Gravity-defying CEO pay is not a payment for talent. It’s not looting by the executives, either. It’s the outcome of principal-agent relationship in a market where new technologies combined with regulatory dereliction have created a lot of winner-take-all situations.
In this post, fiscal expansionist Brad DeLong says kind and admiring about austerian Ken Rogoff, concluding on a note that if taken literally is strikingly humble – not a characteristic we associate with DeLong. All the while, he is gently taking Rogoff’s argument to pieces: the humility smacks of false modesty, going almost too far to be good manners, but it’s clearly meant as good manners. Is he making up for joining in the schadenfreude over the Reinhart-Rogoff spreadsheet debacle? Is he just happy to be able to engage with a prominent austerian who, unlike many of the Chicago school (Fama, Cochrane, Lucas, Stephen Williamson …) understands Keynesian reasoning and has not erased from memory two hundred years of monetary theory? Maybe he just figures you can’t do nuance on the Web, so he slathers the flattery thick. It’s a little disconcerting to see somebody whose reflexive reaction to error is such that he used to run a “stupidist person alive” contest on his blog, to frame a fundamental disagreement about a matter of great import in such an elaborately respectful tone. Still, civil discourse is nice.
p.s. Read De Long’s post down to the comments – Robert Waldmann’s is spot on.