Here is scan of a picture I have had in my office for more than 20* years. It is Angus and the EYM. I think the EYM was about 10 months old, and this was taken just after we had moved to NC from TX. Seems like a long time ago. The EYM is now 23, living in Chile, teaching at UDD, and applying to grad schools.
Angus and I were so much older then. We are younger than that now. Lang may yer lum reek.
From Twitter trolling to dueling blog posts in the Economist, it's been a short, strange trip for the mythical, mystical, "trillion dollar platinum coin".
The young digital progressives are in lockstep on the issue. It's legal, what the Republicans are doing with the debt ceiling is much worse than the coin shenanigans, it will cause less problems than a default.
"But that will be inflationary!" This is a more serious objection, and it gets at what the platinum coin strategy really is -- financing the federal government's operations by printing money instead of borrowing it. The trillion- dollar coin will never circulate, but it will be used to back cash payments coming from the Treasury that would have otherwise been financed by bond purchases.
If the government financed itself this way in general, that would absolutely be inflationary. But the president can hold inflation expectations steady by making absolutely clear that the policy will not lead to a net change in the money supply over the long term. Obama should pledge that once Congress authorizes additional borrowing, he will direct the Treasury to issue bonds to cover the government's coin-backed spending and then to melt the coin.... If the president is clear about his lack of any long-term intention to interfere with the money supply, I don't expect the platinum coin to cause a spike in prices."
I think the coin is excellent political theatre. It's got the right up in arms, positively sputtering with indignation, which can only be a good thing.
However, I think the expectations issue is quite a bit more problematic than what Josh outlines. In economics modeling, expectations aren't anchored by jawboning or empty promises. Without a specific commitment mechanism, mere promises will be non-credible (this of course is the time-consistency issue made famous by another Barro).
Specifically, I worry that when a US president takes up the power to directly print money in a political dispute, his assurances that it's only temporary, will be reversed as soon as his opponents capitulate, and will never happen again, might not be extremely credible. One could make a case that this action would indeed increase expectations of inflation down the road and increase the volatility of inflation as well.
And beyond inflation concerns, it is worth considering what the coin would to do the expectations of future government behavior held by investors, credit raters, trading partners and other relevant actors.
So while I absolutely love the trolling value of the coin, and kind of love the overall idea of the coin, I think is is a much more risky economic proposition than its proponents will recognize.
I got hired as an assistant professor at GMU in 1984, right after the Public Choice Center moved there from Blacksburg. GMU interviewed me at the AEA meetings that year. It was a two-stage interview. I met in the living room with Phil Wiest and someone else who I can't recall. After having "passed" that initial interview, I was escorted into the bedroom where Jim was sitting on the bed in a shirt and tie and stocking feet (and pants too!). He proceeded to grill me for about 20 minutes. I left the interview thinking it had not gone well.
But I got a flyout and, after surviving some serious hazing from Gordon Tullock at my job talk, got and accepted an offer.
Shortly thereafter Jim won the Nobel Memorial Prize. As an assistant professor, I would circulate working papers to several senior colleagues (Tollison, Tullock, Crain, Buchanan). Jim would respond with a typed letter giving comments and criticism. I was made an associate of the Public Choice Center and started getting summer money.
Then I wrote a paper (never published) testing whether surprise deficits raised interest rates (they didn't). Never got any comments from Jim. In fact, I don't think he ever spoke to me again.
But I didn't get kicked out of the Center, and he supported me for tenure (if he hadn't of, I wouldn't have gotten it).
Buchanan was both an intimidating and an inspirational figure to me as a young professor. I would not ever say we were friends or even friendly, but I learned a lot from him and his support was important for launching my career (such as it is).
In France between the two World Wars, the teachers' union decided that schools should replace patriotism with internationalism and pacifism. Books that told the story of the heroic defense of French soldiers against the German invaders at Verdun in 1916, despite suffering massive casualties, were replaced by books that spoke impartially about the suffering of all soldiers -- both French and German -- at Verdun. Germany invaded France again in 1940, and this time the world was shocked when the French surrendered after just 6 weeks of fighting -- especially since military experts expected France to win. But two decades of undermining French patriotism and morale had done their work.
Tom, I'ma NOT gonna let you finish. You have a PhD in economics from the University of Chicago. You should be deeply ashamed of yourself.
Lack of Ceteris Paribus? Check.
Failure to define/consider a reasonable alternative hypothesis? Check
A complete breakdown of logic and intellectual integrity? Check mate.
Finally to those of you who may object to my title by claiming that France did not lose WWII, I say: HA!
I often get criticized (yes, me!) for "caricaturing" the Keynesian view of the multiplier and job creation. To be fair, Keynes himself was circumspect. But the Keynesians are quite clear.
Here is an acolyte, making the straightforward argument that unemployement creates jobs, as long as we PAY people to be unemployed. It gets good after about 2:50...
Hilda Solis is the US Sec'y of Labor. She apparently wants to be the Sec'y of Unemployment. Employed workers aren't docile enough, and they might vote the wrong way. But unemployed folks, getting other peoples' money in the mail? THOSE are Democrats.
