Brad DeLong Tries to Steal "Stupidest Man Alive" Crown from Zoellick

Brad DeLong just posted that Robert Zoellick may be the "Stupidest Man Alive", for advocating a role for gold in a new monetary system. (See: In Which Bob Zoellick Makes His Play for the Stupidest Man Alive Crown)

DeLong writes:

The last thing that the world economy needs right now is another source of deflation in a financial crisis. And attaching the world economy's price level to an anchor that central banks cannot augment at need is another source of deflation--we learned that in the fifteen years after World War.

So Brad, I'm wondering does this mean you want higher prices for cell phones, iPads and personal computers? I'm also guessing you would like to see McDonald's charge $1.25 for its dollar menu items, correct?

Is this your way of trying to steal the "Stupidest Man Alive" crown from Zoellick?

Delong pants:

Markets are using gold as a speculative asset and a hedge. They are not using it is a medium of exchange, a unit of account, or a safe store of nominal value.

Actually, there are using it as a safe store of value, and are holding it at the ready as the likely medium of exchange once you, Krugman and Bernanke drive the dollar debasement to Zimbabwe type levels.

So Brad, I know you see deflation everywhere, so I'll make you the same offer I made Krugman:

Take advantage of me, why don't you teach me a lesson and sell me at last year's prices, gold, silver, oil, sugar, corn, wheat and cotton. Go ahead sell me as much as you want. I'm really stupid about these things. I have no idea that deflation is all around. I'll buy it all.

(Hat tip to the Gold Hater, who naturally found sound analysis in DeLong's race for the "Stupidest Man Alive" crown. Writes the Gold Hater:

Zoellick's characterization of gold is trendy, but there's something to DeLong's argument here.)

The Great Book Reviewer....

has burned his thigh.

Bob Murphy Comment Is "Disappeared" from Brad Delong Site

Brad DeLong has some pretty nasty things to say about what he thinks is Ludwig von Mises' Theory of Money and Credit (TMC).

I say what he thinks is Mises' TMC, since as David Gordon points out in a comment at DeLong's blog, DeLong's quotations are all "from the Appendix, 'Planned Chaos', written in 1944." TMC was originally published in German as Theorie des Geldes und der Umlaufsmittel in 1912.It was then published in the United States in an English version in 1934.

That DeLong mixes this up does not surprise me.

My blood pressure has never gotten excited over Brad DeLong comments about books, especially after reading, last year, his laughable review for the Los Angeles Times of Alan Greenspan's book The Age of Turbulence.

After reading DeLong's review of Turbulence, I thought to myself, "this dude doesn't sound like he read the book."

In the Turbulence review he tells us that

"The Age of Turbulence" is three books in one.

What does he say about book 2? That he is going to give his students a quiz about it. That's it, I kid you not:

The second book gives Greenspan's view of the world and is, I think, least successful. He is trying to convey complicated and subtle technocratic ideas about the global economy -- its current structure and how it functions -- in a way that is comprehensible to general readers whose purchases drive bestseller lists. My students will read it because it will be on the midterm. But the book's target audience is likely to find this world tour a slog, and they are not incentivized by midterms.

I ask you? Would you need to read a book to write this kind of nonsense?

It's the same for what he identifies as book 3:

The third book -- Greenspan's account of public policy -- is making the biggest splash as news. But it is news only in a very peculiar sense. That Greenspan and other committed small-government Republicans have been horrified at the turn their party has taken and have desperately sought some way to take it back from the cynical media consultants and political hacks who now run things is well-known -- to readers of Ron Suskind's "The Price of Loyalty" and Bruce Bartlett's "Imposter" and a host of people who know people who know Bush administration undersecretaries. Greenspan's much-quoted judgment in the book -- that current Republican office holders "deserve to lose" elections because they sold their principles for power and "ended up with neither" -- should come as no secret. Yet stories over the last few days have breathlessly reported selected phrases from the new book, characterizing them, as the Washington Post's Bob Woodward did, as "unusually harsh criticism [of] President Bush and the Republican Party" for abandoning "the central conservative principle of fiscal restraint."

Oh yeah, Delong read this book before he reviewed it.

Dear reader, from Delong's "review" what exactly has he said specifically about what he identifies as book 2 and book 3 (note: he does say a bit more about book3)?

At least, for book 1, he pretends to have read the book and pulls some quotes out that it appears he has skimmed from the book. I say skimmed since he misses all of the most significant Greenspan comments.

