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.
She lived with us for 56 years. She raised me and my siblings without pay. I was 11, a typical American kid, before I realized who she was.
The ashes filled a black plastic box about the size of a toaster. It weighed three and a half pounds. I put it in a canvas tote bag and packed it in my suitcase this past July for the transpacific flight to Manila. From there I would travel by car to a rural village. When I arrived, I would hand over all that was left of the woman who had spent 56 years as a slave in my family’s household.
Maine attached work requirements and time limits to its safety net, intensifying poverty in the state.
ORLAND, Maine—In the eyes of the state of Maine, Laurie Kane is an able-bodied adult without dependents, and thus ineligible for most forms of government support. In her own eyes, it is hard to see how she is going to find housing, work, and stability without help.
Kane is struggling to put her life back together amid a spell of homelessness that has lasted for three years. She has a severe anxiety condition, along with other health problems, and had suffered a panic attack on the day I met her. But she had not managed to sign up for MaineCare, the state’s Medicaid program, because she cannot get a doctor to certify her as being disabled. That’s not because a doctor has evaluated her and found her to be fine, but because she’s been unable to get a doctor’s appointment. “I was denied MaineCare because I’m considered an able-bodied person,” she told me. “A lot of people say, ‘Well, you can just get free care.’ They say, ‘You can go to a clinic with a sliding-fee scale, which would be $20 a visit.’ But what if I can’t come up with $20?”
The condition has long been considered untreatable. Experts can spot it in a child as young as 3 or 4. But a new clinical approach offers hope.
This is a good day, Samantha tells me: 10 on a scale of 10. We’re sitting in a conference room at the San Marcos Treatment Center, just south of Austin, Texas, a space that has witnessed countless difficult conversations between troubled children, their worried parents, and clinical therapists. But today promises unalloyed joy. Samantha’s mother is visiting from Idaho, as she does every six weeks, which means lunch off campus and an excursion to Target. The girl needs supplies: new jeans, yoga pants, nail polish.
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At 11, Samantha is just over 5 feet tall and has wavy black hair and a steady gaze. She flashes a smile when I ask about her favorite subject (history), and grimaces when I ask about her least favorite (math). She seems poised and cheerful, a normal preteen. But when we steer into uncomfortable territory—the events that led her to this juvenile-treatment facility nearly 2,000 miles from her family—Samantha hesitates and looks down at her hands. “I wanted the whole world to myself,” she says. “So I made a whole entire book about how to hurt people.”
The president’s business tells lawmakers it is too difficult to track all its foreign revenue in accordance with constitutional requirements, and it hasn’t asked Congress for a permission slip.
Days before taking office, Donald Trump said his company would donate all profits from foreign governments to the U.S. Treasury, part of an effort to avoid even the appearance of a conflict with the Constitution’s emoluments clause.
Now, however, the Trump Organization is telling Congress that determining exactly how much of its profits come from foreign governments is simply more trouble than it’s worth.
In response to a document request from the House Oversight Committee, Trump’s company sent a copy of an eight-page pamphlet detailing how it plans to track payments it receives from foreign governments at the firm’s many hotels, golf courses, and restaurants across the globe. But while the Trump Organization said it would set aside all money it collects from customers that identify themselves as representing a foreign government, it would not undertake a more intensive effort to determine if a payment would violate the Constitution’s prohibition on public office holders accepting an “emolument” from a foreign state.
In an assault in Montana, two very different ideas of masculinity
On Wednesday the Republican congressional candidate in Montana’s special election Greg Gianforte physically assaulted Ben Jacobs, a reporter from The Guardian, according to Jacobs himself and Fox News reporters who were present.
Jacobs recorded the interaction and published the audio, tweeting “Listen to me get body-slammed in Montana.”
The question Jacobs had asked Gianforte was about the Congressional Budget Office’s score of the new health-care bill. Gianforte can be heard saying, “I’m sick and tired of you guys,” and then there’s what sounds like an altercation, and then “The last time you came here you did the same thing. Get the hell out of here. Get the hell out of here.” Then Jacobs says, as if narrating for the audio recorder, “You just body-slammed me and broke my glasses.”
Speaking in front of the leaders of its member-nations, the president fails to make clear the United States still has the alliance’s back.
