Germany’s central bank completed Wednesday its plan to bring back home 54,000 gold bars it had in vaults located in New York and Paris to beneath its Frankfurt headquarters, three years ahead of schedule…
…The lender said it ‘thoroughly and exhaustively’ tested all of the bars after they arrived back in Frankfurt and ‘no irregularities came to light with regard to the authenticity, fineness or weight of the bars.’
When I first published the Layman’s Guide, I omitted any reference to economists as such, mostly because it seemed to me at the time that not even God himself, let alone an untutored blogger, could make anything either succinct or coherent out of their work. Since then, I’ve read more widely, if not more deeply, and, by George, I think I’ve finally got it.
Economists in General: The health of the economy does not depend on your having any.
Some Economists in Particular: And a damned good thing it is, too, which you would realize if only you could grasp the concepts involved.
The Brothers Koch: You can’t have any.
Ted Cruz: You don’t deserve any.
Goldman Sachs: You can’t have any until we’ve got ours, and most of yours as well.
Larry Summers: Once I’ve got mine, I’ll try really, really hard to get you some.
President Obama: Everybody should have some. Somebody should see to it.
Today Paul Krugman has discovered that, gasp, technological unemployment is really real! And it’s really, finally here! And it really, really will result in a permanent transfer of wealth from labor to capital, no matter how many college degrees laborers go into debt to acquire! (and, coincidentally, of course, this also seems to imply that Marx might actually have been a bit smarter than we thought.)
I’m being unfair, or at least uncharitable, to the penitent Dr. Krugman, who’s a nice guy, and would be a nice guy even if he weren’t an economist. Still, this is an amazingly belated observation on his part. I thought that these economist guys all knew this stuff, but were afraid to mention it for fear of devaluing their Keynesian cheerleading. Horrifying to think that they didn’t actually know it at all.
Brad DeLong at his finest. Proof positive that the talent’s out there:
From Dani Rodrik’s Europe’s Next Nightmare in Project Syndicate:
The challenge is to develop a new political narrative emphasizing national interests and values without overtones of nativism and xenophobia. If centrist elites do not prove themselves up to the task, those of the far right will gladly fill the vacuum, minus the moderation.
That is why outgoing Greek Prime Minister George Papandreou had the right idea with his aborted call for a referendum. That move was a belated attempt to recognize the primacy of domestic politics, even if investors viewed it, in the words of a Financial Times editor, as “playing with fire.” Scrapping the referendum simply postpones the day of reckoning and raises the ultimate costs to be paid by Greece’s new leadership.
A more moderately-worded view of Europe’s delusions. Then again, Rodrik doesn’t need to shriek — he isn’t looking directly down into the abyss. He’s over here on this side of the Atlantic, where we have our own problems with democracy. There are many pathways to the legitimacy conferred on a government by the consent of the governed. Europe can’t seem to find any of them, while we seem to have given up looking. Given that modern history hasn’t tolerated either form of benign neglect for very long, there doesn’t seem much point in preferring one over the other.
Today, in the Süddeutsche Zeitung online, an editorial by Heribert Prantly which makes, among others, the following point:
In der Spitzenpolitik wurde dieses Referendum diskutiert, als habe Premier Papandreou vorgeschlagen, die Demokratie in seinem Land durch ein russisches Roulette zu ersetzen – und als gelte es daher, dem Premier die Waffe wieder aus der Hand zu winden; das hat man denn auch getan. Dabei hatte Papandreou nichts anderes versucht, als die Demokratie in ihr Recht zu setzen: unzulänglich sicherlich, undiplomatisch, ohne zuvor an Angela Merkel und Nicolas Sarkozy wenigstens eine SMS geschickt zu haben.
Er hätte sein Vorhaben früher ankündigen, es besser vorbereiten, es hätte Teil des Euro-Rettungspakets sein müssen. Aber auch mit der falschen Verpackung und falsch dargereicht bleibt eine Medizin eine Medizin; man muss sie besser einsetzen, zur richtigen Zeit und in richtiger Dosierung. Eine Volksabstimmung ist kein Allheilmittel, sie ist aber auch kein Gift. Wer in einer Demokratie das Volk, den Demos, befragen will, ist zunächst einmal kein Narr, sondern ein Demokrat.
Or, as I translate it:
In senior political circles, this referendum was discussed as though Premier Papandreou had proposed replacing democracy in his country with Russian roulette, and as though it would therefore be appropriate to wrest the weapon out of his hands, which was in fact what was done. But in acting as he did, Papandreou had sought to do no more than give democracy its due — inadequately, to be sure, undiplomatically, and without having so much as sent Angela Merkel and Nicolas Sarkozy an SMS beforehand.
He should have announced his plan earlier, prepared it better, it ought to have been part of the Euro rescue package. But even in the wrong wrapper, and improperly administered, a medicine remains a medicine. One need only introduce it more properly, at the right time, and in the right dosage. A plebiscite is no cure-all, but neither is it a poison. In a democracy, he who wants to submit a question to the people, the demos, is first and foremost not a fool, but a democrat.
I agree completely, and can only add that it never ceases to amaze me how thoroughly people who consider themselves the intellectual and moral elite of their respective countries, the custodians of our modern, post-industrial civilization, discount this simple truth. Poke them a little, and none of them actually believes in democracy. That’s their right, I suppose, and no doubt they have their reasons, but I’d have more respect for them if they didn’t expend so much energy trying to convince me otherwise.
