What a treat it would have been to sit in on his lectures! And I confess to missing the old blackboard technology. Can't imagine him giving this lecture using Powerpoint, in particular.
Speaking of the cursed PPT presentation, ever wonder what Lincoln's Gettysburg Address may have looked like had he prepared his notes using Powerpoint? Take a look here.
Am off to look for that old box of chalk...
David, thanks for the link." One doesn't have to go far. Right of the he says, "if it is disagrees with experience then its wrong."
ReplyDeletethat one sentence sure shows that macroeconomics isn't science and the most "scientific," like Lucas, are the worst offenders.
look at how much recent experience has show to us that all his guesses in his 2003 speech as president of the AES were wrong. You will recall, that's where he said problems of depression prevention have been solved.
http://home.uchicago.edu/~sogrodow/homepage/paddress03.pdf
take the Euro. Everyone knew from experience that a currency union of that sort cannot work.
take Globalization. Everyone knew from experience that it would destroy us economically
take Visas for foreign workers. Everyone knew from experience that it would cut wages of Americans and drive them from fields like engineering.
take letting firms gamble with synthetic derivatives. Everyone knew from experience they would explode.
take deflation. Everyone knows from experience that it is not self-correcting.
take the very idea that economies heal or return to equilibrium. Everyone know (especially if they read or listen to Soros) that they don't
take cutting public support for education. everyone knew that Silicon Valley was built of the foundation of great taxpayer funded education in California and that a low tax model won't produce prosperity. Contrast KY and Tenn.
powerpoint---everyone knows from experience that you just have to know when and when not to use it.
John D, just because you steal Alexander Hamilton's name doesn't make you as smart as he was. You're still a kook, and we all know it.
DeleteBy the way, your obsession with Lucas is disturbing. If I were him, I'd consider purchasing a handgun and obtaining a restraining order. Your insanity is currently that of a harmless nutsack, but it doesn't seem like you're that far from turning into Travis Bickle.
If you haven't seen these, they are pretty awesome. Don't use Chrome for it.
ReplyDeletehttp://research.microsoft.com/apps/tools/tuva/
But that is my trojan horse. I just read your NGDP posts and most of the responses. I was a little disappointed in how the conversation went, because it seems like the argument turned toward a kind of red herring. It has never seemed to me that the NGDP proponents cared as much about the importance of risk sharing or sticky long term debt contracts as many of them appeared to in that conversation. Instead, I thought (perhaps incorrectly) it comes down to the nominalists believing that sticky prices are important, even over long periods in some circumstances, and you don't. I also don't think the nominalists all agree as to why. Scott Sumner seems sympathetic to what is mostly just a sticky-wages screwing up the labor market story, while I've always thought (perhaps wrongly) that some of the others (Nick Rowe, Bill Woolsey) would be more sympathetic to a sticky-prices leading to a bad square in a multi-equilibria story.
I guess the problem is partly that there are no models out there that anyone really believes really pin down the story of why such a quasi-equilbrium could persist or how relative price distortions might persist for so long. I know Scott Sumner points to the NK models, but I get the idea he is more hand waving to people who want mathy underpinnings than he is persuaded by the actual model. And I don't think the multi-equilibrium models like the Roger Farmer stuff sounds like what some of the other market monetarists seem (to me) to be saying. I guess there is only so much to say about the importance of sticky prices if there is no model and the empirical stuff is miles from conclusive (I did read your sticky price post critique).
Since we are dueling it out, hand to hand, with anecdotal evidence, here is my reply to David's slide show.
DeleteWHY ONE EMPLOYER ISN'T HIRING
When Michael Eberstadt opened his New York City soul food restaurant in 2007, he had a staff of about 25.
"That was right before the world ended," said Eberstadt, owner of Rack & Soul, referring to the recession that began in December that year. He's since shrunk his staff to about 15.
"Hiring is really a function of demand," he said. "Unfortunately, if the demand isn't there, then you don't need to hire."
