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There was a Memorial Service for Paul Samuelson last weekend. A video of the service and texts of speeches are available and they are quite interesting. Ricardo Caballero’s speech has a lovely passage where he describes a faculty lunch on a snowy day. To a small group of colleagues, Samuelson held forth on a thesis of Alberto Calderon, John Nash’s contemporary at M.I.T. Caballero says:
“This episode left such an impression on me that I decided to take the afternoon off to savor the moment. (And afternoons off are not my thing, as many of you
know…) I drove home in complete awe. The silence that only snow can produce, served to exacerbate the surreal feeling I was experiencing. Much like what one feels when visiting the Basilica di Santa Croce in Florence, where names such as Michelangelo, Galileo, and Machiavelli are buried: Sheer and pure admiration for a great mind.”
We noticed that professional golfers today have ads on their hats, sleeves, collars, belt-buckles, shoes, etc. while in the past few had more than one or two ads. At an individual level this makes sense but collectively it shows that the PGA would do better to centralize their negotiations with advertisers.
When Phil Mickleson considers selling another ad he has to lower his price. He trades off the additional sale versus the reduction in the price to decide whether it is worth it. He doesn’t take into account how his increased supply lowers the price of ads for all PGA golfers. When this negative externality is not internalized, the PGA as a whole sells too many ads. PGA-wide ad revenue would increase if they could negotiate ads as a group rather than individually.
Why don’t they? In the short-term it would be simple. Each golfer reports the ad revenue he is currently earning. Then an agent for the PGA negotiates with advertisers to sell a block of ads and distributes them optimally across golfers. This optimization would not only involve keeping quantity low but it would also take into account complementarity between golfer and ad, screen time, diversification, etc. Then, the total ad revenue would be shared among the players in some way that gives each player at least as much as he was earning individually. Since total revenue would be higher, there would be money left over to divide up in some way.
The problem is how to manage this over time. In order to keep a majority of players willing to go along with it, they will have to be promised at least as much as their autarky value. But the most recent public information about that value was recorded just before they entered the cooperative agreement. Over time that information depreciates as players rise and fall and new players arrive.
But privately, each individual player would be able to estimate their ad revenues should he go it alone. When the players bargain over shares, each individual player will exaggerate his earnings potential and insist on compensation for his outside option. When public information is weak enough, these demands can add up to more than the group can earn, at which point bargaining breaks down and autarky prevails.
When you are competing to be the dominant platform, compatibility is an important strategic variable. Generally if you are the upstart you want your platform to be compatible with the established one. This lowers users’ costs of trying yours out. Then of course when you become established, you want to keep your platform incompatible with any upstart.
Apple made a bold move last week in its bid to solidify the iPhone/iPad as the platform for mobile applications. Apple sneaked into its iPhone OS Developer’s agreement a new rule which will keep any apps out of its App Store that were developed using cross-platform tools. That is, if you write an application in Adobe’s Flash (the dominant web-based application platform) and produce an iPhone version of that app using Adobe’s portability tools, the iPhone platform is closed to you. Instead you must develop your app natively using Apple’s software development tools. This self-imposed-incompatibility shows that Apple believes that the iPhone will be the dominant platform and developers will prefer to invest in specializing in the iPhone rather than be left out in the cold.
Many commentators, while observing its double-edged nature, nevertheless conclude that on net this will be good for end users. Jon Gruber writes
Cross-platform software toolkits have never — ever — produced top-notch native apps for Apple platforms…
[P]erhaps iPhone users will be missing out on good apps that would have been released if not for this rule, but won’t now. I don’t think iPhone OS users are going to miss the sort of apps these cross-platform toolkits produce, though. My opinion is that iPhone users will be well-served by this rule. The App Store is not lacking for quantity of titles.
And Steve Jobs concurs.
We’ve been there before, and intermediate layers between the platform and the developer ultimately produces sub-standard apps and hinders the progress of the platform.
Think about it this way. Suppose you are writing an app for your own use and, all things considered, you find it most convenient to write in a portable framework and export a version for your iPhone. That option has just been taken away from you. (By the way, this thought experiment is not so hypothetical. Did you know that you must ask Apple for permission to distribute to yourself software that you wrote?) You will respond in one of two ways. Either you will incur the additional cost and write it using native Apple tools, or you will just give up.
There is no doubt that you will be happier ex post with the final product if you choose the former. But you could have done that voluntarily before and so you are certainly worse off on net. Now the “market” as a whole is just you divided into your two separate parts, developer and user. Ex post all parties will be happy with the apps they get, but this gain is necessarily outweighed by the loss from the apps they don’t get.
