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Robert Waldmann

Robert Waldmann

Robert J. Waldmann is a Professor of Economics at Univeristy of Rome “Tor Vergata” and received his PhD in Economics from Harvard University. Robert runs his personal blog and is an active contributor to Angrybear.

Articles by Robert Waldmann

plata o plomo

9 days ago

SIlver or lead was something Pablo Escobar liked to say. It means do what I want and I will give you money (plata) if you don’t I will use lead to kill someone close to you. I just noticed that it is the Spanish translation of a debate the US should have about the apparent failure of the Great Society (Johnson;s expansion of the New Deal).

In the conventional analysis the hero is Clinton (if one is a moderate Democrat) Reagan (as always, if one is a Republican). The story is that over generous social welfare caused people to treat the safety net as a hammock with very serious long-term consequences. The evidence for this is the dramatic increase in violent crime, drug abuse and teenage pregnancy which began in the 60s and continued until around

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Why Isn’t The USA in a recession ?

April 28, 2024

Oddly I am back here posting. Even more oddly I am posting on the topic I am paid to address. I start by noting two things. About one year ago, many macroeconomic forecasters predicted that a recession would have started by now in the USA. I forget who placed the probability at 100%. In spite of sltightly disappointing 0.4% (1.6% if annualized) real GDP growth in the first quarter of 2024, we are not in a recesion. What went right ?

The presumed cause of a recession was the sharp shift to contractionary monetary policy in a effort to fight inflation.

In this post, I will focus mostly on domestic demand. Briefly, high interest rates can cause a recession by causing an appreciation of the national currency which causes a sharp decline in net

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Clueless in Gaza II

February 24, 2024

“U.S. officials say they believe Hamas has been constrained by the Israeli operations, but that Israel will not be able to achieve, in the foreseeable future, its goal of eliminating the group’s military capability.”


“An Israeli military intelligence official, who spoke on condition of anonymity under military protocol, said that Israel was engaged in a comprehensive mission to unravel Hamas’s military capabilities.

“Is it possible this mission will be left for my children?” he said. “The answer is yes.””

and “Current and former Israeli officials said Israeli forces would most likely continue to sweep northern Gaza to tamp down the Hamas insurgency for the foreseeable future, at least until there was some kind of political

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The Facts Don’t Care About Your Honor’s Feelings

February 24, 2024

His honor assumes a fact not in evidence.

Ruth Marcus has an important op-ed which cites strong evidence that the party of the president who nominated federal judges helps one predict their opinions. I will fair use the important part.

“Now comes an intriguing study by a Harvard Law School professor that buttresses my point: If anything, it suggests we have underestimated the impact of party affiliation on judicial outcomes. Alma Cohen, whose training is as an economist, examined 630,000 federal appeals court cases from 1985 to 2020 and found that the impact of party affiliation went far beyond hot-button issues such as guns or abortion.

Rather, she wrote, “the political affiliations of panel judges can help predict outcomes in a broad set

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Asymptotically we Will all be Dead

February 21, 2024

This will be a long boring post amplifying on my slogan “asymptotically we will all be dead.”

I assert that asymptotic theory and asymptotic approximations have nothing useful to contribute to the study of statistics. I therefore reject that vast bul of mathematical statistics as absolutely worthless.

To stress the positive, I think useful work is done with numerical simulations — monte carlos in which pseudo data are generated with pseudo random number generators and extremely specific assumptions about data generating processes, statistics are calculated, then the process is repeated at least 10,000 times and the pseudo experimental distribution is examined. A problem is that computers only understand simple precise instructions. This means

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The Mad Dogs Who Didn’t Bark In the Nightime

February 18, 2024

One of the most reliable lazy pundit columns Democrats in disarray and the related warning that Democrats have to watch out for the damage done by the McGovern wing of the party. Lazy pundits have a problem as Democrats are in array and only aging boomers such as myself remember 1972 (even older boomer Michael Kinsley noted that it is odd that the party which nominated Richard Nixon isn’t the one constantly apologizing for the mistake they made in 1972).

