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.
Its faith-based 12-step program dominates treatment in the United States. But researchers have debunked central tenets of AA doctrine and found dozens of other treatments more effective.
J.G. is a lawyer in his early 30s. He’s a fast talker and has the lean, sinewy build of a distance runner. His choice of profession seems preordained, as he speaks in fully formed paragraphs, his thoughts organized by topic sentences. He’s also a worrier—a big one—who for years used alcohol to soothe his anxiety.
J.G. started drinking at 15, when he and a friend experimented in his parents’ liquor cabinet. He favored gin and whiskey but drank whatever he thought his parents would miss the least. He discovered beer, too, and loved the earthy, bitter taste on his tongue when he took his first cold sip.
His drinking increased through college and into law school. He could, and occasionally did, pull back, going cold turkey for weeks at a time. But nothing quieted his anxious mind like booze, and when he didn’t drink, he didn’t sleep. After four or six weeks dry, he’d be back at the liquor store.
The foundation of Donald Trump’s presidency is the negation of Barack Obama’s legacy.
It is insufficient to statethe obvious of Donald Trump: that he is a white man who would not be president were it not for this fact. With one immediate exception, Trump’s predecessors made their way to high office through the passive power of whiteness—that bloody heirloom which cannot ensure mastery of all events but can conjure a tailwind for most of them. Land theft and human plunder cleared the grounds for Trump’s forefathers and barred others from it. Once upon the field, these men became soldiers, statesmen, and scholars; held court in Paris; presided at Princeton; advanced into the Wilderness and then into the White House. Their individual triumphs made this exclusive party seem above America’s founding sins, and it was forgotten that the former was in fact bound to the latter, that all their victories had transpired on cleared grounds. No such elegant detachment can be attributed to Donald Trump—a president who, more than any other, has made the awful inheritance explicit.
As Trump considers military options, he’s drawing unenforceable red lines.
Speaking before the UN General Assembly today, President Donald Trump announced that, unless North Korea gives up its nuclear weapons and ballistic missile programs, “the United States will have no choice but to totally destroy” the country. He sounded almost excited as he threatened, “Rocket Man is on a suicide mission for himself and for his regime.”
North Korea is a serious problem, and not one of Trump’s making—the last four American presidents failed to impede North Korea’s progress towards a nuclear weapon. President George H.W. Bush took unilateral action, removing U.S. nuclear weapons and reducing America’s troop levels in the region, hoping to incentivize good behavior; Presidents Bill Clinton and George W. Bush tried to negotiate restrictions; President Barack Obama mostly averted his eyes. North Korea defied them all.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
The sports network’s controversial transformation is driven more by the audience and less by elites than many observers realize.
Bryan Curtis reports a striking scene in “Jemele Hill and the Fight for the Future of ESPN,” his essay on America’s premier sports network and its relationship with politics. The staff of SportsCenter, a group under fire for producing shows that are “too political,” are gathered together to decide the contents of the 6 p.m. broadcast.
“ESPN’s transformation is usually described as swapping a highlight for a debate segment,” Curtis writes. “But the changes are even more elemental. At the SC6 staff meeting, everyone had their heads buried in their social media feeds, looking for content … Twitter is now the de facto coordinating producer of ESPN’s daytime lineup. The network’s old currency was a highlight of Klay Thompson shooting a three. The new currency — and, indeed, that day’s top offering — was a video of Thompson dancing like a dork in a Chinese nightclub. Programming ESPN is like curating your Twitter feed: Find the content that everyone’s talking about and craft the right joke.”
What was it like inside the brain of an ancient prophet?
James Kugel has been spent his entire scholarly career studying the Bible, but some very basic questions about it still obsess him. What was it about the minds of ancient Israelites that allowed them to hear and see God directly—or at least, to believe that they did? Were the biblical prophets literally hearing voices and seeing visions, understanding themselves to be transmitting God’s own exact words? If so, why did such direct encounters with God become rarer over time?
