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.
To many white Trump voters, the problem wasn’t her economic stance, but the larger vision—a multi-ethnic social democracy—that it was a part of.
Perhaps the clearest takeaway from the November election for many liberals is that Hillary Clinton lost because she ignored the working class.
In the days after her shocking loss, Democrats complained that Clinton had no jobs agenda. A widely shared essay in The Nationblamed Clinton's "neoliberalism" for abandoning the voters who swung the election. “I come from the white working class,” Bernie Sanders said on CBS This Morning, “and I am deeply humiliated that the Democratic Party cannot talk to where I came from.”
But here is the troubling reality for civically minded liberals looking to justify their preferred strategies: Hillary Clinton talked about the working class, middle class jobs, and the dignity of work constantly. And she still lost.
A Chinese scholar argues that the U.S. shouldn’t touch Taiwan—just like China wouldn’t back separatists in Texas or Hawaii.
Shortly after news broke of Donald Trump’s phone call with the head of Taiwan—the first direct communication between American and Taiwanese leaders in 37 years—one of the leading Chinese scholars of U.S.-China relations offered a stunning proposal: If the U.S. president-elect took similar actions as president, the Chinese government should suspend the world’s most important (and precarious) partnership. “I would close our embassy in Washington and withdraw our diplomats,” said Shen Dingli, a professor at Fudan University in Shanghai. “I would be perfectly happy to end the relationship.”
What made the recommendation especially notable was that, just days earlier, Shen had been arguing that Trump’s victory was good for China—much better than the election of Hillary Clinton would have been. So what was it about the Taiwan call that had so quickly soured Shen on Trump? Where did he now think the U.S.-China relationship was headed, and what might that mean for the wider world?
Trump's election has reopened questions that have long seemed settled in America—including the acceptability of open discrimination against minority groups.
When Stephen Bannon called his website, Breitbart, the “platform for the alt-right” this summer, he was referring to a movement that promotes white nationalism and argues that the strength of the United States is tied to its ethnic European roots. Its members mostly stick to trolling online, but much of what they do isn’t original or new: Their taunts often involve vicious anti-Semitism. They make it clear that Jews are not included in their vision of a perfect, white, ethno-state.
On the opposite side of American politics, many progressive groups are preparing to mount a rebellion against Donald Trump. They see solidarity among racial minorities as their goal, and largely blame Trump’s election on racism and white supremacy. Three-quarters of American Jews voted against Trump, and many support this progressive vision. Some members of these groups, though, have singled out particular Jews for their collusion with oppressive power—criticisms which range from inflammatory condemnations of Israel to full-on conspiracies about global Jewish media and banking cabals.
The HBO drama’s finale hinted at a dark, meta message.
This post contains spoilers for the season finale of Westworld.
In 2013, a widely cited study published in Science suggested that reading literature increases a person ability to understand other peoples’ emotions. In 2016, another study seemed to debunk it, finding the original study’s results irreplicable and its resulting media coverage way too broad. “Reading Literature Won’t Give You Superpowers,” went The Atlantic’s headline from last week about the reversal.
It might seem laughable in the first place for anyone to think literature bestows superpowers. But that’s actually one of the more abiding beliefs of popular culture, and the question of whether stories improve the soul and mind—and better humanity more broadly—remains eternally in dispute. It’s a question that HBO’s Westworld has riffed on for 10 episodes, with the popular drama’s finale last night suggesting a cynical take on the social value of storytelling.
A professor of cognitive science argues that the world is nothing like the one we experience through our senses.
As we go about our daily lives, we tend to assume that our perceptions—sights, sounds, textures, tastes—are an accurate portrayal of the real world. Sure, when we stop and think about it—or when we find ourselves fooled by a perceptual illusion—we realize with a jolt that what we perceive is never the world directly, but rather our brain’s best guess at what that world is like, a kind of internal simulation of an external reality. Still, we bank on the fact that our simulation is a reasonably decent one. If it wasn’t, wouldn’t evolution have weeded us out by now? The true reality might be forever beyond our reach, but surely our senses give us at least an inkling of what it’s really like.