The new warning is about the danger poseed by the squad. A problem is that the left most Demorats in Congress have not created any trouble for other Democrats. A challenge – when was the last time the Democrats had trouble whipping votes because of extremists. Another is how many minutes have

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A Longgg Time Series of Safe Real Interest Rates

February 12, 2024

I learn from Brad DeLong (nickname delong run) that Paul Schmelzing has gone to a truly heroic effort and estimated safe real interest rates since 1310!

The main point is the long slow decline (it is ironic that one of the stylized growth “facts” is that there is no clear trend in real interest rates. Brad discusses this at length at his SubStack. Oddly, although he is one of the Efficient Markets Hypothesis’s worst enemies not named Robert Shiller, he uses an Euler curve as his benchmark model.

I believe that the Euler curve has nothing useful to tell us about consumption/savings decisions in the real world (that it is not at all a useful approximation to reality – no link as Google has converted my classic Google site to a worthless new

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The Bipartisan Military Aid and Border Security Bill Appears to be Dead. What now ?

February 6, 2024

The Republican Party has demonstrated it’s subservience to Donald Trump and rejection of policy making as such. In a sane country, this would doom the party to a very long period in opposition, but I am a citizen of the country I have not the country I want. I think the issues are well known, but I will attempt a brief review.

First, while most Republicans in Congress agree that the US should aid Ukraine, some side with Putin. More importantly, many who agree that Ukraine must be aided also insisted on concessions from Democrats in exchange for that aid (see avoiding default and keeping the federal government open). Democrats caved and accepted a fairly extreme border security/less immigration component of a bipartisan compromise bill. They gave

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The Roaring 20s II : This Time It’s Fiscal

January 28, 2024

In the Washington Post David Lynch (no not that David Lynch) reports that “Falling inflation, rising growth give U.S. the world’s best recovery.”

lternative titles

Handling the blue team with velvet gloves

(not used as it alleges bias when the article merely reports the facts without Ballance (TM) for once)

Twin Peaks (inflation and GDP not used as it might invite a downturn and I am superstitious)

The excellent article (just click the link) is mostly straight reporting with some discussion of the advantages of FIscal Policy relative to monetary policy. As a QEx skeptic (for x>1) I am very pleased by “Congressional actions can affect the economy faster than the lagged impact of a change in borrowing costs and are more certain than the

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Houthis In Charge Here

January 27, 2024

This is mainly belated comentary on “How a Ragtag Militia in Yemen Became a Nimble U.S. Foe”

I think there are lessons to be learned from the success of the Houthi militia in Yemen. The lesson I learn is the lesson I claim to have learned again and again — most US defence spending is wasted, because a huge amount is spent on expensive platforms rather than on smart munitions launched from lots of cheap platforms (drones and missiles *again*).

First, I think it is useful to look back a bit at the recent (and horrible) past. There is now mostly near peace in Yemen after years of bloody war pitting the Houthi militia against the internationally recognised Yemeni government and, more importantly, Saudi Arabia and the United Arab Emirates.

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Visting I am shocked, shocked to find that editing is going on there.

January 25, 2024

My quest to detect evidence that the New York Times actually employs copy editors has arrived at success (a day late and an apology short).

TI just discovered that today this article begins with the not absurdly incorrect abstract “Five universities have agreed to pay $104.5 million to settle a lawsuit accusing them of violating an agreement to be “need-blind” when admitting students.”

Recently it began with the absurd abstract which I immedately screen captured.

Now the assertion that they promised “‘need blind’” “financial aid” does bring the word blind to mind, but I would have imagined that any copy editor of normal intelligence (or with a mild to moderate mental handicap) would have noticed that it is nonsense.

What is going on at

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Who’s in Charge Here ?

