Basketball Blogger

Took some time from politics and economics and wrote about basketball. You can find me at The Casual Hoya

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Cyprus Monday March 18

http://nyti.ms/1317mHM The decision of the ECB and Euro Zone leaders to "tax" deposits in Cypriot banks is a phenomenally bad decision that must cause a giant run on their banks and weaken the entire Euro Zone. Part of the problem that places like Cyprus struggle with are constant capital outflows from current account deficits. Those out flows are made for with inflows from Russians and other convinced of Cypriot stability. So much for that. It is inconceivable that this haircut of depositors could work. Should have just nationalized the banks.

Relationship Stock market and Oil prichttp://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=DCOILWTICO,DJIA&scale=Left,Left&range=Max,Custom&cosd=1986-01-02,1986-01-02&coed=2013-01-29,2013-02-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Daily,Daily&fam=avg,avg&fgst=lin,lin&transformation=nbd,nbd&vintage_date=2013-02-04,2013-02-04&revision_date=2013-02-04,2013-02-04&nd=2007-12-01,2007-12-01

As someone who watches the markets for equities and commodities fairly closely I have been interested in the incidence of relationship between increases in oil prices and the increase in the value of stock market indices like the Dow. Here is a chart of the changes over a period from 1986 until today.

Second Inaugural

It was with much warmth and no small amount of pride that I watched the ceremonial swearing in and second inaugural address of Barack Obama. The tradition of the inaugural address is typically more poetry than prose. "With malice toward none", "all we have to fear, "Ask not what your country can do". But there are few addresses that have transformed national discussion and remain in our political lexicon for generations.

There are some great passages from President Obama's speech. But the overwhelming virtue of the speech is his placing the struggle for equality within the context of the nature of America. For progressives of my era, our lifelong struggle has been to get that recognition from our government. That equality is the goal that can bind us together in a great national experience where all are included and none marginalized. We have a long way to go but this paragraph from President Obama yesterday gives me hope...

"For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class. We know that America thrives when every person can find independence and pride in their work; when the wages of honest labor liberate families from the brink of hardship. We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own."

Interim Senator for Mass

Strange positioning occurring in Mass regarding the temporary appointment of a Senator to replace John Kerry once he is confirmed as Secretary of State. Congressman Barney Frank has indicated in recent days that he is available for the appointment which would bridge the period from Kerry's resignation (which hash't happened yet) and the special election which would be a few months later. Sources tell me that the front runner for the Governor's nod (its his appointment) is former Admin and Finance chief Jay Gonzalez. I am hearing from fellow Mass progressives that there is some momentum for Barney Frank and that the Globe will endorse the idea in the morning edition. Personally I think Barney Frank would be among the best qualified people in the country to fill the role (let alone Massachusetts). I can't imagine what political consultant Doug Rubin was thinking when he dissed the idea of a Frank appointment, but Rubin isn't  Congressional scholar so who cares.

Early thoughts on ASSA 2013

Having been absent from the ASSA/AEA conference for a year I am concerned about the dying of the critical retrospection following the financial crisis of 2007. While there was significant discussion of the rupture of conventional wisdom during the Great Recession there is little continued examination in that vein. Too much of the discussion is about the deficit and debt and very little about unemployment. Some panels mention inequality but few solutions challenging the limits of narrow range of policy solutions.

Currently listening to the discussion at a panel on Media and Economics and the takeaway is that the important Econ journalism is through the scholar/bloggers like Paul Krugman, Brad deLong and Justin Wolfers. Christia Freeland accepts that idea ... Econ journalism needs to challenge the conventional.

More thoughts tomorrow from the plane.

Why Thomas Friedman is wrong again

In Sunday's NY Times columnist Tom Friedman has another column demonstrating how to contradict oneself within a paragraph or two and misunderstand markets and politics at the same time. He is bemoaning the descent into political madness of the large part of the Republican electorate that rejects any tax or gun control measures out of hand. The folks who believe that restrictions on automatic weapons are a giant threat to freedom but support massive government intervention into the health choices of women. He roles out reasonable objections to their positions such as objecting to a minor symbolic treaty for weirdly paranoid reasons. or not taking advantage of President Obama's ill considered offer to make senior citizens pay for tax cuts for families with comes over $250K.

But Friedman continues to make the same objectionable mistake in writing about politics that he always does...because he either knows little about electoral political history and public policy or chooses to ignore the evidence. He claims the Republicans need a DLC, an organized force to try to bring them to the corporatist middle. Ignoring the fact that the Democratic Party already fills that space and that when it followed his much praised pattern it did not achieve 50% of the vote in a presidential election even during the two Clinton victories. He claims there was some substantial split in the party because of "pragmatism" that resulted in Ralph Nader allowing GW Bush to win in 2000. How wrong could he be? The problem was the the fact that Nader could have a substantial impact on a poorly run election by getting so few votes. There was no split in the party as there was no substantial constituency from within the party that supported Nader in his candidacy. Most all Nader votes came from states that were not competitive.

That aside, Friedman continues on his desire to have two parties with no differences. It is a shame he does not think that the US is ready for democracy. He argues for "market based solutions" to public policy decisions but not to politics? The best way to get the Republicans to moderate their positions would be for people not to vote for them and for the "market" to reject their product. But what space is their for the "right-of-center" policy he seeks? Isn't the Democratic Party already the "right-of-center" offering? On most any policy issue the Democratic Party is to the right of the mainstream of thought in other advanced countries. Isn't the real opening for a more social democratic party in the US leaving the middle for the Republicans?

The challenge is lack of consensus in contemporary American politics. With a fight to the death to protect Social Security and Medicare the divide between the parties is substantial but we should not mistake that for left and right. Rather the center right and the hard right.