Journal 03/29/2012 (p.m.)

    • First, if money is not going to be printed, it has to come from somewhere. If the government borrows a dollar from you, that is a dollar that you do not spend, or that you do not lend to a company to spend on new investment. Every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both.1 This is just accounting, and does not need a complex argument about “crowding out.”

      Second, investment is “spending” every bit as much as consumption. Fiscal stimulus advocates want money spent on consumption, not saved. They evaluate past stimulus programs by whether people who got stimulus money spent it on consumption goods rather save it. But the economy overall does not care if you buy a car, or if you lend money to a company that buys a forklift.

    • There’s no ambiguity in either case: both Fama and Cochrane are asserting that desired savings are automatically converted into investment spending, and that any government borrowing must come at the expense of investment — period.

      What’s so mind-boggling about this is that it commits one of the most basic fallacies in economics — interpreting an accounting identity as a behavioral relationship. Yes, savings have to equal investment, but that’s not something that mystically takes place, it’s because any discrepancy between desired savings and desired investment causes something to happen that brings the two in line.

      It’s like the fact that the capital account and the current account of the balance of payment have to sum to zero: that’s true, but it does not mean that an increase in capital inflows magically translates into a trade deficit, without anything else changing (what John Williamson used to call the doctrine of immaculate transfer). A capital inflow produces a trade deficit by causing the exchange rate to appreciate, the price level to rise, or some other change in the real economy that affects trade flows.

      Similarly, after a change in desired savings or investment something happens to make the accounting identity hold. And if interest rates are fixed, what happens is that GDP changes to make S and I equal.

    • A member of his inner circle put it another way, suggesting  Gingrich was like a proud ballplayer at the end of his career who saw no sense  in hanging up his spikes in the final month of the season when he could take a  few more at-bats.


      “It’s a very Newtonian thing,” the adviser said. “If you’re 68 years old and  have been thinking about doing this for 20 years and actively doing it for the  last two years, what’s the big deal in doing it for three more months?”

    • “Several things could happen and all of them are sort of extraordinary,” Tyler  said. “But history is extraordinary.”
    • “I’ve always said Newt could never run a conventional campaign and win because  he’s not a conventional candidate,” Tyler noted. “And he could never serve as a  peacetime president; people have to believe that the country’s in significant  trouble. That hasn’t happened in this campaign.”
    • It didn’t have to end this way. Gingrich could have withdrawn graciously  after twice proving his resilience and relevance in a race in which few gave him  much of a chance at being a contender, let alone winning the nomination. But  those who know Newton Leroy Gingrich say that to think he’d retreat quietly to  McLean as a lion in winter is to fundamentally misunderstand the man. The same  forces that propelled him to attempt a comeback at this late moment in his  career is what keeps him in a race he almost certainly can’t win.


      “Newt does think in big historic terms and thinks of himself as a big,  historic player,” explained former Rep. Vin Weber, a close friend of Gingrich’s  in the House who now backs Mitt Romney. “The notion that he’s going to withdraw  and just go away is unthinkable. He’s still looking for drama. He’s imagining  the first seriously contested convention in our lifetimes.”

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Journal 03/28/2012 (p.m.)

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Journal 03/26/2012 (a.m.)

    • IN the Morocco of the 1980s, where homosexuality did not, of course, exist, I  was an effeminate little boy, a boy to be sacrificed, a humiliated body who bore  upon himself every hypocrisy, everything left unsaid. By the time I was 10,  though no one spoke of it, I knew what happened to boys like me in our  impoverished society; they were designated victims, to be used, with everyone’s  blessing, as easy sexual objects by frustrated men. And I knew that no one would  save me — not even my parents, who surely loved me. For them too, I was shame,  filth. A “zamel.”
    • But he’s the elephant in the room peering over so many discussions. His election  is part of the reason that blacks, especially those who have “made it,” are  hesitant to talk about persistent racial inequality. We don’t want to be accused  of whining or being angry for bringing up a problem that many people think is  now relegated to history. After all, if Obama could do it, so can any black man,  right?
    • How do I explain how it feels to have almost every accomplishment that I’ve ever  achieved be attributed to affirmative action? Most recently, a white PhD student  in my program told me that I would sail through graduate school and land a  wonderful gig, despite the difficult job climate, because of the “black thing.”
    • . (A 2010 Blair-Rockefeller Poll found that 56 percent of whites said we talk about race too much, compared with  18.2 percent of blacks.)
    • I have encountered many people who seem to believe, subconsciously or not, that  Obama’s win is proof that America has reached the mountaintop. What more is  there to say about race, they ask me, after this country so proudly and  overwhelmingly elected a black president? They cite success stories as disparate  as Oprah Winfrey, Jay-Z and former Time Warner chief Dick Parsons. But Oprah’s  billions don’t counteract the dire poverty and unemployment rates in the black  community.
    • I thought things would be different by now. The Trayvon Martin story flared up  exactly four years after Obama’s famous campaign speech on race in Philadelphia, a speech that made so many  of us believe that Obama would launch a serious, enduring dialogue. But the  election of the first black president hasn’t made it easier to talk about race  in America. It’s made it harder.

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Journal 03/25/2012 (a.m.)

    • Jackson said that there is a mistaken assumption  in some corners of America that all racial problems went away with the election  of President Obama.  “There was this feeling that we were kind of beyond racism,” he said. “That’s  not true. His victory has triggered tremendous backlash.”


      He added: “Blacks are under attack.” African American families are facing  record home foreclosures and unemployment. Their children are burdened with  student loan debt. States, particularly conservative ones, are passing voter  laws that leaders know will disenfranchise blacks and other minorities.  Meanwhile, the nation’s prisons are brimming with black faces, he said, and  their numbers that suggest that the legal system is quicker to send blacks to  prison than whites.


      Jackson said gunfire in America continues to be a problem for all Americans  — not just blacks. Why, he asked, isn’t America outraged, that far more people  die of gun violence in one year in America than the number of soldiers killed in  the wars waged in Iraq and Afghanistan?


      “Our disparities are great,” he said. “Targeting, arresting, convicting  blacks and ultimately killing us is big business.”

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