A Newly Normal Stroll Down Memory Lane

Larry Summers has some Deep Economic Thoughts in the WaPo:

An e-book containing the papers and presentations from the European Central Bank's central banking forum conference in Sintra, Portugal, is now available. ECB President Mario Draghi and his colleagues are to be greatly commended for running a forum that is so open to profound challenges to central banking orthodoxy.

The volume contains a paper by Olivier Blanchard, Eugenio Cerutti and me on hysteresis...

OK, "hysteresis"? From Wikipedia:

In economics, hysteresis refers to the possibility that periods of high unemployment tend to increase the rate of unemployment, below which inflation begins to accelerate, commonly referred to as the natural rate of unemployment or non-accelerating inflation rate of unemployment (NAIRU). The term is based on the physical phenomenon of hysteresis in magnetic materials.

Implication for statistical characterization of unemployment

If the unemployment rate exhibits hysteresis, then it follows a statistically non-stationary process, because the expected value of the unemployment rate now and in the future permanently shifts when the rate itself changes. The process with hysteresis is a unit root process, which in its simplest form can be characterized as...

Are bells ringing? Back in 2009 Mankiw and Krugman got in an intellectual scuffle, with Mankiw noting that the Team Obama CEA forecasts were ignoring the unit root issue and Krugman noting that Mankiw was an obtuse Republocrat toady. More or less.

At the time, the data supporting the Krugman conclusion were driven by the Reagan recovery of 1981/82, which surely delighted any ironists out there. And in the fullness of time a wager that the CEA forecasts would prove to be unduly optimistic (proposed by Mankiw and not accepted by Krugman) turned out to be a winner for the Unit Root team, leading to journalistic plaints about a "New Normal" of higher than expected unemployment and lower than expected output. Yeah, expected by whom?

And now years later Larry Summers is piling on with more Republocrat obtuseness, telling us that hysteresis, aka the unit root issue, is real.

But Krugman still has his Nobel Prize and NY Times column and Mankiw doesn't, so who's the genius?

Comments

[henry]

You TM, for observing the difference between accomplishment and give every kid Krugmanistic a (Nobel) prize.

[henry]

Krugmanistic is what autospell did, but it seems cromulent on review.

[GMax]

Krugman in a intellectual fight with Mankiw? That would be an unarmed man in a gunfight...

[narciso]

greenspan, helped turn me into a skeptic, bernanke into a cynic on the matter,

http://www.foxbusiness.com/economy-policy/2015/11/03/fed-as-overprotective-parent/

[Threadkiller]

This is why Wikipedia cannot be trusted, TM

"Hysteresis" is the reaction to a leader mocking the unemployed who relyed on that leader's economic plan.

http://youtu.be/4p4-vPrcDBo

[Jack is Back!]

So much for TM kicking his co-contributor to the curb.

I left the last comment there and I think I have the JOM record for that.

[lyle]

Does Krugman have one giant rethuglican doll he jabs needles into or does he have to replace it every now and then? Methinks a president Cruz may force a heart attack so massive, blood might spurt from his chest. Somewhat akin to a compound fracture.

[GMax]

Newly minted right wing conspirator Ron Fornier tells us about Despicable She:

People don’t trust her.

The NBC/WSJ poll re­veals that 53 per­cent of re­gistered voters give her poor marks for “be­ing hon­est and straight­for­ward,” while just 27 per­cent give her high marks.

27%.

Let that sink in. This is who the Democrats are chasing all other viable candidates away for. Chuckle...

[GMax]

Gone?

[narciso]

I included our very own economist musings on monetary policy, for balance. Summers crew included the buccaneers who helped steal Russia from the people and back into the nomenklatura's hands who became the oligarchs,

[daddy]

Via the Brett Baire Show we get this reporting on the Russian airplane crash:

Reporter: "Russian and Egyptian Officials said the Investigation could take months, meaning a clear answer to the cause of the crash is unlikely anytime soon."

Why?

Give us the Data from the Black Boxes, and that ought to be available rapidly. Then if that info fails to be definitive I'll be willing to accept that it may take months, but until then I think we're being prepared to be Bulls###ed.

[narciso]

I'm guessing it was an explosion, but it will take a while for the ground crew at Sharm al Sheikh to be excused,

[Jack is Back!]

Think about it.

[Ignatz Ratzkiwatzki]

Actually I left a Q for you on the last thread JiB.

[anonamom]

JiB, I was happy to read the steroid injection did it for you. Rehab on!