The election is over, but the president-elect is demonstrating he hopes to dominate Washington the same way he dominated his campaign rivals: by taking the case to his loyal movement of supporters.
CINCINNATI—The campaign never ended, and maybe it never will.
So there was Donald Trump a few days ago, doing what he had always done—the thing he knew how to do—the thing that got him here and made him president-elect: standing on a stage, surrounded by the people who couldn’t get enough of him, letting them have what they wanted.
Trump was here, he told them, to say thank you to the people of Ohio. “We won the state by almost 10 points, which they say is totally unheard of!” he said. And then, just as he had during the campaign, he couldn’t resist taking aim at one of his critics, the Ohio governor, John Kasich, who opposed Trump throughout the election and voted for John McCain for president instead.
In two high-profile trials—those of Officers Michael Slager and Ray Tensing—juries declined to hold cops accountable for taking the lives of civilians.
How could the trial have ended in anything but a conviction?
On April 4, 2015, the 50-year-old black motorist was pulled over in North Charleston, South Carolina, to address a broken brake light—a matter that inanely requires citizens to submit to impromptu interactions with armed agents of the state, despite the risk roadside stops pose to the safety of motorists and police officers.
The motorist, Walter Scott, unlawfully fled on foot from his 1991 Mercedes. Then Officer Michael Slager, who executed the traffic stop, pursued him on foot, drew his weapon, and shot the unarmed man in the back as he ran away. A passerby captured what appeared to be a murder on his mobile phone camera, thought about erasing it for fear of his own safety, but decided to come forward after details of the video contradicted the police report that the officer in the case filed.
Confronting racism can be crucial, even when it’s not persuasive.
In the brushfire wars since Donald Trump won the presidency, skirmishes over how to speak to his coalition of voters have consumed liberals. Leading the vanguard in those conversations is a collection of writers and thinkers of otherwise divergent views, united by the painful process of reexamining identity politics, social norms, and—most urgently—how to address racism in an election clearly influenced by it. Though earnest and perhaps necessary, their emphasis on the civil persuasion of denizens of "middle America" effectively coddles white people. It mistakes civility for the only suitable tool of discourse, and persuasion as its only end.
This exploration of how to best win over white Americans to the liberal project is exemplified by reactions to Hillary Clinton’s placing many of Donald Trump’s supporters in a “basket of deplorables.” The debate about whether to classify these voters as racist or bigoted for supporting a candidate who constantly evinced views and policies many believe to be bigoted is still raging. As Dara Lind at Vox expertly notes, Clinton’s comments themselves were inartful precisely because they seemed focused solely on “overt” manifestations of racism, like Klan hoods and slurs. That focus ignores the ways in which white supremacy and patriarchy can function as systems of oppression, tends to forgive the more refined and subtle racism of elites, and may ultimately lead to a definition of racism in which no one is actually racist and yet discrimination remains ubiquitous.
Firefighters have now found 36 bodies inside the artist collective where dozens of people lived together.
Rescue workers say 36 people were killed in Oakland, California, in a fire that torched an artist-collective warehouse known locally as the “Ghost Ship.” It may take weeks to identify everyone killed, because the flames have charred some bodies so badly they’ll have to be identified through dental records. The Alameda County Sheriff’s Office has also opened a criminal investigation into what caused the fire. So far, it’s thought to have been an accident—the result of too many people in a place with rampant building-code violations. But already some of the artistic community’s frustration seems aimed at both the warehouse’s artistic leader as well as the Bay Area’s unaffordable rent.
The fire started Friday during a late-night rave being held at the warehouse, home to a couple dozen artists. The blaze grew so quickly that flames and smoke trapped many of the people inside, and forced some to leap out of the second-floor windows. Since firefighters extinguished the flames early Saturday morning, rescue workers have methodically removed bits of ash and debris, putting them in dump trucks to be taken to an offsite location, where they can be sorted and checked in case they contain human remains. It is one of the worst U.S. fires in recent memory, bringing to mind the 2003 blaze in West Warwick, Rhode Island, that killed 100 people at a nightclub called the Station.