this was a damn good battle and Bob deserves credit for another good match - he's been on a roll lately. megan tried very hard but there's no other way to look at it: greenspan and his dogmatic crew BLEW IT. why try being an apologist for this garbage? we don't need any more matt welches on here. it's beyond disgusting that anyone would even bother to rescue these morons from under the bus. "spineless apologists" is what their defenders are. could anyone have seen the bubble?? gee, i don't know:
http://www.cbsnews.com/stories/2009/...n4801309.shtml

Quoting grits-n-gravy: Twenty-eight minutes in and I'm nominating Dean for a Nobel Peace Prize. The man has the patience of a saint.

I have to agree. I'm about 23 minutes in too, and finding Megan's arguments on the central bank not only unconvincing but ridiculous. She seems to be saying that we are in such uncharted territory that it's hard to blame Alan Greenspan for things he missed and actions not taken, because who knows if those would have worked, and in fact could have made things worse. I think that is a lazy, pass the buck attitude. If you are put in the top position of a given segment, and things are going terribly wrong and has the potential to implode that segment, I would hope that 1) you are enough of an expert to recognize the problem as well as the scope of it, and 2) you would try to warn others, conduct brain storming sessions, do analysis and modeling, and basically do all that you can to see how the ship can avoid hitting the ice berg. If after doing all of those things, you determine that it's better to take a chance

McArdle is going to run out of people willing to do this with her at this rate. Why anyone would put up with this for an hour is mysterious.

Could you have seen the bubble? Indeed, although I'm not sure if this qualifies as "seeing the bubble." I'm talking housing. Go back and read comments sections of articles about real estate prices for as far back as possible. You will see people screaming like their hair is on fire about the UNSUSTAINABLE cost of real estate. Now, 2002? Maybe not so far back. But 2004 and 2005, yes. Many people were complaining LOUDLY about the overvalued real estate market.

megan i see loves blaming ordinary folks and giving experts a freeride....she also should LET DEAN SPEAK!

What?

Ugh! Out of sheer boredom, I thought I might listen to M. McArdle again after boycotting her for a long time. Even though I am probably generally sympathetic to arguments criticizing the New Deal or the stimulus, she is simply terrible. Every time I watch her, I discover a new, annoying aspect. First there was freshman dorm libertarianism, then the well noted reliance on terminally boring anecdotes, now it is her statement that "we're" looking for reliable economic metrics, as though she is some kind of federal reserve governor or something. Among those anecdotes I always hear about some guy she knows in the mortgage business, or whatever. I'm almost certain these are guys she meets on dates, first dates. By the way, I also hate it when she attributes the negative vibes to sexism. I like Ann Althouse, Heather Hurlburt (even though she sometimes gets on my nerves), and many of the women who appear on this site.

Funny.

geez if i keep talkin you won't have time to prove me wrong your ideas are as bankrupt as trickle down laughing curves
but hey its a free market for ideas anyway

I thought Greenspan did tried to say that Fannie and Freddie needed to be put in check. I forget when he said that though. It's not a matter of defending or blaming the guy: the fed chairman is the "interest rate tzar". One man in charge of "the quantity of money in the economy" for goodness sake. I thought the socialist calculation debate had been settled a long time ago. Nobody, no computer, no committee, will ever be able to get the interest rate "right". People should be running out to read books on free banking or at the very least on how to make the fed less central. Instead Dean Baker wants to expand the markets that the Fed should be in charge of getting right. It's in line with most people knee-jerk reactions: the more catastrophically government officials and government regulations fail and the louder people call for more government and more regulation. The whole segment about numbers in the 30s was simply crazy. What a waste of everybody's time. I was waiting for Megan and Dean to explore the area where they actually did agree and instead we

Haven't watched it yet, but I'm excited to see a non-libertarian on bhtv.

Her style is a little juvenile.

oh snap!

Great! More unwarranted Megan bashing! That's to be expected.
As if any of you really know with any predictable certainty what's going to happen.
Maybe she shouldn't chop off Dean's sentences so much. However, that has nothing to do with whether or not her points are valid.

This is the sort of pairing I always hope to see on BHtv. Great discussion and debate! Megan makes a good point by questioning the confidence of people like Dean Baker and Paul Krugman that a massive stimulus is going to work (though, I do find their confidence somewhat comforting, even if Krugman isn't a happy camper these days). On the other hand, Megan's "agnosticism" seems disingenuous. Is there any other issue that she doesn't have a strong opinion on? I'd like to know what she, and other stimulus skeptics, think should be done. You can't be neutral on a moving train.

I agree. I always watch Megan's diavlogs because I think she makes a lot of interesting points. If I didn't, I wouldn't watch.

I agree on giving Dean a Sainthood. Could we please have a fact based economist - one grounded in reality - discuss these topics with Dean? I get so tired of ideologues like Megan. BTW, her opinions on the Great Depression are absurd - her shallow understanding seems to have come from a couple of "libertarian" books - maybe she should actually read some objective history.

Admittedly I've only watched the first 15 minutes of this so far (the vid keeps freezing up on me for some reason), but based on what I've seen I'd say that Ms. McArdle has the better of the argument. Whatever the merits of Mr. Baker's position from a technical point of view, what he is asking for is politically unrealistic.

Sugarkang, As long as we restrict her opinion to being skeptical of the stimulus, as well as the principles behind the stimulus, put me in that same box. I don't have any problem with that opinion at all. I don't believe there are any Keynesian multipliers or any of that. But I do think she's walking, talking proof that women don't face discrimination in journalism. She's got a fairly high profile platform to spout off from, and so long as that's true, I can't believe that there is any undiscovered female journalistic talent out there. And I say that because I can't see any difference between the force and construction of her arguments and your average college bull session. True to her former nom de plume Jane Galt, she sounds like a freshman who read Atlas Shrugged in a non-stop weekend reading session.

Quoting daveh: But I do think she's walking, talking proof that women don't face discrimination in journalism. She's got a fairly high profile platform to spout off from, and so long as that's true, I can't believe that there is any undiscovered female journalistic talent out there.

Interesting that you watched this diavlog and saw a "female journalist." Not an opinionated libertarian. Not a relatively well known conservative blogger from the Atlantic. A female journalist. You'd get along well with my grandfather.

Quoting daveh: And I say that because I can't see any difference between the force and construction of her arguments and your average college bull session. True to her former nom de plume Jane Galt, she sounds like a freshman who read Atlas Shrugged in a non-stop weekend reading session.

I've always wondered at the commenters who say absolutely nothing of interest, and yet act as if they have some special insight into the intelligence of others. It's something you see a lot in the comments on Youtube videos; not so much on bloggingheads.

What’s going on, since Will promised to make an honest woman of Kerry he is not letting her out of the house anymore?
I am not complaining about this diavlog – it was fine. Ms McArdle is likable enough and the new guy Dean Baker is alright. But I miss Will and Kerry!
This is the second Sunday in a row they are absent. The first time around, I thought there must have been a technical glitch; Will screwed up the recording or something. But now, I don’t now.
There was no one happier than me when I found out about Will and Kerry’s engagement. He proposed in a plane, flying over South-East Asia – how romantic! But I am not sure anymore. Will is a Mormon…And I like them, the Mormons, don’t get me wrong. I know they were responsible for making California’s Proposition 8 such a great popular success. I also watch The Big Love; I love the show and learned a lot about Will’s people. But some stuff they do, the Mormons, regarding marriage and all, is…That stuff is just sick. That’s what makes me worry.
What do you think?

Awesome diavlog. Thank you Robert Wright! A couple of thoughts. I'm convinced Megan is a genius and Dean Baker is fast becoming a hero of mine. Megan is so fast and knows so many facts, it makes my head spin. It's like going down the rabbit hole when she gets going and by the time she's done, I'm more confused about everything. Even though I find this style entertaining, at the level of substance, her analysis clearly lacks depth. I think she would do so much better if she just took a deep calm breath to think a bit harder about how all the bits fit together.

I find it fascinating when people use the argument "Nobody could have possibly known that X would lead to disaster Y." This is the argument that people who supported the invasion of Iraq used once it became clear that there were no weapons of mass destruction there; this is the argument that people are using today now that it is clear that there was a bubble not only in the housing market, but in financial assets in general since the mid-90s. The argument is problematic because many of us said precisely that we were headed for a meltdown of financial institutions, largely because of the unaccountability of the derivatives market, and its size as a percentage of overall financial assets. I think the "nobody could possibly have known" argument is a way of avoiding the painful but necessary practice of examining the underlying assumptions of the much touted "New Economy" that emerged from the wreckage of the meltdown of the 1987 stock market. It is that failure to examine underlying assumptions -- about hedge funds, about derivatives, about the Fed itself and the international monetary system -- that ensures that this crisis will continue to worsen despite additional bailouts and stimulus packages.

