Oregon Legislature jobs agenda: brownfields, taxes and industrial development
OregonLive.com
Budget talks in the Oregon Legislature begin in earnest this week and the state's top budget writers will be weighing initiatives to spur industrial development, refund the state's brownfield program and boost workforce development against funding for ...

Learn why hedge fund traders are so angry with Ben Bernanke, and why

There is a reason that the trade of shorting the bonds of a sovereign issuer of a global reserve currency in a depressed economy is called "the widowmaker".

See: Moby Ben, or, The Washington Super-Whale: Hedge Fundies, the Federal Reserve, and Bernanke-Hatred by Brad DeLong.

Financially troubled Oregon counties face critical turning point locally, in ...
OregonLive.com
Financially troubled Oregon counties face critical turning point locally, in Legislature and in D.C.. Print · Jeff Mapes, The Oregonian By Jeff Mapes, The Oregonian The Oregonian Email the author | Follow on Twitter on May 11, 2013 at 9:00 AM, updated ...

Paul Krugman:

In Praise of Econowonkery: ... I would say that in general the quality of economic discussion we’ve been having in recent years is the best I’ve ever seen. ...

Part of what he covers is

that we’re having a conversation in which issues get hashed over with a cycle time of months or even weeks, not the years characteristic of conventional academic discourse. ... events are moving fast, and the long lead times of conventional publication essentially guarantee that it will be irrelevant to current policy issues.

I've called this "real-time analysis" (this is from a much longer essay):

... Real-Time Analysis and Policy Prescriptions Economic research is largely backward looking. After the fact – when all of the data has been collected and the revisions to the data are complete – economists examine data on, say, a financial crisis, and then figure out what caused the economy to become so sick. Once the cause has been determined, which may involve the construction of new theoretical frameworks, they tell us how to avoid it happening again, i.e. the particular set of policies that would have prevented or attenuated the damage. But the internet and blogs are changing what we do, and to some extent we now act like emergency room physicians rather than pathologists who have the time to carefully examine data from tests, etc., determine what went wrong, and then recommend how to avoid problems in the future. When the financial crisis hit so unexpectedly, it was like a patient showed up at the emergency room very sick and in need of immediate diagnosis and care. We had to reach into our bag of macroeconomic models, choose the one that was correct for this question, and then use it to both diagnose the problems and prescribe policies to fix them. There was no time for a careful retrospective analysis that patiently determined the cause and then went to work on the potential policy responses. That turned out to be much harder than expected. Our models and cures are not designed for that type of use. What data should we look at to make an immediate diagnosis? What tests should we conduct to give us data on what is wrong with the economy? If we aren’t sure what the cause is but immediate action is needed to save the economy from getting very sick, what is the equivalent of using broad spectrum antibiotics and other drugs to attack unknown problems? The development of blogs puts economists in real-time contact with the public, press, and policymakers, and when a crisis hits, traffic spikes as people come looking for answers. Blogs are a start to solving the problem of real-time analysis, but we need to do a much better job than we are doing now at providing immediate answers when they are needed. If Lehman is failing and the financial sector is going down with it, or if Europe is in trouble, we need to know what to do right now, it won’t help to figure that out months from now and then publish the findings in a journal article. That means the discipline has to adjust from being backward looking pathologists with plenty of time to determine causes and cures to an emergency room mode where we can offer immediate advice. Blogs are an integral part of that process. ...

• Monitoring the Financial System - Ben Bernanke
• Bernanke warns on excessive risk - FT.com
• Food-Stamp Use Rises From Year Ago - WSJ
• U.S. Posts Biggest Monthly Surplus in 5 Years - WSJ
• Sheedy on NGDP targeting and debt contracts - mainly macro
• Ryan Cooper Tries to Guide Clive Crook Back to Reality - Brad DeLong
• Kahneman's Clarity: Using Mysterious Coinage - Scientific American
• The Multiplier in Action - Econbrowser
• Same As They Ever Were - Paul Krugman
• Estate vs. Capital Gains Taxation - FRB Working Papers
• The Long and the Short of Household Formation - FRB Working Papers
• Declining Migration Within the US - FRB Working Papers
• Technology as a Driver of Growth (or Not) - Economix
• Economists share their views on the Fed (Video) - FRB Cleveland
• American Health Care as a Source of Humor - Uwe Reinhardt
• Worker Flows Over the Business Cycle - Owen Zidar
• All About the ECB - Paul Krugman
• Stability through instability - Free exchange
• The recursion of pop-econ - Andrew Gelman
• Countercyclical no More - Gloomy European Economist
• Pro-Inflation Policies Show Signs of Helping Japan - NYT
• Land of the Rising Sums - Paul Krugman

