You've heard of an international market for superstar soccer players. We need an international market for superstar central bankers.
[ Reuters ]
Great Britain gets a lot of things wrong, like food and spelling. But here's something they get right: They're willing to poach the best central bankers from around the world for the top spots at the Bank of England.
The UK is hardly alone on this. They're just particularly aggressive about it. Their latest target is Mark Carney, the current chief of the Bank of Canada. Before that, though, they snatched up American economist Adam Posen -- an expert on Japan's lost decade -- to serve on their monetary policy committee. You've heard of an international market for superstar soccer players and Olympic coaches. This is an international market for superstar central bankers.
It got me thinking: How much is a good central banker worth? Consider this chart. The blue line shows where our economy could, and should, be if it had kept growing at its long-term trend since 2008. The red line shows where we actually are. The difference between the two is the so-called output gap. (Note: These dollar figures are not adjusted for inflation).
We're in about a trillion-dollar hole. And that's a trillion dollars every year. Even if we get "Morning in America: The Sequel" and the economy rapidly reverts to its long-term trend, we'll forever be $4 trillion poorer than we would have otherwise been.
Let's try a thought experiment. Say that Lars Svensson -- one of the world's top monetary economists and the current deputy governor of Sweden's central bank, the Riksbank -- could get our economy back to trend in half the time Ben Bernanke could. It's actually plausible-ish. Like Bernanke, Svensson spent his academic career championing unconventional monetary policy as a "foolproof" way to escape a liquidity trap. (Coincidentally, they were colleagues at Princeton). But unlike Bernanke, Svensson's Riksbank has been much more willing than Bernanke's Fed to experiment with these kind of heterodox policies. Perhaps unsurprisingly, Sweden's recovery has been the envy of the developed world. So I ask again: How much is a good central banker worth? Put simply, how much cash should we throw at Svensson to steal him away from Sweden?
That's another way of asking how long it will take the economy to return to trend. Here's where things get really depressing. According to Fed Vice Chair Janet Yellen, we won't get back to full employment until after 2018. If we assume the output gap will steadily shrink until then, that leaves us with roughly another $4 trillion in lost income. Maybe more. If Svensson really could double our recovery speed, he'd be worth $2 trillion to us. Even if that's being wildly optimistic, something on the order of hundreds of billions of dollars probably isn't. Tell me that wouldn't be worth paying Svensson a billion dollars a year. Maybe more.
The above suggestion is obviously a bit tongue-in-cheek ... but not completely. Right now, central bankers are paid almost entirely in prestige. Ben Bernanke is making just $199,700 this year. That's not to say that we need to pay central bankers more to attract the best ones. We don't. Economists really care about prestige.
This doesn't necessarily lead to the most efficient allocation of monetary economists. As Matt Yglesias pointed out, we'd ideally have economists prove their central banking chops in smaller countries before moving up to the big leagues of the Fed or the ECB or the Bank of England. Put a bit less diplomatically: Sweden is important, but it's a relative waste of Svensson's talents not to have him running a bigger central bank. (Not that I have anything against Sweden). Here comes the "to be sure" sentence: It wouldn't be enough just to import Svensson. As L.A. Galaxy fans can tell you, bringing in one (albeit, overrated) superstar like David Beckham doesn't help much if his teammates are only mediocre. We'd need to create a Federal Reserve board equivalent of the Super Friends for Svensson to make the biggest difference. We might even find out that we already have a superstar in Bernanke in that scenario.
Central banking should be a superstar profession. The difference between a top central banker and an average one can be astronomical, particularly when conventional policy is impotent. An efficient market would pay them accordingly. If the United States spent $10 billion assembling a central banking fantasy lineup of Lars Svensson, Stanley Fischer, Adam Posen, and Christina Romer, it would probably be a phenomenal investment. It'd pay for itself many, many times over. The biggest challenge is changing the norms around central banking. We shouldn't just consider the top American economists for the top spots.
We're a nation of immigrants. The Federal Reserve should reflect that.
In the name of emotional well-being, college students are increasingly demanding protection from words and ideas they don’t like. Here’s why that’s disastrous for education—and mental health.
