Ireland, Krugman, Depression

Shabby Celtic tigers

I don’t know how I missed this before, but the blog The Irish Economy has just joined my must-read list. It’s not all about Ireland, and anyway Ireland basically is just like us, only more so. Among other things, the blog has hosted a high-quality debate about the pros and cons of nationalization.
Let me also say that Ireland’s recent policy moves — raising taxes and cutting spending in the face of a severe recession, so as to reassure nervous lenders — are an extremely disturbing omen. Iceland was one thing; but now another advanced economy, with a 7-digit population, has hit the limits of anti-recession policy.

Following up, find me a large US state that's not either raising taxes (and/or fees, haha)or cutting spending or both. Depression sets in after ignorant and ambitious politicos get desperate...

Genes Show Limited Value in Predicting Diseases. Economists shocked!

Humanity still cannot be mapped, thank god. Economists and geneticists are freaking out...

Genes Show Limited Value in Predicting Diseases

The era of personal genomic medicine may have to wait. The genetic analysis of common disease is turning out to be a lot more complex than expected.
Since the human genome was decoded in 2003, researchers have been developing a powerful method for comparing the genomes of patients and healthy people, with the hope of pinpointing the DNA changes responsible for common diseases.
This method, called a genomewide association study, has proved technically successful despite many skeptics’ initial doubts. But it has been disappointing in that the kind of genetic variation it detects has turned out to explain surprisingly little of the genetic links to most diseases.

Depression Scenario: "still on the table"

Per Simon Johnson here: Does The US Still Face An Emerging Market-Type Crisis?

I fully agree with him that the feds, and DC in general, are yet again (as in Spring 2008 and Fall 2007) unprepared for another leg down in this crisis. We're being lulled into some sort of nervous complacency, and the media in general is more than happy to play along...

Some excerpts from Mr Johnson:

...I don’t think Treasury understands the potential speed with which the crisis can again become more severe - moving back into another phase of chaotic jumps in financial distress around the world.
The most compelling evidence for lack of readiness comes from those who are now most articulate in Treasury’s defense. “Congress will not provide any more money” and “you must recognize the political constraints” are sensible points. But think about what they also imply. Treasury is not making the case, full-time and flat-out, for more funding - on a contingency basis - from Congress. At least from my conversations on Capitol Hill, I see no signs that this is Treasury’s top priority. In fact, I would go further and be blunter: no one is ready.

Arguing forcefully for another round of TARP funding ASAP from Congress, Johnson writes:

.....Don’t let bankers’ past misdeeds (or current power) and market panics ruin the economy and so many people’s lives. Go get the money from Congress - Capitol Hill is full of responsible and responsive people, but the Administration has to make the case, at the highest levels and in the most persuasive manner that saving the financial system from collapse is our top priority.

Don’t make the mistake of Hank Paulson who, until September 17th, always assumed he had more time to prepare (or just prevaricate). When the crisis is upon you, there is no time

"A Tale of Two Depressions"

If you missed this, you shouldn't have. Must reading:

A Tale of Two Depressions

Lots of scary charts etc...

Summary:

Often cited comparisons – which look only at the US – find that today’s crisis is milder than the Great Depression. In this column, two leading economic historians show that the world economy is now plummeting as it did in the Great Depression; indeed, world industrial production, trade and stock markets are diving faster now than during 1929-30. Fortunately, the policy response to date is much better.

That final sentence is comforting, for sure, but I rather fear that future policy responses will not be as sound, once real election politics really kick in. Think Germany.

PS - "To date" maybe sounds like the beginning of an epitaph, yes?: "He was healthy to date..."

Phish and The Depression

No, not a cool summer twin-bill, but a reference to Trey Anastasio's reasons for the Phish reunion, as quoted in today's Times:

As a longtime fan of Depression-era swing bands, he has been thinking about Phish’s role in the current recession. “For people in hard times, we can play long shows of pure physical pleasure,” he said. “They come to dance and forget their troubles. It’s like a service commitment.”

"Pure physical pleasure". The essence of a Phish concert, and very much worth looking forward to. Thank you for your service commitment Trey. See you at Jones Beach and Bonnaroo