Monthly Archives: August 2013
This is the perfect drink for hot summer afternoons.
3 cups watermelon cut into bite sized or slightly larger chunks
6 tsp sugar
1 tsp rock salt or kosher salt
1 Key lime or 1/2 a regular lime
Cut the watermelon into chunks, add to a pitcher, then add the sugar, salt and the juice of the lime. Keep in the fridge overnight. The macerated watermelon will release its juices. Ready to serve after twenty four hours. Top with some crushed ice, if you like. You can also spike it with vodka if you want. If you do that I suggest using a blender to thoroughly mix all the ingredients.
Recipe notes : You can decrease or increase the amount of sugar as per your taste and the sweetness of the watermelon.
What Samuelson’s Editor should have said to him
LoL by: two_kittehs
Mr. Samuelson, don’t blame the internet, blame the newspapers. Your newspaper lost its readers because they don’t trust you to be objective or even informative. You may have forgotten Washington Post’s relentless cheer leading for the Iraq War based on false premises but we the readers haven’t. We are turning towards the internet for multiple sources of news because we don’t trust you. Its not just the Iraq War either, this problem extends to the coverage of the elections, where you ignore the issues and focus on the horse race and while covering the economy, you drive narratives which favor the already powerful. We don’t want you to take sides or to entertain, but to inform, since you have failed to do so, you are going the way of the dodo. The markets have delivered their verdict on the newspaper business, and too bad that you are at the receiving end of the creative destruction that you celebrate.
Maureen Dowd punctures the trial balloon of Summers candidacy to head the Fed and rips him to shreds in her column in yesterday’s New York Times. It is a work of art, the ruthless efficiency with which she goes for the kill, and I must say that no one deserves it better than pompous gasbag, whose alleged brilliance involves getting fired as a University President and being on the wrong side of the economic policy debates of the last decade. Please Mr. President just say no, better candidates are Yellen for your attention.
She goes for the kill with ruthless efficiency
LoL by: two_kittehs
When I wrote my first post about Raghuram Rajan, it was unclear from preliminary Google searches whether he was still a citizen of India or whether he was a naturalized US citizen. I found a talk he gave on globalization in 2005, when he was at the International Monetary Fund (IMF) which settles this matter conclusively. In the speech he states clearly that he is speaking as a citizen of India.
Good morning. I thank the organizers for inviting me to speak in such august company and to such a distinguished group. At the outset, let me state that my talk reflect my views as a citizen of India,
In his opinion piece, co-authored with Tim Kane, in the New York Times yesterday, Glenn Hubbard advocates the truly horrible idea of a constitutional amendment to balance the budget. That means he wants the government to respond to any economic challenge in the future with one hand tied behind its back and give up a powerful tool in setting fiscal policy. Imagine what the outcome of World War II would have been without deficit financing or the Civil War for that matter? The United States has used public debt to finance itself at many crucial junctures, in fact it was born in debt. This curious fixation that Republican leaning economists and many Republican-lite centrists, I am looking at you Tom Friedman and Steve Rattner, have about debt and the deficit during Democratic administrations is curious to say the least. Where was Hubbard when George W. Bush was whittling away the carefully built budget surplus by Bill Clinton or when Bush was starting wars without any plans of paying for them? Was Hubbard concerned about the debt, penning sad and ominous sounding op-eds in the New York Times? No, he was working for the Bush Administration and was the architect of the Bush tax cuts which changed the budget surplus to a budget deficit in the first place.
Why is the current level of debt the biggest problem facing the United States? Hubbard doesn’t explain, except for invoking Admiral Mike Mullen, and Detroit.
TWO years ago, Adm. Mike Mullen, at the time the chairman of the Joint Chiefs of Staff, said that debt was the “single biggest threat to our national security” — not some rogue nation, or terrorist group, but debt. What makes the threat of exploding debt especially dangerous is that it’s not like a faucet that can be easily turned down. Federal, state and city governments in the United States have lost their fiscal grip, and the saga of Detroit’s bankruptcy is just one example.