Today's lesson about the "science" of Economics: Experience teaches us, "Hiring is really a function of demand."
http://www.dailyfinance.com/article/us-employers-still-waiting-for-sales-to/1708356/
BTW, all indexes down 2.75% from the start of the day, as of this posting.
so we now have an pitched battle between David's slide show and AH's interviews.
Who is right. Only the Confidence Fairy knows.
http://delong.typepad.com/sdj/2012/06/what-can-ben-bernanke-do-now-to-summon-the-confidence-fairy.html
BTW, before I took a sabbatical from Heaven, leaving the Pearly Gates behind me for a few weeks, to comment on your blog and a couple of others, M. Friedman told me to make a few comments and then make a slight snub of Lucas.
He said that Lucas trolls the econ blogs and rants when anyone takes him or Sargent to task. Guess I learned my lesson.
To be half serious for a half a moment. I comment here for only one reason. The World is coming down around us, but the economics profession is still absorbed in arrogance and denial.
Take Lucas. I think he is makes an excellent point that we need to eliminate the capital gains tax. The problem is that he advocates doing such in such a way that he projects an agenda---he wants to do such to make the rich, richer and more powerful.
That isn't going to fly, politically. Lucas never says, here is the whole picture---We should also eliminate FICA taxes on employers and employees, for such are a tax on hiring people and horrible, regressive tax. And we should also do this and this and this.
David here frequently does a great service. Some of his sources and papers, like this one, are outstanding. But, it is never complete. David fudges and hedges his bets.
Heaven knows that Warren is not going to lead Obama to the lost Tribes of leadership with her looking for Falling Rock signs, but is it too much to expect leadership from economic blogs?
You will note that I never comment on Noah Opinion and that is because he gets what he is doing right.
Mr Hamilton,
DeleteI am a big fan of your work, particularly your artwork.
http://en.wikipedia.org/wiki/File:US10dollarbill-Series_2004A.jpg
I am glad you were talking to Friedman. I think the best way to help us out of the doldrums is for you to produce a lot more of your artwork, hand it out, maybe drop it from helicopters.
Unknown to most people, Hamilton was, in private, deeply religious.
DeleteOne can draw an inference that he felt that vision (where there is no vision the people perish) is more important than Martin Wolf style helicopter drops
" he felt that vision (where there is no vision the people perish) is more important than Martin Wolf style helicopter drops"
Deletevision is bloody useless. can u eat vision? maybe you meant "venison"?
" he felt that venison (where there is no venison the people perish) is more important than Martin Wolf style helicopter drops"
see i could agree with that. still need that helicopter tho.
dwb
Deletehere is a wonderful essay on your most distinguishing aspect
https://athens.indymedia.org/local/webcast/uploads/frankfurt__harry_-_on_bullshit.pdf
As soon as people start talking to me about vision and dead people my immediate reaction is that they are about to tell me about a 900 foot Jesus that they saw who assured them that their city of faith will be built. talk about BS. "Vision" is usually limited to people with no imagination.
DeleteI do not know which makes a man more conservative - to know nothing but the present, or nothing but the past.
DeleteJohn Maynard Keynes
And what if they know nothing about present or past?
AH
"You have an astronomically higher chance of persuading me with facts and evidence than based on quotes from dead people."
Delete- dwb
"And what if they know nothing about present or past?"
DeleteThen they're named John D and they pretend to be Alexander Hamilton on the internet.
i love the NY accent and jokes in all his lectures. If i had him as a lecturer i might have got better grades in physics. oddly, i actually did get a good grade in quantum, it was the only physics i understood.
ReplyDeleteMr. Hamilton,
ReplyDeleteWith respect to the survey evidence you cite regarding the conclusiveness of the "deficient demand hypothesis," perhaps you'd like to read what I have to say here first:
http://andolfatto.blogspot.ca/2010/12/deficient-demand-deflated-balloon.html
David, thank you for the link. I really liked these sentences at the end:
DeleteThe process of reallocating resources and rebuidling relationships after a traumatic event like the recent financial crisis is likely to take some time. This would be true even if all the king's men knew how to put Humpty Dumpty back together again.