So it is with this background that my blood pressure did not go over the top when Delong's "analysis" of Mises book was that is a:

readable in a rhetorical-excess-train-wreck mode, for it is also totally bats--- insane.

I just thought that DeLong reads everything in a train-wreck mode. It's his typical modus operandi. Why, he must rhetorically think, should he actually reasonably read and debate anything, when he can spin off nonsense that he has readers for, that will apparently gobble it all up?

But heaven forbid that somebody call him on his nonsense, as Bob Murphy did.

What does Delong the scholar with the unusual book review style do when a reasonale attempt is made to debate his statements? Why he erases Murphy's well reasoned comment and announces on his blog:

OK. Time to cut this off and prune it down to something useful..

And Murphy's comment is disappeared! Poof, bam gone.

Seven minutes later, the Great Reviewer Delong writes:

The comments to this entry are closed.

David Warsh with Big Questions and Big Stories

David Warsh has just published the silver anniversary issue of Economic Principals. I have been reading him from the start, when his column was at the Boston Globe. Twenty-five years ago, his column was the first item I turned to, in the big, thick Sunday Globe. The memories come back, as if it were only yesterday. He is not an Austrian, but he is a damned honest, sincere, interesting and informative writer. We definitely need more people like him (or at least hope, he carries on for another 25 years!)

His silver anniversary issues comes out with rockets blaring and asks these important questions:

How deep has been the opposition between the Federal Reserve Board and the US Treasury Department these last fifteen months? Fed chairman Ben Bernanke and Treasury Secretary Henry Paulson have presented a generally united front. But what goes on behind the scenes? What of their staffs? The sheer opacity of Paulson’s initial plan to buy and hold troubled securities, and the clumsiness with which it was presented, has yet to be explained. What was the process by which it was developed and internally reviewed?

Warsh is on to something here. In early Congressional testimony, Bernanke's view of how the mortgage bail out would proceed was decidedly different from Paulson's. Bernanke testified that the bailout would result in mortgages being bought at "value at maturity". Paulson said they would be bought at discounted market value. The next day in further testimony, Bernanke fell in line with Paulson. Paulson's plan proved a non-starter. Indeed, WSJ reported that it is a dirty little secret that Paulson's Plan to buy up mortgages would not work and indeed would cause more problems for banks, and that is why Treasury shifted to infusing capital directly into banks. And, then, of course, there is the fact that Goldman Sachs and Morgan Stanley become bank holding companies, and each receive a $10 billion infusion from Treasury. What Just Happened? is the title to Warsh's column, yes indeed.


Warsh also broke wide open Harvard University’s Russia scandal of the 1990s.


Warsh writes:

No column I ever wrote cost more than “The Thing’s a Mess,” the first installment, in 2002, of many columns over the last six years about the collapse in 1997 amid charges of corruption of Harvard University’s USAID-sponsored mission to advise the government of Boris Yeltsin. I knew I was damaging several longstanding relationships with economists whom I admired by calling attention to the details of the US Justice Department’s ultimately successful attempt to recover damages in Boston’s Federal District Court.

Since then I have gotten used to it, and in more than twenty pieces, I have given a pretty good account of how Harvard professor Andrei Shleifer was found to be investing in Russia, along with his wife, deputy, and deputy’s family, in violation of his contractual obligation to provide disinterested advice, and how his close friend and mentor Lawrence Summers sought unsuccessfully to distance himself from the lawsuit, but not from Shleifer, first as Treasury Secretary and then as president of Harvard, as the matter plowed on to its ignominious conclusion. The episode was widely covered in Russia, and became part of the rich lore of Russian resentment
of US policy in the aftermath of the Cold War.

Warsh also writes of the reception he received from the usual suspects about his breakthrough story:

But you would never have a clue that any of this [the Russia episode] had happened from three of the most widely-read economists’ blogs, the Freakonomics site, J. Bradford Delong’s Semi-Daily Journal, or N. Gregory Mankiw’s blog. Why? Because they are economists, and not committed to “without fear or favor” news, though they deliver plenty of interesting tidbits over the course of a week. Besides, Shleifer is on the board of directors of the Becker Center on Price, where Freakonomics’ Steven Levitt teaches. DeLong, who worked under Summers at the Treasury Department, has been Shleifer’s friend since the two were college roommates. Mankiw regularly touts his colleague for a Nobel Prize.

The online edition is free, but the $50 Bulldog edition puts bread, not likely steak, on Warsh's table, and is available by subscripton.