[narciso]

ine wonders when they will figure it out,

http://faculty.insead.edu/fatas/CEPR_DP10902.pdf

[daddy]

From the Panel, we get George Will showing us his latest crazy theory, and DrK guffawing at it. The topic is Hillary's Policy Shifts, and specifically her recent comments about Gun Control, Keystone, Wall Street, etc.

Will: Charles (DrK) is right, she's going to be nominated. But let me propose a novel thought as to why she's saying this---she believes it.

Fornier: No. (Laughing)

Will: Yeah. What if she's a person of the Left? She's been in the Public Eye now for a quarter of a Century. There are very few undecided people out there. She's probably not going to move many people either way, so maybe she's just going to say what she thinks.

DrK: I'm willing to entertain almost any crazy theory, but that one is beyond the pale. I don't think she believes...she's, she's a person of the Left the way her husband was, the way Obama is, but that she has any principles that she will stick to? Look at what she did on Keystone, which she has done on the War. She will change as is required for political expediency.

[daddy]

DrK being honest!

Topic is some new poll showing Ben Carson in the lead, doing well with Independents, and tied hypothetically with Hillary.

Fornier: It's not just Republican's who are looking for an alternative to the status quo and right now he (Ben Carson) is a good vessel for that. I don't know how long that'll last.

DrK: Look, I'd like to believe that but he's not a fictitious name, he's been out there for 6 months. He's now leading in the latest Republican Poll. There's something about him. I think it's the Anti-Establishment whatever proposition in somebody, unlike Trump who is the other alternative, looks benign and kinda' sweet. You can't not like him. It's a hell of a way to pick a President but I think thats...look. In other words I have no explanation.

Big laughter :)

[GMax]

So lets do the math.

23 COOPs set up in states for Obamacare. Exactly one, Maine actually made money last year. 11 have failed. I think that means that 11 more are in the process of going out of business, just a tad slower than the others.

Another progressive socialist idea seems to lack just a bit in execution...

[Threadkiller]

GMax, you have to admire Pelosi's effective tactics though.

/ridiculousness

[narciso]

the problem, is what is left in the remains of such plans, fatas (i'm not making that name up) ignores that there has been no growth component, to economic strategies this time around, just fiscal consolidation, first time I heard that phrase,

[daddy]

The Panel continues. On the 50 US troops in Syria and the collapsing coalition as reported in the NYTimes, DrK says it's simply Obama doing something so he can say he did something---nothing but a legacy photo-op.

DrK: It's to give the appearance of motion, to make it look as if something is happening, so that at least he can say, he can issue statements...When you want to end a war, yes it'll be a diplomatic ending, but the way it's ended, who wins, who loses, depends on where the forces are on the ground. The Russians and the Iranians have shown they will do something. Obama has shown over and over again...

Will says that it's nothing but "semantic summersaults."

Fornier says "it's spin, it's lying, it's very much like Vietnam."

[boatbuilder]

In which TM once again demonstrates that he is way smarter than....well, me, for one. He seems to actually understand this stuff.

And I always thought he regularly hammered Krugman just because he couldn't stand the guy. Which is a pretty good reason.

[daddy]

I heard on Talk Radio news that there is an election tonight in Kentucky to replace the outgoing Democrat Governor. Here's a story: Kentucky governor's race highlights off-year election ballot

I have to dog walk now, but if anyone knows anything about this, please give a synopsis.

[Thomas Collins]

1. Clemson

2. LSU

3. Ohio State

4. 'Bama

[daddy]

Gretta and Tucker Carlson hammering the Military for the $43 Million Gas Station. Why don't they hammer their Government bosses, not the Military underlings?
Argghhhhhh!

Tucker makes the point that that $43 Million would train 1 Syrian Freedom Fighter.

Dogs.

[narciso]

well that's sort of my view with David 'abbott' Kirkpatrick, who almost always removes all doubt,

[Rick Ballard]

Kentucky Election Results (via AP)

Bevin looks to be in good shape, up 4% with 44% of precincts reporting. He has a 16K vote margin.

[narciso]

clarice pointed out something I hadn't considered,
look where the station is located,

http://www.weather-forecast.com/locations/Sheberghan,

it's on the main road that runs south to north, it's the fiefdom of Gen, Dostum, former vice presidential candidate

[Rick Ballard]

Bevin has it won. The sad news is that Grimes took the Secretary of State race. That's going to raise some problems next year wrt state legislature seats.

[narciso]

architect of the turtle soup strategy,

http://hotair.com/headlines/archives/2015/11/03/how-should-conservative-christians-handle-a-rapidly-changing-culture/

[narciso]

he does show flashes of anger, when warranted,

http://www.thegatewaypundit.com/2015/11/ben-carson-its-obvious-opponents-are-using-national-review-as-their-political-tool-to-attack-me/

[Buckeye]

TC

Rankings sound about right to me.

