Very heavy on the economics today, with several hat-tips to Mark Thoma.
1. Daily Krugman.
This is a point that needs making more often; Germany internalised a lot of profits from the Euro-periphery finance boom, and is very successfully externalising most of the costs.
2. Mark Thoma is in the Fiscal Times.
He’s spot on; the 112th Congress and everything since has made it very clear that any risk or uncertainty about the future reflected in the US economy constitutes uncertainty about the precise degree of insanity on the hill and what it might do as a result. Not, in any way, uncertainty about the effects of the actual budget, budget deficit, or debt ceiling themselves.
3. “Tipping points” and other Lafferish talking-points. Econospeak on fiscal policy, entitlements, revenues and GDP.
4. And then there’s taxes.
Charlotte Crane documents unintended, or at least largely unforseen, consequences at the Atlantic. Income Tax in the US did a lot more to how the country functioned and what it could do than the simple impacts of of slightly progressive taxation.
5. Simon Wren-Lewis on unions.
Unions political and monetary, not labour in this case. Lots of good stuff on the Euro crisis, the ECB, the UK/USA, and why circumstances matter. It’s always worth remembering that the American union in particular is an extremely unusual political phenomenon.
6. FireDogLake brings the numbers.
Large swathes of macroeconomic theorists failed to predict, and then largely ignored the implications of, the Great Recession. Argument here is that this happened in part because they bought the sales pitch and treated the financial industry as if they knew what they were doing to such an extent that they could be ignored in models. Rational actors, indeed.
7. And finally, in from the world of education…
We have the news that reality has a notorious liberal bias.