Fiat Currency. Fractional Reserve Banking. Collectivism. Curse words as familiar these days on the Intertubes as socialist or liberal used to be at Baptist church suppers. Disciples of the Austrian Holy Trinity — Hayek, Von Mises, and Rothbard — are everywhere these days, and everywhere eager to counsel us that any houses we build in the future must be paid for, not with electrons and promises, but with actual money — you know, hard money, money you can bite down on, money that you can toss up in the air like Scrooge McDuck, and actually feel it hit you on the head when it comes down. They’re having none of this stuff that any government can conjure on a computer, and any central bank can issue. They claim that civic virtue is what’s driving them, but I suspect that they’re just out of breath chasing events that they don’t understand, and consequently need a rest more than they need our attention.
Yes, hard money would certainly slow things down for a time. People who presently have access to hard money, or can imagine themselves having access to it in the future, think that this would be a Good Thing, inasmuch as it would a) give them more leisure to lecture us on eternal verities, and b) keep the political fantasists and other rabble at bay until better security measures could be devised.
They’re wrong, of course. It’s not just that they’d have to put down the masses of people pissed at being forced to give up their iPads and go back to grubbing on somebody else’s acreage all day with only a dish of oaten gruel as their reward at the end of it. They’d also have to figure out how to finance a dozen nuclear-powered aircraft carriers and accompanying battle groups to replenish the gold they’d frittered away producing goods that no one but themselves had enough hard money to buy.
So what else is on offer, and who’s offering it? These days, business as usual, of the kind prescribed by Wolfgang Schäuble on the far side of the Atlantic, or Hank Paulson closer to home, has about it the unmistakeable odor of wishful thinking. Slightly left technocrats agree, and offer us Keynes instead. They swear it’s because his theories work, but I suspect that at least part of their enthusiasm arises from the notion that adopting his theories would put them in charge again, which for them, if not for us, is reason enough. Revolutionaries are still trying to exhume Marx — brush the grave-mold off his burial suit, put a little touch of rouge on his cheeks, they say, and he’s good to go again. With all due respect for what he accomplished in his day, I doubt it.
We need to do better than this. What do we mean by freedom? What do we mean by prosperity? Is capitalism — any form of capitalism — really essential to either? Who’s minding the store anyway? I can’t really blame the Hayekians for asking similar questions, but when it comes to answers, I’d as soon consult my local astrologer.
Tinkering…. As good a word as any for a dearth of political will. I hate to bash Brad DeLong, who’s one of the good guys, and doesn’t really deserve a snarking, but he’s a classic case of the technocrat who believes in all the seemingly correct policy solutions, yet is left as helpless as the rest of us by the madness of Realpolitik, not to mention the madness of people who wouldn’t recognize realism if it bit them in the ass.
Here’s Professor DeLong, who’s as smart as we make them these days, waxing ironic:
And here we reach the limits of my mental horizons as a neoliberal, as a technocrat, as a mainstream neoclassical economist. Right now the global market economy is suffering a grand mal seizure of high unemployment and slack demand. We know the cures–fiscal stimulus via more government spending, monetary stimulus via provision by central banks of the financial assets the private sector wants to hold, institutional reform to try once gain to curb the bankers’ tendency to indulge in speculative excess under control. Yet we are not doing any of them. Instead, we are calling for “austerity.”
It may make for decent theater, but irony is hardly the best defense against the limitations of the intellect in situations like the one we all find ourselves facing today. Neither is cognitive dissonance, as in the governor of Wisconsin — Wisconsin, for Christ’s sake — threatening to use the National Guard to shoot public employees who object to being beggared by a nasty right-wing ideologue. Or, if you’d rather read about the problems of furriners, this: The Arab World’s Triple Crisis.
If Professors DeLong and Krugman can’t handle the political implications of our manifold current crises, who can? My answer is that no one can, not and remain unscathed. Our future is no longer strictly a mattter of policies good or bad, and no matter how much we might wish it to be otherwise, the outcome has become unpredictable.
If a just and merciful God actually ruled our modest corner of the universe, this might well be the last headline in the last newspaper before the world’s presses are shut down forever. The justice of it is obvious. Having devoted the last twenty years of his pitiful life to a self-indulgent campaign against the very foundations of human civilization, it’s only fitting that His Obesity should be compelled to prove the last full measure of his devotion to the cause. The mercy, of course, comes at the end, in the blessed silence which descends on us as his bones are being picked clean, and we’re at long last left alone in the ruins to ponder our own collusion in his ascendancy.
Whatever you may hear about our essential Godlessness, never doubt for a moment that we secular humanists have our own vision of End Times. It may not be as emotionally satisfying as the one being marketed by our fundamentalist Christian brethren, but unlike them, we have actual evidence to offer for ours: here, here, and here.
So, while Rush blames the decline and fall of the American empire on negroes and homosexuals, on feminazis and San Franciso liberals and socialists, and anoints himself with Wal*Mart oil in anticipation of being crowned our first Social Darwinist emperor, I like to imagine him subbing for Montgomery Clift in the climactic scene of Suddenly Last Summer. (Tennessee Williams may have been abhorrent to Real Americans, but he more or less wrote the book on many of our latter-day hypocrisies.)
I plead guilty to a lack of charity toward Mr. Limbaugh, but if we really are destined to face the Four Horsemen in the not-too-distant future, it would be a lot easier for me to greet them with bread and salt if I knew that he’d already gone to his reward. Mea Culpa.