Why is the very sharp Ken Rogoff so sure higher interest rates are here to stay?; the CRISPR anti-sickle cell miracle; our economy really is in miraculous shape; Martin Wolf on the crisis of...
"What is noteworthy is not that Trump wants to enhance presidential power — some of us were warning about that issue years ago — but the degree to which Republican elites and voters have wholeheartedly embraced these ideas as well. If he wins again, he will likely do so with GOP majorities in the House and Senate along with a conservative Supreme Court. "
As in Nazi Germany, a sizable fraction of the country want this authoritarianism . And let's call a spade a spade - Fascism. It seems part of the DNA of the USA, from slavery, to the near genocide of the indigenous population. We think we have progressed, but this has simply hidden itself until reemging with permission. Trump is just one cultish figurehead, but there are many others, and it needs to be stamped out so that it crawkls back under the rocks again.
Rogoff: Those "rapidly aging populations," have been "rapidly" aging since the 1980s. It has become one of those tropes that people throw in no matter what they are arguing - especially when they want to rein in public spending. They were saying the same thing almost a decade ago during the "sovereign deb crisis," which turned out to be the absence of "the lender of the last resort crisis." It all went away after Draghi's "whatever it takes" and that first Securities Market Program. Moreover, population aging was being cited back then for lower interest rates. Now it is supposed to push interest rates up. Go figure.
Look, the population has been aging since at least the late nineteenth century. People may want to study its relationship with economic variables before arguing from both sides of their mouths.
Rogoff says interest rates for the next decade will likely remain higher than they were the decade after the financial crisis. Fed Funds Rate from 2009-2018 averaged about 0.5%. A prediction that future interest rates will average over 0.5%, while allowing that they will fall a lot during recessions, doesn't sound that controversial. But maybe someone made a spreadsheet error.
Along with Brad's critique, let me suggest people read a 2018 IMF working paper (Interest-Growth Differentials and Debt Limits, P. Barrett, WP18/22, 2018) and Ball, Elmendorf, Mankiw, JMCB Nov 1998, "The Deficit Gamble," and of course the CBO's "The 2023 Long-Term Budget Outlook." First, CBO predicts real interest rate on U.S. debt will average 1.1%--and reach only 1.4% in 2053--over the next thirty years. That's alongside their prediction that debt/GDP ratio grows to 1.81 by thirty years from now. "The deficit gamble" and Barrett's paper document that r<g on average over a century and more--by on average between 1% and 2%. This is evidence (or facts)--not confirmation bias--that lower rate environments are not an anomaly but a persistent feature, and that the CBO believes there is a continuing sufficient appetite for the burgeoning supply of US treasuries into the next few decades. Sure, there are risks--not imminent ones, I would argue-- associated with our current projected fiscal policies, but also real costs to cutting government benefits over the next few decades. How about less "fiscal fearmongering" and more "watchful waiting?"
Economics: The recovery from the COVID recession was definitely better than expected and accomplished with less inflation than some would have though necessary. The question for economists who were surprised is, did the Fed do a better job of setting policy instruments than they expected or did the economy respond differently. Was the mistake of political economics or of economic modeling?
Rogoff: interesting speculation. Higher than what? Real long-term rates higher than today? What should who do different if he were wrong? Either way we want to raise taxes to reduce deficits, right?
'How will these therapeutic advances be translated to the millions of SCD patients living in Africa, Asia and beyond? Speaking at GEN’s “The State of Biotech” virtual event in 2022, Doudna predicted that a one-time in vivo delivery approach—without ex vivo manipulation and bone marrow transplantation—would ultimately be achievable. “Is that going to be possible? My answer is yes,” she said. “Is it possible today? No.”'
Casgevy treatment price is $2.2m - apart from the hospital fees. IOW, totally unscalable to treat even US sufferers, let alone those in Africa.
IIRC, it was once thought (still true?) that sickle cells were protective against malaria by preventing the parasite from entering the RBCs. If this is true, then eliminating SCD in Africa might worsen mortality UNLESS we also eradicate the plasmodium parasite.
I can only hope we get the development of a simpler way to change stem cells in the marrow without needing to do the difficult marrow operations to allow the new stem cels to proliferate and treat these types of diseases. Ideally, every fertilized egg should be made defect-free of debilitating genetic diseases simplifying the process of treatment. For genetic diseases that can be treated at the somatic level, we need retro-virus or similar delivery mechanisms.
Casgevy is a start, but will be available to only a few, unless there is a massive government funding program to treat SCD in the US and elsewhere. Since we cannot even manage to raise teh funding to mitigate global heating, I fear that the US and elsewhere will have potential cures that are only available to the very wealthy.
Barry Ritholtz: Yep, the response from labor supply has been astounding. But that is also the type of reallocation of time that higher wages would bring about. Plus, there may have been a positive "hysteresis," in the sense of greater job "flexibility" and such. Gains in participation by the people with disabilities and by women of child-bearing age has been strong. So good of Barry to tell his audience that something miraculous has happened. But it might also be time to revisit the notion of labor market "hysteresis" and recognize that it doesn't only carry a negative connotation (as it did in the European context back in the 1990s).
