silly. I also disagree with American criticism of their defense policies.)
Oh this was an actual literal set of laws you were actually citing. thanks for the actual update. It's hard for me to infer context and I'll read the blog post now.
Air conditioning is great idk why critiziing the lack of it is strange, it requires a tiny change to a heat pump to turn it into a dual use air conditioning system which is perfect for places where it is mostly hot year round but occasionally gets a little cold in the winter (ex spain). To me it's one of the major wonders and greatest parts of living in places that rarely go below freezing.
But a lot of american criticisms of europe are really just downstream of europe being a much poorer place than the USA.
Europoor and Amerifat are underrated terms in many ways.
Australia demonstrates that, indeed, “de-regulation” was not the problem. Australia had a more de-regulated financial system than the US and entirely avoided the GFC. The caveat here is we had sound prudential regulation, not run by our central bank but by a specific regulatory authority.
That it reached the point where the market capitalisation of Australia’s banks equalled the market capitalisation of all the Eurozone banks is a measure of Australia doing—to put it politely—better in its policy performance than the EU/ECB.
Good point.
De-regulation was indeed the problem. No, by mid-1995 (a deliberate and misguided policy change by Alan Greenspan in order to jump start the economy after the July 1990 –Mar 1991 recession), legal, fractional, reserves (not prudential), ceased to be binding – as increasing levels of vault cash/larger ATM networks, retail deposit sweep programs (c. 1994), fewer applicable deposit classifications (including allocating "low-reserve tranche" & "reservable liabilities exemption amounts" c. 1982) & lower reserve ratios (requirements dropping by 40 percent c. 1990-91), & reserve simplification procedures (c. 2012), combined to remove reserve, & reserve ratio, restrictions.
This was the direct cause of the GFC, the boom/bust in real-estate as predicted by Dr. Leland Pritchard in May 1980.
Alan Greenspan as the best Fed Chair is a very strong case. I have always discounted his performance somewhat because he did not bequeath a more explicit model to his successors. In that, he compares less impressively with Bernie Fraser, who I rate the best central banker of the C20th. (I disagreed with him at the time of his tenure as RBA Governor because I was suspicious of using the inflation/unemployment trade-off as a way of avoiding accountability, but Bernie was right and I was wrong because he found a way to finesse the problem.)
Indeed, regarding many of your links, if I was to summarise the problems of the Western democracies (including the declining quality of fiscal and economic policy) I would nominate the expanding subversion of accountability by the expansion of the unaccountable classes—those paid not by performance, but for turning up.
“Broken Britain” is an extreme case, because Blair’s debauching of the British constitutional order by putting so much policy decisions in the hands of quangoes and, via human rights legislation, to judges, hugely attenuated democratic feedback leading to both systematically bad decision-making and an angry and frustrated electorate. This was aggravated by using the EU as cover for bad decision-making by the British state and influence of the BBC, given the way public broadcasting has become the media of the unaccountable classes.
Canada has gone down a similar path, if not quite as badly, with the CBC playing a similar role.
Here in Australia, the ABC also plays a similar role and while our constitutional order works better, it has not proved immune to these problems. Hence the current turmoil in Australian politics.
The unaccountable classes use status games to defend and expand their alleged moral authority and so claims on resources. Making things work, not their problem. Hence the decline in the quality of economic and fiscal policy: both due to their status-politics and the pushback against them.
A common thread is unpopular immigration policies, with the worse the policy, the worse the political turmoil: the UK has bad policies, Canada has better but too high a rate of immigration, Australia better still but also too high a rate. The British Government managing to unite Ulster Protestants and Catholics in effective, if low-level violent, pushback was a particularly spectacular own goal, though wags have commented that we now know they could have stopped the Troubles just by dumping Muslim immigrants on Ulster.
Economists being historically illiterate and failing to grapple with the constraints on immigration are definitely a guilty party in all of this. Treating polities as if they are just arenas for transactions, so immigration at any level and any content is fine because gains from trade and “GDP go up”, has been both wrong-headed and resulted in bad policy and worse politics. Reminds me of all those economists who took support for the gold-standard as a benchmark of intellectual soundness and seriousness. That led to bad policy and worse politics too,
"A common thread is unpopular immigration policies"
A common thread in all of your rather long comments?
"...and of course there’s a theory that The Tempest was loosely based on a shipwreck in Bermuda."
A theory only an intellectual yahoo could believe. The ship is traveling from Tunisia to Naples. That route is up the west coast of Sicily, then a right turn takes it past the Aeolian Islands. Prospero's island is almost certainly Vulcano. See Richard Paul Roe's 'The Shakespeare Guide to Italy' for the details.