Is there any good argument why this should not be considered anti-competitive?
Obama’s Nuclear Posture Review has been revealed. The main changes:
(1) We promise not to use nuclear weapons on nations that are in conflict with the U.S. even if they use biological and chemical weapons against us;
(2) Nuclear response is on the table against countries that are nuclear, in violation of the N.P.T., or are trying to acquire nuclear weapons.
This is an attempt to use a carrot and stick strategy to incentivize countries not to pursue nuclear weapons. But is it any different from the old strategy of “ambiguity” where all options are left on the table and nothing is clarified? Elementary game theory suggests the answer is “No”.
First, the Nuclear Posture Review is “Cheap Talk”, the game theoretic interpretation of the name of our blog. We can always ignore the stated policy, go nuclear on nuclear states or non-nuclear on nuclear states – whatever is optimal at the time of decision. Plenty of people within the government and outside it are going to push the optimal policy so it’s going to be hard to resist it. Then, the words of the review are just that – words. Contracts we write for private exchange are enforced by the legal system. For example a carrot and stick contract between an employer and employee, rewarding the employee for high output and punishing him for low output, cannot be violated without legal consequences. But there is no world government to enforce the Nuclear Posture Review so it is Cheap Talk.
If our targets know our preferences, they can forecast our actions whatever we say or do not say, so-called backward induction. So, there is no difference between the ambiguous regime and the clear regime.
What if our targets do not know our preferences? Do they learn anything about our preferences by the posture we have adopted? Perhaps they learn we are “nice guys”? But even bad guys have an incentive to pretend they are nice guys before they get you. Hitler hid his ambitions behind the facade of friendliness while he advanced his agenda. So, whether you are a good guy or bad guy, you are going to send the same message, the message that minimizes the probability that your opponent is aggressive. This is a more sophisticated version of backward induction. So, your target is not going to believe your silver-tongued oratory.
We are left with the conclusion that a game theoretic analysis of the Nuclear Posture Review says it seems little different from the old policy of ambiguity.
My memory is not so good but it seems to me that professional golfers didn’t used to look so much like race cars.
Perhaps they have been consulting with auction theorists. Selling ad space on your shirt is like a multi-unit auction but with an interesting twist. Like any auction you want to insist on a reserve price to keep revenues high. The reserve acts as a threat not to sell unless bids are high enough and this induces more agressive bidding. Normally this leads to under-supply, just as a textbook monopolist restricts output to keep prices high.
But here’s the twist. After you have sold the ad on your hat, your auction for an ad on your lapel is a threat against the advertiser on your hat. If you sell an ad on your lapel it’s going to take some focus off the hat.
That means it is in both yours and the hat-advertiser’s interest to have him bid for the lapel ad. Yours because more competition is better, and his because he wants to keep the competitors off your lapel. Now think about how your reserve price for the lapel-auction works. Just as before, for the new bidders it is an inducement to bid higher. But for the hat-guy it’s an inducement to lower his bid for your lapel. If you set a high reserve then he can safely lose the auction for your lapel and expect that nobody else will win, which for him is just as good as winning.
This leads you to set a lower reserve on your lapel than you otherwise would. In effect this is a threat to the hat-hawker that if he doesn’t bid high enough to keep your lapel clean, you are going to put someone else’s logo there. That is, you are over-supplying ads (relative to the situation in which the ads had no spillovers.)
When these principles are put to use, two kinds of outcomes can occur. If there is a high enough bidder you will sell exclusive advertising to that bidder. If not, you will sell lots of little ads to little bidders.
While we are on the subject, here are recent prices for apparel real-estate.
A new paper by Bollinger, Leslie, and Sorenson studies Starbuck’s sales data to assess the effects of New York City’s mandatory calorie posting law. Here is the abstract:
We study the impact of mandatory calorie posting on consumers’ purchase decisions, using detailed
data from Starbucks. We find that average calories per transaction falls by 6%. The effect is almost
entirely related to changes in consumers’ food choices—there is almost no change in purchases of beverage calories. There is no impact on Starbucks profit on average, and for the subset of stores located close to their competitor Dunkin Donuts, the effect of calorie posting is actually to increase Starbucks revenue. Survey evidence and analysis of commuters suggest the mechanism for the effect is a combination of learning and salience.
