Cambridge can send David Cameron a thank-you note for its rock bottom borrowing costs
Can you afford not to borrow right now? If you're a big, AAA-rated institution like the University of Cambridge, the answer is probably no -- which is why it's issuing a bond for the first time in its 800-year history. Hey, these guys know historically low interest rates when they see them.
Just how low is historically low? Well, interest rates have had nowhere to go but up for years now, and might still for years more. The chart below, courtesy of the Guardian, puts today's near-zero interest rates in historical context, going all the way back to when the Bank of England was created in 1694. Notice the flat line at the far right, just barely above the x-axis.
Anybody and everybody who can tap capital markets should be locking in these rates. Cambridge has, to the tune of a 40-year, £350 million ($560 million) bond. Because, research facilities! As if they need a reason when money is free.
There's another institution that should be taking notes -- the British government. As Matt Yglesias of Slate points out, it's both hilarious and irrelevant that the British government has a lower credit rating than Cambridge. The government borrows for basically nothing in a currency it controls. It can't default on its debts, though it can inflate them away. Now, inflation risk is a real risk for investors, but it's no less a risk for investors who buy Cambridge's bonds, since the university also borrows in sterling. In other words, the British government should worry about what markets, and not credit rating agencies, think about their creditworthiness.
Right now, the market's message is to spend, spend, spend. Investors would still rather pay the government to hold their money than risk it in stocks. There are no free lunches in economics, but this comes awfully close. Brad DeLong and Larry Summers think borrowing money to put people back to work might actually pay for itself right now, since it keeps our capital stock from falling too low and the unemployed from becoming unemployable. In other words, the future cost of more debt might be less than the future cost of more stagnation.
More stagnation is what Britain has now. They can thank the Conservative-led coalition for that. David Cameron tried to preempt a debt crisis, but it's only worsened their growth crisis. His mistake has been to worry about rising interest rates, when he should worry about interest rates not rising. Huh? There are two reasons interest rates might rise: default risk and inflation risk. Britain doesn't have to worry about the former, and shouldn't worry about the latter. They should actually welcome it. More inflation would be a sign of more growth right now. Interest rates would climb, but for the good reason that investors are regaining their animal spirits. The Cameron government has missed this. They think the point is to keep rates low, lest they turn into Greece. In this they have succeeded -- the keeping rates low bit. Premature austerity has killed growth, which has killed confidence, which has helped keep rates down. Rinse and repeat.
It's terrible for Britain, but great for Cambridge, now that they're breaking their 800-year debt-free streak. I can think of at least one former professor would be happy his alma mater hasn't forgotten that the slump is not the right time for austerity.
Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don’t get an M.B.A. Study philosophy instead
During the seven years that I worked as a management consultant, I spent a lot of time trying to look older than I was. I became pretty good at furrowing my brow and putting on somber expressions. Those who saw through my disguise assumed I made up for my youth with a fabulous education in management. They were wrong about that. I don’t have an M.B.A. I have a doctoral degree in philosophy—nineteenth-century German philosophy, to be precise. Before I took a job telling managers of large corporations things that they arguably should have known already, my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry.
Comprehensive insurance, with benefits like maternity or mental-health coverage, could become unaffordable—if not unavailable—under the GOP’s replacement plan.
Get ready for the “mommy tax.”
One of the most powerful arguments against House Republicans’ embattled legislation to repeal the Affordable Care Act has been that it imposes an “age tax” by raising health-insurance premiums and out-of-pocket expenses for older, working adults.
More broadly, many health-insurance experts say, the latest round of revisions—which are still under negotiation—would undermine Republican promises to protect consumers with preexisting health conditions and could leave comprehensive health insurance virtually unavailable at almost any price on the individual market.
Donald Trump flaunted his elastic conception of truth in an interview with Time—but he may yet learn that facts are stubborn things.
How can anyone convince the most powerful man in the world of something he does not wish to believe?
It’s not an idle question. In a remarkable interview with Time’s Michael Scherer, President Trump flaunted his elastic relationship with truth. Instead of weighing evidence, he explained, he prefers to trust his gut. “I’m a very instinctual person,” he said, “but my instinct turns out to be right.”
Trump unrepentantly rehearsed his litany of false or unsubstantiated claims with Scherer. Was Ted Cruz’s father linked to Lee Harvey Oswald? “Why do you say that I have to apologize? I’m just quoting the newspaper.” (The newspaper in question is the National Enquirer.) Had the president tapped his phones? “A lot of information has just been learned, and a lot of information may be learned over the next coming period of time. We will see what happens.” Were there 3 million fraudulent votes cast in 2016? “Well I think I will be proved right about that too.”
Party leaders postponed a House vote Thursday after President Trump and Speaker Paul Ryan failed to win enough support.
Updated on March 23 at 4:28 p.m. ET
Lacking the majority needed to pass their bill to replace the Affordable Care Act, House Republican leaders have postponed a planned Thursday vote, imperiling President Trump’s first major legislative priority.
The move was an indication that a series of meetings Trump and Speaker Paul Ryan had with reluctant members in the party’s conservative and centrist wings had failed to achieve a consensus. Members of the House Freedom Caucus left a meeting with the president early in the afternoon saying there was “no deal” as they pushed Ryan to move the bill further to the right. And for Trump and Ryan, the delay dashed their hope of voting to dismantle the law on the seventh anniversary of its signing by former President Barack Obama.