[Jack is Back!]

I actually think Baylor is number one and OSU, LSU and Clemson in the mx. But Clemson? No way. Not yet.

[narciso]

that seems improbable,

[narciso]

keynes was right, but not in the way he intended,

http://www.wsj.com/articles/the-tyranny-of-a-big-idea-1446510186

[Rick Ballard]

For those who wish to assess the value of polling this year, I would suggest perusal of this piece from five days ago which contains this priceless gem

Steve Voss, a political science professor at the University of Kentucky, said other polls completed recently have similar findings, which makes him believe the Bluegrass Poll is accurate.

“It echoes poll results emerging from other places as well, using different methodologies,” he said. “The likelihood that this is a fluke is pretty small.”

The Bluegrass Poll had Bevin at 40%. With 84% in, AP has called the race for Bevin who currently has 52% of the vote to Conway's 44%.

Not all polling is pure crap but polling of this year's Kentucky Governors race was uniformly pure crap.

[Agent J]

Fox just gave it toBevin.

[Threadkiller]

Exit polling may push in pure crap.

[narciso]

one wonders if there was a kim davis factor, involved, that carried over from breshears handling of the case,

[narciso]

I don't know why she complained, he wanted to die like che, and the Guatemalan army obliged him,

http://www.rollingstone.com/politics/news/the-border-war-on-birthright-citizenship-20151029

[Buckeye]

JiB

Clemson will get tested this weekend. Commitee must think Baylor will fade with 2nd string QB.

[Rick Ballard]

Narciso,

Too many of the FSA Louisville Brigade stayed in the barracks. Maybe their BOzophones didn't pick up for the calls from the Field Marshal.

[narciso]

probably, but I wouldn't discount other factors,

[narciso]

I know it's texas, but it's also houston, which has gone a little wacky in the last few years,

http://www.chron.com/politics/election/local/article/HERO-results-6608562.php

[GMax]

Conway was a two time elected AG in KY. KY has now elected its second Republican Governor since 1971 ( no not a typo ). So you have to hand it to Obama, he certainly has brought change to Kentucky. Now if you have been paying attention to things I post, you know that I believe Zero has chased a whole lot of lifetime Democrat voters out of the party. This would tend to bolster that argument a tad would it not?

[Captain Hate on the iPad]

The Towel Folders being against an outsider? I'm sure nobody saw that coming.

[Captain Hate on the iPad]

GMax is right. How much evidence do the commiecrats need that 404 has been their own little Jonestown?

[peter]

I first encountered the word hysteresis years ago, as I wasted large segments of my youth reading car buff magazines like Road and Track. Michelin (or one of those high end European tire manufacturers whose tires I couldn't afford) used to advertise that theirs were low hysteresis, meaning low rolling resistance.Did I also tell you I wasted huge portions of my youth reading about high end stereo equipment I could not afford either?

[Michael (fpa Patriot4Freedom)]

jimmyk - Congrats on your piece on foxbusiness.com.

Yet another reason to love JOM . . .
the quality of commentary and insight one finds here is simply beyond compare.

[lyle]

I want to believe, GMax. Newsletter.

[Captain Hate on the iPad]

I have confidence in the Fighting Dabos to screw things up between now and the playoffs. They were very fortunate to beat the Golden Domers.

Listening to Buckeye AD Gene Smiff "explain" JT Barrett's suspension is a quick reminder of how he somehow escaped being run out of town after having exhibited no supervision of the exiled Sweater Vest.

[Stephanie]

From Appalled from two threads back:

he promises some big effective action in Congress (which usually means shutting down the whole shebang) which inevitably collapses, then he raises money on the idea that the big old plan would have succeeded, if it weren't for those darn kids...er, establishment RINOs.

He's had some major successes, too. Just because the MSM didn't harp on them doesn't mean they didn't happen. They were bold and effectively checkmated his Royal Flushiness but don't let the fact that they were downplayed imply they weren't important and that he wasn't fighting the good fight.

See this exchange with Bret Baier for the true story on his wins and his push back about the 'lack of wins' narrative of the GOPe and MSM about his record:

http://therightscoop.com/boom-ted-cruz-schools-bret-baier-on-the-false-notion-that-he-hasnt-won-any-fights/

[Janet]

That is good news, narciso.

I was at the polls here today. Arlington voters failed..again. :(

[Stephanie]

I don't believe that any of the ESPN analysts had the CF poll even close.