People, the simple fact is that there is no one set of experiences, working conditions, or stress levels that describe the job of "university professor".
If you are a "full-time adjunct", man that is a stressful life. Low pay, low status, no job security, little to no benefits. If I were to give someone in that situation advice, it would be to find another line of work.
At the other extreme, if you are a tenured professor at all but the most elite of institutions, that can be a very stress-free life. Or to put it another way, most stress that may come there is self imposed. For example, I find it stressful to have PhD. students on the job market. I am to a certain degree responsible for their placements and that weighs on me. However, I could always just not be a thesis advisor or greatly restrict the number of students I advise and avoid this "stress".
Prepping a new class, or mastering new research tools can be difficult and stressful. However, most tenured professors can avoid doing these things unless they at some level want to do them. Again, the stress involved is self imposed.
It's true that many tenured professors check out every spring and are not heard or seen again until the new academic year starts in the fall. They don't do research. They don't update their class notes. They work the system. Not only is there no stress, there's no sweat.
However, many other tenured professors work pretty hard year-round, continue to publish and continually work on their teaching. A lot of sweat, perhaps some stress, but most of it is self imposed. Getting significant pay raises, getting promoted, getting a chair, are post-tenure goals that often require continued productivity, but the basic fact is that you can hunker down and hibernate for the rest of your natural life with few overtly negative repercussions.
Assistant professors on tenure track have another different set of experiences. Sometimes they have no clear idea of what it will take to earn tenure. That can be stressful. Sometimes their colleagues or university bureaucrats will take advantage of them, pressuring them into spending time on things that won't pay off at tenure. That can be stressful too.
The job experiences of professors are way to diverse to be captured in a single description. The stress-level is extremely context dependent.
"In the opinion of this Democrat, Free Staters [explanation] are the single biggest
threat the state is facing today. There is, legally, nothing we can do
to prevent them from moving here to take over the state, which is their
openly stated goal. In this country you can move anywhere you choose
and they have that same right. What we can do is to make the
environment here so unwelcoming that some will choose not to come, and
some may actually leave. One way is to pass measures that will restrict
the 'freedoms' that they think they will find here. Another is to
shine the bright light of publicity on who they are and why they are
But the very worst is likely the requirement that companies find a way to use more bio-fuels. And in THIS special place of stupidity, the focus on corn-based ethanal is the worst, of the worst, of the worst.
I am always amazed that my colleagues think that Sarbox or Dodd-Frank increase regulation, and are therefore good. What they do, and what they are designed to do, is to advantage the big financial companies (Goldman in particular, but generally the large outfits) at the advantage of small nimble companies that would otherwise make the industry competitive.
This is hardly surprising. The Obama administration, and the Democratic party generally, is bought and paid for by the dinosaurs of the financial industry. Goldman, et al. are desperately trying to defend what they see as their birthright of keeping what they win--if they win--and getting bailed out at taxpayer expense--if they lose. Gotta keep the little guys out. That's what regulation is designed to do, and that is what regulation does in fact do. The idea that Dodd-Frank was "better" regulation is risible. I'm laughing at it right now, in fact. Ha. Ha ha!
The paradox of the war on drugs is that the harder governments push the
fight, the higher drug prices become to compensate for the greater
risks. That leads to larger profits for traffickers who avoid being
punished. This is why larger drug gangs often benefit from a tougher war
on drugs, especially if the war mainly targets small-fry dealers and
not the major drug gangs. Moreover, to the extent that a more aggressive
war on drugs leads dealers to respond with higher levels of violence
and corruption, an increase in enforcement can exacerbate the costs
imposed on society.
Jonathan Wai, Martha Putallaz & Matthew Makel Current Directions in Psychological Science, December 2012, Pages 382-390
Abstract: By studying samples of intellectual outliers across 30 years, researchers can leverage right-tail data (i.e., samples at or above the 95th percentile on tests of ability) to uncover missing pieces to two psychological puzzles: whether there are sex differences in cognitive abilities among smart people, and whether test scores are rising (a phenomenon known as the Flynn effect) among smart people. For the first puzzle, data indicate that the high male-to-female ratio among extremely high scorers on measures of math ability has decreased dramatically, but is still likely one factor among many explaining female underrepresentation in some professions. For the second puzzle, data indicate that the right tail has risen at a similar rate as the general (or middle portion of the) distribution; it is thus likely that the entire curve is rising at a relatively constant rate, consistent with the Flynn effect, which may explain why a greater number of gifted students have been identified in recent years. However, the causes for these gains and whether they reflect real gains in intelligence continue to remain a mystery. We show how these two puzzles are linked and stress the importance of paying attention to the entire distribution when attempting to address some scientific questions. Several interesting things here.
1. Jonathan Wai is from Duke's TIP program. The EYM profited from that program, in my opinion.
2. "Searching for the Right Tail" sounds like a book about singles bars. Sequel to "Looking for Mr. Goodbar." But from the male perspective.
3. Instead of studying intellectual outliers, how about studying intellectual out-and-out liars, like P-Kroog? I bet those are FAR more likely to be men. Women have scruples.