January 25, 2024

By “here” I refer to my home town Washington DC. The answer, obviously, is that Binyamin Netanyahu is in charge there. At least he has much more influence over US Federal Government spending than the guy wincing in the photo. Both Biden and Netanyahu know that Netanyahu has much more support in the US Congress than Biden and both understand that Congress can control spending, sometimes by over riding vetos.

Biden has the impossible task of attempting to conduct US foreign policy (with the advice and consent of the Senate) when that involves dealing with someone who has more influence over US policy than he does. Importantly, they both understand this perfectly.

Netanyahu is powerful, because he has the support of a narrow majority in the

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2 Posts on 2 Articles II : this time it’s less pedantic

January 21, 2024

Just below, I express my shock caused by the disappearance of basic copy editing, blocking, and tackling at The New York TImes, but, in this article, I want to discuss substance.

The article on what President Nixon did in 1979 is, aside from that little slip, very interesting. It notes that people in Taiwan are worried about Xi Jin Ping (rationally) and don’t trust the USA to protect them (very very rational).

However, they don’t seem to feel the need to do much about these problems. “Not that he or other officials are solely lobbying for help. Taiwan’s 2024 budget included a jump in military spending to 2.5 percent of gross domestic product, or $19 billion. But its leaders have been slow to shift toward the drones, missiles and other

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2 Posts on 2 Articles in The New York Times I

January 21, 2024

I will get to an actual policy discussion in part II of this pair of posts, but first I have to ask “what the hell is happening at the New York Times”? I am old enough to remember a time when it had actual editors, but the Journal of Record seems to be edited about as much as my posts here (spelll check if you are lucky).

First it seems that  Damien Cave and Amy Chang Chien believe that Richard Nixon was president of the USA in 1979. I insert a screen capture in case some sort of editor shows up some time

RIchard Nixon visited the PRC but, when he left office, the USA still recognized the Republic of China (and its claim of authority over, among all the others, Taiwan province of the Republic of China. The USA later recognized the People’s

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Marking my Beliefs to Market N

January 18, 2024

In 1980 I had a long argument with an unfortunate guy who didn’t just say “let’s agree to disagree” which sometimes works. He was arguing that the US should build B-1s, then the weapon of the future. I argued that the US should rely on Tomahawk missiles (launched from B-52s) which I asserted were the weapon of the future.

It is now what was in 1980 the future and guess what weapon was used yesterday (hint it wasn’t a B-1 bomber).

I love to say “I told you so” however, in this case I can’t. I can type “I told him so” and just did

Tags: Tomahawk missiles

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Burn on the 4th of July

January 18, 2024

Fireworks, drone swarms, military history and the military future. Oh and China always China.

This is a followup to

The 101st Chairborn: History is a Prankster

The key new point is drone *swarms* that is thousands of drones in coordinated flight. the point is that e even if a drone is slow so that the chance of shooting it down is 99.99%, the chance of shooting down all of 10,000 isn’t (0.9999)^10000 = 1/e because the drones draw fire from each other and overwhelm the defence.

Now the key is to control 10,000 drones without 10,000 human drone operators. To do this one must have say 100 drone operators each of which controls a drone which is somehow followed by 99 other drones.

Something like this has been displayed, say of the 4th of

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Naval Lessons from the Russia-Ukraine War

January 14, 2024

I have a very extreme opinion about what we can learn from the struggle between Russian and Ukraine for control of the Black Sea. First I think it is agreed that Ukraine basically has won the struggle so far. First Russia removed naval vessels from Sebastopol to Russia proper — this is huge news as it would have been at any time in the past 150 or so years.

The ships were too vulnerable to anti-ship missiles and drones. This means that the Russian Black Sea fleet is retreating from an adversary which doesn’t technical have an actual navy.