In fact if you see the chart below, the debt has been at higher levels relative to the GDP. For example after WWII, the era that followed was a period of unprecedented economic expansion in the nation’s history.
Since amendments to the constitution are extremely rare, this idea will hopefully die an early death. I think it may be the first salvo in the upcoming battle of raising the debt limit, the Congressional GOP will offer to raise the debt limit if the Democrats agree to a balanced budget amendment. So lets see, taxes are evil, and Hubbard and his ilk want no taxes, especially on the wealthy, government can’t use debt to finance itself so how exactly does the government function?
About Hubbard himself, why does this man have any credibility left . He was also consulting for Country Wide Financial, a major lender of the sub-prime loans and one of the prime culprits behind the housing bubble for $1200/hr. He bought us the Bush tax-cuts, he is by his own admission an advocate of austerity led growth, which says that if you cut the government spending in a recession, economy will grow. This makes no sense because during a recession, when businesses are holding back their spending, if the government doesn’t ramp up its spending the economy will contract, not grow.
What should send chills down your spine is the knowledge that he will be making economic policy in any Republican Administration.
Raghuram Rajan is being hailed as the second coming of Christ or tenth avatar of Vishnu by most in the media. There has been a lot of breathless gushing and swooning, with the media playing the role of teenage girls to Rajan’s Justin Bieber. A brief sampling of the head lines.
From The Times of India
Raghuram Rajan: Engineer-turned economist with a rockstar’s appeal
From the Economist
A Star Economist is put in charge of India’s Central Bank
From the Telegraph
India’s financial prophet Raghuram Rajan to run central bank
Independent Media Hard at Work
These news articles usually begin with how Rajan predicted the financial crisis. At the Jackson Hole Economic Symposium in 2005 Rajan presented a paper, that raised concerns about the financial sector. However, Rajan was hardly the only one who had raised these concerns. Academics like James Crotty and Greta Krippner, had also been pointing out the hazardous dominance of the FIRE (Finance Insurance Real Estate) sector in the economy before the crisis. Neither of them however have managed to become media darlings, and continue to toil in relative academic obscurity. While the media treats Nouriel Roubini, another famous prognosticator of the crisis as somewhat of a crank, going so far as to label him Dr. Doom.
What Rajan pointed out in 2005 was plain enough for anyone who paid attention to see, mainly that housing prices could not go on rising forever and the entire house of cards* built upon this assumption was destined to collapse sooner or later. If economists and other so-called experts failed to see the impending catastrophe it is not because it was difficult to see but it was because they did not want to see it. Just like the story of the Emperor and his new clothes. I have no idea why he is being hailed as a Messiah for stating the obvious, which he did in a good well reasoned paper, it was not like he came up the economist’s equivalent of the General Theory of Relativity.
So since 2005 has he been speaking truth to power? A sampling of his columns tells a different story;
1. Why blaming bankers for the crisis is a bad policy: Shorter Rajan, the government made banks loan money to poor people and that was responsible for the housing bubble and the resulting crisis. The last time I heard this claim trotted out was during the Republican Primaries by Romney and Gingrich. A claim debunked by both Federal Deposit and Insurance Corporation (FDIC) and the Federal Reserve.
2. Is finance too competitive? This column is so full of fail that I don’t even know where to start. I may have to do another post on it. One gem, towards the end of the column, he wants banks to be regulated just like any other industry, open to the forces of what he calls creative destruction. So no FDIC?
In short he has been writing things that comfort the comfortable, and make Paul Krugman mad. Tighten your seat belts India, and squeeze your buttocks, you are in for a bumpy ride, you have just handed the keys of your economy to a devotee of Schumpeter.
*House of cards refers to the securitization of the mortgages, rating agencies determining the mortgage backed securities to be investment grade (AAA), creating the over the counter derivatives to hedge against the mortgage backed securities and so on. In short creating layer upon layer of complexity not to mitigate risk, though that was the cover story, but to make profit, every step of the way.