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.
An exclusive look at how Alphabet understands its most ambitious artificial intelligence project
In a corner of Alphabet’s campus, there is a team working on a piece of software that may be the key to self-driving cars. No journalist has ever seen it in action until now. They call it Carcraft, after the popular game World of Warcraft.
The software’s creator, a shaggy-haired, baby-faced young engineer named James Stout, is sitting next to me in the headphones-on quiet of the open-plan office. On the screen is a virtual representation of a roundabout. To human eyes, it is not much to look at: a simple line drawing rendered onto a road-textured background. We see a self-driving Chrysler Pacifica at medium resolution and a simple wireframe box indicating the presence of another vehicle.
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 hookup culture that has largely replaced dating on college campuses has been viewed, in many quarters, as socially corrosive and ultimately toxic to women, who seemingly have little choice but to participate. Actually, it is an engine of female progress—one being harnessed and driven by women themselves.
The porn pic being passed around on the students’ cellphones at an Ivy League business-school party last fall was more prank than smut: a woman in a wool pom-pom hat giving a snowman with a snow penis a blow job. Snowblowing, it’s called, or snowman fellatio, terms everyone at this midweek happy hour seemed to know (except me). The men at the party flashed the snapshot at the women, and the women barely bothered to roll their eyes. These were not women’s-studies types, for sure; they were already several years out of college and proud veterans of the much maligned hookup culture that, over the past 15 years or so, has largely replaced dating on college campuses and beyond.
With every passing day, the stain and responsibility for Trump’s actions stick more lastingly to the Republican establishment.
Last night I was in circumstances where I could hear only a few excerpts from Donald Trump’s inflammatory speech in Phoenix. The parts I heard were remarkable enough.
They included Trump’s wink-wink implied promise to pardon ex-Sheriff Joe Arpaio, who was first turned out of office by the voters of Maricopa County and then found guilty by a federal judge of criminal contempt-of-court. There was also Trump’s threat to “close down our government” if the Congress won’t provide funding for his border wall—the same one Mexico was going to pay for. Plus his flatly deceitful rendering of what he had said about the neo-Nazi violence in Charlottesville, and why the press had criticized him for it. Plus his railing against Democratic obstructionism and the filibuster, when his biggest legislative failure, the repeal of Obamacare, was on a simple-majority vote.
Do you know someone who needs hours alone every day? Who loves quiet conversations about feelings or ideas, and can give a dynamite presentation to a big audience, but seems awkward in groups and maladroit at small talk? Who has to be dragged to parties and then needs the rest of the day to recuperate? Who growls or scowls or grunts or winces when accosted with pleasantries by people who are just trying to be nice?
A best-selling author submits a draft to his editor. Hijinks ensue.
I had written five books for Scott Moyers, following him as he moved from editing jobs at Scribner’s to Random House and then to Penguin Press. We worked well together, and in part thanks to his strong editing hand, my last three books had been bestsellers.
So what happened when I finished years of work and sent him the manuscript of my sixth book stunned me. In fact, I was in for a series of surprises.
They began about 18 months ago, after I emailed to him that manuscript, a dual appreciation of Winston Churchill and George Orwell. When I had begun work on it, in 2013, some old friends of mine thought the subject was a bit obscure. Why would anyone care how two long-dead Englishmen, a conservative politician and a socialist journalist who never met, had dealt with the polarized political turmoil of the 1930s and the world war that followed? By 2016, as people on both the American left and right increasingly seemed to favor opinion over fact, the book had become more timely.
Small towns across Japan are on the verge of collapse. Whether they can do so gracefully has consequences for societies around the globe.
TOCHIKUBO, Japan—The children had moved to the big city, never to return.
So their parents, both over 70, live out their days in this small town in the mountains, gazing at the rice paddies below, wondering what will become of the house they built, the garden they tended, the town they love.
“I don’t expect them to come back,” Kensaku Fueki, 73, told me, about his three daughters, all married and living in Tokyo. “It’s very tough to live on farming.”
For decades, young people have been fleeing this rural village, lured by the pull of Japan’s big cities like Tokyo and Osaka. Tochikubo’s school now has eight children, and more than half of the town’s 170 people are over the age of 50. “Who will come here now?” said Fueki, who grew up in this village and remembers a time when many of the houses weren’t abandoned, when more people farmed the land and children roamed the streets.
The nation’s current post-truth moment is the ultimate expression of mind-sets that have made America exceptional throughout its history.
When did America become untethered from reality?
I first noticed our national lurch toward fantasy in 2004, after President George W. Bush’s political mastermind, Karl Rove, came up with the remarkable phrase reality-based community. People in “the reality-based community,” he told a reporter, “believe that solutions emerge from your judicious study of discernible reality … That’s not the way the world really works anymore.” A year later, The Colbert Report went on the air. In the first few minutes of the first episode, Stephen Colbert, playing his right-wing-populist commentator character, performed a feature called “The Word.” His first selection: truthiness. “Now, I’m sure some of the ‘word police,’ the ‘wordinistas’ over at Webster’s, are gonna say, ‘Hey, that’s not a word!’ Well, anybody who knows me knows that I’m no fan of dictionaries or reference books.
A faction on the left wants to weaken the free-speech rights that protect marginalized people at the very moment when doing so would help Donald Trump to persecute them.
When free-speech advocates point out that the First Amendment protects even hate speech, as the attorney Ken White recently observed, they are often met with extreme hypotheticals. For example: “So, the day that Nazis march in the streets, armed, carrying the swastika flag, Sieg-Heiling, calling out abuse of Jews and blacks, some of their number assaulting and even killing people, you'll still defend their right to speak?"
In Charlottesville, he declared, something like that scenario came to pass: “Literal Nazis marched the streets of an American city, calling out Jews and blacks and gays, wielding everything from torches to clubs and shields to rifles, offering Nazi slogans and Nazi salutes. Some of their number attacked counter-protesters, and one of them murdered a counter-protester and attempted to murder many others. This is the ‘what if’ and ‘how far’ that critics of vigorous free speech policies pose to us as a society.”
The president went to Phoenix to deliver a speech that was dishonest, assailed his own allies, and contradicted itself.
How many people, given the prerogative to travel wherever they wanted and the use of a fully staffed jet to do it, would head to Phoenix, Arizona, in the dog days of August? But then Donald Trump often prefers to turn up the heat, and his rally Tuesday night was no different.
In remarks that veered between the carefully composed and the spontaneously concocted, Trump called for national unity even as he mounted all-out attacks on his enemies in the press and the Republican Party. He insisted he stood for all Americans but called Confederate monuments a part of “our” history. The president all but promised to pardon former Maricopa County Sheriff Joe Arpaio, convicted of criminal contempt of court, and told a series of out-and-out lies in the course of accusing the media of dishonesty.