Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Sunday, July 11, 2010

Quote of the day

FDR was on the right track, but didn't have it quite perfect when he said the only thing we had to fear was fear itself.  They real bogeyman is deflation.

On this topic, Kruman's blog today is a must read. (Plus - he has graphs!  You know I love graphs.) To save you a couple of click throughs, here is the very Krugmanesque-sounding also must-read article by conservative economist John Makin, from the American Enterprise Institute (!?!) which prompted his post. 

It is also the source of today's quote:

In fact, banks have virtually ceased to function as financial intermediaries since 2008, preferring to use the zero cost of money provided by the Fed to finance purchases of Treasury securities instead of supplying loans to households and small businesses. After a financial crisis, banks become much more risk averse, as is manifest in their willingness to lend only to the government instead of to households and businesses. That development is deflationary because it means that a sharp boost in the monetary base engineered by the Fed does not translate into faster monetary growth at a time when the precautionary demand for money has been boosted by elevated uncertainty.

I can't say for sure that the dysfunction of banking is the cause of the M1 multiplier collapse, but the timing is impressive, and it could hardly be mere coincidence. Maybe its the other way around, or they have some common cause.

While I love having both Krugman and Makin agree with me, I seriously fear things will become far, far worse before they get any better.   B. Hoover Obama is not a progressive, and there is no political will to correct the ongoing depression.  Meanwhile, Repugnicants and lots of other conservative economists, along with the E.U., are preaching austerity, which will be the ruin of us all.

There is no comfort in being right about this stuff.


BadTux said...

Yeah, don't it feel like we're re-arranging the deck chairs on the Titanic? There's that big fucking iceberg looming right ahead, and we're screaming "Hey you dumb fools, we're going to sink if keep going this way!" and the captains and officers far above us are just going "what are those nutters nattering about now? The Titanic is unsinkable!"

Sigh. WASF.

- Badtux the Butt-cheek-tightening Penguin

Jazzbumpa said...

As the story goes, the band on deck kept playing until the ship listed so far their music stands tipped and they fell of their chairs.

More trombones are lost that way.

lo siento,