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Real Estate
New York Boomers on Hipster Turf
Driven by a taste for adventure and a lively urban lifestyle, an older set is moving into neighborhoods colonized by the young and the artistic.
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U.S.
Illinois Moves to Ease Chicago Pension Woes
The state legislature approved a plan put forth by Mayor Rahm Emanuel that would presumably include a property tax increase for Chicago residents.Wall Street, The City, And Austerity
Noah Smith, Simon Wren-Lewis, and I
have in effect been having an intermittent, long-distance conversation
about the role of the finance industry in promoting a view of our
economic problems — one that emphasizes the dangers of deficits and
monetary expansion — that has had a seriously damaging effect on policy.
The question is why so many people in finance gravitate toward that
view, and cling to it despite what is at this point overwhelming
evidence that it’s wrong.
Wren-Lewis suggests that it was in large part
about deflecting blame — that the financial industry was eager to shift
attention away from its own role in creating crisis to the alleged role
of fiscal profligacy. And I’m sure that was part of it. But I’d like to
add a couple of other motives that seem, in my own experience, to have
mattered.
One is the issue of stocks versus flows, which sounds obscure, but bear with me for a minute.
If you were listening to the deficit worriers
from late 2009 right through until the summer of 2011, they were
constantly asking “Who’s going to buy all those bonds we’re issuing?”
And they kept arguing that while yes, someone was buying them now, those
purchases will dry up any day now. In 2009 it was the argument that US
Treasuries were being bought only through an unsustainable “carry
trade”; in 2010-2011 it was only QE2 that was supporting bond prices;
and so on.
Meanwhile, economists like me or Ben Bernanke
were arguing that this was the wrong question: Asset prices mainly
reflect the willingness of people to hold the stock of assets out there,
not the flow of new assets being created, so that obsessing over who
happened to be buying the flow today was wrong and created a false sense
of fragility.
Events have largely confirmed the stock view.
But why would finance people have leaned toward a flow view? One
answer, I think, is that while demands for stocks are the big story,
day-by-day movements in asset prices — movements that are usually just a
fraction of a percent — do often reflect the order flow. And here’s the
thing: while those day-to-day fluctuations aren’t important for
economic policy, they’re all-important for traders trying to make money
(which is why getting your trades in a millisecond before your rivals is
a big business).
So finance guys were taking the kind of thing
they worry about in their business, asset price movements driven by
flows, and extrapolating it to macroeconomics, where it didn’t belong.
And this brings me to my second point:
deficit scoldery, in addition to being in the class and industry
interest of the scolds, was a way to assert the value of what they knew
over the ideas of pointy-headed economists. Think about it: finance
industry types know, or think they know, a fair bit about what goes on
in markets — buyers and sellers, confidence, etc.. But here we were in a
macroeconomic situation, the liquidity trap, which nobody in the West
had seen for three generations.
And there were these guys with beards and
cheap suits telling everyone that to understand what was going on you
needed to know macroeconomic theory and a lot of musty old economic
history. I suppose Wall Street and City guys could have decided to sit
down and read textbooks and history books; yeah, right. It was much more
natural for them to defend their turf, to declare that book learning
was beside the point, that they knew markets and how markets worked and
could tell you that those deficits were putting us in grave danger.
I don’t think that any of the reasons I’ve
described are mutually exclusive. Ego, political interest, and personal
interest all combined to encourage finance types to tell a story about
the world that pushed governments toward austerity. And since nobody
ever admits being wrong about anything, it just keeps happening."
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Automobiles
Wheelies: The Car Tipping Edition
Hooligans tip Smart cars around San Francisco; some Toyota factories replace robots with people.
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N.Y. / Region
‘An Addict With Friends’
Robert Aaron, who had stayed largely in the background as a musician, suddenly became a national news figure when he was presented as the man who sold deadly heroin to Philip Seymour Hoffman.
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U.S.
Big G.O.P. Donors Stir Senate Runs
Democrats in races that will help determine control of the Senate are burning through campaign cash as they fend off attacks from conservative groups.
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Sports
Alex Ovechkin Reaches 50-Goal Mark for Fifth Time in Career
The Washington right wing became the 11th player in league history to do so, scoring in a 4-1 victory over St. Louis.