A key issue has been Urkaine’s desire to export grain by ship sailing the Black Sea. In December 2023 Ukraine exported more grain in spite of the efforts of the Russian navy to block exports than it ever

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The 101st Chairborn: History is a Prankster

January 10, 2024

I don’t know if kids these days still use the slang, but back in the glory days of blogging, a way to mock chicken hawks was to call them keyboard warriors or the 101st chairborn. These were people convinced they were fighting terror by advocating aggressive foreign policy in the safety of their own house (or by other insulting assumption their mother’s basement). I guess an even sillier bunch were the people who felt brave and manly while playing, say “Call of Duty” or “World of Warcraft”.

The worlds most powerful person clearly thought that web addiction would make his people weak. Xi JinPing decided to crack down on the internet at a time when capitalists and commentators on capitalism were very focused on web companies (to the extent

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This Time It’s Different ?

January 5, 2024

I guess this is the latest installment in my soft landing series. However, it might also be a warning of terrible trouble in the fairly near future (next 5 years). It is certainly proof (if more were needed) that I am clueless.

The topic is the US housing market. This is highly related to the (possible) soft landing as one important surprise is that residential construction has held up in spite of high mortgage interest rates. The question for this post is whether that happened because of another speculative bubble which will burst (as the last one burst in 2006).

Unfortunately for me, I have a published stated position that implies that we are headed for huge trouble. I do not want to believe this, so I want to argue that this time it’s

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Soft Landing II

December 27, 2023

I promised a second entry in the series, Soft Landing this time it’s monetary. The question is why didn’t the FED’s monetary tightening cause a recession. There certainly was tightening, the Federal Funds rate rose from 0.07% to 5.33%

There certainly were people who predicted a recession in 2023 (hey they still have 4 days so I am giving a hostage to fortune). Indeed some forecasters put the probability at 100%.

Why ?

First there was the view that a soft landing would be more unique than rare. The FED was clearly determined to fight inflation, and examination of all such determined fights against inflation so far include the resulting recession. This means that they guessed that, if 5.33% wasn’t enough to cause a recession, it

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Soft Landing

December 23, 2023

Brad DeLong asked me if I had an explanation of how the US economy managed to land softly. He is confident that it is softly landing. This encourages me to actually try to do my job for once and act as a macroeconomist, and also to return to blogging here some. In the spirit of challenging reopening, I will indulge myself by skimping on links, simply asserting things which I could and should back up with a bit of Google.

The basic story is that CPI inflation has declined from around 6% to around 3% during a period with unemployment below 4%. This surprised a lot of people who had predicted that inflation fighting would require (or at least cause) a recession. There are two questions. FIrst how did inflation decline without high (or even

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Why did you ask me a rhetorical question

December 16, 2023

A warning (for comments I guess). I really like to answer rhetorical questions. The answers are quite long. I can semi remember one. Being clever (as he often is*) Matthew Yglesias asked how and when the Democratic Socialists became bitter adversaries of the Social Democrats, which is odd since both phrases are translations of the same polysyllabic German word. I happened to know the approximate answher (I didn’t recall the exact date which turns out to be a few years later than I thought).

As is usual, the Socialist Party split over a war — in this case the US-Vietnamese war. The Social Democrats supported US involvement in the war. The Democratic Socialists opposed it. This is a common reason for Socialist parties to split. It turns out

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Swift but Not Serious

November 5, 2023

I believe that I have caught a typographical error in the New York Times. The article is interesting, it alleges that Taylor Swift fans may decide the Argentinian presidential runoff (voting for the center left Sergio Massa and not for the right wing Javier Milie). A pop singer with actual measurable political influence (in a foreign country even) makes me think of the 70s as does Javier Milie’s hairstyle (longish, tousled, & with sideburns and it seems to be working he has a lot of support among the young — Taylor Swift saving Argentina from distraction by appearances would be one of brilliant comedian History’s better jokes).