Is Megan actually arguing that the only "natural" jobs are jobs that are created by market demand, and that jobs that were created by the WPA were inessential? By that reasoning a "natural" job is to sell sugar water and a "make work" job is to build bridges, levies and shipping ports. It is a strange notion (almost a kind of religion) to suggest that market demand should determine our economic activity. Could the market have produced the Tennessee Valley Authority, to create electricity for vast areas of the Appalachian region? Could the market have build dams and power generating plants in the west? It seems that a lot of things are "neither here nor there" for Megan, but if she slows down a bit she might find that policies can and do often serve more than one purpose. Yes, one purpose is to create jobs -- but in creating jobs, if a nation is wise, it will also increase its productive capacity by building up its physical infrastructure, as the US did during the New Deal.

If at first you don't succeed try, try again: http://bloggingheads.tv/diavlogs/177...4:20&out=46:02 Megan's arguing style here is dangerously close to the circular logic of intelligent designers. Sorry Megan, I still enjoy listening to you. If you think that the approximation of the multiplier being close to 1 on round 1 (say 0.95) is wrong then what is a better estimate? To counter with "I don't know, economic models are imperfect" is a little lame. If you think health care is such a big counter example prove that examples like it are the dominant source of the spending and not examples like the excess supply of steamrollers or whatever.

It took me 20 years, but I just figured out libertarians are just as nuts as full-on communists. I've totally snapped. No more! We need to stop indulging their reveries. Anyway, I would like to see two liberals go at it sometime. Maybe a Brad DeLong vs James Galbraith. They actually have plenty to disagree about.

In praise of Megan, I'll say that I thought her point about the how government spending helps to revive the "real" economy is one worth exploring. Clearly, when gov spending draws back we hope the gap gets filled by the private sector. Whether the gov spending filler helps to do that is a good question. Though Dean's answer that private sector production increases during the 30's reflect this, seemed credible enough to me.

I would love, love to see anti vs. pro stimulus academic economists go at it. Mankiw or Barro vs. Krugman would be my bloggingheads dream. It would be great to see how the Harvard guys justify their thoughts on spending multipliers.

If anybody had their patience tried, it was me. A large chunk of this diavlog was wasted on Dean being deliberately obtuse about make-work jobs to dodge the question of how otherwise usually-useful economic indicators get puffed up artificially when the government borrows and spends in large amounts.

Wow, love the sparks. I don't think I've seen Megan this angry on Bloggingheads before.

I did go to sleep last night listening to this conversation. And i have to say that Megan irritated me because she didnt let the other guy finnish his sentences. She also raised her voice when Dean was talking. And she quickly jumped from one point to another. So i guess the next time she should speak a litle slower, with pauses between some of her words, and be willing to engage in a substantive debate.
She is undoubtedly very smart, but needs to let her opponent finnish his thaughts from time to time.

Quoting matthawk: Is Megan actually arguing that the only "natural" jobs are jobs that are created by market demand, and that jobs that were created by the WPA were inessential?

That is exactly what she is saying.

Ms. M. seems a bit heavy-handed with ideology, opinionation, and bluster, apparently scared to death to let Dean finish his sentences for fear the superiority of his reality-based stance, rationality, and analysis will become too obvious. She seems almost angry in this DV. Sure would love to see and listen to more of Dean Baker. He really seems to have his facts lined up and his analysis solid. A real pleasure to listen to (especially when he's allowed to complete his sentences without being so rudely interrupted by a panicked sparring partner reaching for really stretched logic to try and counter what is, after all, irrefutable). EW

Quoting matthawk: Is Megan actually arguing that the only "natural" jobs are jobs that are created by market demand, and that jobs that were created by the WPA were inessential?

Are you saying that the jobs created by the WPA weren't inessential? Cause I kind of thought that was the whole point. The reason that jobs created via market demand are, ceteris paribus, more valuable than jobs created by government spending is that they are based on voluntary exchange, which means that all the parties involved believe that they will be made better off by the transaction than they otherwise would be. That isn't the case when the government takes money forcibly from people and spends it on things partially just for the sake of spending the money.

Quoting matthawk: Could the market have produced the Tennessee Valley Authority, to create electricity for vast areas of the Appalachian region? Could the market have build dams and power generating plants in the west?

Not only could the market have done this, but it was in the process of doing so before the government stepped in to take over the job. In fact, it was

Dean is simply arguing hindsight and suggesting that hindsight should determine fiscal policy. Or suggesting that we should all be psychics. The fact that Dean predicted the bubble doesn't really mean much considering there are others offering competing arguments as to whether there is a bubble. One could only be proven right or wrong by having a bubble pop and if you constantly tamp down the market before a bubble commences Dean could never actually be proven right that there was a bubble in the works. Instead it would look like, were Greenspan to follow Dean's advice, we were simply trying to stifle a market every time it showed signs of success, which in turn would only hamper the expansion of markets. And then Dean and co.would be griping about how the FED is not allowing the economy to grow. I get an advertisement from a contrarian newsletter that predicted that the housing market would collapse and stock prices would fall. So the newsletter was right. However, the same advertisement was sent to me from the early 90's to the present, and in many of

Quoting kidneystones: To make the new administration look bad. The American president is scheduled to sign his porky package, deemed 'too little, too late' by most investors, on Tuesday and the Asian markets tanked.

Republicans want the American economy to go into the toilet. No, really, that's the argument. The GOP want Americans to suffer for voting for bho are clearly pulling strings to embarrass Changiness inc.

Clap louder!

The GOP insurgents also wish us to fail in our fight against terrorism. You are so right ks... Their solid display of anti-stimulus voting solidarity has emboldened their Taliban brethren to action in Pakistan: Taliban tactics pay dividends
Sessions:GOP commits to insurgency

To Dean regarding makeshift jobs and the bridge to nowhere, what exactly, taking his argument about makeshift jobs, is wrong with a bridge to nowhere or say the big dig in Boston? Or any porky project that the government spends a huge amount of money on, with limited results. can we gauge something as pork even, is there no discussion about money well spent, or the value of spending said money on that project when it could have been more efficiently spent on another project which actually employs more people or spends money more efficiently? Dean is a wunderkind on determining exactly when bubbles occur yet can't seem to make a call that paying people to dig potholes and others to fill them might be a waste of money and that no meaningful job creation is actually created doing so.

I find myself in nearly complete agreement with Dean on almost any topic under discussion in this diavlog, and yet I can't help but feel that Megan is the victim here of latent (and certainly unintentional) sexism on our collective part as commenters. Why does she annoy so much? Perhaps, on some minor but not negligible level, because she strongly resists her interlocutor's arguments. In the discussion on whether it makes sense to measure unemployment in a certain way, Megan is expressing a view that is shared by people with whom Dean may have disagreed less vehemently. It seemed to me that both Dean and Megan were slightly uncharitable towards each other's views on the matter in this segment, but Dean's irritation with Megan (and mine) was completely unnecessary.

Also, are we creating our own bubbles by using Keynesian models and having the government borrow and spend incredible amounts of money? Dean suggests that the economy went up everytime we increased spending in the 30's, yet perhaps he is arguing for creation of artificial bubbles, which will then turn around and bite us on our ass because we shouldn't have borrowed in the first place, like for example when government cut spending later or has to raise taxes. So he appears to have a blindspot for government created bubbles, yet suggests that he can predict with unnering accuracy the bubbles in the housing market and stock market. I wish Dean were as demanding of looking into the fiscal soundness of government artificially spending money to force the economy to expand as he does in blaming Greenspan for not recognizing the bubble early enough. For government spending he faults Obama and FDR for being too cautious, yet for the private sector any increase in the value of an asset should have triggered experts to instantly recognize bubbles and stamp those bubbles out before they pop, or should show an excess of caution.

An interesting discussion, which in one sense mirrored the interview Stephanopolous had with Steele when Steele inartfully claimed that Government jobs werent real jobs, similar to Megan's suggestion that getting paid to water one's lawn is really not the kind of employment one desires in the economic statistics.
But the question shouldnt be the static snapshot statistic comparing moments in time but rather the question of how one gets from here to there. Government stimulus, by definition, means paying people to do jobs which the private sector cannot justify, including defending the population against external physical threats or internal economic downturns, particularly that leading to deflation. Hopefully, the moneys injected by the Government into those faux jobs which Steele and Megan believe give a distorted picture of economic activity and thus not justified, will actually enable those doing these jobs to demand other goods and services which the private sector can then justify providing. That should be the true "multiplier" effect.

Quoting vidal_olmos: I find myself in nearly complete agreement with Dean on almost any topic under discussion in this diavlog, and yet I can't help but feel that Megan is the victim here of latent (and certainly unintentional) sexism on our collective part as commenters. Why does she annoy so much? Perhaps, on some minor but not negligible level, because she strongly resists her interlocutor's arguments. In the discussion on whether it makes sense to measure unemployment in a certain way, Megan is expressing a view that is shared by people with whom Dean may have disagreed less vehemently. It seemed to me that both Dean and Megan were slightly uncharitable towards each other's views on the matter in this segment, but Dean's irritation with Megan (and mine) was completely unnecessary.

