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.
The most popular news channel in the Arab world sits uneasily at the center of the Qatar crisis.
Earlier this month, managers at Al Jazeera, the most popular news channel in the Arab world, summoned nervous journalists into a glass-paneled conference room in the network’s headquarters in Doha. A coalition of Arab states led by Saudi Arabia had just imposed an embargo on Qatar, closing its airspace and expelling thousands of Qatari citizens. One of the conditions for lifting the blockade, according to a list leaked on Thursday, was reportedly the closure of Al Jazeera. The network’s leadership wanted to reassure its staff that their jobs were safe. “We’re not planning any changes right now,” journalists were told, according to two participants in the meeting. That left quite a bit unsaid. (I resigned from Al Jazeera English in mid-2013 after working there for nearly four years.)
Mounting evidence that Trump’s election was aided by Russian interference presents a challenge to the American system of government—with lasting consequences for democracy.
Day by day, revelation after revelation, the legitimacy of the Trump presidency is seeping away. The question of what to do about this loss is becoming ever more urgent and frightening.
The already thick cloud of discredit over the Trump presidency thickened deeper Friday, June 23. The Washington Post reported that the CIA told President Obama last year that Vladimir Putin had personally and specifically instructed his intelligence agencies to intervene in the U.S. presidential election to hurt Hillary Clinton and help Donald Trump.
Whether the Trump campaign knowingly coordinated its activities with the Russians remains uncertain. The Trump campaign may have been a wholly passive and unwitting beneficiary. Yes, it’s curious that the Russians allegedly directed their resources to the Rust Belt states also targeted by the Trump campaign. But it’s conceivable they were all just reading the same polls on FiveThirtyEight and RealClearPolitics.
The president’s policies in office have aligned almost perfectly with Vladimir Putin’s goals.
Fifty-four years ago this month, former President John F. Kennedy delivered the “Strategy of Peace,” a powerful address that captured America’s indispensable leadership at the height of the Cold War. Kennedy knew that our country could not guard against the Soviet Union alone, for he believed that “genuine peace must be the product of many nations, the sum of many acts.”
Incredibly, the man who now leads the United States seems to find himself locked in an alarming and perilous embrace with the Russian government. These ties threaten to weaken a system of alliances that have held Russia—and countless other threats to the international community—at bay since the conclusion of the Second World War.
Richard Ben-Veniste on the uncanny parallels between the scandal he investigated and the controversy over the White House’s alleged links to Russia
Watching the national controversy over the White House and Russia unfold, I’m reminded of Karl Marx’s oft-quoted observation: “History repeats itself: first as tragedy, second as farce.” I was a close witness to the national tragedy that was Richard Nixon’s self-inflicted downfall as president, and I’ve recently contemplated whether a repeat of his “Saturday Night Massacre” may already be in the offing. Given how that incident doomed one president, Trump would do well to resist repeating his predecessor’s mistakes—and avoid his presidency’s descent into a quasi-Watergate parody.
The massacre began when Nixon gave the order to fire Watergate Special Prosecutor Archibald Cox, a desperate effort to prevent him from hearing tape-recorded evidence that proved the White House’s involvement in a conspiracy to obstruct the investigation of a break-in at Democratic National Committee headquarters. Nixon’s misuse of executive power backfired, immediately costing him two highly respected members of his administration: Attorney General Elliot Richardson and his deputy William Ruckelshaus, who both resigned rather than follow Nixon’s directive. Third in command at the Justice Department was Solicitor General Robert Bork, who agreed to do the dirty deed and fired Cox.
By searching the church's famed family trees, scientists have tracked down a cancer-causing mutation that came west with a pioneer couple—just in time to save the lives of their great-great-great-great grandchildren.
Nobody knew it then, but the genetic mutation came to Utah by wagon with the Hinman family. Lyman Hinman found the Mormon faith in 1840. Amid a surge of religious fervor, he persuaded his wife, Aurelia, and five children to abandon their 21-room Massachusetts house in search of Zion. They went first to Nauvoo, Illinois, where the faith’s prophet and founder, Joseph Smith, was holding forth—until Smith was murdered by a mob and his followers were run out of town. They kept going west and west until there were no towns to be run out of. Food was scarce. They boiled elk horns.The children’s mouths erupted in sores from scurvy. Aurelia lost all her teeth. But they survived. And so did the mutation.
