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Archive for 2011

Monetarism vs. Fiscalism Redux

Posted on: December 27th, 2011 by Mike Sax No Comments

      After writing my last piece, I read a little more from Lars and in his post "Monetary Policy Can't Solve All Problems" he elaborates a little on this.        When he says: "The professor has now introduced the AD-AS model (and the dynamic AD-AS model). Since AD is just (1)’ the professor has not started to talk about fiscal policy (what multiplier??). In his head the AD curve can be shifted by shocks to M or V, but that has nothing to do with fiscal policy. In β€œhis” AD-AS model fiscal policy does really not exist, as it is basically a micro phenomenon – fiscal policy might have an impact on relative prices, but it has no impact on the PY aggregate and fiscal policy might impact the supply side of the economy, but not the AD-curve? No, of course not."        ...

Kim Kardashian: Man, There’s a Lot of Haters Out There

Posted on: December 27th, 2011 by Mike Sax No Comments

     I find the treatment of the Kardashians, Kim Kardashian particularly, pretty interesting. There is so much hate and bitterness towards her. As so many seem to want to insult her and denigrate her as much as possible, I see it as a sociological phenomenon.      As the feminist Nancy Friday once said, women don't wish other women well. Recently there was a piece in the Enquirer where Oprah Winfrey was censoring Kardashian for visiting Haiti in support of the victims of the earthquake.     Oprah was sure that it was just to repair her image that has been hurt by her very short marriage to Kris Humphries.     I'm not in her head and don't know her motivations. I mean I don't necessarily think even if Oprah's right that makes her a horrible person. I guess what I don't get is why her marriage to Humphries gets people's knickers in such a twist to begin with.     Her marriage was a bust,...

US Economy Not Beyond Hope

Posted on: December 26th, 2011 by Mike Sax No Comments

     Which is more than we can say for Europe which is beyond hope unless Angela Merkel and Mario Draghii each get a lobotomy. As it is Germany is determined to bite the nose of Greece to spite it's own face.      In the US we have seen unemployment claims coming down along with the unemployment rate with signs that even the housing market may have bottomed. With the congressional Republicans to to finally letting a few hostage goes without even more ransom money there would seem to be some reason for optimism.      The negative to this is that while we saw unemployment claims reach to the lowest level since 2008-to the territory needed to see the unemployment rate come down, the question remains how much of this is rather people falling out of the labor market rather than finding a place back in it.       Still it is not hopeless. Which is more than you can say for Europe-there the reason for...

Hope You had a Good Christmas-I have Redirect Issues

Posted on: December 26th, 2011 by Mike Sax No Comments

     I should add if your Jewish hope you had a good  Hanukkah-though Hanukkah is still going on I've learnt-this year it falls on our calender from the 20th to the 28th-it is different every year on our calendar but is on the same dates on the Hebrew calender.      I had a great weekend for sports-the Giants beat the big talking Jets, 29-14-yes Rex guess you were wrong-and the Knicks beat the Celtics for the first game of the new NBA season 106-104. There are few sweeter things as a Giants fan than beating the Jets-only thing sweeter is beating the Cowboys which we did a few weeks ago but need to do one more time this Sunday; beating them for the NFC East title will be even sweeter!-and as a Knicks fan there is almost nothing sweeter than beating the Celtics-I guess the only thing would be an NBA title for the first time since 1973.      I got to spend time with my brother and his wife-she is now very pregnant...

Rex Ryan Fails to Put Money Where Mouth is.

Posted on: December 25th, 2011 by Mike Sax No Comments

     All week nothing could dissuade him from going on and on. This game is a big deal he said, and the Jets are going to win it.       When people suggested he should talk less and let the game speak for itself he said, "That's your opinion. My opinion is what counts to me."        Now it is once again clear his opinion doesn't mean much as the Giants whipped the Jets yesterday 29-14. What is it about the Jets? It seems to be a characteristic of the franchise that they always have to talk a huge game. They don't agree with Teddy Roosevelt, they don't speak softly and too often carry a tiny stick.        We have :Broadway Joe" Namath guaranteeing Super Bowl III for the Jets only Super Bowl. Since Rex has come to New York, it's as if it's necessary for him to guarantee every game as if this is the only way his team can get up for important games....