Oregon Legislature wades into vaccine debate, considers requiring education ...
The Republic
SALEM, Oregon — With the nation's highest rate of parents refusing vaccinations for their kindergartners, Oregon has become ground zero for the contentious debate over whether children should be vaccinated. A growing number of parents are declining ...

and more »

Trying to figure out what to make of this:

Markets erode moral values, EurekAlert: Researchers from the Universities of Bamberg and Bonn present causal evidence on how markets affect moral values Many people express objections against child labor, exploitation of the workforce or meat production involving cruelty against animals. At the same time, however, people ignore their own moral standards when acting as market participants, searching for the cheapest electronics, fashion or food. Thus, markets reduce moral concerns. This is the main result of an experiment conducted by economists from the Universities of Bonn and Bamberg. The results are presented in the latest issue of the renowned journal "Science". Prof. Dr. Armin Falk from the University of Bonn and Prof. Dr. Nora Szech from the University of Bamberg, both economists, have shown in an experiment that markets erode moral concerns. In comparison to non-market decisions, moral standards are significantly lower if people participate in markets. ...

Details here.

Tim Duy:

When Will The Divergence Between PCE and CPI Matter?, by Tim Duy: The divergence between PCE and CPI measures of inflation remains in the headlines. Pedro da Costa at Reuters sees a test of the Fed's credibility at hand:

With the inflation rate about half of the Federal Reserve's 2.0 percent target, the central bank is facing a major test and some experts wonder whether it will eventually need to ramp up its already aggressive bond buying program.

The challenge for policymakers is that they are clearly falling short of their dual mandate and that should open the door for additional asset purchases. But, but, but...I think that additional asset purchases is just about the last thing they want to do right now. We will see if their thinking evolved much at the last FOMC meeting, but the minutes of the March meeting clearly indicate that a large contingent of FOMC members are looking to end the asset purchase program by the end of this year. Take ongoing improvements in labor markets, add in concerns about financial stability, mix in some cost-benefit analysis about the efficacy of additional QE, and top-off with a dash of improving housing markets, bake at 350 for 40 minutes, and you get monetary policymakers hesitant to push the QE lever any further.

My sense is that policymakers will thus try to find reasons to dismiss falling PCE inflation as a non-issue. From an email exchange last week, today da Costa quotes me as saying:

"The Fed may view the divergence between the two measures as indicating that worries about deflation are premature," said Tim Duy, a professor of economics at the University of Oregon. "If core CPI was trending down as well, the Fed would be more likely to conclude that their inflation forecasts should be guided lower."

And also last week, Greg Ip at the Economist had this observation:

If CPI inflation were to converge to PCE inflation, that would be a concern. Goldman expects CPI inflation to drop to 1.8% in coming years and PCE inflation to rise to 1.5%. It would be preferable for both to converge to 2%; but so long as inflation expectations remain where they are, it is of little consequence for monetary policy – and a tangible plus for incomes and spending.

Yesterday, Philadelphia Federal Reserve President Charles Plosser had this to add, via the Wall Street Journal:

As of right now, “I’m not concerned” about inflation drifting too far under the central bank’s price target of 2%, Federal Reserve Bank of Philadelphia President Charles Plosser said in response to reporter’s questions at a conference here.

Inflation expectations “look pretty well anchored,” and it’s likely that price pressures as measured by the personal consumption expenditures price index will drift back up to 2% over time and reconverge with the consumer price index, he said.

Today, Chicago Federal Reserve President Charles Evans seemed resigned to low inflation. Again, from the Wall Street Journal:

“Inflation is low, and it’s lower than our long-run objective,” Mr. Evens said in an interview on Bloomberg Television, adding that he would like to see inflation closer to 2% but expects it to stay below 2% for several more years. Inflation, he said, “can be too low” when the central bank’s objective is 2%.