David, my words for this are vision or leadership.
Long ago I became convinced that PK, Wolf's, and Brad's vision of helicopter drops wasn't sufficient, necessary but not sufficient. The damage we have done is worse, perhaps, than what a major war could do. Five words come to mind: vision, leadership, trust, patience, and shared sacrifice.
My two cents is that between Obama being so weak on the vision leadership thing and the GOP so intent on making sure that he does not succeed that it is over. All the King's men ain't never going to put it back together again.
In particular, the Right wants power and then wants to destroy all but the .5% at the top. And they are damn sure that all the sacrifice is by the people who can least make such. They are the most hateful vicious evil people on the planet since the Nazis and the Banzi Boys.
Principally, I hold people like your friend SW at fault.
SW to me is just a ____ He is worse than a Cochrane or Taylor or Lucas. Miles Kimball starts a new blog, trying to lay some middle ground and first think out of the box SW attacks him.
With friends like that, who needs enemies. Well piss on SW. Anyone reading his blog can tell: (1) he has no idea what he is talking about, and (2) the only gene in his body is the "I told you so gene." He works for the Fed and for 4 years has been writing that he is smarter than Bernanke, that Bernanke can't do his job, and that inflation is going to jump out from under a bush, so that he can say, "I told you so." Useless.
What is especially useless is that he never ever gives sufficient information for anyone to judge risk. He missed his calling. Given his ability to hide the ball, he should be trading bonds for Jamie.
David,
ReplyDeleteI'm on a "blog comments" diet, but I was moved to share this with you. I thought I would do e-mail, but then I thought maybe other readers would benefit: http://www.paulgraham.com/hamming.html.
As one whose vocation is research, I believe you will relate to Richard Hamming, though it is a strong position.
Best,
Jeff Oxman (signing full name because can't figure out how to change Google id)
Awesome. Thanks, Jeff!
DeleteDoes Spain Aim To Take The Euro Down?
ReplyDeletehttp://www.forbes.com/sites/haydnshaughnessy/2012/06/03/does-spain-aim-to-take-the-euro-down/
To the second question – well, it’s complicated. Spain is thought to have more unsold housing stock than the United States has – with a population one tenth of the size - in a country where unemployment is now over 24% and household debt is around 125% of household income. Spanish banks hold the majority of that fragile mortgage debt.
The key is though that the banks of other European countries also hold a lot of Spain’s debt. A third of the country’s mortgage debt, for example, is owned by French, German and Dutch banks.
Europe mulls major step towards "fiscal union"
ReplyDeletehttp://www.reuters.com/article/2012/06/03/us-eurozone-union-idUSBRE85207J20120603
Europe has 'three months' to save euro: George Soros
http://economictimes.indiatimes.com/news/international-business/europe-has-three-months-to-save-euro-george-soros/articleshow/13787785.cms
The point: that old vision thing.
Go back to 1785, where the United States found itself many many times worse off than today. The problem was tackled by vision, specifically the vision of Alexander Hamilton. He had the vision to create a national government (fiscal union plus) and to go through the process of writing the Constitution, getting it adopted, getting Washington elected, and then as the First Secretary of the Treasury leading the Country to doing an extraordinary number of things to lay a long term foundation for prosperity (national bank, The Plan for the Federal Government taking over all debt from the Revolutionary War, . . . )
Europe is an object lesson right before our eyes. It's problems are a lack of political institutions that can deal with the complexity of modern economics and the fundamental challenge of maintaining confidence.
As an aside, no Hayekians need apply for the job.
Unfortunately, we refuse to learn from Europe. Macro doesn't have the answers and cannot, for the economy was broken and flawed long before 2006, as noted by Stiglitz and many others. Our problems are more fundamental.