Re: The Authoritarianism Is The Point, Part II
"What is noteworthy is not that Trump wants to enhance presidential power — some of us were warning about that issue years ago — but the degree to which Republican elites and voters have wholeheartedly embraced these ideas as well. If he wins again, he will likely do so with GOP majorities in the House and Senate along with a conservative Supreme Court. "
As in Nazi Germany, a sizable fraction of the country want this authoritarianism . And let's call a spade a spade - Fascism. It seems part of the DNA of the USA, from slavery, to the near genocide of the indigenous population. We think we have progressed, but this has simply hidden itself until reemging with permission. Trump is just one cultish figurehead, but there are many others, and it needs to be stamped out so that it crawkls back under the rocks again.
Rogoff: Those "rapidly aging populations," have been "rapidly" aging since the 1980s. It has become one of those tropes that people throw in no matter what they are arguing - especially when they want to rein in public spending. They were saying the same thing almost a decade ago during the "sovereign deb crisis," which turned out to be the absence of "the lender of the last resort crisis." It all went away after Draghi's "whatever it takes" and that first Securities Market Program. Moreover, population aging was being cited back then for lower interest rates. Now it is supposed to push interest rates up. Go figure.
Look, the population has been aging since at least the late nineteenth century. People may want to study its relationship with economic variables before arguing from both sides of their mouths.
"The very sharp Ken Rogoff."
Well, he excels, I suppose. Fortunately I wasn't drinking coffee when I read that.
Rogoff says interest rates for the next decade will likely remain higher than they were the decade after the financial crisis. Fed Funds Rate from 2009-2018 averaged about 0.5%. A prediction that future interest rates will average over 0.5%, while allowing that they will fall a lot during recessions, doesn't sound that controversial. But maybe someone made a spreadsheet error.
Re: Ken Rogoff and higher interest rates.
Along with Brad's critique, let me suggest people read a 2018 IMF working paper (Interest-Growth Differentials and Debt Limits, P. Barrett, WP18/22, 2018) and Ball, Elmendorf, Mankiw, JMCB Nov 1998, "The Deficit Gamble," and of course the CBO's "The 2023 Long-Term Budget Outlook." First, CBO predicts real interest rate on U.S. debt will average 1.1%--and reach only 1.4% in 2053--over the next thirty years. That's alongside their prediction that debt/GDP ratio grows to 1.81 by thirty years from now. "The deficit gamble" and Barrett's paper document that r<g on average over a century and more--by on average between 1% and 2%. This is evidence (or facts)--not confirmation bias--that lower rate environments are not an anomaly but a persistent feature, and that the CBO believes there is a continuing sufficient appetite for the burgeoning supply of US treasuries into the next few decades. Sure, there are risks--not imminent ones, I would argue-- associated with our current projected fiscal policies, but also real costs to cutting government benefits over the next few decades. How about less "fiscal fearmongering" and more "watchful waiting?"
Economics: The recovery from the COVID recession was definitely better than expected and accomplished with less inflation than some would have though necessary. The question for economists who were surprised is, did the Fed do a better job of setting policy instruments than they expected or did the economy respond differently. Was the mistake of political economics or of economic modeling?
Roman History: Nice and nice choice of Times Roman as the font. :)
Rogoff: interesting speculation. Higher than what? Real long-term rates higher than today? What should who do different if he were wrong? Either way we want to raise taxes to reduce deficits, right?
Re: Real GDP Divided by the Labor Force since 1948
How does this help those whose wages are not keeping up with this growth? Isn't inequality the real danger here, not growth/capita?
'How will these therapeutic advances be translated to the millions of SCD patients living in Africa, Asia and beyond? Speaking at GEN’s “The State of Biotech” virtual event in 2022, Doudna predicted that a one-time in vivo delivery approach—without ex vivo manipulation and bone marrow transplantation—would ultimately be achievable. “Is that going to be possible? My answer is yes,” she said. “Is it possible today? No.”'
- https://www.genengnews.com/topics/genome-editing/fda-approves-casgevy-the-first-crispr-therapy-for-sickle-cell-disease/
Casgevy treatment price is $2.2m - apart from the hospital fees. IOW, totally unscalable to treat even US sufferers, let alone those in Africa.
IIRC, it was once thought (still true?) that sickle cells were protective against malaria by preventing the parasite from entering the RBCs. If this is true, then eliminating SCD in Africa might worsen mortality UNLESS we also eradicate the plasmodium parasite.
I can only hope we get the development of a simpler way to change stem cells in the marrow without needing to do the difficult marrow operations to allow the new stem cels to proliferate and treat these types of diseases. Ideally, every fertilized egg should be made defect-free of debilitating genetic diseases simplifying the process of treatment. For genetic diseases that can be treated at the somatic level, we need retro-virus or similar delivery mechanisms.
Casgevy is a start, but will be available to only a few, unless there is a massive government funding program to treat SCD in the US and elsewhere. Since we cannot even manage to raise teh funding to mitigate global heating, I fear that the US and elsewhere will have potential cures that are only available to the very wealthy.
Barry Ritholtz: Yep, the response from labor supply has been astounding. But that is also the type of reallocation of time that higher wages would bring about. Plus, there may have been a positive "hysteresis," in the sense of greater job "flexibility" and such. Gains in participation by the people with disabilities and by women of child-bearing age has been strong. So good of Barry to tell his audience that something miraculous has happened. But it might also be time to revisit the notion of labor market "hysteresis" and recognize that it doesn't only carry a negative connotation (as it did in the European context back in the 1990s).