Asked if low inflation should prompt a policy response from the Fed, Mr. Evans said “I think it’s way too early to think like that.” In the debate over how the Fed might exit from the asset purchase program, Mr. Evans, a voting member of the policy-setting Federal Open Market Committee, said he remains “open minded [and] I’m listening to my colleagues.”

The general story seems to be that as long as inflation expectations remain anchored, and CPI inflation does not drift much below 2%, then the Fed will resist accelerating the pace of asset purchases.

Also note that the downward inflation drift is an underlying trend, or so concludes the Federal Reserve Bank of Atlanta's macroblog. The authors use a principle component model to estimate a common trend in the price data, and get these results:

The author's note that by this measure, the decline in PCE is not as ominous as it first seems, but it is clear that inflation by either measure is missing the Fed's target and currently trending away from that target. They conclude:

Does that mean we should ignore the recent disinflation being exhibited in the core PCE inflation measure? Well, let’s put it this way: If you’re a glass-half-full sort, we’d say that the recent disinflation trend exhibited by the PCE price index doesn’t seem to be “woven” into the detailed price data, and it certainly doesn’t look like what we saw in 2010. But to you glass-half-empty types, we’d also point out that getting the inflation trend up to 2 percent is proving to be a curiously difficult task.

Indeed, very curious given that we tend to think that at a minimum the monetary authority should be able to raise inflation rates. You are left with thinking that either the Federal Reserve still had more work to do or that monetary policy can do little more at this point than put a floor under the economy. If the latter, and if you want something more, you need to turn to fiscal policy.

Bottom Line: I suspect that at this point the Fed tends to think the costs of additional action still outweigh the benefits, and thus below-target inflation only induces pressure to maintain the current pace of QE longer than they currently anticipate rather than increase the pace of purchases.

I am here today (I discuss inequality, poverty, and social policy quite a bit and thought this conference would be a good opportunity to hear some of the latest academic research on these issues):

NBER Universities' Research Conference
Poverty, Inequality, and Social Policy
Phillip B. Levine and Melissa Schettini Kearney, Organizers May 10-11, 2013
Royal Sonesta Hotel PROGRAM Friday, May 10 1:30 pm Welcome and Introduction 1:40 pm
Hilary W. Hoynes, University of California at Davis and NBER
Marianne Bitler, University of California at Irvine and NBER
Elira Kuka, University of California at Davis
Do In-Work Tax Credits Serve as a Safety Net?
Discussant: Bruce Meyer, University of Chicago and NBER 2:30 pm
Bhashkar Mazumder, Federal Reserve Bank of Chicago
Sarah Miller, University of Michigan RWJ Scholar
The Effects of the Massachusetts Health Reform on Financial Well Being
Discussant: Robin McKnight, Wellesley College and NBER 3:20 pm Break 3:40 pm
Joanne Hsu, Federal Reserve Board
David Matsa, Northwestern University
Brian T. Melzer, Northwestern University
Unemployment Insurance and Consumer Credit
Discussant: Tal Gross, Columbia University and NBER Food Insecurity Roundtable 4:30 pm
Neeraj Kaushal, Columbia University and NBER
Jane Waldfogel, Columbia University
Vanessa Wight, Columbia University
Public Policy and Food Insecurity among Children

Patricia M. Anderson, Dartmouth College and NBER
Kristin Butcher, Wellesley College and NBER
Hilary W. Hoynes, University of California at Davis and NBER
Diane Whitmore Schanzenbach, Northwestern University and NBER
Understanding Food Insecurity During the Great Recession