Two Princeton economists elaborate on their work exploring rising mortality rates among certain demographics.
Two years ago, the Princeton economists Anne Case and Angus Deaton published an alarming revelation: Middle-aged white Americans without a college degree were dying in greater numbers, even as people in other developed countries were living longer. The husband-and-wife team argued, in a study in the Proceedings of the National Academy of Sciences, that these white Americans are facing“deaths of despair”—suicide, overdoses from alcohol and drug, and alcohol-related liver disease.
The paper caused a stir in academic circles and in the media, and has remained in the public discourse following Donald Trump’s win partly on the strength of his support from these same middle-aged white Americans (the alive ones, to be clear). The paper, however, couldn’t answer the question everyone had: Why was this demographic in particular struggling? It couldn’t be purely the economic pain they faced in the wake of globalization; after all, European countries are also affected by globalization, and their residents are getting healthier and living longer. And non-whites in the U.S. are living longer than they used to as well, and they are subject to the same economic forces as middle-age whites and are struggling, at least in economic terms, even more.
The commander in chief embraces a peculiar worldview in which bogus claims are retroactively justified and evidence simply conjured into existence.
President Trump remains peculiarly fixated on the cover of Time magazine. He has claimed in the past that he holds the record for most covers, but in an interview with Michael Scherer for this week’s magazine, the president asked if he was the all-time leader. Scherer had to break the bad news to him: Richard M. Nixon still held the lead—though he added, “He was in office for longer, so give yourself time.” “Ok, good. I’m sure I’ll win,” Trump replied.
The exchange is full of intrigue. Neither man noted that though Nixon was elected to two terms, his presidency was foreshortened by paranoia and lawbreaking. Nor did they note the increasingly frequent comparisons between Nixon’s terminal scandal and Trump’s own difficulties. But in the course of an interview about Trump’s extremely distant relationship with the truth—from obvious lies to head-scratching speculation—the president offered Nixonian maxim of his own.
New research on the creatures’ family tree could “shake dinosaur paleontology to its core.”
When I first read Matthew Baron’s new dinosaur study, I actually gasped.
For most of my life, I’ve believed that the dinosaurs fell into two major groups: the lizard-hipped saurischians, which included the meat-eating theropods like Tyrannosaurus and long-necked sauropodomorphs like BrontosaurusYes, Brontosaurus. It’s a thing again. ; and the bird-hipped ornithischians, which included horned species like Triceratops and armored ones like Stegosaurus. That’s how dinosaurs have been divided since 1887. It’s what I learned as a kid. It’s what all the textbooks and museums have always said. And according to Baron, a Ph.D. student at the University of Cambridge, it’s wrong.
By thoroughly comparing 74 early dinosaurs and their relatives, Baron has radically redrawn the two major branches of the dinosaur family tree. Defying 130 years of accepted dogma, he splits the saurischians apart, leaving the sauropods in one branch, and placing the theropods with the ornthischians on the other. Put it this way: This is like someone telling you that neither cats nor dogs are what you thought they were, and some of the animals you call “cats” are actually dogs.
Trump promised to revitalize the blighted heartland. His policies will punish them.
President Donald Trump might be consumed by half-truths and conspiracy theories, but during the campaign he brought attention to a very real phenomenon: regional inequality. He promised not only a proper swamp-draining in Washington, D.C., but also a renaissance for the Rust Belt, Appalachia, and America’s blighted heartland.
Even when his prognoses were fantasies—neither trade wars nor border walls will ever bring back 1950s-level manufacturing employment—the underlying diagnosis was pretty much right. For much of the 20th century, productivity in America’s poorest regions actually grew faster than in rich metros. But decades of convergence have come to a screeching halt in the 2000s. Rich coastal cities have left the rest of the country behind. In 1980, the typical New York City worker earned 80 percent more than the national average. By 2013, he earned 172 percent more.
The Wellesley professors find that status quo too permissive.
So they urged new norms that would eschew invitations to speakers like Kipnis. Their premise: “There is no doubt that the speakers in question impose on the liberty of students, staff, and faculty.” Knowing many will be skeptical of that premise, I present their argument at length, in their words, in the order that they appear.
Tech companies are spending hundreds of millions of dollars to improve conditions for female employees. Here’s why not much has changed—and what might actually work.
One weekday morning in 2007, Bethanye Blount came into work early to interview a job applicant. A veteran software engineer then in her 30s, Blount held a senior position at the company that runs Second Life, the online virtual world. Good-natured and self-confident, she typically wore the kind of outfit—jeans, hoodie, sneakers—that signals coding gravitas. That day, she might even have been wearing what’s known as the “full-in start-up twin set”: a Second Life T-shirt paired with a Second Life hoodie.
In short, everything about her indicated that she was a serious technical person. So she was taken aback when the job applicant barely gave her the time of day. He knew her job title. He knew she would play a key role in deciding whether he got hired. Yet every time Blount asked him a question about his skills or tried to steer the conversation to the scope of the job, he blew her off with a flippant comment. Afterward, Blount spoke to another top woman—a vice president—who said he’d treated her the same way.