And this bit caught my eye:
The competitive effect of calorie posting highlights the distinction between mandatory vs. voluntary posting. It is important to note that our analysis concerns a policy in which all chain restaurants, not just Starbucks, are required to post calorie information on their menus. Voluntary posting by a single chain would result in substantively different outcomes, especially with respect to competitive effects.
A natural response to these laws is that if it were in the interests of consumers, vendors would voluntarily post calorie counts. But if consumers are truly underestimating calories, then unilateral posting by a single competitor would backfire. Consumers would be shocked at the high calorie counts at Starbucks and go somewhere else where they assume the counts are lower.
It’s as if someone at the New York Times scanned this blog, profiled me, and assembled an article that hits every one of my little fleemies:
(Follow closely now; this is about the science of English.) Phoebe and Rachel plot to play a joke on Monica and Chandler after they learn the two are secretly dating. The couple discover the prank and try to turn the tables, but Phoebe realizes this turnabout and once again tries to outwit them.
As Phoebe tells Rachel, “They don’t know that we know they know we know.”
Literature leverages our theory of mind.
Humans can comfortably keep track of three different mental states at a time, Ms. Zunshine said. For example, the proposition “Peter said that Paul believed that Mary liked chocolate” is not too hard to follow. Add a fourth level, though, and it’s suddenly more difficult. And experiments have shown that at the fifth level understanding drops off by 60 percent, Ms. Zunshine said. Modernist authors like Virginia Woolf are especially challenging because she asks readers to keep up with six different mental states, or what the scholars call levels of intentionality.
And they even drag evolution into it.
To Mr. Flesch fictional accounts help explain how altruism evolved despite our selfish genes. Fictional heroes are what he calls “altruistic punishers,” people who right wrongs even if they personally have nothing to gain. “To give us an incentive to monitor and ensure cooperation, nature endows us with a pleasing sense of outrage” at cheaters, and delight when they are punished, Mr. Flesch argues. We enjoy fiction because it is teeming with altruistic punishers: Odysseus, Don Quixote, Hamlet, Hercule Poirot.
Cordobés address: Marcin Peski.
My former colleague Oprah Winfrey reportedly resigned once the grading of term papers got too much for her.
Luckily, for busy Oprahs and slightly less busy Baligas and Elys everywhere, capitalism has come up with a solution – outsourcing of grading to India:
Virtual-TA, a service of a company called EduMetry Inc., took over. The goal of the service is to relieve professors and teaching assistants of a traditional and sometimes tiresome task — and even, the company says, to do it better than TA’s can.
The graders working for EduMetry, based in a Virginia suburb of Washington, are concentrated in India, Singapore, and Malaysia, along with some in the United States and elsewhere. They do their work online and communicate with professors via e-mail. The company advertises that its graders hold advanced degrees and can quickly turn around assignments with sophisticated commentary, because they are not juggling their own course work, too.
The company argues that professors freed from grading papers can spend more time teaching and doing research.
Who does the grading and how do they know how to grade? Answer:
Assessors are trained in the use of rubrics, or systematic guidelines for evaluating student work, and before they are hired are given sample student assignments to see “how they perform on those,” says Ravindra Singh Bangari, EduMetry’s vice president of assessment services.
Mr. Bangari, who is based in Bangalore, India, oversees a group of assessors who work from their homes. He says his job is to see that the graders, many of them women with children who are eager to do part-time work, provide results that meet each client’s standards and help students improve.
“Training goes on all the time,” says Mr. Bangari, whose employees work mostly on assignments from business schools. “We are in constant communication with U.S. faculty.”
Such communication, part of a multi-step process, begins early on. Before the work comes rolling in, the assessors receive the rubrics that professors provide, along with syllabi and textbooks. In some instances, the graders will assess a few initial assignments and return them for the professor’s approval.
When will I be replaced by a robot?
Frances Xu wrote to me:
Someone asked me why evolution lets a bee die after it stings. I don’t seem to have a good theory. I have a bad one: it shows that bees are of a crazy type, so people are more afraid of them. Just wonder if you have any thoughts on this.
There are two ways to phrase the question. First, why would a bee sacrifice its life to sting me. Second, why would Nature design the bee so that it dies after it stings? The answer to the second question is that after stinging the bee’s life is not worth living. The answer to the first is that it wasn’t worth much before either.
The queen honeybee uses sperm stored from her maiden flight to fertilize and lay eggs. Time seems to be the only binding constraint on how many bees she can bring to life. There is no opportunity cost because her capacity is essentially unlimited. This means that the marginal bee has close to zero net marginal value for the colony.