Lucie Schmidt, Williams College
Lara Shore-Sheppard, Williams College and NBER
Tara Watson, Williams College and NBER
The Effect of Safety Net Programs on Food Insecurity 5:30 pm  Adjourn 6:00 pm Reception and Group Dinner Saturday, May 11 8:00 am Continental Breakfast 8:30 am
Hannes Schwandt, Princeton University
Unlucky Cohorts: Income, Health Insurance and AIDS Mortality of Recession Graduates
Discussant: Ann Huff Stevens, University of California at Davis and NBER 9:20 am
Ariel Kalil, University of Chicago
Magne Mogstad, University College London
Mari Rege, Case Western Reserve University
Mark Votruba, Case Western Reserve University
Father Presence and the Intergenerational Transmission of Educational Attainment
Discussant: Elizabeth Ananat, Duke University and NBER 10:10 am Break 10:30 am
Phillip B. Levine, Wellesley College and NBER
Melissa Schettini Kearney, University of Maryland and NBER
Income Inequality and the Decision to Drop Out of High School
Discussant: David Deming, Harvard University and NBER 11:20 am
Anna Aizer, Brown University and NBER
Florencia Borrescio Higa, Brown University
Hernan Winkler, University of California at Los Angeles
Impact of Rising Inequality on Health at Birth
Discussant: Doug Almond, Columbia University and NBER 12:10 pm Lunch 1:10 pm
Adriana Lleras-Muney, University of California at Los Angeles and NBER
Anna Aizer, Brown University and NBER
Joseph P. Ferrie, Northwestern University and NBER
Shari Eli, University of Toronto
The Long Term Impact of Means-Tested Transfers: Evidence from the Mother's Pension Program
Discussant: Hoyt Bleakely, University of Chicago and NBER 2:00 pm
Sendhil Mullainathan, Harvard University and NBER
Eldar Shafir, Princeton University
The Psychology of Poverty (additional paper) 2:45 pm
David Ellwood, Harvard University and NBER
What Can We Possibly Do Now?  Reflections on Future Directions for Research and Policy in an Era of Rising Inequality 3:15 pm Adjourn

Oregon lawmakers consider new workplace protections for interns: Oregon ...
OregonLive.com
Michael Lloyd/The Oregonian. Oregon legislators are moving toward doing something for the often-lowly intern, that increasingly common symbol of the difficult job market. The House Rules Committee on Friday will consider approving a measure, House Bill ...

Should we worry about bond and/or stock bubbles?

Bernanke, Blower of Bubbles?, by Paul Krugman, Commentary, NY Times: Bubbles can be bad for your financial health — and bad for the health of the economy, too. .... So when people talk about bubbles, you should ... evaluate their claims — not scornfully dismiss them, which was the way many self-proclaimed experts reacted to warnings about housing. And there’s a lot of bubble talk out there right now. Much of it is about an alleged bond bubble.... But the rising Dow has raised fears of a stock bubble, too. So do we have a major bond and/or stock bubble? On bonds, I’d say definitely not. On stocks, probably not, although I’m not as certain. .... Why, then, all the talk of a bond bubble? Partly it reflects the correct observation that interest rates are very low by historical standards. What you need to bear in mind, however, is that the economy is also in especially terrible shape... The usual rules about what constitutes a reasonable level of interest rates don’t apply. There’s also, one has to say, an element of wishful thinking here. For whatever reason, many people in the financial industry have developed a deep hatred for Ben Bernanke... As it turns out, however, dislike for bearded Princeton professors is not a good basis for investment strategy. ... O.K., what about stocks? Major stock indexes are now higher than they were at the end of the 1990s, which can sound ominous. It sounds a lot less ominous, however, when you learn that corporate profits ... are more than two-and-a-half times higher than they were when the 1990s bubble burst. Also, with bond yields so low, you would expect investors to move into stocks, driving their prices higher. All in all, the case for significant bubbles in stocks or, especially, bonds is weak. And that conclusion matters for policy as well as investment. For one important subtext of all the recent bubble rhetoric is the demand that Mr. Bernanke and his colleagues stop trying to fight mass unemployment, that they must cease and desist their efforts to boost the economy or dire consequences will follow. In fact, however, there isn’t any case for believing that we face any broad bubble problem, let alone that worrying about hypothetical bubbles should take precedence over the task of getting Americans back to work. Mr. Bernanke should brush aside the babbling barons of bubbleism, and get on with doing his job.