Updated at 5:07 p.m.
BRUSSELS — President Trump did not explicitly endorse the mutual-aid clause of the North Atlantic Treaty at the NATO summit on Thursday despite previous indications that he was planning to do so, keeping in place the cloud of ambiguity hanging over the relationship between the United States and the alliance.
Speaking in front of a 9/11 and Article 5 Memorial at the new NATO headquarters, Trump praised NATO’s response to the 9/11 attacks and spoke of “the commitments that bind us together as one.”
But he did not specifically commit to honor Article 5, which stipulates that other NATO allies must come to the aid of an ally under attack if it is invoked.
The only time in history that Article 5 has been invoked was after the September 11 attacks, a fact that Trump mentioned. The memorial Trump was dedicating is a piece of steel from the North Tower that fell during the attacks.
When the FBI discovered a network of Bosnian-Americans giving support to terrorists, they also discovered Abdullah Ramo Pazara, a U.S. citizen and a battalion commander in Syria.
Abdullah Ramo Pazara had a craving for packets of instant hot cocoa. The Bosnian-American former truck driver was, at the time, a commander of an Islamic State tank battalion in Syria. Apparently, even foreign fighters who reject their former lives in Western countries for a chance at martyrdom for ISIS sometimes long for the creature comforts of their previous homes.
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In 2013, six Bosnian immigrants in the United States allegedly sent money, riflescopes, knives, military equipment, and other supplies to jihadists in Syria and Iraq through intermediaries in Bosnia and Turkey. According to the U.S. government’s allegations, individual ISIS fighters would make specific requests—mostly for money and military equipment—and the group would then raise funds and send supplies to Syria. The requests included what was surely an unexpected revelation of nostalgia—packets of Swiss Miss hot cocoa. By sending the cocoa mix and other supplies, federal prosecutors argue, these U.S.-based Bosnians provided what is known as “material support” to terrorists, in violation of the Patriot Act.
It’s not all Donald Trump’s fault. But he has in every way already made the situation gravely worse.
“In battle, nothing is ever as good or bad as the first reports of excited men would have it.”
—Field Marshal Viscount Slim
Let’s hope that same caution applies to presidential transition geopolitics too, because the first reports from the Trump transition are very bad indeed.
Among America’s oldest and truest allies, the reaction to the election of Donald Trump has ranged from horror to terror, sometimes including large elements of each. Nowhere, though, does the reaction look more dangerous than inside the most powerful state on the European continent, Germany.
The morning after Donald Trump’s victory, German Chancellor Angela Merkel released a cooly diffident pledge of cooperation to the new American president. The key passage:
Republican candidate Greg Gianforte has been cited for misdemeanor assault after a journalist accused Gianforte of “body slamming” him in response to a question about GOP health-care legislation in Congress.
Updated on May 25, 2017 at 3:00 p.m. EST
The closely watched Montana special election on Thursday has been highly anticipated as a potential referendum on Donald Trump’s presidency and a test of whether Democrats can win back congressional seats in conservative and rural parts of the country.
But the race was thrown into turmoil Wednesday evening into early Thursday morning, when a Montana sheriff’s office cited GOP candidate Greg Gianforte for misdemeanor assault, after journalist Ben Jacobs accused Gianforte of “body slamming” him after he asked the Montana Republican about the recently passed GOP health-care bill. The Gianforte campaign disputed the reporters’ account, but it was corroborated by eyewitnesses at the scene of the incident.
A recent push for diversity has been blamed for weak print sales, but the company’s decades-old business practices are the true culprit.
Marvel Comics has been having a rough time lately. Readers and critics met last year’s Civil War 2—a blockbuster crossover event (and aspiritual tie-in to the year’s big Marvel movie)—with disinterest and scorn. Two years of plummeting print comics sales culminated in a February during which only one ongoing superhero title managed to sell more than 50,000 copies.* Three crossover events designed to pump up excitement came and went with little fanfare, while the lead-up to 2017’s blockbuster crossover Secret Empire—where a fascist Captain America subverts and conquers the United States—sparked such a negative response that the company later put out a statement imploring readers to buy the whole thing before judging it. On March 30, a battered Marvel decided to try and get to the bottom of the problem with a retailer summit—and promptly stuck its foot in its mouth.