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Guernica PotPourri

January 31, 2009

Fair’s fair

The Ultimatum Game: what an eye-opener for economists. You never know what you’re going to get until you actually run the experiment.

Focusing on The Family

Journalist Jeff Sharlet went undercover to infiltrate the secretive Washington, D.C., religious organization, The Family. Sarah Posner asks him what they want, and how they go about getting it.

John Maynard Keynes, the Man for all Seasons

Faith-Based Economics

Keynes makes a comeback, but his ideas are still wrong

We Are All Keynesians Again

Why Ben Bernanke isn’t listening to Robert Samuelson

What Cooked the World’s Economy? It wasn’t your overdue mortgage.

Constructing a new world

For Alexander Rodchenko and Lyubov Popova, the entire fabric of daily existence – from biscuit packets to book jackets – served a revolutionary vision

Is Deregulation to Blame?

Deregulation is a convenient scapegoat in the current economic trouble. But what role did it really play?

While casting about for causes of the U.S. financial crisis during the heat of the presidential election, many in the media and Congress hit upon a theme of rampant deregulation. But is deregulation really to blame?

In 1988, one-third of black students attended schools that were at least 90 percent black. Today, thanks to the work of the conservative judiciary in overturning desegregation orders, 40 percent of black students attend such a school. Black and Latino children are more segregated in 2009 than they were at the time of Martin Luther King Jr.’s death.

Up From Conservatism

America needs a better Right than the GOP can provide.

Unheeded Warnings

Well before this year’s economic collapse, business journalists shined a spotlight on serious problems in the U.S. economy. But regulators and members of the public didn’t pay much attention.

The Future of the American Frontier

Can one of our most enduring national myths, much in evidence in the recent presidential campaign, be reinvented yet again?

The end of white america?

The violence network

It’s biased, gruesome, and totally compelling. How Al-Jazeera makes one American think differently about war.

Paradigm lost

Economists missed the brewing crisis. Now many are asking: How can we do better?

In the great national narrative, where will Obama’s election really fit? Five historians answer.

Always at the After Party

“Liberals and Libertarians: Kissing Cousins or Distant Relatives?” That question was debated at a January 13 event sponsored by Stanford University’s Program in Ethics in Society and the Cato Institute. Boston Review co-editor Joshua Cohen gave these comments.

Free Market Myth

Regulation is everywhere. Let’s choose who benefits.

Amazing Race

How post-racial was Obama’s victory?

The other Adam Smith

What Would Jefferson Do?: How Limited Government Got Turned Upside Down

Hierarchy in the Library: Egalitarian Dynamics in Victorian Novels

Are sexual and emotional infidelity equally upsetting to men and women?

Humor as a mental fitness indicator.

Older men use their wealth to attract younger women, younger women look for wealthy older men.

Reading fiction with Darwin’s eyes.

Why Men Spend: To Lure Mates

Swedish study shows women prefer older men.

Help! Mom! There are Liberals Under My Bed!

Women have so many don’ts. What’s a guy to do?

Modern man is an impossible position when it comes to seduction.

Defusing the American Right

The 2008 Democratic Shift

How voters have changed and why.

The Fed’s “Depression” and the Birth of the New Deal

Market failure reconsidered.

Leviathan Then And Now

The latter-day importance of Hobbes’s masterpiece.

After Gaza: what’s behind 21st-century anti-Semitism?

Anti-Israel sentiment is morphing into anti-Jewish sentiment, as more and more people project their disdain for the modern world on to ‘the Jew.’

Forget Iraq and the economy. Barack Obama’s greatest feat may be ending the ruinous, decades-long battle over race and religion that has plagued the Democratic Party

WHITHER THE REPUBLICANS?

the continuing GOP death spiral

and

No one could have predicted

and

2008 is not 1993

and

Politics done right

and

Bipartisanship is dead, killed by the GOP unanimous vote against the stimulus package

and

Bipartisanship? DeMint Predicts Zero Senate GOP Votes For Obama’s Recovery Package.

The stupidity of the mainstream media [“MSM”] continues here and here.

Why is it that even with Democrats in control of the White House and Congress, TV continues to have a favor the GOP?

