September 27th, 2014

File Under Schadenfreude

I erratically read a few blogs, including Paul Krugman's at the NYT:

http://krugman.blogs.nytimes.com/2014/09/27/gross-gone/

Pretty sure that's a reference to _Gone Girl_, formerly a best selling book, currently a high profile movie. Compared to the sorts of comparisons Gross regularly made in his writing, that's incredibly subtle. Speaking of that kind of comparison, McBride over at Calculated Risk also noted that Gross is out at PIMCO.

http://www.calculatedriskblog.com/2014/09/trivial-bill-gross-and-yoga-in-2007.html

That's an innocuous title. In this post, McBride explains -- 7 years and 3 months later -- a post Tanta made Back In the Day that included an inside joke. Go read the older post. Tanta was always worth reading. [ETA: I sure love McBride. He really illustrates what bloggers can do and be. Right, with patience, a long memory and documentation. I'm rarely any of that, but I admire it when I see it.]

If there is anyone on the planet alive today (other than war criminals) who deserves to be kicked while they down, it is Bill Gross. My sincere and heartfelt thanks go out to Krugman and McBride for doing it with a degree of class that Gross himself never once displayed.

I am unable to express the joy I feel at seeing this ridiculously puffed up idiot finally brought down to nearly the level I feel he belongs. I've had an insane number of arguments with otherwise more or less sensible people, trying to convince them that worrying about inflation is Not What They Should Be Doing Right Now. And most of those people were sheep in the flock of this particularly bad shepherd. But that's not even why I loathe Gross. I loathe him for his abuse of the English language in general, his constant retreat into cliche and his relentless display of white male privilege.

I'm trying to figure out how this compares to watching Reinhart and Rogoff go down. I think this is actually more satisfying. It also bodes really well for our future policy choices -- this is one more road block to sanity that has been reduced.

Pro-Hegel evidence

Ever wondered about Hegel's whole thesis/antithesis thing as an explanation of the historical process? Well, never wonder again, because look at this:

http://en.wikipedia.org/wiki/Permanent_income_hypothesis

Yup, _Milton Friedman_ came up with that one. If ever there was proof that a thesis creates -- inevitably -- its antithesis, it would be this idea from this man. Obvs, he's dead wrong. That only even looks like it's happening in the post New Deal era, with high tax rates, low income inequality, high employment, rising standard of living, 30 year mortgages and a stock market which really didn't do anything at all for a decade or more at a time.

I had no idea this kind of idea was kicking around until I was reading a paper that Krugman pointed to. The paper used census data in the service of Veblen style theory about income inequality and needing to flaunt that ya got it. I got really hung up on the authors mentioning the absence of permanent income information. Just the _idea_ of something called permanent income sort of stuck in my craw.

And yeah, I really do get the synthesis part of Hegel. I know that the generation after me will have ideas that partake of both my perspective and Friedman's generation's perspective.

The Krugman post: http://krugman.blogs.nytimes.com/2014/09/25/unseemly-notes/

The paper he refers to (he h/ts Bruce Bartlett): http://www.federalreserve.gov/econresdata/feds/2014/files/201476pap.pdf

Anyone who _doesn't_ come from a stable, multi-generational middle-class-or-higher socioeconomic background knows perfectly well that people change their spending habits wildly in response to changes in income. It's kind of impossible to imagine any kind of plausible response to poverty coming from people who can't even imagine that.