• LOLCat Sez - Brad DeLong
• Stop the Plunder of Africa - Kofi Annan
• Fed’s Evans: Low Inflation to Persist for Years - WSJ
• More on the Roots of Bernanke Hatred - Paul Krugman
• Senate did the right thing--will the House? - ataxingmatter
• Pro-Inflation Policies Show Signs of Helping the Japanese Economy - NYT
• The Health Care “Market” is So Not a Market - Jared Bernstein
• Keynes cared little about the long run. but not because he was gay - WP
• Fed’s Plosser: Slow Inflation Not Yet a Problem - WSJ
• How Barney Frank fooled the mega-banks - WP
• Fed Officials Shrug Off Waning Inflation - WSJ
• Time to End the Tax Havens - Jeffrey Sachs
• Martin Feldstein Is at It Again - Uneasy Money
• Martin Feldstein: The Federal Reserve's Policy Dead End - WSJ
• Weighing In on the Recent Discrepancy in the Inflation Statistics - macroblog
• The Problem With Corporate Governance at JPMorgan Chase - Economix
• I Am Become Ben, Destroyer of Worlds - Paul Krugman
• Banking crises and political survival over the long run - Vox EU
• House Approves Prioritizing Payments on Debt - WSJ
• Liberal Wonk Blogging Could Be Your Life - Rortybomb
• We Need a Third Term of Ben Bernanke - Supply-Side Liberal
• Mergers and Enforcement in 2012 - Tim Taylor
• China to Switch Sides (of the Trilemma)? - Twenty-Cent Paradigms
• The tragedy of US higher education - Felix Salmon
• The Moral Equivalent of Space Aliens - Paul Krugman
• Weekly Initial Unemployment Claims decline to 323,000 - Calculated Risk
• In Praise of Public Libraries (Personal and Trivial) - Paul Krugman
• Regulating Systemically Important Financial Institutions - Brookings
• Econ PhD Musings - Twenty-Cent Paradigms
• The dramatic adjustment in eurozone trade imbalances - Gavyn Davies
• The new challenges for urban planners - MIT News

Legislature makes late push for jobs: Agenda 2013
OregonLive.com
Much like seeds that were planted in pots that were shoved into a dark, cold corner without water, legislation related to job creation has suffered from neglect in the 2013 Oregon Legislature. Until now. With the session nearing its home stretch, two ...

Oregon Legislature votes to ban teens from tanning salons
The Register-Guard
West. Oregon Legislature votes to ban teens from tanning salons. By The Associated Press. Published: 4:44 p.m., May 9. Print Friendly and PDF. SALEM — Oregon lawmakers have decided minors should not be allowed in tanning salon beds. The bill passed ...

KATU
Oregon Legislature bans tanning for teens
KMTR NewsSource 16
Oregon Legislature bans tanning for teens. Images. Set Text Size Small, Set Text Size Medium, Set Text Size Large, Set Text Size X-Large. Print Story. Published: 2:27 pm. Share. Updated: 2:45 pm. SALEM, Ore. (AP) — Oregon lawmakers have decided ...
Teen tanning bill returns, in-state tuition for veterans, tax breaks for film ...OregonLive.com
Legislature bans teens from using tanning salonsKATU
Political contribution tax credit draws praise, fireStatesman Journal

all 9 news articles »

KATU
Oregon Legislature bans teens from tanning salons
KMTR NewsSource 16
Oregon Legislature bans teens from tanning salons. Images. Set Text Size Small, Set Text Size Medium, Set Text Size Large, Set Text Size X-Large. Print Story. Published: 2:27 pm. Share. Updated: 2:29 pm. SALEM, Ore. (AP) — Oregon lawmakers have ...
Teen tanning bill returns, in-state tuition for veterans, tax breaks for film ...OregonLive.com
Legislature bans teens from using tanning salonsKATU

all 7 news articles »

Another travel day quickie:

Economists See Deficit Emphasis as Impeding Recovery, by Jackie Calmes and Jonathan Weisman: The nation’s unemployment rate would probably be nearly a point lower, roughly 6.5 percent, and economic growth almost two points higher this year if Washington had not cut spending and raised taxes as it has since 2011, according to private-sector and government After two years in which President Obama and Republicans in Congress have fought to a draw over their clashing approaches to job creation and budget deficits, the consensus about the result is clear: Immediate deficit reduction is a drag on full economic recovery. Hardly a day goes by when either government analysts or the macroeconomists and financial forecasters who advise investors and businesses do not report on the latest signs of economic growth — in housing, consumer spending, business investment. And then they add that things would be better but for the fiscal policy out of Washington. Tax increases and especially spending cuts, these critics say, take money from an economy that still needs some stimulus now, and is getting it only through the expansionary monetary policy of the Federal Reserve. ... In all this time, the president has fought unsuccessfully to combine deficit reduction, including spending cuts and tax increases, with spending increases and targeted tax cuts for job-creation initiatives in areas like infrastructure, manufacturing, research and education. That is a formula closer to what the economists propose. But Republicans have insisted on spending cuts alone and smaller government as the key to economic growth. ...

And they keep insisting this is true despite the evidence to the contrary because it supports their ideological goals, and there is little political price for taking this position.

Travel day, so some quick ones before heading out:

Big Data Needs a Big Theory to Go with It, by Geoffrey West: As the world becomes increasingly complex and interconnected, some of our biggest challenges have begun to seem intractable. What should we do about uncertainty in the financial markets? How can we predict energy supply and demand? How will climate change play out? ... To bring scientific rigor to the challenges of our time, we need to develop a deeper understanding of complexity itself. What does this mean? Complexity comes into play when there are many parts that can interact in many different ways so that the whole takes on a life of its own: it adapts and evolves in response to changing conditions. It can be prone to sudden and seemingly unpredictable changes—a market crash is the classic example. One or more trends can reinforce other trends in a “positive feedback loop” until things swiftly spiral out of control and cross a tipping point... The digital revolution is driving much of the increasing complexity..., but this technology also presents an opportunity..., enormous amounts of data. ... The trouble is, we don't have a unified, conceptual framework for addressing questions of complexity. ... “Big data” without a “big theory” to go with it loses much of its potency and usefulness...  We now need to ask if our age can produce universal laws of complexity... We won't predict when the next financial crash will occur, but we ought to be able to assign a probability of one occurring in the next few years. The field is in the midst of a broad synthesis of scientific disciplines, helping reverse the trend toward fragmentation and specialization, and is groping toward a more unified, holistic framework for tackling society's big questions. The future of the human enterprise may well depend on it.

KATU
Teen tanning bill returns, in-state tuition for veterans, tax breaks for film ...
OregonLive.com
Teen tanning bill returns, in-state tuition for veterans, tax breaks for film, video: Oregon Legislature today. Print · Janie Har, The Oregonian By Janie Har, The Oregonian The Oregonian Email the author | Follow on Twitter on May 09, 2013 at 6:00 AM ...
Legislature bans teens from using tanning salonsKATU
Teen Tan Ban On Its Way To Oregon Governor's DeskNW News Network
Political contribution tax credit draws praise, fireStatesman Journal
The Republic
all 9 news articles »

• Preventing the next catastrophe: Where do we stand? - David Romer
• Rethinking macroeconomic policy - Olivier Blanchard
• Lessons for economic theory and policy - Joseph Stiglitz
• The cat in the tree and further observation - George A. Akerlof
• The Dwindling Deficit - Paul Krugman
• Reinhart and Rogoff publish errata - FT.com
• CO2 levels at highest point in 800,000 yrs - Brad Plumer
• My Thoughts on Dani Rodrik's Thoughts - Robert Waldmann
• There’s Something About Maynard - Paul Krugman
• China’s Economy Unexpectedly Stumbles Again - NYT
• The most important story in global economics - Neil Irwin
• Stock Markets Rise, but Half of Americans Don’t Benefit - NYT
• Robust Standard Errors for Nonlinear Models - Dave Giles
• Why Were Young People Hit Harder by the Recession? - WSJ
• We are governed by outright morons - Hunter
• Barrow on Boehner - Tim Duy
• Africa's Economic Pulse - Tim Taylor
• A case for inequality? - Stumbling and Mumbling
• The Fix the Debt Fix Is Still In - Paul Krugman
• Large Variation in Hospital Billing Data - Owen Zidar
• Abenomics and Mortgage Rates - EconoSpeak