Assorted links

1. From Washington Monthly: monetary policy, gargoyles, and the emotions.  I say focus ruthlessly on substance and do your best to explore and present the limits and drawbacks of your own ideas and recommendations.  Years down the road — or sooner — one will end up wiser and better informed.  The reasoning in this article is an excuse to dismiss moderating or inconvenient ideas, or ideas which de-moralize a topic somewhat.

2. Wage stagnation isn’t due to a compositional shift.

3. Old Germans who die and leave their estates to Israel.

4. There is no great swimsuit stagnation.

5. Why are New Yorkers reviving taxidermy?

Comments

Well, now we know what gargoyles sound like.

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Re: Washington Monthly

The author's hysteria aside, isn't it worth thinking about whether the "low costs" of inflation will be born most heavily by the unemployed and fixed-income people? Especially if it doesn't work? That is, if unemployment *does not* improve, then the people that this author is so passionate about may be worse off than they are now.

Not saying this concern is a definitive reason to not ease, but it provides a reason why we should be *cautious* about easing. The author mistakes cautious acceptance for indifference.

How dare you.

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1. "The reasoning is airtight, but completely ignores the enormous, hulking fact that hundreds of millions of people are sufferingly horribly accross the world for lack of adequate demand, and better monetary policy could potentially ameliorate that."

Yeah, that's just what we need, some illusory demand.

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Tyler, you often present a conclusion with "shout it from the rooftops". If the expected value (not a certainty) of monetary easing is a significant number of lives improved, doesn't that merit rooftop shouting?

Despite being known for rooftops, gargoyles aren't particularly famous for shouting.

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Shout in a calm and balanced manner.

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Point taken, but I still say one should really try to grapple with the moral consequences of one's policy preference in situations like this. Constantly trying to upend the presentation of issues to drain them of their moralism can be good for avoiding bias and thereby deepening one's own understanding, but these are real people's lives we're talking about. Sometimes a moral conclusion is unavoidable.

Years down the road we are all dead.

Adoption of a moralistic argument = grappling with the moral consequences of one's policy preferences? It seems like the opposite is true. A dispassionate, rational analysis leads one to weigh the consequences of both sides more than mouth-frothing zealotry.

+1

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Ryan's argument isn't quite "mouth-frothing zealotry"; it's probably more fair to call it "advocacy" (in the courtroom sense). A litigator's job is to convince the jury that a particular conclusion is obviously correct, and that you'd have to be a complete idiot or moral reprobate to disagree. Counterarguments are generally to be scoffed at or mischaracterized rather than objectively analyzed.

It's an argument advocating a free lunch solution. An economist properly tamps down the enthusiasm.

But how convincing is a competent, dispassionate economic analysis to the average American? The pen is mightier than the multivariate analysis.

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@Tevyeh: I agree, but I interpreted Ryan's comment as an appeal to right conduct rather than to expediency. I think we can agree that it's harder to win an argument through reason than through appeals to emotion.

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"...I interpreted Ryan’s comment as an appeal to right conduct rather than to expediency."

Few journalists understand that there's a difference.

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Maybe, the problem is that we have too many advocates and not enough judges and jurors. In the court of public opinion, of course, we all play all roles simultaneously. In court, the ratio is 13 jurors/judges to 2 advocates, not counting the higher-level appeals court judges. It seems that most people, though, reverse the ratio: they spend much more of their public discourse presenting their advocates' arguments rather than engaging in jurors' deliberations or delivering their judges' opinions.

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I am more persuaded by arguments in the form of "This may or may not work, but the downside risk is low so we might as well try" than "The correct policy is so blindingly obvious that only a monster could possibly oppose it." People who favor the former type of argument over the latter are more credible to me. I guess this means I am a gargoyle.

I'm with you, but we're a minority. If you want to convince "the masses", then you need to appeal to human passions and cognitive biases. Every rhetorical tool needs to be brought to bear, including strawmen, false dichotomies, and other logical fallacies. Paul Krugman has figured this out, and is why he's more influential than Dr. Cowen within the U.S. population as a whole.

Not that your typical NYT reader considers himself part of "the masses."

OK, mini-masses.

Mini-asses?

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Disagree. Paul Krugman is more "influential" only among the Left, who already agree with him anyways. Since they already agree with him, he is not really "influencing" them, other than perhaps providing them with ammo that they then use to fail to persuade others, except for those on the Left that already agreed with them.

All the more remarkable that Krugman is seen as a polemicist, given that he is a Nobel Prize winner, most of whom enjoy wise statesman status. I would say that relative to other Nobel Prize winners, Krugman's bringing to bear of "every rhetorical tool" has actually harmed his reputation. Even Obama left him off his economic team.

Milton Friedman, for example, was much more influential during the Reagan years than Krugman is now. For that matter, one could argue that Friedman is more influential now, even though he has passed away, than Krugman is now. Will anyone be mentioning Krugman's 100th birthday in a few decades? Doubtful.

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Am I missing something, or is there no meaningful argument provided for why wage stagnation is not the result of compositional change?

I guess their argument is that because two variable aren't correlated exactly they can't be related. That seems like a pretty lazy counterargument, but I'm not a fancy-pants economist.

