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 Trump administration may be accelerating "Easternization," argues Gideon Rachman.
Next week, Chinese President Xi Jinping will travel to the United States to meet Donald Trump for the first time. But according to Gideon Rachman, the chief foreign affairs commentator for the Financial Times, power is flowing in the opposite direction. Rachman is far from the first analyst to argue that China and other Asian nations are rising while the Western world declines, nor is he the first to cite the now-familiar statistics about China’s ballooning economy and unparalleled manufacturing might. His contribution is to help explain some of the most confounding developments of the day—from the Middle East’s descent into anarchy to the ascent of populist politicians in the West to the emergence of nostalgia as a political force—through his theory of the “Easternization” of international affairs.
The Sony World Photography Awards has announced the winners of its Open categories and National categories for 2017.
The Sony World Photography Awards, an annual competition hosted by the World Photography Organisation, has announced the winners of its Open categories and National categories for 2017. This year's contest attracted 227,596 entries from 183 countries. The organizers have again been kind enough to share some of the winners and runners-up with us, gathered below. All captions below come from the photographers.
Angela Merkel’s country can resist the rightward pull in European politics.
Amid fears of a rising populist tide in Europe, Germany seems to be resisting its rightward tug with unique success.The day after Donald Trump’s election, The New York Timeshailed German Chancellor Angela Merkel as the “Liberal West’s Last Defender.” And it was to Merkel, the new “leader of the free world,” that Barack Obama directed his final phone call as president.
Meanwhile, others around the world are embracing right-wing populism, from the Britons’ stunning decision to leave the European Union to Indian Prime Minister Narendra Modi’s Hindu nationalist agenda to Philippine President Rodrigo Duterte’s authoritarian policies. Trump’s election has appeared at times to inject fresh energy into the right-wing parties of Europe.As some countries there brace for national elections this year, the prospects for these parties look bright. In France, for example, far-right National Front party leader Marine Le Pen is expected to advance to the second round of balloting in April’s presidential elections; recent polls show her beating scandal-ridden conservative candidate Francois Fillon in the first round.
The program is based on the idea that habit-forming behaviors start in childhood.
At a Berlin day-care center, the children packed away all the toys: the cars, the tiny plastic animals, the blocks and Legos, even the board games and most of the art materials. They then stood in the empty classroom and looked at their two instructors.
“What should I do now?” my son, then 5, asked.
He did not get an answer to this question for a long time. His day-care center, or kita, was starting a toy-free kindergarten project. For several weeks, the toys would disappear, and the teachers wouldn’t tell the children what to play. While this practice may seem harsh, the project has an important pedagogic goal: to improve the children’s life skills to strengthen them against addictive behaviors in the future.
The Fox News host—like White House Press Secretary Sean Spicer—landed himself in hot water Tuesday for responding to how a woman of color looked, and not to what she said.
Tuesday was not a good day for America’s hard-charging white men. Fox News host Bill O’Reilly began his day on the set of Fox & Friends, where he was asked about remarks that Representative Maxine Waters made Monday evening on the floor of Congress about Trump supporters and patriotism. Instead of responding to Waters’s comments, O’Reilly opted to focus on something else. “I didn’t hear a word she said,” O’Reilly said, interrupting his hosts. “I was looking at the James Brown wig.”
In response, there were loud barks of (male) laughter on the set.
O’Reilly continued: “If we have a picture of James—it’s the same one.”
The laughter continued.
Host Ainsley Earhardt interjected, “No, I gotta defend her on that,” she said, “You can’t go after a woman’s looks. I think she’s very attractive.”
No, the regional manager of the fictional Dunder Mifflin insisted: His suit fits him, and he is a man, therefore, "at the very least, it's bisexual." What made it clear to Michael, finally, that his "power suit" was indeed also a women's suit was that the buttons of its jacket were, he noted, "on the wrong side."
Leave it to Michael Scott to bumble, via a sales bin and a career separates brand named MISSterious, into an insight about the arbitrary gender differences in clothing. Women’s and men’s shirts and jackets differ not just in terms of how they’re cut, but also in how they’re oriented: To the person wearing them, men’s dress shirts have their buttons on the right, while women’s have them on the left.
Years of misleading coverage left viewers so misinformed that many were shocked when confronted with the actual costs of repeal.
As the Republican Party struggled and then failed to repeal and replace Obamacare, pulling a wildly unpopular bill from the House without even taking a vote, a flurry of insightful articles helped the public understand what exactly just happened. Robert Draper explained the roles that Stephen Bannon, Paul Ryan, and others played in deciding what agenda items President Trump would pursue in what order. Politicoreported on how and why the House Freedom Caucus insisted that the health care bill repeal even relatively popular parts of Obamacare. Lest anyone pin blame for the GOP’s failure on that faction, Reihan Salam argued persuasively that responsibility rests with poor leadership by House Speaker Paul Ryan and a GOP coalition with “policy goals that simply can’t be achieved.”
Senators Richard Burr and Mark Warner promised a long, slow, even dull inquiry into election interference—an implicit rebuke to the House’s ever-more-chaotic process.
As Tolstoy would have written if he were a national-security reporter, all dysfunctional committees are dysfunctional in their own way, while all functional committees are frustratingly tight-lipped.
Or something like that. In any case, a Wednesday press conference by Senators Richard Burr and Mark Warner, the chairman and ranking Democrat on the Senate Intelligence Committee, presented a glaring contrast to the House’s own intelligence committee, which seems to spin into greater chaos daily. The pair emphasized bipartisanship, process, and patience, offering little in the way of factual revelations while implicitly rebuking the House Intelligence Committee.
A new poll suggests a majority back the president’s unsubstantiated accusations about former President Obama.
An overwhelming majority of Republicans—at 74 percent—believe it’s likely that Donald Trump was wiretapped or otherwise subject to government surveillance while he was running for president, according to a CBS News poll released on Wednesday.
The results suggest that Republican voters have largely accepted the president’s claim—which he first made earlier this month in a tweet—that President Obama ordered a wiretap of Trump Tower. That’s despite the fact that there is no evidence to substantiate his charge, which PolitiFact has labeled “false.” So why do so many Republicans appear to believe the president if there’s no concrete evidence to back him up? A few factors help explain the polling result.
The philosophers he influenced set the stage for the technological revolution that remade our world.
THE HISTORY Ofcomputers is often told as a history of objects, from the abacus to the Babbage engine up through the code-breaking machines of World War II. In fact, it is better understood as a history of ideas, mainly ideas that emerged from mathematical logic, an obscure and cult-like discipline that first developed in the 19th century. Mathematical logic was pioneered by philosopher-mathematicians, most notably George Boole and Gottlob Frege, who were themselves inspired by Leibniz’s dream of a universal “concept language,” and the ancient logical system of Aristotle.
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Mathematical logic was initially considered a hopelessly abstract subject with no conceivable applications. As one computer scientist commented: “If, in 1901, a talented and sympathetic outsider had been called upon to survey the sciences and name the branch which would be least fruitful in [the] century ahead, his choice might well have settled upon mathematical logic.” And yet, it would provide the foundation for a field that would have more impact on the modern world than any other.