Markets describe reality; models should explain market reactions

December 22, 2014
EconLog
by Scott Sumner   Scott Sumner

"Paul Krugman has a new post that explains why he is pessimistic about monetary stimulus at the zero bound. He briefly describes his 1998 paper on the zero bound problem. This paper shows that if base money and bonds are perfect substitutes at the zero bound, and if monetary stimulus is expected to be temporary (i.e. not to affect future money supplies) then conventional open market purchases are ineffective at the zero bound. From a technical perspective, there is nothing wrong with Krugman's model. The real problem is the way he uses the model." (12/20/14)

http://econlog.econlib.org/archives/2014/12/markets_describ.html  

Pakistan makes arrests in Taliban school carnage

December 22, 2014
Newnan Times-Herald    

"Authorities made several arrests in the case of the Taliban school attack that killed 148 in the northwestern city of Peshawar, on Sunday, officials said. 'Quite a few suspects who were facilitators in one way or the other have been taken into custody,' Interior Minister Chaudhry Nisar Ali Khan said, adding that the interrogations were 'moving ahead in a positive manner.' He did not disclose their identities or say how many they were." (12/21/14)

http://tinyurl.com/krwfgtr  

Persian cats and bureaucrats

December 22, 2014
Bleeding Heart Libertarians
by James Taylor   Bleeding Heart Libertarians

"My wife and I used to own a small grey Persian cat, called 'Peen.' Peen had a number of endearing characteristics, among them a very obvious 'WTF?!' expression whenever something occurred that he considered an affront to the world as it should be. His eyes would grow wide as saucers, an expression of extreme indignation would cover his face, and his head would dart from side to side as though asking everyone around him to explain the bizarre event that had just occurred 'WTF is that cat doing in my spot?' 'WTF is this flavor of cat food?' 'WTF is this new puppy doing here?' I had a 'Peen moment' a couple of days ago at a Public Hearing at a Planning Board meeting in Hopewell Township, New Jersey." (12/20/14)

http://bleedingheartlibertarians.com/2014/12/8792/  

To praise or to push?

December 22, 2014
Liberty Unbound
by Jo Ann Skousen   Liberty Unbound

"'No two words are more harmful in the English language than 'Good job.'' So says Terence Fletcher (played by J.K. Simmons) when asked why he humiliates and browbeats his students. Fletcher is the menacing, profanity-spewing, name-calling, face-slapping, chair-hurling, off-balancing dictator of the Shaffer School of Music, who also happens to be the most sought-after band coach in the most sought-after music school in New York -- which, as everyone knows, is the same as saying in the world." (12/18/14)

http://libertyunbound.com/node/1347  

Egypt opens border with Gaza after two-month closure

December 22, 2014
Gulf News [UAE]    

"A Palestinian border official says Egypt has opened its border post with the Gaza Strip for the first time in two months, offering temporary relief to Palestinians seeking to leave the coastal enclave. Maher Abu Sabha, the Gaza official in charge on the Gaza side, says the Rafah crossing is only to remain open for two days. It’s the main gateway to the outside world for Gaza’s 1.7 million residents. Egypt had kept the border closed since an October 24 attack in the Sinai Peninsula that killed 31 Egyptian soldiers. About 250 Palestinians as well as ambulances with medical patients crossed into Egypt on Sunday." (123/21/14)

http://tinyurl.com/l9bbdpc  

Oil and dictators

December 21, 2014
Independent Institute
by Alvaro Vargas Llosa   Alvaro Vargas Llosa

"Will the collapse of oil prices benefit or erode petrodictators in the Middle East, Eurasia, Africa, and Latin America? At first glance, the answer would seem obvious. Venezuela, Nigeria, and Iran need crude prices as high as $110 per barrel to fund their states in their present condition. Russia, half of whose government budget depends on black gold, is not far behind. Saudi Arabia, which did much to reverse the 'Arab Spring,' announced in recent years new oil-funded projects costing about $500 billion and aimed at pre-empting adversaries who could use the discontent with the regime in Riyadh to agitate the mind of the masses. But things are more complicated than they seem." (12/19/14)

http://blog.independent.org/2014/12/19/oil-and-dictators/  

Bankers earn more than medics: What can we do?!

December 21, 2014
Adam Smith Institute
by Vishal Wilde   Adam Smith Institute

"A common criticism leveled against the financial services industry concerns their remuneration compared to those from more 'noble' professions -- such as Medical Doctors. Proclamations such as 'it's ridiculous that the average Doctor earns less than the average investment banker' are not unusual to hear in common parlance; Doctors cure ailments and save lives whereas Investment Bankers supposedly wreck households and exploit taxpayers. It is, therefore, unfair that Bankers are paid more than Doctors. The oft-proposed solution is heavier taxation and regulation on Investment Banks. However, these critics conveniently forget the other side of the coin -- the inadequate remuneration for noble professions." (12/20/14)

http://tinyurl.com/q2dj5mf  

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