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I didn't see one either.

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ASSume ceteris paribus. Plus they have the wrong confounding factor that has been a drag on wages over the last three decades. Aging of the labor force. Peak real earnings occur in your mid 30's and its downhill from there (baby boomers).

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#5: Because hipsters.

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Regarding #2, unfortunately few to none of those involved in the recent debate on blogs have directly discussed the academic literature on this topic. A good place to start is Acemoglu and Autor's chapter in the latest Handbook of Labor Economics. An almost-final draft is available on Autor's website (PDF: http://economics.mit.edu/files/5571).

If I remember correctly all the tables and figures in this chapter show composition-adjusted numbers. See notes to Figures 1 and 2 for details. Figure 7b shows stagnant median wages for males since the early 1970s using March CPS data. Figure 8b shows a slightly more positive picture using the May/ORG CPS data, although a gain of about 10 percent over 35 years is not very good and might well be called stagnation. Figures 7c and 8c show better outcomes at the median for women.

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Re: #3

200 estate bequests to Israel by older Germans - total? Out of a population of over 80 Mill.? The article hints that the phenomenon has reached a peak, and that it happens about once a month.

Is that a lot? Does that qualify as some sort of trend or movement? I would wonder what the rate of such bequests are in other European countries.

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Re: #3

http://en.wikipedia.org/wiki/Parasitic_castration

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Although I believe QE plus a Reinforcing Stimulus has worked & could work better, I do see a Moral Aspect to my very Pragmatic Reasons for trying more now. Honestly, I thought that was one of Tyler's reasons for supporting doing more now as well.

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I'm sympathetic to monetary stimulus in this environment, but I hate that guy's argument. It would apply at any arbitrarily high cost for starters. A cynic might also say that moral grandstanding is a way to gloss over just how uncertain anyone is that it would really work.

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#2: this frequently repeated claim that real wages have frozen since the 70s seems to miss the point so drastically.

I remember the 70s and our standard of living was so much lower than it is today, and there were so many more differences between the rich and the middle class.

The differences between the rich and the middle class today are mostly in the areas where technology/globalization hasn't yet made everything cheap for everyone (real estate, education, healthcare). There are also status symbols like swiss watches which only rich people want and normal people don't care about.

The real problem today isn't wages, but the difficulty in maintaining stable employment until retirement.

I

"Three decades of stagnant median wages" has been repeated often enough to attain the status of Gospel to many.

Of course, there are a zillion ways to analyze such a claim. Here's a simple one. Data on Social Security covered wages since 1990:

http://www.ssa.gov/OACT/COLA/central.html

Between 1990 and 2010, median wages have increased about 9% AFTER adjusting for CPI based on these data. This is not world-beating performance, but it's far different from conventional wisdom.

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The problem is that Google changes their PageRank algorithm from time to time. Therefore it's good to repeat, in different ways, and on different sites, the same misinformation.
That way, when Google changes their algorithm, a search for the stagnancy of wages since 1970 still returns a million results.

More on topic, re #2, has Lane Kenworthy weighed in on whether or not Harry Reid is a pederast?

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ref #1
It's not like the world is lacking in enthusiastic roof top screamers, even trained economist ones. Economics is still a social science, so a good dose of skepticism about it's own conclusions is a good thing.
A good intellectual not turning into an advocating hack at all costs? I say stick to your guns, Tyler.

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It's much easier for a country to win medals in a women's sport than in a men's sport, except for the handful of sports that females really care about, such as gymnastics and figure skating in the Winter Olympics. The ROI on investing in women's sports is much higher because few young females are intensely self-motivated to become athletes. So a society that decides to devote a lot of resources to training females in a particular sport can enjoy a lot of success, such as in women's golf, where Sweden did well in the recent past and South Korea today.

Before intensive drug testing began after 1988, it was especially easier to win women's medals by giving artificial male hormones to women, as East Germany did with so much success from 1976 through 1988.

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1. "Years down the road — or sooner — one will end up wiser and better informed" This sounds like great advice for an academic, but little comfort to a policy maker today. On a related point, is unconventional monetary policy useable outside a crisis or do we still have too much to learn? In crises like the near meltdown of the financial system in fall of 2008, the costs of inaction were too high and something had to be done even if the effectiveness was uncertain. Now there's no crisis requiring immediate action but rather the ongoing private and social costs of high unemployment. Does this kick us into wait-and-see mode since we don't know enough about the expected effects of unconventional policy? Seems counterproductive to need a crisis to get some real policy action to address existing problems. Maybe you could just see the Wash. Mo. piece as trying to argue that we do have a crisis.

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Mr. Corwen, this isn't an academic debate. Its not a seminar on history. Its not even a policy debate anymore.

Its people's lives. Their livelihoods. Perhaps most importantly its their growing inability to feed their children.

Put it another way: how about you and Chairman Bernanke come to a few homeless shelters and food banks here in New York City and explain to the families gathering there how you can't come up with a plan to get the economy moving again that doesn't involve an infintismal bump in inflation and some inconvenience for investors, and thus they all have to continue on as they are.

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