The "sexism" charge can't stand. There's no uniformity among people who dislike McArdle, or Althouse for that matter, regarding their views of other female commenters. Or is it also sexism when, say, Jonah Goldberg, or Eric Alterman, gets smacked down? And do those sexist McArdle bashers just forget their anti-woman views when they lavish praise on Heather Hurlburt, or Kerry Howley?

Quoting Blackadder: The reason that jobs created via market demand are, ceteris paribus, more valuable than jobs created by government spending is that they are based on voluntary exchange, which means that all the parties involved believe that they will be made better off by the transaction than they otherwise would be.

Derivatives.

McArdle is very sceptical of the "multiplier" effect....at least on the way up. But surely she is aware that the "multiplier" also operates on the way down, and that the US economy, as well as the world economy, are now spiralling downward at a dizzying speed, as a result of unemployment, deflating assets and the evaporation of credit? Does she really believe that this downward spiral will correct itself? The trouble with libertarians and the country club Republicans who believe in the Gospel according to Milton Friedman is their naiveté and their ignorance of history. Like the classical economists they have an unshakeable faith that the economy is a self-stabilizing mechanism that will always return to equilibrium (=full employment) and that government intervention of any kind only distorts this marvelous mechanism (hence McArdle's bizarre reference to "natural" demand). They even believe that their beloved hero Ronald Reagan was a faithful disciple of Friedman, when in fact he was a closet Keynesian who used the power of the purse to give the US economy a huge boost: Although Reagan cut taxes for the very wealthy, the budget deficit during his administration

Quoting kidneystones: Dean is right. The new administration is too timid and intellectually dishonest to face up to the size and scale of the challenge. Rather than do something different: listen and learn from experience, the new administration is retreating deeper into the bunker. Megan is also right. The stimulus package is pork-heavy. Nuclear? Not likely.

I think you must have been listening to a different bloggingheads. Mcardle gets a lot of grief around here but I don't think anyone would expect her to buy a line of reasoning as dumb as the pork one. I do wish they had gone over more of today's stimulus instead of the value of hypothetical jobs or of jobs in the 30s.

Is it true that Ms. McArdle may join the NYT as a columnist? I can't follow her actual arguments -- she's ranting in econbabble. Dean, in contrast, is coherent whether or not he's right.

I am not sure where Megan was trying to go with this diavlog. I have a feeling that Dean is a Keynesian and Megan is not. However, her meandering around in all this econo speak about the 30's, WW2, WPA, when her parent's were born, real work versus makework, what Barro or Schiller said about this and that, whether Greenspan was a boob or not, left me scratching my head. John

Quoting JoeK: What’s going on, since Will promised to make an honest woman of Kerry he is not letting her out of the house anymore?
I am not complaining about this diavlog – it was fine. Ms McArdle is likable enough and the new guy Dean Baker is alright. But I miss Will and Kerry!
This is the second Sunday in a row they are absent. The first time around, I thought there must have been a technical glitch; Will screwed up the recording or something. But now, I don’t now.
There was no one happier than me when I found out about Will and Kerry’s engagement. He proposed in a plane, flying over South-East Asia – how romantic! But I am not sure anymore. Will is a Mormon…And I like them, the Mormons, don’t get me wrong. I know they were responsible for making California’s Proposition 8 such a great popular success. I also watch The Big Love; I love the show and learned a lot about Will’s people. But some stuff they do, the Mormons, regarding marriage and all, is…That stuff is just sick. That’s what makes me worry.
What do you think?

Let's get a grip here. This soap operish fetish with Will and Kerrey is a bit odd. By the

Quoting jr565: Also, are we creating our own bubbles by using Keynesian models and having the government borrow and spend incredible amounts of money? Dean suggests that the economy went up everytime we increased spending in the 30's, yet perhaps he is arguing for creation of artificial bubbles, which will then turn around and bite us on our ass because we shouldn't have borrowed in the first place, like for example when government cut spending later or has to raise taxes.

So he appears to have a blindspot for government created bubbles, yet suggests that he can predict with unnering accuracy the bubbles in the housing market and stock market.

I wish Dean were as demanding of looking into the fiscal soundness of government artificially spending money to force the economy to expand as he does in blaming Greenspan for not recognizing the bubble early enough. For government spending he faults Obama and FDR for being too cautious, yet for the private sector any increase in the value of an asset should have triggered experts to instantly recognize bubbles and stamp those bubbles out

Quoting Eastwest: Sure would love to see and listen to more of Dean Baker. He really seems to have his facts lined up and his analysis solid. A real pleasure to listen to...

I must agree. For once it was nice to see someone talking econ with Megan who is actually qualified to do so, instead of, say, Ta-Nehisi Coates or Brian Buetler. Both are fine gentlemen and great bloggers, but pitting them against Megan for an econ discussion is a bit unfair. Dean Baker was outstanding -- someone from the reality based community who can talk reality to Megan's fantasy.

Noooooooooooo!! These youngsters must not be charging anything for their services.

I agree with the previous posts -- Dean has the patience of a Saint, for putting up with the constant interruptions and the off-hand dismissive "that's beside the point...." So, one criticism would be leveled at Megan's method of discussion, which implicitly seems not to acknowledge that there is another person in the conversation. I also agree with the critiques focused on content. Megan's reasoning on Greenspan and company seems to be that Greenspan, the presumptive expert, should have been held intellectually hostage to the popular opinion of non-experts. If an expert does not have the intellectual courage to challenge the short-sightedness of non-experts then we don't need an expert to chair the Federal Reserve Board; all we need is a pollster. One of the responsibilities of the Chairman should be to educate, to engage in dialogue and to attempt to persuade. Greenspan, by contrast, preferred to cultivate the image of mysterious oracle while the economy was inflating recklessly on smoke and hot air.

Does Fed have the power to control interest rates? Only short-run, according to the textbooks. Rates stayed low for years because of the unusually large supply of savings, in this case from China, mostly. Could the Fed have prevented that? Also, I was taught (way back in the 1960's) that the Fed controlled one independent variable (money supply) and therefore could target only one dependent variable, either inflation or the volume of employment, but not both simultaneously. Can we now add a 3rd, asset prices? I don't get it.

The WPA built beautiful natural stone walls up and down the W road where I live. Doesn't that count?

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Creating "inessential jobs" was not "the whole point" of the New Deal, or any other large government investment to improve the efficiency of the national economy, whether one is talking about building the Erie Canal, the Transcontinental Railroad, or funding exploration of the West and the Pacific.

Social investment, like most things, serves more than one purpose. An economic crisis can create the conditions for a consensus for social investment, but this does not mean that we shouldn't have been doing things like increasing electric power generation and transmission systems and improving freight transportation and water mains all along.

Projects such the Tennessee Valley Authority had to be undertaken by the government because the private sector was not prepared to make the size of investment necessary to ensure that the region as a whole would be served. They were only prepared to invest in projects where they were sure to turn a profit, which is understandable. The government could absorb direct losses on large infrastructure projects because

read more . . .

Makework definition: "busy work of little value." Examples: raking leaves, watering the lawn. Non-examples: murals, oral history projects, stonewalls along highways, etc. Megan is presumptuous in this case.

Quoting AemJeff: The "sexism" charge can't stand. There's no uniformity among people who dislike McArdle, or Althouse for that matter, regarding their views of other female commenters. Or is it also sexism when, say, Jonah Goldberg, or Eric Alterman, gets smacked down? And do those sexist McArdle bashers just forget their anti-woman views when they lavish praise on Heather Hurlburt, or Kerry Howley?

The "sexism" charge you perceive me as making certainly cannot stand. But my charge is not that the people who dislike McArdle (and lavishly praise Kerry Howley) are sexist; rather, it is that certain memes about McArdle that *I* and others find ourselves holding are indeed informed by sexism in our culture. In your interpretation, human beings are agents and are therefore either sexist or not, and in my view, certain attitudes and their justifications are sexist, and all of us can sometimes embrace or reject such attitudes and their justifications.

Megan: Average recession lasts 2 years. O.k. The 2000 recession lasted 6 months. If this one lasts 3.5 years, we are still in the average. 5 year recessions can happen, however rare.

Quoting BornAgainDemocrat: The WPA built beautiful natural stone walls up and down the W road where I live. Doesn't that count?

Yes, those beautiful stone walls up and the road where you live certainly do count, although I'm sure you don't need me to tell you that. Isn't it amazing that they still add to the quality of your life 70 years after the United States made the social investment in their construction. That investment has benefited three generations where you live while providing jobs for people who needed them at the time the walls were built. And to think, some people would dismiss this as "just trying to find a way to spend money" while protecting derivatives traders and managers of hedge funds.

Quoting matthawk: I agree with the previous posts -- Dean has the patience of a Saint, for putting up with the constant interruptions and the off-hand dismissive

Something Megan did repeatedly that I had never seen before on BHTV was after listening to something Dean said, she would just pick right up where she had left off before he spoke, as if he hadn't said anything, as if she had merely been on pause while waiting for her next turn. It's a sign of real insecurity that she can't let him speak. But still, Dean was the best yet as a pairing for Megan. Let's hope he is willing to come back. Not just for the sport of it, which is fun, but for the important things he has to say. Speaking for myself, I learned a lot listening to him.