I feel well informed on Swift and recognize a good faith effort to teach me about K-Pop (the group which trolled Trump

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How I Learned to Soak the Rich

October 29, 2023

From time to time I argue that the optimal strategy for Democrats is good old egalitarian populism: soak the rich and spread it out thin. I note the polls which have, for 3 decades now, shown that a majority of US adults think that upper income people and corporations pay less than their fair share in taxes and the fact that Bill Clinton, Obama, and Biden were elected promising to raise taxes on the rich and cut taxes on everyone else.

I suppose I should address two important questions. FIrst why don’t all Democrats do this? In particular, why didn’t Mondale, Dukakis, Gore, Kerry, or Hillary Clinton do this (note the perfect 100% pattern of fitting which Democrats get elected) ? Second, given the importance of the issue and the fact that all

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Gaza N

October 25, 2023

This is an inspiring article, but one sentence makes me sad “Israel’s massive democracy movement is ready for war” The general inspiring story is that the massive movement trying to protect the Israeli judiciary from Netanyahu has temporarily shifted to protecting Israel from Hamas and helping internally displaced Israelis.

a logical evolution, said Bressler, who now visits victims around the country and finds herself “at too many funerals.”

“We were fighting to save the country, and we are still fighting to save the country,” she said. “And this is what that means now.””

However, I was alarmed by one of the inspiring stories

“Nir Avishai Cohen is a deputy infantry battalion leader and 20-year reserve veteran who was shoved during

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Biden, Netanyahu, and Gaza

October 24, 2023

First if my obsession with sharing ideas based on my almost total ignorance is getting to be a nuisance please tell me (can’t hurt – might get me to stop – no promises).

Second, many commenters (on my pointless posts below) claim that the USA could prevent Israel from killing even larger numbers of Palestinians in the near future. I am not sure that this is possible, but in any case it is a hope not a plan. The USA acting together as actually united people … well there is no need to go on, that’s not going to happen. The USA will certainly not act together to help Arabs or Moslems.

The question is what could someone who *might* have good intentions do. I will assume (hope wish) that top Biden administration officials have good intentions.

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Gaza Again

October 24, 2023

The useful content of this post on a topic where I have no expertise is this link to a Twitter thread by Gen Mark Hertling (retired) who has a whole lot of expertise and is also very smart and reasonable. The thread is brief. I suggest reading it.

I also quote one tweet here: “There will be an IDF incursion. Hamas will prove better than many expect in repelling the IDF advance. Unfortunately, I also believe the fight will last a long time, will result in thousands of casualties, and neither side will achieve their strategic objectives. 8/”

I read it as implicitly asserting that “there should not be an IDF incursion, but there will be one”. I can’t help adding my non expert thoughts (those with things can do can ignore the rest of this post

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Fuel For Peace

October 23, 2023

Who is willing to die for diesel ? There is an extreme crisis in the Gaza strip and at the Rafah crossing from the Gaza strip to Egypt. *Finally* Israel is allowing food, bottled water, and medical supplies to enter the Gaza strip. However, they refuse to allow fuel in (claiming they are worried that Hamas will seize it). This is a crisis as Hospitals are running on backup generators and about to run out of fuel. Yesterday The UN Relief and Works Administration, said they had fuel for 3 or 4 days.

The problem can not be solved by inspections at the crossing (determining that a truck is full of diesel and not say TNT) since it concerns where the fuel goes after entering the Gaza strip. It seems clear it will be necessary to have the fuel

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What Can be Done With This House of Representatives ?

October 21, 2023

Obviously the only thing any reasonable person would do is point and laugh at the Republicans. I am not that reasonable person, so I will try to think of a solution.

Obviously one very boring possibility is that the Republicans will finally get their act together and elect a speaker. This is the most likely outcome, but very far from optimal.

The other possibility is that a speaker will be elected by a bipartisan majority like the majority which prevented default and delayed the government shutdown. I think this would be very good and want to figure out how it might possibly happen.

One possibility is that number 1 vote getter Hakeem Jeffries picks up 5 more votes and is elected speaker. This requires finding 5 Republican Representatives

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