The marginal bee’s value at birth incorporates the value of stinging together with the value of all of the other services it contributes to the colony. When the bee loses its stinger it loses its ability to sting and its value to the colony drops a discrete amount. Now its value to the colony is negative. The cost in terms of demand on colony resources for survival outweighs the benefits.
At this point it is optimal for the colony that the bee should die.
Now if the bee were genetically identical to the colony then its interests would align perfectly and it would therefore also be in the bee’s interest to die. In fact the bee is genetically identical only to a component of the colony: those other bees produced from the sperm of the same drone. (Roughly 15 drones mate with the queen.) Since the bee’s contribution to the colony is presumably shared by all bees, this means in fact that the bee has even less incentive to go on living.
The final variable is whether the bee could expect someday to mate with a new queen and get his genes into a new colony. That prospect would give the bee reason to live. But worker bees are sterile.
Drones are not. And drones don’t die when they sting. (update: drones don’t have stingers.)
The phamily kind. Let’s say you are hiding something from your husband. For example, let’s say that you are trying to teach your husband a lesson about putting things “in their right place” and you hide his newly-arrived tomato seeds. Its time to germinate them indoors to be ready for a mid-May transplanting and he comes to you and says
H: I found the seeds.
Y: You did?
H: Yep. Were they there all the time? I am sure I looked there.
Y: I thought you would have. That’s where you always put stuff. You never put stuff in the right place.
H: I always put stuff there? Like what?
Y: Like remember you put X and Y and Z there and I couldn’t find them?
H: Ahh yes, X, Y and Z, I remember them well. Thanks for telling me where my tomato seeds are.
If I have a jug of milk that is close to its expiration date and another, newer and unopened, jug of milk I will use up the old milk before opening the new one.
But if I have a batch of coffee that was roasted 2 weeks ago and a new, fresher batch comes in, I will open the new batch and save the old batch to be used up after the newer one is done.
The difference derives from shape of their expiration curves. Milk stays relatively fresh for a while and then rapidly deteriorates. It’s freshness curve is concave. Coffee quality deteriorates quickly after roasting and then stays relatively constant after that. 2 month old coffee is just as agreeable as 5 days old but both are much worse than 1 day old. Coffee’s freshness curve is convex.
The shape of the expiration curve determines whether you like or dislike mean-preserving spreads in the age profile of your stash. Convexity means you would choose 1/2-new 1/2-old over all-medium. Concavity means you have the opposite preference.
What are the expiration curves of other things?
Convex: eggs, bananas, significant others (except mine of course, she gets fresher with age.)
Concave: vegetables, bread, co-authors, this blog post
1. Possible future Prime Minister and Chancellor of Exchequer of Britain in earlier days. A Who’s Who for the David Cameron photo.
2. Of course, it’s hard to join the Bullingdon Club. But you can approximate their social and dress codes (y-updated).
Rats in the lab learn to play best-responses in a repeated prisoner’s dilemma. The rats were given rewards according to which of two compartments each walks into, and these rewards were structured as in a Prisoner’s dilemma. First the rats were given a “training session” where they learned the payoff function. Then the strategy of one rat was manipulated as the experimenters manually placed the rat into compartments before the other rat made his choice.
When the control rat played a random strategy, the experimental rat mostly “defected” but when the control rat played a reciprocating strategy (Tit-for-tat), the experimental rat not only learned to cooperate but also how to invite escape from a punishment phase.
It may not be entirely surprising that rats cooperated in the Prisoner’s Dilemma. After all, animals often cooperate in nature to altruistically serve the group, whether that means hunting in packs to get more meat, or a surrogate mother animal adopting an abandoned baby to boost the pack’s numbers. Still, there’s no direct evidence that shows rats grasp the concept of direct reciprocity. Given that the rats in this study changed their strategy based on the game their opponent was playing, and cooperation rates were only high when the rats played against a tit-for-tat opponent, the authors showed, perhaps for the first time, that rats directly reciprocate.
There are many differences between men and women that create delicate asymmetries in a relationship. But few are as polarizing and mysterious as a man’s appreciation of his own farts.
Beneath the Dutch ovens, pulled fingers, and silent but deadlies, there must be a scientific explanation and I believe that, as usual, it all boils down to evolution and sex.
Monogamy is relatively rare among animals and for good reason. Monogamous males forego the opportunity to have offspring by other mates. This sacrifice in quanitity is evolutionarily beneficial for the male only if monogamy has some offsetting benefits. The obvious benefit would be the male’s investment the survival probability of the offspring in the monogamous relationship. But the return on this investment is always threatened by the female’s incentive for cuckoldry: secretly being impregnated by a superior male and passing on the burden of rearing to the cuckold.
