Tuesday, August 30, 2011

Unit proliferation

I have no praise for this mess, but I find its intricacies interesting. Different units of length developed for different applications in historically contingent ways. I find it equally interesting that, the French revolution not withstanding, units have continued to proliferate. For reasons completely orthogonal to idiosyncratic America, the SI just can't get to universality. For simplicity, just consider units of length used by modern scientists. We have (at least) angstroms, light years, Planck lengths, Bohr radii, astronomical units, and parsecs. All of these are convenient in certain contexts. All but the first of these also have appealing definitions (some theoretically appealing; some operationally appealing).

Friday, August 26, 2011

Advances in dentistry

Peptide paint reverses tooth decay. I hope larger studies replicate this. Drinking all that acidic soda and coffee has yet to give me a cavity, but who wouldn't pay a little more for the dentist to reverse or more reliably prevent tooth decay?

Friday, August 12, 2011

Predictions from retrospections of predictions

Look at the recent price histories of the following Intrade prediction markets: Now look at recent consumer confidence.

My interpretation is that voters (in aggregate) will not punish Republicans for the debt ceiling game, but they will punish Obama for the economy (and maybe for the debt ceiling game too). Here is Mitch McConnell's corollary:

I think some of our members may have thought the default issue was a hostage you might take a chance at shooting. Most of us didn’t think that. What we did learn is this — it’s a hostage that’s worth ransoming.

FOMC nominees Clarida and Stein?

Good news:
Basically I see it as that Obama and Bernanke have chosen two academics — two guys who think monetary policy really works, or at least can really work. Odds are, they are Ben’s guys, and in my view that is good news. By the way, Clarida I believe is a Republican.

Wednesday, August 10, 2011


...didn't work in the 1820s:
What happened, basically, is that without political parties, there were no clear upward paths to political advancement... Not only did the infighting undermine the efficacy of the executive branch, the lack of parties meant that not only did the president not face organized congressional opposition he couldn’t wield a bloc of congressional supporters either. There were no hierarchical ties of loyalty, no relationships of patronage dependency, just a lot of jockeying for position. Consequently, not a lot got done, and today we don’t really remember the Monroe administration for much of anything.

Sunday, August 07, 2011

While I'm complaining about monetary policy, let me mention the folly of interests on reserves. To the extent that our problems are of debt overhang, inflation is the most practical cure.

Saturday, August 06, 2011

Unilateral helicopter drop

The most interesting thing I learned from the recent debt ceiling game was a bit of formerly obscure law about platinum coins. As my readers know, I'm all for injecting a few trillion into the money supply. If Obama's supposed pivoting back to the jobs issue is to amount to anything, he should use the platinum coin option as leverage.

One explicit threat would be, "Senators, confirm Mankiw and Romer to the Fed board of governors, or I'll do my own monetary policy." Another would be, "Fed governors, I want QE3 yesterday. I've told the nice folks at the West Point Mint to help you out if you get too far behind schedule."

Coin seigniorage is actually a more credible threat than the Tea Party's threat of a US technical default. The Mint could immediately make a trickle of platinum coins with $10K face value, most to be sold to collectors, but some for the Treasury to deposit with its account at the Federal Reserve Bank. In this scenario, would explicit threats even be necessary?

That was fun, but in the real world, Obama accepts the opinion of many (most?) professional economists that looser monetary policy wouldn't work. Therefore, Obama doesn't really care whether misguided inflation hawks among Senate Republicans continue to prevent the confirmation of new Fed appointees.