Quoting Blackadder: Are you saying that the jobs created by the WPA weren't inessential? Cause I kind of thought that was the whole point.

Not only could the market have done this, but it was in the process of doing so before the government stepped in to take over the job. In fact, it was the TVA's hamhandedness with regard to private electrical companies that led Wendell Willkie to drop his support for the New Deal, switch parties, and run for president.

Creating "inessential jobs" was not "the whole point" of the New Deal, or any other large government investment to improve the efficiency of the national economy, whether one is talking about building the Erie Canal, the Transcontinental Railroad, or funding exploration of the West and the Pacific. Social investment, like most things, serves more than one purpose. An economic crisis can create the conditions for a consensus for social investment, but this does not mean that we shouldn't have been doing things like increasing electric power generation and transmission systems and improving freight transportation and water mains all along. Projects such the Tennessee Valley Authority had to be undertaken by the government

I don't know whose niece Megan is, or how she got a job at the Atlantic, but she should spend more time interviewing the guests she's on with and less trying out her half-baked arguments. Adam Greenspan's meddling was central to reducing risk premia and blowing up a massive complacency bubble in the financial markets. If he was willing to appear on the cover of Time Magazine under the caption "The Committee to Save the World," then he should have been willing to take on the shadow banking system, use alternative (truer) measures of inflation, and use his platform to report the alarming trends so obvious to so many. Barring that, we should follow Milton Friedman's advice and replace the Fed with a computer that gradually increases the money supply.

I don't know why no one is talking about making the necessary transition from a petroleum-based agricultural system to more labor-intensive but sustainable organic or semi-organic farming. That would surely put lots of people to work, and I believe much of that work is truly "shovel-ready" and needs little education/experience, unlike construction projects. As far as critiques of Megan, it is tempting to be angry at her for dissing the WPA, but I always remind myself that she has an MBA and I only read about economics in newspapers. Not that an MBA precludes one from making horrible, ideology-driven mistakes, but Megan is articulate and usually respectful and I have to give her some benefit of the doubt. I certainly am not qualified to call her an "ideologue" or a "Freshman dorm libertarian". Also, I second the call to bring Free Will back, with more Kerry Howley. And second the request to get Krugman, if possible. Isn't it pronounced "KROOG-man?" Everyone always says "KRUHG" on bhtv.

Quoting vidal_olmos: ...
In your interpretation, human beings are agents and are therefore either sexist or not, and in my view, certain attitudes and their justifications are sexist, and all of us can sometimes embrace or reject such attitudes and their justifications.

That's a reasonably accurate description of my view. I also have no problem with the notion that the conjunction of "certain attitudes and their justifications" can also be sexist. I don't see that in the attitudes expressed here, however. I made the point because the "sexist" charge is raised here periodically in what generally strikes me as an attempt to deflect criticism (instead of answering it) by defenders of certain diavloggers.

The back-and-forth on the New Deal was one of the most childish, annoying displays I've witnessed to date on Bloggingheads. I'll leave it to the reader to imagine who I thought was the source of the incredibly annoying childishness.

Quoting vidal_olmos: I find myself in nearly complete agreement with Dean on almost any topic under discussion in this diavlog, and yet I can't help but feel that Megan is the victim here of latent (and certainly unintentional) sexism on our collective part as commenters. Why does she annoy so much? Perhaps, on some minor but not negligible level, because she strongly resists her interlocutor's arguments.

The fact that Megan is a woman is, I think, incidental to criticism about her method of discussion which is to cut the other person off repeatedly, after having asked him a question and to constantly dismiss a line of discussion which she, herself, started by saying "that's neither here nor there..." To transform such criticism into latent "sexism" discredits the notion of sexism itself and is probably insulting to women. It shifts the conversation from her style of discussion and her dogmatic libertarianism to her gender. If this is done often enough it becomes difficult to have a conversation because we will be focused on who or what our conversation partner is rather what our conversation partner is saying and how they are saying it.

Megan,
If you should happen to do another episode with Dean, I would like you to know that I would like to listen to him speak for more than 15 seconds at a time -- so if you could restrain yourself from repeatedly interupting him, that would be great. Thanks so much,
Twin

Quoting claymisher: It took me 20 years, but I just figured out libertarians are just as nuts as full-on communists. I've totally snapped. No more! We need to stop indulging their reveries.

Anyway, I would like to see two liberals go at it sometime. Maybe a Brad DeLong vs James Galbraith. They actually have plenty to disagree about.

Provided they have plenty to disagree about, maybe. I want 10% higher corporate tax rates !!!! NO !!!! It should be 15% higher tax rates !!!!!!! I kid, I kid. But honestly, it is virtually ALWAYS better to have people who come from different perspectives to go at it. Otherwise it often becomes a circle j..rk. Bill Maher has a great show on hbo. But it really is a hit or miss. His BEST shows are when he has 1 or 2 conservatives to disagree with him and the rest of the panel and guest and audience. His worst shows are when everyone just goes around agreeing with everything.

Yes recessions should only last 2 years. So if Obama doesn't have this mess cleaned up in 2 years we will know he failed. Just like FDR did since by 1931 he in no way had resolved the recession.
Anyway I always like to bring up this blog post of Megans; I think on the video she claimed she called the housing market crash; From Asymettrical Information I know I saw that recession around here somewhere . . .
31 Jul 2008 11:56 am The economy grew at 1.9% last quarter. Two thoughts. First, the American economy is simply amazingly resilient--1.9% is cause for exultant celebration in a lot of European finance ministries. And second, Barack Obama's campaign team is probably doing some serious rethinking this morning. Here was my reply
"I know I saw that recession around here somewhere . . . "
It's just behind the piles of federal and consumer debt and in front of the subprime housing mortgage meltdown. Just look a little better and I'm sure you'll find it.

Dean nails my take on this whole conversation. Megan
strikes me as someone who's played with Tinker Toys all her life,
then suddenly decides she's a construction genius and sets out to
build a skyscraper. Sorry, Bob Wright, for the sarcasm. Someone stop me before I insult
again.

Quoting Namazu: I don't know whose niece Megan is, or how she got a job at the Atlantic, but she should spend more time interviewing the guests she's on with and less trying out her half-baked arguments. Adam Greenspan's meddling was central to reducing risk premia and blowing up a massive complacency bubble in the financial markets. If he was willing to appear on the cover of Time Magazine under the caption "The Committee to Save the World," then he should have been willing to take on the shadow banking system, use alternative (truer) measures of inflation, and use his platform to report the alarming trends so obvious to so many. Barring that, we should follow Milton Friedman's advice and replace the Fed with a computer that gradually increases the money supply.

Absolutely. It's clear that Greenspan both knew what was going on, and thought that it was all good.

Barack Obama sued Citibank because they denied mortgages to some low-income minority applicants.

Quoting JonIrenicus: Provided they have plenty to disagree about, maybe. I want 10% higher corporate tax rates !!!! NO !!!! It should be 15% higher tax rates !!!!!!!

I kid, I kid. But honestly, it is virtually ALWAYS better to have people who come from different perspectives to go at it. Otherwise it often becomes a circle j..rk. Bill Maher has a great show on hbo. But it really is a hit or miss. His BEST shows are when he has 1 or 2 conservatives to disagree with him and the rest of the panel and guest and audience. His worst shows are when everyone just goes around agreeing with everything.

Heh. I bet the points on each side of the 10% vs 15% argument would be fascinating. To me at least. But I'm serious. There are some surprisingly radical leftish ideas out there. In Galbraith's most recent book he says that we should just have wage standards, and if companies can't make money paying people high wages, then they'll get driven out of business and replaced by businesses that can. I'm sure DeLong would say that's bonkers. I'd love to hear that debate.

Quoting kidneystones: First, thanks to both Dean and Megan for doing their best, for free ...

In light of your recent pronouncements, such as:

Quoting kidneystones: And, actually, now that I think about it, I'm going to have to withdraw my offer to provide any financial support for the site, for the time being at least.

Best of luck to you all.

and:

Quoting kidneystones: PS I gave Mother Jones the cash Bob doesn't have the wit to request.

that thanks rings a little off.

Quoting kidneystones: As some may or may not know I have less respect for the skill sets and intellectual honesty of some of the most prolific who post here.

But not, apparently, the courage to address them directly. But that'd mean having to come up with specifics, wouldn't it? Easier to stick with muttering vague imprecations, isn't it?

Quoting kidneystones: Yes, folks can dislike Milton Friedman, supply-side economics, Ayn Rand, Megan and her writings and still be sexist. We can love or not love any combination of the above and still be sexist.

You'd think you wouldn't need to explain that here. But you'd be wrong.

Which is why I'm sure everyone is delighted to be educated by someone like you, with your long history of posting respectful and even-handed

Quoting kidneystones: Free money from the government. I suspect this is the concept that bothers Megan most.