Ha! They needed to be taken down a peg or two. Sportscenter is getting more annoying by the week. Too much input from the talking heads and not enough straight reporting. Like anyone GAS what Scott VanPelt thinks about the rankings. He's a former GOLF analyst. D'oh!

[narciso]

I don't think it was the winning vote, but at the margins it probably drove out turnout,

meanwhile the ABC minitrue moment, totally misrepresented the issue in light of recent events,

[narciso]

well I've found it works best, to watch SportCenter with the sound down,

[GMax]

Ace is calling the Republicans holding the Va Senate. Lots of DC Democrat money down the tubes there too.

Anyone seen anything on the Ohio marijuana ballot initiative?

[Janet]

and Bloomberg money. I read something somewhere today that said Bloomberg put a lot of money into Virginia.

[Jane]

Isn't Bevin the Tea Party guy?

And can someone repost the link to Jimmy's Piece.

[GMax]

Bloomberg is a Democrat.

[Jane]

Dave,

Wasn't there an election in MA today? What for?

[Captain Hate on the iPad]

Pot legalization is losing fairly heavily in early results

[Janet]

And can someone repost the link to Jimmy's Piece.

http://www.foxbusiness.com/economy-policy/2015/11/03/fed-as-overprotective-parent/

[Janet]

Sorry GMax. I thought he was an ex-Republican, current-Independent that votes Dem..

[Rick Ballard]

JimmyK v Fed

[narciso]

yes, Bloomberg, Steyer, Gillam, (behind the suppression of the pebble mine), all their money is clean, no dark money there,

if Ginsberg, had turned in such a brief, in law school, Kingsfield would have sent him to torts,

[narciso]

I had it up in the thread,

[Jane]

Jimmy, you were a former Vice President of the Federal Reserve Bank of New York?

Holy shit.

Tell us about it.

(Nice article BTW)

[narciso]

here's an earlier piece,

http://libertystreeteconomics.newyorkfed.org/2011/09/the-productivity-slowdown
reaffirmed.html#.Vjlv2LerTIU

[GMax]

Janet he called himself a Republican for an easy path to standing for election as NYC mayor. He gave up calling himself a Republican while still in office.

Everything that comes out of his mouth or his wallet these days is in support of prog causes. He is a prog and a Democrat...

[narciso]

'game over, man'

http://legalinsurrection.com/2015/11/jeb-surrenders-to-france/

[Captain Hate on the iPad]

So twatboy Trudeau has shitcanned the Keystone pipeline from the Canuck side?

[narciso]

yep, the Canadian menace had to be stopped, I'm trying to remember who this punk reminds me, like David spade from some mid 90s comedy,

[narciso]

also an older version of that farrow whelp,

[Rick Ballard]

It's a little more complicated than that. The big oil boys have started scaling back on exploration based upon a shift in demand forecasts by their in house economists. Their economists are making new demand forecasts based upon their reading of Chinese tea leaves which indicate a rather cloudy future for the world's leading planned economy.

It's a nice failure cascade and it's just beginning.

[GMax]

AP has called the Ohio initiative with voters rejecting the measure. Here is a sense:

The issue to legalize pot for recreational and medical use is going down 65 percent to 35 percent, losing in all 88 counties with more than 48 percent of the statewide vote counted.

Another 25 M of prog money down the tubes...

[DebinNC]

James A. Kahn, a former Vice President of the Federal Reserve Bank of New York, is Chairman of the Department of Economics and Henry and Bertha Kressel University Professor of Economics at Yeshiva University in New York.

Wow. Double wow to James for his humble "just one of y'all" attitude here, when he's anything but.

[narciso]

yes, but we will eventually need the pipeline,

http://www.zerohedge.com/contributed/larry-summers-economic-war-criminal

[Michael (fpa Patriot4Freedom)]

(Apologies in advance for the length of this)
1-What ever happened to the mutilated livestock story out in the West?
2-What about those huge UFO's which were seen over Phoenix several years ago?
3-Why doesn't anyone ever research what Obama was doing in Pakistan when he was a traveling college kid?
Drives me nuts!
Posted by: Miss Marple 2 | November 03, 2015 at 10:34 AM (potemkin-coalitions thread)

Miss M 2 - Since it looks like no one responded, here's my take:

1- I think the mutilated livestock was just a sick prank that went the way of the so-called "crop circles." After a time-lapsed video was broadcast of a group of 8 or 10 young guys creating a massive "crop circle" in a field in just a few hours, there was no point in publicizing them and raising claims of alien activity.
Plus, IIRC, a number of the affected ranchers announced they were going to be checking their herds randomly, and would be shooting any trespassers on sight. That probably helped the mutilators to reconsider their commitment to the cause.