We need, now, to tackle the shortcomings of our political institutions, which are equally poorly adapted to a very changed economic world. The problem is obvious.
David here does a better job of explaining why than any other econ blog; as he wrote a day or two ago, a lot of stuff needs sorted out, more than a helicopter drop.
What is equally and painfully obvious is that we have no Hamilton on the horizon, nor do we have any prospect of him or her coming on the scene.
Such a person is not going to come from a university, for they would never make tenure (the professional jealousies and palace intrigue too great (law schools are so sick that we now have faculties purging non-tenure track legal writing instructors).
They are not going to come from any state government. They are not going to come from Congress---look at the professional jealousies against Obama
In sum, it is only about vision; it has always been about vision.
David,
ReplyDeleteMiles Kimball has a reply up to SW in which he writes:
"Monetary policy does not have the power to permanently raise the level of output."
Now I mention this for two reasons:
First, it gives me the opportunity to apply Feynman: experience shows that monetary policy does have the power to permanently raise the level of output. For example, it can finance, through the creation of money, the building of the Eire Canal, the railroads across the West, or the Hoover Dam. Even Franklin was wise enough to print money, whenever the opportunity presented itself in Philadelphia.
Second, if true, why permit private debt, for doesn't it logically follow that private debt would not have the ability to permanently raise the level of output either?
How does the economy know whether the Hoover dam is publicly or privately financed? Or whether the money to pay for the dam was created by the Fed Res or Chase?
(Please don't tell me that banks don't create money.)
Once again, John D, you show your ignorance. Buying the Hoover Dam is a different issue from how it is financed. Please stop killing electrons to put your nonsense on the internet.
Delete" How does the economy know whether the Hoover dam is publicly or privately financed? Or whether the money to pay for the dam was created by the Fed Res or Chase?"
Deletesure, good question.
ive got an idea, lets eliminate taxes and pay for everything with Bernanke Bills. Hows that sound? instead of taxes well all just pay for it through inflation.
https://athens.indymedia.org/local/webcast/uploads/frankfurt__harry_-_on_bullshit.pdf
DeleteSoros, yesterday, on the scientific method and economics
ReplyDeletehttp://www.georgesoros.com/interviews-speeches/entry/remarks_at_the_festival_of_economics_trento_italy/
Your link doesn't work, just like Soros.
DeleteDavid, sorry, but you were too slow to the link.
DeletePerhaps Soros only intended the speech for limited distribution. Perhaps he fears for people can't handle the truth.
Anyway, as confirmed by Joe Weisenthal and others, the speech is no longer up on the Soros site.
If I can find a copy you will be the first to know. What is your motto: Believe those who are seeking the truth. Soros is a seeker.
MYSTERY: That Amazing George Soros Lecture Goes Missing From His Website
DeleteRead more: http://www.businessinsider.com/george-soros-article-no-longer-on-website-2012-6#ixzz1wrjayvzg
David
DeleteTry this link
Read, learn, enjoy
http://2800827.blog.hexun.com/76470341_d.html
I visited this site this evening only to read that you have elevated yourself above Soros in addition to Krugman.
DeleteHere is the link to full text of the "Secret Speech" by Soros.
http://www.businessinsider.com/full-text-of-george-soros-speech-2012-6
It would be interesting to read your attempts at explaining where or why he is wrong.
Oh Alex, let me send you my kid's soother.
DeleteBoy, John D is really persistent, isn't he? Despite all evidence to the contrary, he still thinks he understands economics and that he is scoring "points" with his bizarre hero-worship of George Soros. Get a hobby, John, before you have a stroke.
DeleteWow.....What a nice post!!....Your post is an excellent example of why I keep coming back to read your excellent quality content that is forever updated.I would like to read newer posts and to share my thoughts with you.Thanks a lot....
ReplyDeletefilozofia