Here is his non-excerptable attempt, via Brad DeLong.  Still I am not convinced.  Using the Law of the Excluded Middle, yes you can get me to agree that the stimulus package is unlikely to do direct economic harm.  I still see the stimulus plan in terms of larger symbolic battles.  We pass too many policies just to show politicians are "doing something," just because it is an election year, just because voters think government should solve every problem, and just because politicians know that voters don’t understand any real economics.  This fits all those categories.  On the substance, I would add that for the U.S. "not going bankrupt" is a matter of degree.  Compared to Brad or Arnold Kling, I’m still a fiscal optimist.  But I’ve spent too much time reading papers on the intransitivity of indifference relations:  "Just another grain of sugar in your coffee, dear.  It won’t change the taste even a tiny bit…"

Paul Krugman points to the new Federal Reserve senior loan officer survey which reports that standards for commercial real estate loans are tightening creating in Krugman’s words "an incredible credit crunch in progress."

Over at Carpe Diem, however, Mark Perry looks to Federal Reserve data on actual loans and finds that commercial loans from large banks are at an all time high and increasing rapidly.

The credit crunch, if that is what one should call higher standards, appears to be contained to the real estate market.

Best evidence that the merger between Microsoft and Yahoo will increase competition?

Publicly, Google came out against the deal, contending in a statement
that the pairing, proposed by Microsoft on Friday in the form of a
hostile offer, would pose threats to competition that need to be
examined by policy makers around the world.

Here’s an Open Letter on Antitrust Protectionism (pdf) that I drafted nearly ten years ago during the Microsoft trial.  It’s still relevant today.

French Finance Minister Christine Lagarde said Monday that some internal controls at Societe Generale failed or were ignored before the banking giant announced massive losses attributed to a single trader.

Here is one version of the story.  It’s gotten plenty of news coverage.  It’s gotten relatively little pundit coverage.  It neither fits the pro-market narrative of one side, nor the "blame it on the Bush administration and deregulation and bad U.S. corporate governance" narrative of the other.  By noting the story, and pondering its broader implications ("your favorite hobby horse matters less than you think"), I would like to do my small amount to counteract the silence of the pundits.  By the way, I owe this concept to Daniel Klein.

Via Brad DeLong and Mark Thoma, here is Mark quoting Brad:

But as Rodrik points out, "…saying that the impact of globalization
on advanced-country labor markets is quantitatively rather small in the
real world and is overshadowed by other phenomena (such as
technological change) is no different [in the Heckscher-Ohlin-Vanek
framework] from saying that the gains from trade have in practice been
small."  There is a problem of cognitive dissonance here.

I worry about this, but I am not so sure that trade advocates have painted themselves into a corner.  Trade can improve the global economy in at least three ways: a) factor price equalization and the resulting higher output, b) spreading innovations, new technologies, and new products, and c) by improving domestic politics.  The existence of b) and c) means that the gains from trade can in principle be large while the factor price equalization effect is relatively small.  Factor b) points us toward a very favorable opinion of trade.  Rodrik of course also worries about c):

How does Rodrik believe that globalization undermines social democracy?
First, because globalization has undermined governments’ ability to
carry out social insurance programs.

I’m not sure that Rodrik’s view is so uniform on this question; for instance he has a JPE piece suggesting that more open economies are more likely to be interventionist.  In any case my view is that the wonders of Sweden, Denmark and Norway rely very heavily on external trade.  Note that "openness" and "smallness" are distinct but correlated variables here; most likely both qualities are necessary for welfare states of the Nordic kind.  Or look at it from the other side.  In recent times (though it has been changing) Brazil and India were relatively closed to trade, and I don’t see that it led them to take better care of their poor.  International trade also makes countries more tolerant and it makes people more interesting.  That’s the old classical liberal case for trade from Wilhelm von Humboldt and Richard Cobden; let’s not toss it out just because Heckscher-Ohlin came along.