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Opinion
Big Bang to Little Swoosh
The discovery of gravitational waves in the fabric of space may go down as one of the greatest in the history of science.
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U.S.
Lobby for Small Brewers, Concerned Over Rule, Finds Friends in Washington
Many members of Congress have rallied to the cause of their home-state beer makers.
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N.Y. / Region
Pre-K Victory Ad With Mayor de Blasio’s Family Aims to Help Him Regain His Footing
Allies of Bill de Blasio spent nearly $500,000 to put the ad on the air, and they plan to spend more to keep it on through the month.
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Sports
Surgical Infections End Ian Thorpe’s Career
The five-time Olympic gold medalist Ian Thorpe, 31, will never swim again after contracting two potentially deadly infections during shoulder surgery, his agent said.
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N.Y. / Region
Testimony Still Sought on Shut Lanes at George Washington Bridge
Investigators in New Jersey say they will begin calling witnesses to testify despite a judge’s ruling that two former aides to Gov. Chris Christie did not have to comply.
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N.Y. / Region
Another Prosecutor Is Said to Investigate Port Authority
The Manhattan district attorney’s office has subpoenaed documents concerning a range of the troubled agency’s major construction projects, a person with knowledge of the matter said.
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Opinion
The Apple Chronicles
These days, the tech industry is battling over patents instead of new products.
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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.
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Sunday Review
Reclaiming the Words That Smear
Female politicians make dismissive words work for them.
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World
Mexico: Convicted Trafficker Now Aiding U.S. Officials
The United States attorney in Chicago said that a top member of the Sinaloa gang had been cooperating with the authorities since he pleaded guilty to drug trafficking charges a year ago.
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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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World
Warily, Jordan Assists Rebels in Syrian War
Jordan has been quietly providing a staging ground for the rebels and their foreign backers on Syria’s southern front, but many say the aid is not enough.None of the parties can afford to be seen as hostile to all.
The peace when it comes will be dramatic.
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Real Estate
New York Boomers on Hipster Turf
An older set is moving into the city’s hip neighborhoods. Why? Because that’s where the action is.
4Allies of Bill de Blasio spent nearly $500,000 to put the ad on
the air, and they plan to spend more to keep it on through the month.
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Automobiles
Wheelies: The Car Tipping Edition
Hooligans tip Smart cars around San Francisco; some Toyota factories replace robots with people.
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N.Y. / Region
‘An Addict With Friends’
Robert Aaron, who had stayed largely in the background as a musician, suddenly became a national news figure when he was presented as the man who sold deadly heroin to Philip Seymour Hoffman.
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U.S.
Big G.O.P. Donors Stir Senate Runs
Democrats in races that will help determine control of the Senate are burning through campaign cash as th
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Sports
Alex Ovechkin Reaches 50-Goal Mark for Fifth Time in Career
The Washington right wing became the 11th player in league history to do so, scoring in a 4-1 victory over St. Louis.
10
Opinion
Big Bang to Little Swoosh
The discovery of gravitational waves in the fabric of space may go down as one of the greatest in the history of science.
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U.S.
Lobby for Small Brewers, Concerned Over Rule, Finds Friends in Washington
Many members of Congress have rallied to the cause of their home-state beer makers.
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U.S.
Pressing Obama’s Agenda, Maryland Lawmakers Raise Minimum Wage
The General Assembly’s vote was a victory for Gov. Martin O’Malley, who said on Monday that he would also sign a bill to decriminalize possession of small amounts of marijuana.
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Sports
Surgical Infections End Ian Thorpe’s Career
The five-time Olympic gold medalist Ian Thorpe, 31, will never swim again after contracting two potentially deadly infections during shoulder surgery, his agent said.
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Sports
Devils Win; Are a Point From a Playoff Spot
Travis Zajac scored the go-ahead goal on a deflection in the second period to help the Devils earn a point in their seventh straight game.
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World
Facing His Torturer as Spain Confronts Its Past
José María Galante says he was tortured by an infamous enforcer of the Franco dictatorship in the 1970s. He is seeking to prosecute the man in an Argentine court.
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