She kept insisting the opposite throughout the dialogue though. Multiple times she said the government should be giving away more free money and IIRC once she said she liked make-work programs (when she was saying they shouldn't be marked as employment in unemployment figures)

This episode was quite entertaining. Of particular interest to me was Dr. Baker trying to expand central bankers' job descriptions to fight asset price bubbles with one breath, and trying to render meaningless the unemployment statistics they use to spot problems in the economy with the next.

Megan lost the Battle of the Fed. However, Dean Baker wasted about 10 minutes with his obtuse rebuttles to Megan's points about the purpose of the unemployment rate. Riveting match up. Atta boy, Bob. Now if you could only get Mickey back, we'd be all set.

If Dean is this all knowing and has correctly predicted every bubble and has never been wrong, why is he here. He should take his omnipotence to what used to be Wall Street and make a fortune on his knowledge. Until then, I'm with Megan. What he's asking Greenspan to do is know the economy all the time, and be right 100% of the time, and be able to clearly explain to the masses why he's going to "pop another bubble". If he can't do that, he shouldn't take the job? That sounds impossible.

Quoting thedudicus: If Dean is this all knowing and has correctly predicted every bubble and has never been wrong, why is he here. He should take his omnipotence to what used to be Wall Street and make a fortune on his knowledge.

Until then, I'm with Megan. What he's asking Greenspan to do is know the economy all the time, and be right 100% of the time, and be able to clearly explain to the masses why he's going to "pop another bubble". If he can't do that, he shouldn't take the job? That sounds impossible.

Exactly right! And it never occurred to any of these ignorant, liberal yahoos in bhtv commentariat how preposterous Dean's claims are. Bob should close the comments section. It's embarrassing.

Quoting JoeK: Exactly right! And it never occurred to any of these ignorant, liberal yahoos in bhtv commentariat how preposterous Dean's claims are. Bob should close the comments section. It's embarrassing.

I'd say the quoted post is a pretty good argument in favor doing just that. Fortunately, Joe's self-loathing is unlikely to be a cause of action any time soon.

Regarding their discussion of the Depression unemployment rate, if the discussion were centered on campfires Dean would still be talking about how great the kindling wood was being consumed while Megan would be pointing out the relatively untainted status of the fire logs.

Quoting JoeK: Exactly right! And it never occurred to any of these ignorant, liberal yahoos in bhtv commentariat how preposterous Dean's claims are. Bob should close the comments section. It's embarrassing.

I'm an ignorant liberal yahoo and commented earlier on the presposterousness of this claim

Quoting AemJeff: I'd say the quoted post is a pretty good argument in favor doing just that. Fortunately, Joe's self-loathing is unlikely to be a cause of action any time soon.

Yep. That was a real wurzelbacherism, wasn't it? Right up there with "Joe" the "Mideast correspondent" proclaiming that journalists shouldn't be allowed to cover wars.

Quoting thedudicus: If Dean is this all knowing and has correctly predicted every bubble and has never been wrong, why is he here. He should take his omnipotence to what used to be Wall Street and make a fortune on his knowledge.

Until then, I'm with Megan. What he's asking Greenspan to do is know the economy all the time, and be right 100% of the time, and be able to clearly explain to the masses why he's going to "pop another bubble". If he can't do that, he shouldn't take the job? That sounds impossible.

Aw hell, I knew about the bubble. You can lose your shirt trying to time a bubble (Remember McArdles's anecdote about her friend?) Besides, Baker's got a job. He's an economist. He writes books. BTW, McArdle said she called the bubble. So why is she smarter than Baker?

Quoting thedudicus: If Dean is this all knowing and has correctly predicted every bubble and has never been wrong, why is he here. He should take his omnipotence to what used to be Wall Street and make a fortune on his knowledge.

There's no omnipotence. That's the point. People who fully understand economics know that you can't beat the market.

Quoting Tara Davis: A large chunk of this diavlog was wasted on Dean being deliberately obtuse about make-work jobs to dodge the question of how otherwise usually-useful economic indicators get puffed up artificially when the government borrows and spends in large amounts.

No obtusity. Baker simply knows that Megan's point doesn't lead anywhere. If you discount stimulus-funded jobs from employment figures because of the quality of the work, then you'd have to discount make-work jobs in the private sector. If you discount government jobs because they will exist only for a limited time, then all contract work shouldn't count as real employment either. Megan assumes that all private sector jobs signify genuine demand and, conversely, that there is no demand for any work the private sector does not do.

Megan's point about unemployment statistics wasn't that hard to understand. Had Dean accepted or bypassed it, Megan would have had time to complete her point about the experience of other countries. I think she was going to say that other countries have gone through contractions like this, and recoveries were faster in the absence of New Deal style interventions. Dean may have won the first half, but he lost so many points in the second that I award the match to Megan.

I enjoyed this dialog. MM didn't do her usual fence-sitting routine (well, not as much) because DB wouldn't settle for easy collegiality. My only wish was that I was more knowledgeable about economics, so that I could follow the details of their arguments more closely.

Megan's defense of Greenspan, the idea that he was in a bubble insulated from institutional information about the mortgage brokerage industry, is absurd. "Greenspan could not have documented widespread fraud in mortgage brokerage." A lobotomized cat could have done it. Hence, Greenspan could have done it. Doesn't Greenspan have access to "The Economist?" This woman is a horrible ideologue. Why should anyone take her seriously? I don't.

Megan has points to make on interesting topics, which makes her a plausible blogger, but she's very brittle in conversation, which makes her a poor blogginghead. This poor performance is far from her worst, for which I nominate that bh episode with the author of the book on contemporary slavery, but she shows no sign of really reforming. It's really unnecessary to be so belligerent to make your points heard, as Mickey and many others demonstrate, all in their own styles. Megan only relaxes enough to have a good conversation with people she knows well already, like Dan Drezner, and so it maybe makes more sense to keep Megan's appearances within that sort of circle of familiars.

Quoting ledocs: Megan's defense of Greenspan, the idea that he was in a bubble insulated from institutional information about the mortgage brokerage industry, is absurd. "Greenspan could not have documented widespread fraud in mortgage brokerage." A lobotomized cat could have done it. Hence, Greenspan could have done it. Doesn't Greenspan have access to "The Economist?" This woman is a horrible ideologue. Why should anyone take her seriously? I don't.

It's the old glibertarian zen: "If there's no solution, there's no problem." I'm with Baker. To have the housing bubble right after the dotcom bubble, having learned nothing, it's just baffling. The Fed banks and the Treasury both blew it.

Quoting Ray: No obtusity. Baker simply knows that Megan's point doesn't lead anywhere.

If you discount stimulus-funded jobs from employment figures because of the quality of the work, then you'd have to discount make-work jobs in the private sector. If you discount government jobs because they will exist only for a limited time, then all contract work shouldn't count as real employment either.

Megan assumes that all private sector jobs signify genuine demand and, conversely, that there is no demand for any work the private sector does not do.

By definition, there are no "make-work" jobs in the private sector. Nobody will give you a job just for the sake of giving you a job with their own money. If the job exists in the private sector, then its very existence proves that there is a demand for it. Keynes once suggested that the government can sometimes find it useful to pay one man to dig a hole and another to fill it in. Megan is AGREEING with this concept as a means to improve the lot in life of the unemployed at times of severe crisis, but at the

Quoting Tara Davis: By definition, there are no "make-work" jobs in the private sector. Nobody will give you a job just for the sake of giving you a job with their own money. If the job exists in the private sector, then its very existence proves that there is a demand for it.

Clearly, it has never been your unhappiness to deal with nepotism. Lucky you.

Quoting jmoe: This is the sort of pairing I always hope to see on BHtv. Great discussion and debate!

Megan makes a good point by questioning the confidence of people like Dean Baker and Paul Krugman that a massive stimulus is going to work (though, I do find their confidence somewhat comforting, even if Krugman isn't a happy camper these days).

On the other hand, Megan's "agnosticism" seems disingenuous. Is there any other issue that she doesn't have a strong opinion on? I'd like to know what she, and other stimulus skeptics, think should be done. You can't be neutral on a moving train.

Okay, not your fault specifically, but this is getting tiresome. Every time Megan strays from the dogma of purist libertarianism, she gets accused of not having the courage of her oh-so-squishy convictions. Every time she expresses a pillar of libertarian thought, she's a brainwashed Ayn Rand cultist. Some of you people just can't stand the fact that her views are nuanced and not easy to pigeon-hole, because if you can't categorize her, you can't dismiss her out of hand. News flash: Megan is not a libertarian. She's a free-thinking Democrat who sees the sense in

Quoting bjkeefe: Clearly, it has never been your unhappiness to deal with nepotism. Lucky you.

Nepotism is giving attractive (but existing) jobs to people close to you. That's not make-work, it's favoritism in hiring. Every black-and-white movie about the evils of capitalism features the useless nephew given a "job" that allows him to play golf all day, but in the modern economy that's a total myth. I work for a fortune 500 company. I'm not in management myself, but I make a point of getting to know who everybody is at the top of the org chart, and what they do. They all have very important tasks, and if our CEO was foolish enough to give one of those jobs to a useless shirt-tail relative who goofed off all day, that relative would be fired in short order, followed shortly by the person who insisted on hiring him. Heck, the way headcount is scrutinized, you can't even OFFER a job in a major company these days without:
1. Justifying the need for the position with HR.
2. Letting HR vet every candidate and letting THEM tell you who you can and can't interview for the job.
3. Hiring them on a probationary basis for a

Quoting willmybasilgrow: That is exactly what she is saying.