In his new and final book, The Great Shift, Kugel investigates these questions through the lens of neuroscientific findings. (The approach is reminiscent of other recent books, like Kabbalah: A Neurocognitive Approach to Mystical Experiences, co-written by a neurologist and a mysticism scholar.) First, Kugel uses biblical research to show that ancient people had a “sense of self” that was fundamentally different from the one modern Westerners have—and that this enabled them to experience and interpret prophecy differently than we do. Then he uses scientific research to show that we shouldn’t assume their view was wrong. If anything, our modern Western notion of the bounded, individual self is the anomaly; most human beings throughout history conceived of the self as a porous entity open to intrusions. In fact, much of the rest of the world today still does.
Old French Canadian genealogy records reveal how a harmful mutation can hide from natural selection in a mother's DNA.
The first King’s Daughters—or filles du roi—arrived in New France in 1663, and 800 more would follow over the next decade. Given their numbers, they were not literally the king’s daughters of course.
They were poor and usually of common birth, but their passage and dowry were indeed paid by King Louis XIV for the purpose of empire building: These women were to marry male colonists and have many children, thus strengthening France’s hold on North America.
And so they did. The filles du roi became the founding mothers of French Canadians, for whom these women are a source of historical pride. A grand old restaurant in Montreal was named after the filles du roi. So is a roller-derby team. French Canadians can usually trace their ancestry back to one or more of these women. “French Canadian genealogy is so well documented, it’s just a piece of cake to trace any line you have,” says Susan Colby, a retired archaeologist who comes from a French Canadian family and has done some of that tracing herself.
Amidst aggressive fundraising to support his reelection, the wealthiest president in American history is tapping the Republican National Committee and his campaign to pay Russia-related lawyer fees.
President Trump, whose surname became a byword for gilded opulence in the 1980s and 1990s, is reportedly leaning on his reelection campaign and the Republican National Committee to pay legal fees stemming from the Russia investigation.
Reuters reported on Tuesday that Trump’s legal team had received payments from both organizations, although it was not immediately clear how much has been disbursed. The payments are legal, the wire service noted, because Federal Election Commission regulations authorize using private campaign funds to pay for legal costs incurred “as a candidate or elected official.” They’re also not entirely unprecedented.
Trump’s campaign coffers are being filled through an aggressive fundraising operation. The president made the unprecedented decision to begin raising money for his reelection in 2020 soon after he won last November, far earlier than any of his predecessors in the modern campaign-finance era. Some of his email solicitations for donations have included thinly veiled references to the Russia investigation, usually by way of criticizing the media. In a July 19 fundraising pitch sent one week after Donald Trump Jr. disclosed a secret 2016 meeting with a Russian lawyer, Trump denounced the “fake news media” as “the real opposition.”
The Ken Burns / Lynn Novick 18-hour series on The Vietnam War began its run on PBS on Sunday night and continues through this week and next. I felt about as familiar with that era as I could imagine—with its tensions at the time, with the journalism and literature that came out of it, with the historical assessments, with the war’s role in music and movies and others parts of pop culture and public imagination. Even so I found this a tremendously revealing series. I recommend it very highly. Please find a way to watch—now, or in the many streaming and download alternatives they are making available.
As with any attempt to grapple with a topic this vast and complex, and of such emotional and historical consequence, the Burns/Novick series is bound to be controversial. For one example of an avenue of criticism, see this review by veteran Asia-hand correspondent Jim Laurie, who was on-scene in Vietnam and Cambodia during the war.
The Republican Party laid the groundwork for dysfunction long before Donald Trump was elected president.
President Trump’s approach to governance is unlike that of his recent predecessors, but it is also not without antecedents. The groundwork for some of this dysfunction was laid in the decades before Trump’s emergence as a political figure. Nowhere is that more true than in the disappearance of the norms of American politics.
Norms are defined as “a standard or pattern, especially of social behavior, that is typical or expected of a group.” They are how a person is supposed to behave in a given social setting. We don’t fully appreciate the power of norms until they are violated on a regular basis. And the breaching of norms often produces a cascading effect: As one person breaks with tradition and expectation, behavior previously considered inappropriate is normalized and taken up by others. Donald Trump is the Normless President, and his ascendancy threatens to inspire a new wave of norm-breaking.