Monetarism vs. Fiscalism

Posted on: December 24th, 2011 by Mike Sax No Comments

    This debate which is always out there has smoldered more to the surface lately with the Market Monetarists' visceral reaction to Stiglitz's Vanity Fair piece. It seems that there are three basic positions: you can say that fiscal policy is irrelevant and using it to fight a recession only distorts things as it is usurping the job of monetary policy.    The opposite extreme "fiscalist" view that monetary policy has little relevancy in fighting a recession-this is what many of the MM school thought Stiglitz said anyway. Then there is the view that neither are irrelevant and that both have some level of impact. This view can be seen in people like Krugman and Eggertsson.     It might seem that the "intermediate" school would have something to say to the monetarist school, but the monetarists see it as a kind of "crowding out"; if you try to fight a recession by both a fiscal stimulus and effective monetary policy the one cancels out...

Ron Paul Further Muddying the GOP Field

Posted on: December 24th, 2011 by Mike Sax No Comments

     As if they need this. Fact is this one is totally getting away from them, and it just keeps getting worse. The more the Republican establishment tries to stop the bleeding the worse it gets.      Now as if things were not muddied enough and as if this primary season hasn't contained enough comic relief, we now have the tremendous specter of Ron Paul taking over the lead in Iowa.      I presume it is canonical that the Republican establishment-the RNC, Karl Rove, and thinking Republican who actually has a clue about politics-wants Romney. He is, has been, and will always be their choice. He may still win-I still think he's probably better than an even chance to win. There are some signs that Newt's wave has already crested.    Have no doubt, the party establishment did not want Cain, did not want Perry, and don't want Gingrich. But no doubt even worse for them now is the sudden surge of Ron Paul....

The Limits of Monetarism

Posted on: December 23rd, 2011 by Mike Sax 2 Comments

     The more I read the monetarists-especially Scott Sumner-it begins clear to me that monetarism is something which does make some valuable insights but still you must be careful with as it's agenda never changes.      This is why Sumner keeps writing snarky posts about Keynesianism. The hope of monetarism is always the same-that we will be weaned from the illusions of "fiscalism." For deep problems in an economy to always being due to nominal shocks is what Sumner wants us to drink.     Therefore if we get monetary policy right there should be no problem-ever? To underscore how one sided this view is, Sumner once claimed that if Benjamin Strong had lived there would have been no Great Depression.     And this is really the difference between monetarism and Keynesianism. Monetarism is committed to laissez faire. To an extent it weakens it's own position by saying that the Federal Reserve caused the Great...

Gingrich Wants to Rein in Judicial Independence

Posted on: December 23rd, 2011 by Mike Sax No Comments

     While the conservatives chafe at anything which might check "Fed independence"-read it Fed independence to serve the interests of banks rather than the American people-Newt Gingrich has a new idea that he calls "bringing the courts back under the Constitution."      "These include calling judges before Congress to explain their decisions, impeaching judges or eliminating courts that consistently get the Constitution wrong, and limiting the applicability of Supreme Court decisions that distort the Constitution." (pg. A19, today's Wall Street Journal)      These ideas have been criticized as violations of the Constitution's separation of powers. Of course the Wall Street Journal  editorial page is here to tell us that these criticisms are "overblown." What else is new. This is the function of the WSJ editorial page-to defend indefensible Republican positions. They are essentially  an organ of the GOP,...

Sophie Clarke’s Home Town of Wilsoboro Celebrates Her Win

Posted on: December 23rd, 2011 by Mike Sax No Comments

     I had a conversation with a very nice guy by the name of Bryan Elder. Turns out he went to school with Sophie, actually graduated from the same class of 2007.      For the roster of their class please see      What struck me is the glowing terms he spoke of her in. He is now an Occupy Wall Street supporter, but his memories of her are particularly of the time they were both on the drama club. He was bullied in school but in the drama club she helped him.      He remembers that she would teach third world kids to read and was the valedictorian of her class. While he wasn''t close friends with her it's clear that she made a real impact on him. As she did on many of us in just one short season.     As he puts it, "the whole town of Wilsboro has her back."...

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