Inessential would probably be the wrong word for it. She's saying that if a job was not created by market demand, then the existence of that job should not be held up as a measure of the current market demand for labor. Like Megan *tried* to point out about a dozen times, if the government decided to, for example, pave the Arizona desert to put in a massive parking lot over the span of one year, not because we particularly need a parking lot but just to create jobs in 2010, and then hired every single unemployed American to do it, then unemployment in America would be zero for 2010, but that number would not be a useful trend-line indicator of the American job market. On a chart from 2000 to 2020, any responsible analyst trying to figure out the long-term impact of that project would throw out the numbers from the Great Arizona Parking Lot construction year and just look at the over-all trend line surrounding it. That, or try to figure out what was happening in the rest of the job market while the parking lot was being built.

Quoting Tara Davis: Nepotism is giving attractive (but existing) jobs to people close to you. That's not make-work, it's favoritism in hiring.

[...]

In all the companies I've worked for (over more years than I would care to admit), I've never once meet a "Tommy Boy" employee. Corporate America runs way too lean to put up with such shenanigans anymore.

Sorry, but an argument from incredulity is not persuasive. As I said, you've been lucky, not to have worked in places where "manager" or "advisor" or "vice president" jobs were quite literally created for someone's friend or family member. Or, even more often, where a useless job was preserved so that the favorite could hold it. There's a variant on the latter, too: a job kept so that the budget for that department the next year would not be trimmed. Say what you want about lean, mean corporate America, but it is not universally true.

Quoting claymisher: It's the old glibertarian zen: "If there's no solution, there's no problem."

I'm with Baker. To have the housing bubble right after the dotcom bubble, having learned nothing, it's just baffling. The Fed banks and the Treasury both blew it.

We need institutions that are less reliant on individual excellence. If you keep on wishing for supermen in power you might in the end get them, and get them hard.

Quoting matthawk:
Projects such the Tennessee Valley Authority had to be undertaken by the government because the private sector was not prepared to make the size of investment necessary to ensure that the region as a whole would be served.

Except that it was. The TVA is a classic example of government waste. It was created to wire up the Tennessee Valley in 1933, and it STILL EXISTS, spending 9.1 Billion dollars a year. People in trailer parks in the middle of nowhere in the west have electricity with no help for the government at all, yet we're still wasting government resources on maintaining the grid in Shoeless Hicksville, Tennessee. And does a grid even make sense anymore for such remote regions? 9.1 Billion dollars could buy a LOT of personal solar panels and/or windmills for those homes, complete with storage batteries.

Quoting bjkeefe: Sorry, but an argument from incredulity is not persuasive. As I said, you've been lucky, not to have worked in places where "manager" or "advisor" or "vice president" jobs were quite literally created for someone's friend or family member. Or, even more often, where a useless job was preserved so that the favorite could hold it.

There's a variant on the latter, too: a job kept so that the budget for that department the next year would not be trimmed.

Say what you want about lean, mean corporate America, but it is not universally true.

So are you saying you have observed such abuses first-hand, or are you simply being incredulous about my observations, and dismissing them as non-typical because they don't fit the way you like to paint corporate America? But even if you maintain that such shocking waste goes on in every big company (I've never seen it, but for the sake of argument...), a few fat-cats getting their brothers on the corporate dole is not going to be enough jobs to distort macro-level labor statistics the way a big WPA-style program can. Plus, if it's as widespread and eternal as you claim, you

Is absurd. She criticizes GDP growth stimulated by government spending in contrast to "native growth?" WTF is "native growth?" Is it GDP growth based on exploiting cheap overseas labor while corporations are borrowing irresponsibly and leveraging at 30 to 1 rates? She sets up a false dichotomy by comparing demand and growth stimulated by government to some mythical economy that is perfect. And in doing so, she diminishes realities - the concrete benefits of government stimulated growth: people educated and trained, infrastructure built, increased consumer confidence, competitive advantage against the economies of other countries, lower poverty rates, decreased costs from people who aren't accessing healthcare or who become even more dependent on welfare because they're not developing skills. She wants to find some "real" measure - and in doing so turns to completely abstracted concepts. Real measures are the poverty rate, the gap between the rich and the poor, the numbers of people turning up homeless. Use those measures and compare 1933 to 1939, and then get back to me.

Quoting Tara Davis: So are you saying you have observed such abuses first-hand ...

Yes.

But even if you maintain that such shocking waste goes on in every big company ...

That's not at all what I said. (Perhaps you should have scrolled down the page at the last link and followed on to a related page?) I was merely disputing your original assertion, "If the job exists in the private sector, then its very existence proves that there is a demand for it."

Plus, if it's as widespread and eternal as you claim you can dismiss it as a non-factor, because there will never be a year that it abruptly ends, unlike a short-term stimulus bill. The long-term effect on the market of nepotism is easy to predict, because it will still be there in similar numbers next year as it is now.

While I'm happy to hear you now acknowledge that nepotism exists, I don't see why you next simultaneously claim it can be a dismissed as a non-factor and is easy to predict and will never change. What happened to all these lean, mean companies cutting the fat? Won't they respond

so, is kerry hosting "free will" an example of nepotism. if so, is it a make-work job? and should she be counted in the employment figures? tara?

Quoting bjkeefe: Sorry, but an argument from incredulity is not persuasive. As I said, you've been lucky, not to have worked in places where "manager" or "advisor" or "vice president" jobs were quite literally created for someone's friend or family member. Or, even more often, where a useless job was preserved so that the favorite could hold it.

There's a variant on the latter, too: a job kept so that the budget for that department the next year would not be trimmed.

Say what you want about lean, mean corporate America, but it is not universally true.

I do not doubt that there are jobs in the private sector that are make work, A father who hires his daughter and pays her 20 dollars an hour to run errands. And if some want a different technical definition than make work, then call it a job of charity, a job that could be cut with little ill effect on the company. Fine, and my response to the existence of such things is so what? The point I think Meagan was trying to make was that it was still a worthwhile question to ask about of the number of productive jobs on the

You buy into Megan's idea that she can decide which jobs are "make-work" and which are not, which is just ridiculous. It was pointed out a number of times that she can't actually define this term - so there is no way to operationalize it except in some ham-handed ideological manner (i.e. any job that can be tied in some way the stimulus is not a "job" and should not count in the employment figures). I drove to the Coast last weekend. I crossed four bridges built by the WPA or one of the other programs from the new deal (they all have a little plaque on them). According to megan, the people that built those bridges were not employed. if you buy that, then you've got your head neck deep in your dark, smelly.... ideology.

Quoting JonIrenicus: [...]

Again, I was just disputing that one assertion Tara made, not commenting on the diavlog. I didn't watch the diavlog.

thats a lot of nice theoretical rambling. now define make-work jobs. are teachers in make-work jobs? are all government workers doing make-work jobs? how about private contractors working on government projects - such as in the defense industry or NASA? if you can find the money being spent to dig then refill holes, you might have a starting point. but it doesn't exist. Megan had a worthless libertarian cocktail party idea, she couldn't define it, she couldn't be clear on how anyone could usefully put her idea to use, and Dean didn't let her get away with it. Its about time someone held Megan's feet to the fire when she is spewing libertarian one-liners.

Quoting popcorn_karate: thats a lot of nice theoretical rambling.

now define make-work jobs. are teachers in make-work jobs? are all government workers doing make-work jobs? how about private contractors working on government projects - such as in the defense industry or NASA?

if you can find the money being spent to dig then refill holes, you might have a starting point. but it doesn't exist.

Megan had a worthless libertarian cocktail party idea, she couldn't define it, she couldn't be clear on how anyone could usefully put her idea to use, and Dean didn't let her get away with it. Its about time someone held Megan's feet to the fire when she is spewing libertarian one-liners.

By this logic, nothing is make work, there will always be something useful the government could spend money on, new roads, fixing roads, etc. Even teachers and firefighters can be considered make work if you wish. And we need a certain level of them to function, no one is decrying all government jobs, the point, which you gloss over as meaningless, is that the creation of make work jobs is not the same entity as the creation of private market jobs. Jobs

Quoting Tara Davis: By definition, there are no "make-work" jobs in the private sector.

"By definition"--that's your problem. And Megan's. You're defining a term and then expecting reality to fall in accord with your definition, rather than changing your definition based on evidence. Demand is constantly falsified in the private sector. Look at the publishing industry. Look at Enron. Look at diamonds. Look at farm subsidies. Look at advertising in general, for Christ's sake. Demand is a shell game, and, yes, this game takes place on scales even greater than those of the stimulus. I'm ready to call it out for the phony work it produces whenever you are.