Gyms and other secular communities are starting to fill spiritual and social needs for many nonreligious people.
“You always know if someone goes to Harvard or if they go to CrossFit—they’ll tell you,” said Casper ter Kuile, a ministry innovation fellow at Harvard Divinity School. “It’s really interesting that evangelical zeal they have. They want to recruit you.”
CrossFit is his favorite example of a trend he has noticed: how, in the midst of the decline of religious affiliation in America, and the rise of isolation and loneliness, many ostensibly non-religious communities are “functioning in ways that look a little bit religious,” he explained on Friday at the Aspen Ideas Festival, which is co-hosted by the Aspen Institute and The Atlantic.
“People’s behavior and practice is really being unbundled from the institutions and identities that would have been homes for it,” ter Kuile says. “[For example], ‘I was raised Catholic but yoga is really the practice where I find my experience of contemplation.’ As institutional affiliation decreases, people have the same age-old desires for connection, relationships, connection to something bigger than themselves.”
Republicans are going to insist otherwise, but that’s simply not the case.
If there was one goal Senate Republicans had set out to achieve in developing their health bill to show they were less “mean” than their colleagues in the House, it was to take away the House Republicans’ green light for insurers to once again discriminate against those with pre-existing health conditions. Senate Republicans were willing to drive up deductibles and co-pays and be more draconian on Medicaid cuts, but on the one issue of pre-existing conditions they were intent on being less “mean,” as President Trump termed the House bill. Now that the text of the bill has been released, it’s clear that they have failed to achieve that.
As they argue for the bill, Republicans are going to claim that it will not allow insurance plans to discriminate against people because they have a pre-existing condition. But that just isn’t the case. The Republican plan may not allow insurers to discriminate against a pre-existing condition through the front door, but they’ve created a backdoor way in.
Most used to work in July and August. Now the vast majority don’t. Are they being lazy, or strategic?
The summer job is considered a rite of passage for the American Teenager. It is a time when tossing newspaper bundles and bussing restaurant tables acts as a rehearsal for weightier adult responsibilities, like bundling investments and bussing dinner-party plates. But in the last few decades, the summer job has been disappearing. In the summer of 1978, 60 percent of teens were working or looking for work. Last summer, just 35 percent were.
Why did American teens stop trying to get summer jobs? One typical answer is: They’re just kids, and kids are getting lazier.
One can rule out that hypothesis pretty quickly. The number of teens in the workforce has collapsed since 2000, as the graph below shows. But the share of NEETs—young people who are “Neither in Education, Employment, or Training”—has been extraordinarily steady. In fact, it has not budged more than 0.1 percentage point since the late 1990s. Just 7 percent of American teens are NEETs, which is lower than France and about the same as the mean of all advanced economies in the OECD. The supposed laziness of American teenagers is unchanging and, literally, average.
If the party cares about winning, it needs to learn how to appeal to the white working class.
The strategy was simple. A demographic wave—long-building, still-building—would carry the party to victory, and liberalism to generational advantage. The wave was inevitable, unstoppable. It would not crest for many years, and in the meantime, there would be losses—losses in the midterms and in special elections; in statehouses and in districts and counties and municipalities outside major cities. Losses in places and elections where the white vote was especially strong.
But the presidency could offset these losses. Every four years the wave would swell, receding again thereafter but coming back in the next presidential cycle, higher, higher. The strategy was simple. The presidency was everything.
As Washington loses patience with the Gulf crisis, the Saudi-led campaign resorts to extreme measures.
Now, Qatar has a list.
On Thursday evening, news reports surfaced of 13 demands from Saudi Arabia, Bahrain, the United Arab Emirates, Egypt, and four other nations that, if fulfilled by Doha, will resolve their ongoing standoff with the tiny Gulf nation. Among the more onerous demands appearing on the list, which may or may not be official, are that Qatar sever all ties with the Muslim Brotherhood and other Islamist movements in the Middle East, downgrade diplomatic relations with Iran, close all Al Jazeera affiliates and severalother Qatar-funded media outlets, pay an unspecified sum in compensation for loss of life and damage caused by Qatari regional policies in recent years, and submit to regular monitoring for up to 12 years to ensure compliance.