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U.S.
School Funding Deal in Kansas Complicates Governor’s Campaign for Re-election
Late additions to the bill included diminishing job protections for teachers, which would almost certainly become a thorny campaign issue for Gov. Sam Brownback should he sign the measure.
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Arts
Federal Panel Rejects Design for Eisenhower Memorial
The federal panel that oversees the design of the nation’s monuments on Thursday rejected the plans for a planned memorial to Dwight D. Eisenhower and asked for revisions.
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Business Day
In New Tack, I.M.F. Aims at Income Inequality
The International Monetary Fund has been moving away from its single-minded focus on spending cuts, and broadening its scope.Greenish Shootlets in Southern Europe (Implicitly Wonkish)
"There are hints of recovery in some of Europe’s austerity-stricken economies. Even Greece
is finally showing some signs of an uptick. And you know one thing is
going to happen: some people will say, “See — growth despite austerity!
Krugman and the Keynesians were wrong!”
What’s interesting is that at the very same
time other people (or in some cases, I think, the same people) are
pointing to the lack of recovery in the United States and declaring “This has gone on so long that it can’t be cyclical. Krugman and the Keynesians are wrong!”
So whatever happens, I’m proved wrong. So it goes.
But what we should really be doing, of course, is asking what the models (not the person) predicts. And I want to enlarge on some points I made last fall.
Back then I pointed out that textbook
macroeconomics says that economies will eventually self-correct from
adverse demand shocks, including those created by fiscal austerity. And I
do mean textbook: from the World’s Best Principles Book,
The idea is that high unemployment produces
gradually falling wages and prices, and that the economy slides down the
aggregate demand curve until full employment is restored in the long
run. The problem is that this is the long run in which we are all dead —
that is, the cost in output lose and lives ruined may be immense by the
time you finally get there.
Beyond that, I noted that in a liquidity trap
it’s hard to see why aggregate demand should slope down. The usual
channel through which lower prices increase demand, via an increased
real money supply and lower interest rates, doesn’t work; meanwhile a
worsened burden of debt means that a falling price level probably
reduces demand. So the aggregate demand curve slopes the “wrong” way,
and the auto-correct mechanism doesn’t work:
The paradox of flexibility
But wait: this is an analysis for a closed
economy, or more realistically, for an economy with a floating exchange
rate. What if you’re Greece, with a fixed exchange rate (because you
have no currency of your own) vis-a-vis a much larger currency area? IN
that case falling wages and prices make you more competitive, so that
the aggregate demand curve probably slopes down after all, for different
reasons.
So we would expect deflation in Greece
eventually to produce recovery, even in a totally Keynesian framework.
The point, however, is that the cost of austerity and currency rigidity
has been immense, and will continue to be immense for years even if GDP
is finally growing again."
4
Opinion
It's Time for Africa's Green Revolution, Focused on Corn
A look at the steps required to spark a green revolution in Africa.
5
U.S.
Senate Panel Votes to Reveal Report on C.I.A. Interrogations
People who have read the report have said it details the C.I.A.’s brutal methods of interrogating terrorism suspects in the years after Sept. 11, 2001.
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U.S.
Fort Hood Gunman Was Being Treated for Depression
Officials said Specialist Ivan Lopez, accused of killing three people at the Texas base, had been prescribed a sleep aid and other medications, and that he had a “clean record.”
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Fashion & Style
Banking on My Future as a Father
A spate of reports on potential fertility problems among older men sends the author on a mission to the sperm bank.
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N.Y. / Region
Judge Allows Christie Aides to Withhold Bridge Emails
The decision involving Bridget Anne Kelly and Bill Stepien is a major setback in the legislative inquiry into lane closings at the George Washington Bridge.
9
Arts
Chasing a Dream and an Unalloyed Ethos
Brooklyn is our 19th-century Paris or 18th-century Rome, with one of the largest concentrations of artists in the world.
10
World
Syrian Rebels Find Support, and Frustration, in Jordan
Jordan has quietly been providing a staging ground for the rebels and their foreign backers on Syria’s southern front, but many say the aid is not enough.
12
N.Y. / Region
Last Bohemian Turns Out the Lights
Clayton Patterson, an avant-garde artist, has been disillusioned by gentrification on the Lower East Side and is moving to Austria.
14
Magazine
How to Think Like the Dutch in a Post-Sandy World
Can Henk Ovink sell Americans on a new approach to flooding — letting the water in?
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18
World
Libyan Rebels Vow Gradual End to Oil Standoff
The agreement reached with the government allows some ports to reopen immediately, both sides confirmed, while others will resume functions within four weeks.
19
N.Y. / Region
Grand Jury Questions Christie Aide in an Inquiry
Michael Drewniak, who previously served as Mr. Christie’s chief spokesman, appeared before a grand jury in Newark on Friday to answer questions about the George Washington Bridge lane closing scandal.
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