To paraphrase and extend Megan, if the jobs are created to vacuum up workers, and the government has to borrow their salaries, those jobs are relief. Yes, some fraction of all jobs are like this, but claiming success in reducing unemployment by such means is trivial.

I listened to this last night, and what really stood out to me was Megan's new deal argument. I felt that she was making an argument that would be acceptable to anyone in a graduate level macro-economics or history of economics course. They would have listened to her argument about terminology and almost certainly agreed with her terms, even if they had some other disagreement about the 1930's.
Dean was arguing something else. It wasn't that his argument was bad, or a bad approach to disagree, it was that he wasn't debating on the same plane that Megan was. Now, if they were arguing something other then an economics definition question, his points might have been more relevant. I think it's just a generational divide. Megan's argument makes more sense in light of modern interpretation of the 1930's by economists (most macro economists believe the New Deal failed), and Dean's argument makes sense looking historical argument (only 25% of historians share the view that the new deal failed), and was the classical interpretation. The shift in the field towards Megan's view, and probably how she was taught, was likely after Dean got

Quoting Tara Davis: Okay, not your fault specifically, but this is getting tiresome.

Every time Megan strays from the dogma of purist libertarianism, she gets accused of not having the courage of her oh-so-squishy convictions.

Every time she expresses a pillar of libertarian thought, she's a brainwashed Ayn Rand cultist.

Some of you people just can't stand the fact that her views are nuanced and not easy to pigeon-hole, because if you can't categorize her, you can't dismiss her out of hand.

News flash: Megan is not a libertarian. She's a free-thinking Democrat who sees the sense in a lot of libertarian ideas, especially in regards to economic policy.

She calls herself "agnostic" on the stimulus because she's neither convinced nor disbelieving of the idea that what we need right now is a massive Keynesian injection of cash into the economy.

Personally, I'm a hard skeptic. I'd much prefer to see draconian cuts in spending, but that's been my position for decades now, and apart from a little trimming around the edges that Clinton and Congressional Republicans managed to do in the 90s, I don't see a whole lot of evidence that anybody in Washington

Mcardle's argument seems to be that the jobs the New Deal provided were make work jobs because the marginal productivity of the jobs wasn't worth the labor, and that the marginal productivity of the jobs wasn't worth the labor because the jobs were only provided in order to employ people. This doesn't seem to follow, since there is a strong ideological bias against government interventionism in the United States. Indeed, it seems to me that there are plenty of jobs in the private sector that would fall under Mcardle's definition of make work jobs.

Quoting Alexandrite: Megan's argument makes more sense in light of modern interpretation of the 1930's by economists (most macro economists believe the New Deal failed), and Dean's argument makes sense looking historical argument (only 25% of historians share the view that the New Deal failed), and was the classical interpretation. The shift in the field towards Megan's view, and probably how she was taught, was likely after Dean got his Ph.D. These generational gaps in any field are kind of sad, since you see the old foggies cling to what they built their careers on, and they either create a specter over a field or institution until they retire, or they are relegated to more dismal and less respected roles.

So 75% of historians are old foggies by your reckoning (in fact the percentage of historians who judge the New Deal a success is probably higher)? Has it occurred to you that historians might be better judges of what constitutes "success" than present-minded economists, who, in general, are completely out of their depth when it comes to history? The whole point of the debate was the definition of "success", which can

If anyone thinks the Ayn Rand jokes about sophomoric "free market" imbeciles who populate libertarian turf are hyperbolic, consider this: http://online.wsj.com/article/SB123146363567166677.html

Quoting kidneystones: ... the other tax delinquents running America.

Yes, those tax delinquents sure are a problem, aren't they? Stand by while kidneystones goes hysterical about this "sexist attack."

you are correct that there is an issue there. the problem is in making some useful distinctions from that issue. One person's "make-work" job is someone else's heroic public service, such as teaching or being a firefighter. i can't see any way that a stock broker's job is more real than teaching children, or saving lives. Megan's ideology leads her to think otherwise - which makes me think she should re-examine her ideology.

Quoting brucds: If anyone thinks the Ayn Rand jokes about sophomoric "free market" imbeciles who populate libertarian turf are hyperbolic, consider this:

http://online.wsj.com/article/SB123146363567166677.html

Hilariously, the name of one very prominent Rand fan is nowhere mentioned in that piece: Alan Greenspan.

Quoting bjkeefe: Yes, those tax delinquents sure are a problem, aren't they?

Stand by while kidneystones goes hysterical about this "sexist attack."

Everyone is still playing gotcha, also.

Megan is a very annoying person and very hard to listen too. She thinks that by repeating herself over and over again that somehow she will be right. Let's see, some WPA projects that by Megan's definition were make work projects: The Hover dam, post offices, city halls, housing projects for low and middle income people, ship building (my grandfather went from extreme underemployment into full employment at the Brooklyn Navy Yard in the late 30's), roads and bridges. The WPA built the Hutchinson River Parkway in New York , the Merritt Parkway in Connecticut and countless other large infrastructural projects that were not only needed but after WW2 became and asset to the countries growth.

In general, any government job is a make work job. Megan is somewhat unwilling to make this statement, but it is fairly obvious, and Dean exploits this hole in her understanding of libertarian economic theory. Any job the government creates would not be there in a free market. It's marginal productivity is less than its marginal cost. There are some government jobs that are similar and rivalrous to other private sector jobs, and these are displayed as the ultimate proof that government jobs are indeed necessary. In reality these jobs are displaying the ultimate failing of government jobs by pushing out and undercutting the prices of private players. Police, Fire, Ambulance, Roads, etc. and what many liberals consider fundamental requirements crowd out other players willing to do the same job better, at a lower rate. If only Megan were to make the logical jump her arguments would hold much more strongly against Deans incessant "Who defines a make work job?" spiel.

Quoting NateS: Police, Fire, Ambulance, Roads, etc. and what many liberals consider fundamental requirements crowd out other players willing to do the same job better, at a lower rate.

Fascinating. Please name for me a country, where you would be happy to live, in which police, fire, ambulance, and road building and maintenance services are all performed by the private sector. NB: Said country must be on this planet.

Fascinating there was even a time when Socialism and Democracy which you hold so highly were but a pipe dream. It is interesting that your argument against something new revolves around the fact that it is new. Why invent anything, write anything, do anything really?

Quoting bjkeefe: Fascinating.

Please name for me a country, where you would be happy to live, in which police, fire, ambulance, and road building and maintenance services are all performed by the private sector.

NB: Said country must be on this planet.

Ancient Rome had private firefighters. If you didn't pay them, they set your house on fire.

Quoting claymisher: Ancient Rome had private firefighters. If you didn't pay them, they set your house on fire.

Yeah, I probably should have added a time constraint as well as a space one.

Russia had socailism... it was bad. I can't form arguments so I post tangential stories.

Ancient Rome had private firefighters. If you didn't pay them, they set your house on fire.

The "good old days" according to all the Ayn Randians.

We will see some good 'ol days in the next 4 years. Just don't come crying when the government rations your electricity, cuts off your internet connection, and bends you over the bench while cleaning your pockets. Willful slavery never had it so good.

Quoting NateS: We will see some good 'ol days in the next 4 years. Just don't come crying when the government rations your electricity, cuts off your internet connection, and bends you over the bench while cleaning your pockets. Willful slavery never had it so good.

Easy to say. Randian solipsism has exactly no track record, and the current system of Churchillian compromise ("...worst form of Government except all those others...") has generally worked for a long time. That sort of prediction feels almost exactly the same to me as a Fundy warning me I'll be left behind after the Rapture.

Wow. Dean Baker really mopped the floor! Megan McArdle is a libertarian, so she is duty bound to defend Alan Greenspan and to minimize the potential effectivenes of government. Those duties twist her into knots. I liked her argument that by the time you get to Greenspan's level you are of course cut off from what really happens. Does it occur to her that good leadership means resisting those forces that insulate and isolate and finding a way to stay connected in spite of thos barriers? Doen's she get the point of the old myths where the king would dress as a commoner and go out among the people, bypassing the courtiers whispering in his ear? But the best part was that she simultaneously bragged that she saw the dot com & real estate bubbles, but it is too much to ask the chairman of the Federal Reserve to be similarly perceptive. Shorter Megan McArdle: Being the Fed chairman is too difficult to do well, so even though the financial world is imploding Alan Greeenspan is awesome.

Dean Baker has helped me understand the economy through a lot of his work most recently through an essay -From Financial Crisis to Opportunity- as part of the book Thinking Big, put out by the Progressive Ideas Network (a coalition of many influential progressive groups). It's a great read, I encourage y'all to get on the same page so we can haul ourselves out of this mess!