Something strange is happening at America’s colleges and universities. A movement is arising, undirected and driven largely by students, to scrub campuses clean of words, ideas, and subjects that might cause discomfort or give offense. Last December, Jeannie Suk wrote in an online article for The New Yorker about law students asking her fellow professors at Harvard not to teach rape law—or, in one case, even use the word violate (as in “that violates the law”) lest it cause students distress. In February, Laura Kipnis, a professor at Northwestern University, wrote an essay in The Chronicle of Higher Education describing a new campus politics of sexual paranoia—and was then subjected to a long investigation after students who were offended by the article and by a tweet she’d sent filed Title IX complaints against her. In June, a professor protecting himself with a pseudonym wrote an essay for Vox describing how gingerly he now has to teach. “I’m a Liberal Professor, and My Liberal Students Terrify Me,” the headline said. A number of popular comedians, including Chris Rock, have stopped performing on college campuses (see Caitlin Flanagan’s article in this month’s issue). Jerry Seinfeld and Bill Maher have publicly condemned the oversensitivity of college students, saying too many of them can’t take a joke.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
I traveled to every country on earth. In some cases, the adventure started before I could get there.
Last summer, my Royal Air Maroc flight from Casablanca landed at Malabo International Airport in Equatorial Guinea, and I completed a 50-year mission: I had officially, and legally, visited every recognized country on earth.
This means 196 countries: the 193 members of the United Nations, plus Taiwan, Vatican City, and Kosovo, which are not members but are, to varying degrees, recognized as independent countries by other international actors.
In five decades of traveling, I’ve crossed countries by rickshaw, pedicab, bus, car, minivan, and bush taxi; a handful by train (Italy, Switzerland, Moldova, Belarus, Ukraine, Romania, and Greece); two by riverboat (Gabon and Germany); Norway by coastal steamer; Gambia and the Amazonian parts of Peru and Ecuador by motorized canoe; and half of Burma by motor scooter. I rode completely around Jamaica on a motorcycle and Nauru on a bicycle. I’ve also crossed three small countries on foot (Vatican City, San Marino, and Liechtenstein), and parts of others by horse, camel, elephant, llama, and donkey. I confess that I have not visited every one of the 7,107 islands in the Philippine archipelago or most of the more than 17,000 islands constituting Indonesia, but I’ve made my share of risky voyages on the rickety inter-island rustbuckets you read about in the back pages of the Times under headlines like “Ship Sinks in Sulu Sea, 400 Presumed Lost.”
Heather Armstrong’s Dooce once drew millions of readers. Her blog’s semi-retirement speaks to the challenges of earning money as an individual blogger today.
The success story of Dooce.com was once blogger lore, told and re-told in playgroups and Meetups—anywhere hyper-verbal people with Wordpress accounts gathered. “It happened for that Dooce lady,” they would say. “It could happen for your blog, too.”
Dooce has its origin in the late 1990s, when a young lapsed Mormon named Heather Armstrong taught herself HTML code and moved to Los Angeles. She got a job in web design and began blogging about her life on her personal site, Dooce.com.
The site’s name evolved out of her friends’ AOL Instant-Messenger slang for dude, or its more incredulous cousin, "doooood!” About a year later, Armstrong was fired for writing about her co-workers on the site—an experience that, for a good portion of the ‘aughts, came known as “getting dooced.” She eloped with her now ex-husband, Jon, moved to Salt Lake City, and eventually started blogging full time again.
ISIS did not merely blast apart old stones—it attacked the very foundations of pluralistic society.
If the ruined ruins of Palmyra could speak, they would marvel at our shock. After all, they have been sacked before. In their mute and shattered eloquence, they spoke for centuries not only about the cultures that built them but also about the cultures that destroyed them—about the fragility of civilization itself, even when it is incarnated in stone. No designation of sanctity, by God or by UNESCO, suffices to protect the past. The past is helpless. Instead these ruins, all ruins, have had the effect of lifting the past out of history and into time. They carry the spectator away from facts and toward reveries.
In the 18th century, after the publication in London of The Ruins of Palmyra, a pioneering volume of etchings by Robert Wood, who had traveled to the Syrian desert with the rather colorful James Dawkins, a fellow antiquarian and politician, the desolation of Palmyra became a recurring symbol for ephemerality and the vanity of all human endeavors. “It is the natural and common fate of cities,” Wood dryly remarked in one of the essays in his book, “to have their memory longer preserved than their ruins.” Wood’s beautiful and meticulous prints served as inspirations for paintings, and it was in response to one of those paintings that Diderot wrote some famous pages in his great Salons of 1767: “The ideas ruins evoke in me are grand. Everything comes to nothing, everything perishes, everything passes, only the world remains, only time endures. ... Wherever I cast my glance, the objects surrounding me announce death and compel my resignation to what awaits me. What is my ephemeral existence in comparison with that of a rock being worn down, of a valley being formed, of a forest that’s dying, of these deteriorating masses suspended above my head? I see the marble of tombs crumble into powder and I don’t want to die!”
