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.
Joe Weisenthal at Business Insider posts this chart as an exoneration of the Obama administration’s recovery efforts. The Eurozone has the Eurocrisis, and Obama has Congress, so I suppose it’s a fair match.
The Tax Justice Network dishes dirt on what the “financial services” industry of Cyprus was selling. So will the EU really close this business down in Cyprus? And will it roll on from that to the many other tax havens (or what the TJN people call “secrecy jurisdictions”) either in the EU or under the protection of various EU states? It could, in the end, go that way.
We can hope that this is a step on the road to bringing the financial sector under control. Continue reading →
My paper with Andrea Filippetti is now available from Birkbeck’s Centre for Innovation Management Research. Bottom line: European countries with a combination of good short-term unemployment insurance and vocational training participation were less likely to see reductions in private sector investment in innovation in the first year of the financial crisis: having just one of these was no help, and job security, the bête noire of neo-liberalism, made no difference. Another way of putting it is that, in this particular case (investment in innovation, during the financial crisis), it is the security part of the flexicurity model that provides the benefit. This is consistent with the logic of Estevez-Abe, Iversen & Soskice’s chapter in Hall & Soskice’s Varieties of Capitalism.
In case you were still wondering who was being bailed out (h.t. Counterparties) in Spain…
Blaming the governments of the Eurozone periphery for the current banking & currency crisis is not so different from blaming the mayors of Atlanta and San Bernardino for the US housing bubble.
Economic crisis brings public works programs, which are often slated as protectionist. A public works program (albeit not a “shovel-ready” one) that might seem to be exempt from this criticism is the proposed low-altitude (i.e., all-weather) rail link between Argentina and Chile, subject of a recent a memorandum of understanding between the two governments (h/t Tyler Bridges, McClatchy). And it is certainly true that such a link would facilitate Chilean trade across the Atlantic and Argentinian trade across the Pacific. The more important consequence, however, would be to facilitate regional integration within South America. In keeping with the Pacific-facing orientation imposed by the Andes, Chile is an associate (i.e., peripheral) member of Mercosur; Argentina is a full member, along with Brazil, Paraguay, and Uruguay. The new rail link would bring Chile closer to the fold.