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.
His paranoid style paved the road for Trumpism. Now he fears what’s been unleashed.
Glenn Beck looks like the dad in a Disney movie. He’s earnest, geeky, pink, and slightly bulbous. His idea of salty language is bullcrap.
The atmosphere at Beck’s Mercury Studios, outside Dallas, is similarly soothing, provided you ignore the references to genocide and civilizational collapse. In October, when most commentators considered a Donald Trump presidency a remote possibility, I followed audience members onto the set of The Glenn Beck Program, which airs on Beck’s website, theblaze.com. On the way, we passed through a life-size replica of the Oval Office as it might look if inhabited by a President Beck, complete with a portrait of Ronald Reagan and a large Norman Rockwell print of a Boy Scout.
As Oklahoma attorney general, Scott Pruitt sued the federal government to prevent rules about air and water pollution from taking effect.
Throughout the long campaign, and in the long month that has followed, President-elect Donald Trump sounded some odd notes about the environment.
He rejected the scientific fact of climate change, calling it a hoax or a fraud. He repeatedly announced his intent to repeal all of the Obama administration’s environmental regulations. He lamented, wrongly, that you couldn’t use hairspray anymore because it damaged the ozone layer.
And then, out of nowhere, he met with Al Gore, who won a Nobel Peace Prize for educating the public about the dangers of climate change.
While the broad strokes of Trump’s policies were never in doubt, there was often enough bizarreness to wonder what he would do with the powers of the Environmental Protection Agency.
Why the ingrained expectation that women should desire to become parents is unhealthy
In 2008, Nebraska decriminalized child abandonment. The move was part of a "safe haven" law designed to address increased rates of infanticide in the state. Like other safe-haven laws, parents in Nebraska who felt unprepared to care for their babies could drop them off in a designated location without fear of arrest and prosecution. But legislators made a major logistical error: They failed to implement an age limitation for dropped-off children.
Within just weeks of the law passing, parents started dropping off their kids. But here's the rub: None of them were infants. A couple of months in, 36 children had been left in state hospitals and police stations. Twenty-two of the children were over 13 years old. A 51-year-old grandmother dropped off a 12-year-old boy. One father dropped off his entire family -- nine children from ages one to 17. Others drove from neighboring states to drop off their children once they heard that they could abandon them without repercussion.
Why has Trump shown such eagerness to select former military brass for his Cabinet? The reasons may be both pragmatic and political.
Donald Trump didn’t always speak highly of military brass. “I know more about ISIS than the generals do,” he said in fall 2016. “Believe me.” In September, he added, “I think under the leadership of Barack Obama and Hillary Clinton, the generals have been reduced to rubble. They have been reduced to a point where it’s embarrassing for our country…. And I can just see the great—as an example—General George Patton spinning in his grave as ISIS we can’t beat.”
But Trump’s disdain had a caveat: “I have great faith in the military. I have great faith in certain of the commanders, certainly.”
These days, he’s leaning toward the second pole. Already, Trump has selected three retired generals for Cabinet-level jobs. On Tuesday, he formally announced that he’s nominating retired Marine General James Mattis as defense secretary. On Wednesday, multiple outlets reported that he has selected John Kelly, another retired Marine general, as secretary of homeland security. Former Lieutenant General Michael Flynn got the nod as national security adviser on November 17.
The same part of the brain that allows us to step into the shoes of others also helps us restrain ourselves.
You’ve likely seen the video before: a stream of kids, confronted with a single, alluring marshmallow. If they can resist eating it for 15 minutes, they’ll get two. Some do. Others cave almost immediately.
This “Marshmallow Test,” first conducted in the 1960s, perfectly illustrates the ongoing war between impulsivity and self-control. The kids have to tamp down their immediate desires and focus on long-term goals—an ability that correlates with their later health, wealth, and academic success, and that is supposedly controlled by the front part of the brain. But a new study by Alexander Soutschek at the University of Zurich suggests that self-control is also influenced by another brain region—and one that casts this ability in a different light.
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.
Americans are optimistic about the communities they live in—but not their nation. Why?
I have been alive for a long time. I remember the assassination of John F. Kennedy, when I was a 10th-grader, and then watching with my family through the grim following days as newscasters said that something had changed forever. The next dozen years were nearly nonstop trauma for the country. More assassinations. Riots in most major cities. All the pain and waste and tragedy of the Vietnam War, and then the public sense of heading into the utterly unknown as, for the first time ever, a president was forced to resign. Americans of my children’s generation can remember the modern wave of shocks and dislocations that started but did not end with the 9/11 attacks.
Through all this time, I have been personally and professionally, and increasingly, an American optimist. The long years I have spent living and working outside the United States have not simply made me more aware of my own strong identity as an American. They have also sharpened my appreciation for the practical ramifications of the American idea. For me this is the belief that through its cycle of struggle and renewal, the United States is in a continual process of becoming a better version of itself. What I have seen directly over the past decade, roughly half in China and much of the rest in reporting trips around the United States, has reinforced my sense that our current era has been another one of painful but remarkable reinvention, in which the United States is doing more than most other societies to position itself, despite technological and economic challenges, for a new era of prosperity, opportunity, and hope.
Strangling public-sector unions in Wisconsin has shrunk teachers’ pay and benefits. Who’s next?
Back in 2009, Rick Erickson was happy with his job as a teacher in one of the state’s northernmost school districts on the shores of Lake Superior. He made $35,770 a year teaching chemistry and physics, which wasn’t a lot of money, but then again, he received stellar healthcare and pension benefits, and could talk honestly with administrators about what he needed as a teacher every two years when his union sat down with the school district in collective bargaining sessions.
Then, five years ago, Wisconsin passed Act 10, also known as the Wisconsin Budget Repair Bill, which dramatically limited the ability of teachers and other public employees to bargain with employers on wages, benefits, and working conditions. After Act 10,Erickson saw his take-home pay drop dramatically: He now makes $30,650. His wife is a teacher, too, and together they make 11 percent less than they did before Act 10. The local union he once led no longer exists, and so he can’t bargain with the school district for things like prep time and sick days. He pays more for health care and his pension, and he says both he and his wife may now not be able to retire until they are much older than they had planned.
Studies show that for most types of cognitively demanding tasks, anything but quiet hurts performance.
Like most modern “knowledge” workers, I spend my days in an open office. That means I also spend my days amid ringing phones, the inquisitive tones of co-workers conducting interviews, and—because we work in a somewhat old, infamous building—the pounding and drilling of seemingly endless renovations.
Even so, the #content must still be wrung from my distracted brain. And so, I join the characters of trend pieces everywhere in wearing headphones almost all day, every day. And what better to listen to with headphones than music? By now, I’ve worked my way through all the “Focus” playlists on Spotify—most of which sound like they were meant for a very old planetarium—and I’ve looped back around to a genre I like to call “soft, synthy pop songs whose lyrics don’t make much sense:” Think Miike Snow rather than Michael Jackson.
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.