I *heard* Robert Wright when he asked commenters to be civil about the bloggers, who are donating their time. But I, like Otto, think that MM can have a *very* offputting manner. I, like Otto, remember her horrible performance in the diavlog about white slavery, when her contempt for a possibly naive but well-intentioned politically correct writer dripped from the screen until the viewer was drowning in a fetid ooze. She is way too young to adopt the tone of belligerent haughtiness and iconoclasm that she sometimes does adopt, as in this diavlog. On a somewhat related topic, how much longer are we going to have to put up with the phrase "push back," as in, "I think I want to push back on that point," or "Some folks might want to push back on that point?" I want to "push back" by saying that anyone who uses this noisome euphemism should be expelled from public debate for one month after the first offense, with complete ostracism being the penalty for a third offense. Why can't people just agree to disagree? Has all this pretended comity of "folks" and "pushing back" mitigated class and economic divisions one iota, anywhere in

Quoting ledocs: ... But I, like Otto, think that MM can have a *very* offputting manner. ...

Agreed. I just don't watch her anymore. Cuts down on stomach acid.

Quoting ledocs: On a somewhat related topic, how much longer are we going to have to put up with the phrase "push back," as in, "I think I want to push back on that point," or "Some folks might want to push back on that point?" I want to "push back" by saying that anyone who uses this noisome euphemism should be expelled from public debate for one month after the first offense, with complete ostracism being the penalty for a third offense. Why can't people just agree to disagree? Has all this pretended comity of "folks" and "pushing back" mitigated class and economic divisions one iota, anywhere in the world? But maybe there is an argument that social divisions in the US have in fact been mitigated by all the "folksiness." Let's get Jeff Nunberg, if that's his name, or someone like him, onto bhtv and get this figured out. But I find this use of language phony and obnoxious, at least until someone can show me that it serves a purpose other than to make me fume and

Amen,Ledocs, to "folks" and all the folksy folk who use it to signify their authentic folkishness. If the word must be used, it should only be used in the singular, and even then only with extreme caution. SO LET US ALL PUSH BACK HARD AGAINST POPULIST PIFFLE OF ALL KINDS.

Quoting ledocs: Why can't people just agree to disagree?

because it's mathematically impossible: http://en.wikipedia.org/wiki/Aumann%...eement_theorem

Rapture? Is that like the magical deflation induced super recession monster that Keynesians whine about incessantly?

Nepotism is a valid private sector justification for hiring someone. A boss could feel more secure knowing a family member would be less likely to steal and abuse the companies assets. Furthermore, a parent has every right to leave a business to their child and would have an incentive to pass on business knowledge before death. In the end, if hiring of various employees based on racism, sexism, or your bizarre obsession with nepotism leads to failure and "make work" situations, the company will lose money and be cleansed from the marketplace, unless of course it convinces the government that there is a magical economic multiplier to supporting it's failing business.

Quoting NateS: Nepotism is a valid private sector justification for hiring someone. [...]

Sure. I'd say your scenarios apply in some cases. But not all. My response, if you'll review the thread, was merely to dispute Tara's claim that there was no such thing as a make-work job in the private sector.

In the end, if hiring of various employees based on racism, sexism, or your bizarre obsession with nepotism leads to failure and "make work" situations, the company will lose money and be cleansed from the marketplace, unless of course it convinces the government that there is a magical economic multiplier to supporting it's failing business.

No. That's too absolutist. More likely, when a nepotistic hire for the wrong reason exists, that just becomes, effectively, a cost of doing business. Carried to an extreme, sure, as when George W. Bush is put in charge of an oil company, say.

This was painful to watch. I do not believe that Megan McArdle is a serious person. Deep thought: If you're a young woman--preferably with a pseudo-aristocratic or upper class background--who has attended a top university, and you're willing to espouse crazy right-wing crap, there are numerous media outlets itching to give you a megaphone. Rich kids complaining about "welfare" (which according to McArdle, means...a gov paycheck: postmen, fire fighters, teachers, city planners, etc etc)? Christ, please, give me a break.

I agree about MM, but her father owns a construction company, apparently. He does business with state government. I get the impression that MM thinks of herself as working class girl made good, that her father is a self-made man. I can say with absolute certainty that she doesn't see herself as belonging to the Eastern prep school elite. I have not been able to glean from her many personal asides and anecdotes what kind of high school she attended. The important thing to understand about her is that her haughtiness is that of the pragmatic iconoclast, someone who thinks of herself as beyond ideology. I see her as an intellectual version of the Margaret Thatcher mindset, prominently including intense idealization of the small-scale entrepreneur.

Megan must have missed Dean's debate with Diane Rogers. Years of debating the Caro/Heritage type has made him a force. If libertarian types want to keep their charade up then it would be wise of them to avoid the Dean Baker types in debate.

Why are you throwing "folks" under the bus? ;-) Next thing you'll be banning Joe 6-pack!!

Quoting uncle ebeneezer: Why are you throwing "folks" under the bus? ;-) Next thing you'll be banning Joe 6-pack!!

Who we'd all like to have a beer with, if you will, my friends, because he's a Real American who kept America safe.

NateS; Does that mean like plural of Nate (multiple Nates, which is a frightening thought) or last name begins with "S"? (or, perhaps, a dual meaning)

Quoting Uhurusasa: purist thinking about the eclectic maze(or should that be labyrinth???!!!), that got us in our current mess, is so much self-serving dribble! eclectic is about best choices of various methods, but best for whom? the winners in this economic drama, may be benefitting from the collective confusion of so much uncommon-sense!!

we need a collective stimulus of our thought processes, imho!! "WE THE PEOPLE" are getting screwed! maybe WE should become asexual(politically) like Dorothy Parker became when she said "the screwing she was getting was not worth the screwing she was getting"!

besides arguing endlessly, is there a pattern that WE can learn from?? where are the fresh, new ideas!!???

maybe megan and dean are both wrong! who is profiting from these economic games, and why!!??

Quoting Uhurusasa: if there is nothing so uncommon as common-sense, then,what must be common is uncommon-sense! who is the intellectual in this scheme of things? in the land of the blind, the one-eyed people are having fun!? do intellectuals and/or the academy have some monopoly on common-sense?

euphemism, public servant; servants serve their masters. how intelligent, articulate, and clean does anybody need to be, to figure out who is serving whom. oh, but that would take common-sense!

the state is packed,full of intellectuals(i guess lawyers

WHY is it too absolutist? Your word is fact now? What logical series of events leads to the refutation of the obvious point that wasteful, racist, sexist, and nepotistic companies don't survive long in a market free of government favoritism and intervention? And it seems like every other post someone trots out George Bush as a means to an argument against Libertarianism. His oil companies have gone belly up multiple times and get bought out by those seeking regulatory favor from the government. Do you honestly believe that the government throwing around 1450 billion dollars will reduce lobbying and other wasteful rent seeking behavior?

Quoting NateS: WHY is it too absolutist? Your word is fact now?

I've given several factual examples. Recall that you (and earlier, Tara) have been making pronouncements that involve words like "all" and "will always." I'm just pointing out that your claims go too far, that they are not universally true.

What logical series of events leads to the refutation of the obvious point that wasteful, racist, sexist, and nepotistic companies don't survive long in a market free of government favoritism and intervention?

I'm not interested in playing logic games in an imaginary setting. I'm talking about the real world, which does not need to concern itself with resolving questions about dancing angels and pinheads.

And it seems like every other post someone trots out George Bush as a means to an argument against Libertarianism.

I don't know what other posts you're thinking of, but I wasn't using him to say anything about Libertarianism. I was using him, here, as an example of nepotism existing and persisting -- the company absorbing the cost of his incompetence. (Until the company was rescued by other cronies and he was eased out, without suffering any punishment, and in fact, collecting extra compensation, if memory serves.)

His oil

I still don't see nepotism supporting the case for private "make work". People play video games. It provides no economic output. Are the makers of video games in "make work" jobs. No, ultimately it is the markets job to provide what people want. If a billionaire uncle wants to give me a lavish job for his own personal gratification, there is still no justification for government intervention. Will his company be profitable? Rarely, and many of those in the company could quit, and build their own enterprise without being addled by an incompetent nephew. The most common systemic examples of racist, sexist, and nepotistic practices are companies given monopolies by the government. Without the threat of government force or large subsidies, blatantly inefficient businesses fail. To use nepotism as an example of why "make work" jobs exist in the private sector when they rarely exist without government intervention is absurd.

Quoting NateS: ... If a billionaire uncle wants to give me a lavish job for his own personal gratification, there is still no justification for government intervention. ... To use nepotism as an example of why "make work" jobs exist in the private sector when they rarely exist without government intervention is absurd.

I never argued for anything anywhere close to these things. These are beyond straw men. You're so far from understanding the one and only point I have tried to make in this thread that I am not going to respond to your thoughts. You are apparently incapable of doing anything except chanting passages from your holy book, and I've heard them too many times already.

Quoting grits-n-gravy: "I'm {too} nominating Dean for a Nobel Peace Prize" along with the one for the economy. "The man has the patience of a saint" INDEED. Why was Megan McArdle not giving Dean a chance to respond to her questions? Why was she talking over him? Why was she closing her eyes when he was responding? I believe our society is full Megan McArdles who give extreme case examples to argue their view points.. i.e the homeless are homeless because they are lazy. I wish Obama can get to hear what Dean has to say. The people, not the bankers, would be better off. Peace!