REPORT: GOP Lawmakers Outnumber Democratic Lawmakers 2 To 1 In Stimulus Debate On Cable News.

and

If It’s Sunday, It’s Still Conservative

Special Report: How the Right Continues to Dominate the Sunday Talk Shows.

The new Mr. GOP’s stimulus plan.

Plunder and Blunder: A Roundtable

Part one of a two-part discussion of Dean Baker’s new book, Plunder and Blunder: The Rise and Fall of The Bubble Economy.

Dean Baker’s new book, Plunder and Blunder: The Rise and Fall of The Bubble Economy, explores the stock and housing bubbles at the heart of our current economic crisis.

and

Plunder and Blunder, Part II

Gallup has put up the first in a four-part series on the “State of the States,” looking at party affiliation and the results don’t jibe too well with the conventional wisdom of a “center-right” nation. Only five states could be considered Republican or Republican-leaning in Gallup’s analysis, with 35 going to Democrats and the remaining ten considered “competitive.” Those five states make up 2 percent of the nation’s population.

Form Affects Content: Reading Jane Austen

What does it mean to hold that the significant aspects of a literary passage cannot be captured in a paraphrase? Does a change in the description of an act “risk producing a different act” from the one described? Using Jane Austen as an example, we’ll consider whether her use of metaphor and symbol really amounts to calling someone a prick, whether her narrative voice changes what it is that is expressed, and whether comedy can hold just as much significance as tragedy without all the heavy breathing.

Narratives of the Fall: Bubbles, Bailouts and the Social Construction of Economic Crisis

Abstract:

The current so called “economic crisis” is a social construct. There are three dimensions to the problem. One is in fact economic, one is social and psychological, and one is political. The collapse of the housing market and the chaos on Wall Street is quite real. But the bankruptcy of so many financial institutions is only a symptom of the bankruptcy of federal economic policy. These failed economic policies trace back to a set of classical economic assumptions. In the aftermath of chaos, the bailout policy of the federal government is part of the “moment” of panic and is no part of any cure.

The basis of this critique is historical analogy. In Lochner v. New York, the era of the last depression, the Supreme Court held that government, essentially, had no power to regulate in the socio-economic realm. Of course there was no objective basis for this sweeping prohibition. The court mistook certain laissez-faire assumptions for “facts.” It was only the rejection of the Lochner era ideology which enabled the New Deal which followed.

The purpose of this article is say our problem is very similar. The government in the current crisis has labored under a series of blinding assumptions. Each assumption represents a story, not gospel. I then expose how these stories, which are factually unanchored, are disempowering and create false horizons for action.

We explore three basic fallacies. The first fallacy is that the crisis is primarily economic in origin. In a story entitled “There is No Bubble” I chronicle the linkage between laissez -faire philosophy, failure to regulate and failed monetary policy. I chronicle how the federal government by Greensand and Bernakhe largely enabled the crisis through a combination of low interest rates, lapse regulation, and misleading rhetoric.

In a story entitled “The Minsky Moment” I explore the second fallacy, that the market is rational. High interest rates, foreclosure and a “devaluation mentality” are not part of any logical scheme of profit maximization. This pattern is part of a vicious cycle of self-defeating behavior-a symptom of panic not rationality. The actions of the federal government are equally symptomatic of the “panic” moment. I would characterize the bailout as giving more steam to the engine of a sinking ship. One must stop the flooding not stoke the boiler.

The flooding is the tidal wave of foreclosure. This brings me to the third fallacy , that we can stand by the side-lines while the massive wave of foreclosures slowly sinks the economy. In a story entitled, “The New New Deal.” I provide a both a theory and a mechanism as to how the government could more forcefully intervene. The story seems to be that this is a private problem which should be handled through the courts. We seek to test this through a series of impact hearings. What is the macro-economic impact of foreclosure? My hypothesis is that massive foreclosures are more systemically damaging than the bank failures-this is unsustainable. The second step is the fix: I argue for a comprehensive solution based on an historical analogy to action taken by Roosevelt in the 1930’s. The substantial intervention that I argue for will require a kind paradigm shift, perhaps as significant as took place between Lochner and West Coast Hotel. But this paradigm shift is less drastic than our current collision course with the 1930’s.

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