2- They were proven to be a series of parachute-borne flares dropped by a flight of (Australian?) military jets on a training mission. They descended behind a mountain, which caused them to appear to "go out" in a synchronized pattern.

3- Repubs have been scared off, and the Dems/MFM (they *are* one and the same, imo) have absolutely NO interest in oBOzo's real background and life history. Btw, this is one of the few chapters in his past that doesn't sound suspicious.
He was probably visiting his mother, who worked there for a few years, or maybe he just wanted to see how the Muslims he loves so much live their lives of post-colonial oppression in modern-day Pock-keee-stahhhhn.

[jimmyk on iPhone]

Thanks again. I tweeted the link to my piece and guess who favorited it?
@GeorgeSorosInv

You guys are blowing my cover. Incidentally VP is just a title, there were dozens.

[clarice]

Bevin's Lt Gov, also a Republican, is an AA woman, the first Black ever elected to statewide office in the history of Ky.

[narciso]

I don't know about the last two, but the third was interesting because of when it happened, I don't think Zia was taking too many visitors of a left wing bent in that period,

[GMax]

Current oil rig count in the USA is around 500. A year ago around 1500. Once the natural decline curves start kicking in, the natural laws of supply and demand will drive the price of oil northward...

[Captain Hate on the iPad]

I don't recall the mailman's son making any comment one way or another on the pot initiative. The campaign commercials for it weren't very good; mainly irritating sob stories and an unexpected ad by Oscar Robertson which left everybody scratching their heads.

A disorganized pot campaign; what are the chances?

[GMax]

You are saying they were dipping into the inventory before making the ads? That is pretty funny!

[narciso]

yes, Morgan and Morgan's campaign, didn't make it here, last fall either,

[Buckeye]

Good day in Central Ahia.

In a local election we are sending our scummy Chamber of Commerce weenie on city council packing.

Pot legalization going down. Little Nicky Lechay has been making commercials about how legal pot would be an economic stimulant. Only came out today that he has is a partner on one of the proposed pot farms.

Glad to see the punk get spanked.

[hrtshpdbox]

Incidentally VP is just a title, there were dozens.

Sorry, but VP at a regional Fed is not like VP of marketing at Best Buy - it's very impressive. Terrific article at Fox biz, too.

"The transition away from ZIRP is long overdue, and while it may not be pleasant, postponing it will likely only make the eventual consequences more painful."

They've postponed it for quite some time already, and with no finite end to it in sight it's become more than a little scary (I'd guess the Fed is a bit terrified too).

[narciso]

Nich Lachey, in the past, they would be relegated to Hollywood Squares, now you can't get rid of them with a stick,

[narciso]

my concern is the last time, the Fed had suppressed the rates, and then they took the foot off the gas,
that had impacts not onlly here, but in places as far away as Argentina,

[GMax]

And Houston will have gender specific restrooms. Odd that you have to have a vote on that.

[clarice]

Nytol--behave.

[Could be random.]

There was a famous 2000 comment climate blog thread about the unit root and temperature series. I still don't understand it. Maybe it's because I didn't quite read all 2000 comments.

[Ignatz Ratzkiwatzki]

Vice President at the NY Fed?

Come on; he's Kahn!

KAAAHHNNNNN!!!

[narciso]

no, John Harrison, the subterfuge, they went through in the last film, to show he wasn't khan, for which there should have been some lashings,

http://www.steynonline.com/7272/manifest-destiny-in-the-new-wild-west

[sbw]

Cut it out people, jimmyk works at a university and is a nice guy to quaff beers with.

[Dave (in MA)]

Jane, Rep. Geoff Diehl of Whitman took a shot at (but lost) the open state Senate seat in the 2nd Plymouth and Bristol district, but this encompasses Brockton and you know how hard it is to win an urban area when you're not part of the D machine. This is really unfortunate. He's the guy who spearheaded the campaign to take down the automatic gas price hike in the ballot initiative last year, and led the fight to undo the legislative pay raises that they voted themselves. He was also a key player in stopping the Olympics boondoggle. He and Shaunna O'Connell are the best people we have in this state. Screw this electorate, they get what they deserve.

[Dave (in MA)]

Or to put it another way,

Dave,

Wasn't there an election in MA today?

Yes.

What for?

Indeed.

[jimmyk]

sbw, I hope we can quaff a few in January when rse comes to town. And CH, with you too over Thanksgiving.