Some Republican candidates are promoting a policy change that would hurt workers by disguising it with a pleasant-sounding phrase.
Americans like their Social Security benefits quite a bit: They oppose cuts to them by a margin of two to one. Even Millennials, who won’t be seeing benefits anytime soon, feel protective of Social Security, according to a poll from the Pew Research Center.
One way to effectively cut Social Security benefits is to raise the age at which they kick in. And yet, when asked specifically about raising the retirement age, Americans are mixed.
Perhaps confusion arises because “raising the age of retirement” sounds like a nice jobs program for older Americans, or an end to forced retirement. I sympathize with that position: Anyone who wants to retire later and work into old age should have a job. But that’s not what raising the retirement age would entail—the fact is, raising the Social Security retirement age represents a reduction in benefits: Because the monthly payments a person receives grow bigger the later in life he or she retires, raising the age cutoff reduces the total amount of money paid out.
In continuing to tinker with the universe she built eight years after it ended, J.K. Rowling might be falling into the same trap as Star Wars’s George Lucas.
September 1st, 2015 marked a curious footnote in Harry Potter marginalia: According to the series’s elaborate timeline, rarely referenced in the books themselves, it was the day James S. Potter, Harry’s eldest son, started school at Hogwarts. It’s not an event directly written about in the books, nor one of particular importance, but their creator, J.K. Rowling, dutifully took to Twitter to announce what amounts to footnote details: that James was sorted into House Gryffindor, just like his father, to the disappointment of Teddy Lupin, Harry’s godson, apparently a Hufflepuff.
It’s not earth-shattering information that Harry’s kid would end up in the same house his father was in, and the Harry Potter series’s insistence on sorting all of its characters into four broad personality quadrants largely based on their family names has always struggled to stand up to scrutiny. Still, Rowling’s tweet prompted much garment-rending among the books’ devoted fans. Can a tweet really amount to a piece of canonical information for a book? There isn’t much harm in Rowling providing these little embellishments years after her books were published, but even idle tinkering can be a dangerous path to take, with the obvious example being the insistent tweaks wrought by George Lucas on his Star Wars series.
It’s not just Trump: With Ben Carson and Carly Fiorina on the rise, Republicans are loving outsiders and shunning politicians.
For the first time in a long time, Donald Trump isn’t the most interesting story in the 2016 presidential race. That's partly because his dominance in the Republican polls, while still surprising, is no longer novel and increasingly well explored and explained, but it’s also partly because what’s going on with the rest of the GOP field is far more interesting.
The brash Manhattan billionaire would seem to stand for values they despise—yet conservative Christian voters are flocking to his campaign.
Donald Trump is immodest, arrogant, foul-mouthed, money-obsessed, thrice-married, and until recently, pro-choice. By conventional standards, evangelical Christians should despise him. Yet somehow, the Manhattan billionaire has attracted their support.
According to the most recent polls, Trump is one of the top picks for president among evangelical Christians. One Washington Post poll even had him as the group’s favorite by a margin of six points. His first major rally in the Bible-Belt fortress town of Mobile, Alabama, drew an estimated 18,000 attendees. And on September 28, prominent televangelist Paula White will reportedly lead a delegation of evangelical leaders to meet with the mogul in Trump Tower.
Burning Man is underway in the Nevada desert, the migrant crisis grew in both scale and impact, new Star Wars toys went on sale worldwide, China marked the 70thanniversary of the end of World War II, Alaska’s Mt. McKinley was renamed Denali, and much more.
Burning Man is underway in the Nevada desert, the migrant crisis grew in both scale and impact, new Star Wars toys went on sale worldwide, China marked the 70th anniversary of the end of World War II, Alaska’s Mt. McKinley was renamed Denali, a Kentucky county clerk was jailed for contempt of court while refusing to issue same-sex marriage licenses, and much more.