The sort of yahoo who thinks Homer might have based the story of "Atlantis" on massive explosion that actually occurred in the Aegean?
The sort of Yahoo that thinks Shakespeare might have changed the location of the shipwreck in his story after hearing about an actual shipwreck in Bermuda?
The sort of yahoo who believes that Shakespeare wrote Shakespeare's plays?
Guilty as charged.
"The sort of Yahoo that thinks Shakespeare might have changed the location of the shipwreck in his story after hearing about an actual shipwreck in Bermuda?"
Since that line of reasoning is clearly circular, yes. A possibility; 'Shakespeare might have" is not a probability (there were hundreds of shipwrecks in the 16th century, if Shakespeare needed a spur not of his own experience). And it certainly is not an actuality. Especially Sir Philip Sidney referred to The Tempest in his, 'In Defense of Poesie', which had to have been written before he was killed fighting the Spanish in 1586. Which would have been about a quarter century before the shipwreck in Bermuda you are referencing.
"The sort of yahoo who believes that Shakespeare wrote Shakespeare's plays?"
Since, for the 'Shakespeare' of orthodox belief, we don't even have evidence he could write his own name legibly, had any education at all, could read and speak French and Italian, had traveled to Italy, knew the Earl of Southampton personally and told us in Sonnet #107 that he was near death after referring to three events that took place in 1603 (including the death of Elizabeth I), yes, that sort of yahoo.
From the yahoos at Wikipedia:
"The wreck of the Sea Venture is believed to have inspired William Shakespeare's play The Tempest, probably written in 1610–1611. This tradition has been confirmed by a detailed comparison to survivors' narratives such as Silvester Jourdain's A Discovery of the Barmudas,[33][34] Robert Rich's "Newes from Virginia: the lost flocke triumphant", and that of historian and author William Strachey, who wrote an account of the storm entitled True Reportory of the Wrack, and Redemption of Sir Thomas Gates Knight. Though these accounts were not published until after the play's writing, their existence implies Shakespeare was likely aware of the wreck from other, similar contemporary accounts and may even have drawn upon them for inspiration"
"...Though these accounts were not published until after the play's writing, their existence implies Shakespeare was likely aware of the wreck from other, similar contemporary accounts and may even have drawn upon them for inspiration"
I can't imagine a bigger error in logic than that. Or were you trying to help me prove that most Shakespeare commentary is in fact done by intellectual yahoos?
https://www.amazon.com/Date-Sources-Design-Shakespeares-Tempest/dp/0786471042
"This book challenges a longstanding and deeply ingrained belief in Shakespearean studies that The Tempest, long supposed to be Shakespeare's last play, was not written until 1611. In the course of investigating this proposition, which has rarely been questioned and has not received the critical inquiry it deserves, a number of subsidiary and closely related interpretative puzzles have come sharply into focus. These include the plays sources of New World imagery; its festival symbolism and structure; its relationship to William Strachey's True Reportory account of the 1609 Bermuda wreck of the Sea Venture (not published until 1625) and the tangled history of how and why scholars have for so long misunderstood these matters. When some preliminary elements of the case were published in leading Shakespearean journals (starting in 2007), the sometimes intemperate responses they received became part of the critical history, and some scholars supposed that we had been answered. Our reply to these criticisms is here given in full."
"When some preliminary elements of the case were published in leading Shakespearean journals (starting in 2007), the sometimes intemperate responses they received became part of the critical history, and some scholars supposed that we had been answered."
LOL, I'd love to read those "intemperate responses"
Were the authors viewed as crackpots by the experts?
#31 Especially if you know how to pronounce "pho"
I do know how to pronounce it, but I admit to being too dumb to know if this is intentional. (It seems like it must be, but I haven't followed pop culture recently. Is this sort of joke now acceptable?)
What would it feel like going there on a first date? Or is it just like "Burger King"? Reminds me of a time a truck driver was hauling grapes through CA for the first time, it's about dinner time as he is going through La Jolla and stopped at a burger joint. As he is paying for his order, he asks the checkout girl, "How do you pronounce the name of this place?" She places both hands flat on the counter, leans forward, and slowly, one letter at a time, announces "B-u-r-g-e-r...K-i-n-g."
That Burger King story reminds me of when someone at our table asked the waitress what the soup of the day was. She went back to the kitchen to check and then came back and told us that it was "du jour soup"
Re: #20 (AI job impact) — I’ve got some data comparing AI exposure, Claude usage, and employment across industries. It’s kind of a nuanced story, so I will unsatisfactorily not summarize in the comments, but I’ve got a write-up on my site: https://ratpoisonandretinol.substack.com/p/ai-exposure-and-new-business-start