dagblog - Comments for "Let the Experts Manage the Economy"

I, for one, think it's great

Atheist — Fri, 02 Jul 2010 13:04:26 +0000

In reply to This is not quite on topic,

I, for one, think it's great that the CEO of Goldman Sachs Canada is going to serve an 18-month term. Oh, wait, wrong kind of term…

I'm now wondering, especially

DF — Thu, 01 Jul 2010 21:02:14 +0000

In reply to This is not quite on topic,

I'm now wondering, especially after the recent passage of Prop. 14, whether my fellow Californians are going to send esteemed GS boardmember Meg Whitman to the governor's mansion this Novemeber. I mean, we're only $20B in the hole this year. Come on, California, we can do worse than that!

I don't mind former i-bankers

Michael Wolraich — Thu, 01 Jul 2010 21:01:30 +0000

In reply to This is not quite on topic,

I don't mind former i-bankers managing fiscal policy. There's not much conflict of interest, and their reputations are directly tied to good stewardship of the economy.

Where I don't want want them is in a regulatory role, which it sounds like Hodgson has been hired to do. Is the Bank of Canada responsible for regulation? That's surprising.

Heh, that almost seems to

DF — Thu, 01 Jul 2010 20:58:07 +0000

In reply to Yeah, I glossed over

Heh, that almost seems to echo DeLong's want for Krugman to be more optimistic if he has to be right all the time.

But don't look now if you're looking for optimism. Yeah, that's Robert Schiller of the Case-Schiller housing index and one of the few economists to call the bubble. FYI, the interview in this post is incredibly painful to watch. WSJ's Kelly Evans is beyond obnoxious.

More to the point, check out Krugman's recent posts RE: Europe, austerity and the spectre of bond vigilantes if you haven't already.

As far as whose technocrats are better, I think that goes back to the rift amongst American academic economists that Krugman describes. If the technocrats in charge of fiscal policiy are Krugmans or Bakers or even Thomas or DeLongs, then I like it. If they're Famas or Laffers or... hey, what about Greenspans? In that case, I don't like it so much.

The more I study this stuff, the more it looks to me like plain old class war with a lot of window dressing. If we can't get past plutocracy and aristocracy, then all of this voting stuff is just fun and games.

This is not quite on topic,

acanuck — Thu, 01 Jul 2010 20:45:15 +0000

In reply to Let the Experts Manage the Economy

This is not quite on topic, but the headline "Let the Experts Manage the Economy" brings it to mind. Two days ago, the Canadian Press reported:

OTTAWA - Timothy Hodgson, chief executive of Goldman Sachs Canada, has been named a special adviser to the Bank of Canada governor Mark Carney.

Hodgson will serve for an 18-month term, beginning Sept. 1, with a focus on repo and over-the-counter derivatives markets and the capital adequacy of financial institutions, the central bank said Tuesday.

"Tim Hodgson is one of Canada's top investment bankers. He is widely recognized for his exceptional transaction skills and understanding of how markets work," Carney said in a statement.

"These skills will be invaluable as the bank works with its partners to design and implement vital reforms. The bank is privileged that someone of his experience has chosen public service at this critical time."

Carney spent 13 years at Goldman Sachs in its London, Tokyo, New York and Toronto offices before being named a deputy governor at the central bank in 2003.

I don't know which upsets me more -- that a top Goldman Sachs exec has been hired to advise our central bank on reforming the derivatives markets, or to realize for the first time that Canada's top banker is also a GS alumnus.

Amazingly, our banking system sailed through the meltdown without a failure. I'm confident Hodgson can find a creative way to tweak those results.

Yeah, I glossed over

Michael Wolraich — Thu, 01 Jul 2010 20:30:51 +0000

In reply to Ah, a technocratic appeal we

Yeah, I glossed over Krugman's criticism of today's economists, particularly the Europeans, hence my apologetic qualifier at the end. Did you see Josh's "Into the Abyss" post at TPM?

What's particularly chilling is that the elite and popular policy debates are moving in the same direction. The professional economists, international financial agency types, etc are pushing for retrenchment. They seem to have won the argument at the G20 meeting. And at the same time, Republicans are pushing the argument that the stimulus spending which probably forestalled a Depression actually didn't do anything or even caused the problem...It all has the look of watching a car head off the edge of a cliff in slow motion.

I'm just banking on the American technocrats being better than the politicians or the European technocrats, who have always been conservative about monetary and fiscal policy. Not that my proposal has a chance in hell anyway.

I'm also hoping that DeLong is wrong about Krugman. Krugman is an inveterate pessimist who has been predicting economic collapse for at least a decade. He finally got it after years of erring on the bearish side. I just hope that he's still erring on the bearish side.

Ah, a technocratic appeal we

DF — Thu, 01 Jul 2010 19:59:49 +0000

In reply to Let the Experts Manage the Economy

Ah, a technocratic appeal we can all love! Well, maybe not all of us. As this link illustrates, Krugman has his own explanation for why there isn't a strong consensus on macro policy. The link also illustrates one of DeLong's rules: Paul Krugman is always right.

Maybe we should just appoint Paul Krugman economic czar and be done with it.