The only way this incentive can be mitigated is the presence of a signature that identifies the child as the true descendant of the monogamous father. There are in principle many ways this signature could have evolved, but natural selection favors solutions that piggyback on existing physiology and minimize incidental costs. The passing of gas makes an ideal signature because of two facts. First, the rapid development of intestinal flora means that infants are already especially gassy. Second, as documented by Professor Hugh Kuddachize of the University of Wafting, the susceptibility to various lactose-feeding bacteria is determined by genes on the Y-chromosome.
That is, a male infant’s farts will smell similar to those of his biological father. This enables the father to determine parenthood at an early stage. And because the mother can’t know in advance whether the child will be male or female, this 50% detection probability is enough to dissuade her from sneaking around. And the father’s pleasure at the smell of his son’s farts is Nature’s incentive mechanism to keep him at home while still shielding him from cuckoldry.
The humorous byproduct of this development of course is that men love the smell of their own farts. And we can now understand the asymmetry. There is no uncertainty about maternal parentage, so no need for any signature. On the other hand, bacterial infection of the intestine is a signal of the child’s health and Nature accordingly programs the mother to respond to the olfactory expression with alarm. The father’s farts carry the same signature and induce the same response.
Understanding our evolutionary origins helps us understand ourselves and in this case it teaches us to appreciate and indeed cherish the gas that keeps the family together.
Growing up in California I didn’t get much experience driving in the snow and I had a steep learning curve when I moved to Chicago. So it’s pretty important to me to make sure that my kids get an early start. My 3 year old made a lot of progress with his driving lessons last fall and so I wanted to strike while the iron was hot and get him out on the road in some snow this winter.
There are certainly some new challenges involved. For safety reasons I wanted him to learn in a car with all-wheel-drive. Only my car has that, but my car is a manual transmission. He’s a big boy but still its a big reach down to that clutch. We figured out that he could see a lot better with a simple convex mirror held at just the right angle.
It takes a lot of practice to do that and shift gears quick enough to get his hands back on the steering wheel, so we had to start early before the big snows hit to make this transition as smooth as possible.
Another big issue with driving in the snow of course is that the car can easily get stuck, especially when you are just learning. Before I’m going to let him take the wheel in a major snow storm I want to make sure he knows how to get the car out of rut when necessary. We are firm believers in teaching our children to be self-sufficient. So we practiced this a lot.
As with every big milestone in a child’s life, there were many ups and downs. Not to mention some real nail-biting moments as you would expect. So you could imagine our pride and emotion when he was finally ready for his first solo ride. (Click here to see video if you are using google reader)
See this interesting new approach to MBA teaching. Here is an interesting novel approach by a new school in Moscow and the associated Times story:
New York Times, April 1, B1
MBA students pay high fees, leave the job market for two years and lose income and face the stress of getting a job when they’re done. Why?
The value added from an MBA must be high. Where does it come from? The teaching, the professors, the exams and grades. All that value has to be substantial. But undoubtedly, another huge part of the value comes from meeting other like-minded, smart, beautiful, go-getting people.
But the value of networking can be generated without a bricks-and-mortals B School. At least this is the bet taken by a budding education entrepreneur, Anton Napolitanokich, based in Moscow.
“Leading B Schools in the US and Europe are not going to risk their reputation by going digital,” said Napolitanokich. “And nor are great students in those regions going to give up the brand reputation that a HBS degree gives you to do something risky. But here in Moscow, there is little competition and a more amenable market. The Virtual MBA is the future of business education”
Napolitanokich’s business model is based on social networking websites like Facebook and as well pure, old-fashioned “networking” in nightclubs! “MBA students are in constant wireless contact already. All they need is someone to screen the group they interact with. That’s the key to what the traditional bricks and mortar B Schools do and we will replicate that. Of course we are total unknowns right now. So, we will do an excellent job letting in great students in our first round. We will let them in for free to prime the pump. If it works out, everyone will want to interact with our star students. In the next rounds, we will auction off entry into this select group It is kind of like a nightclub: you let in the good-looking people for free and then wait for everyone else to line up to get in. Of course, we can’t let in everyone – we have to maintain a high quality pool. So, we’ll restrict the number of spots and let the bidding takeoff! If it works, the price will be even higher than a traditional MBA! Go to www.virtualmba.com and apply for admission right away! It’s the future – even Sergey Brin is interested in the idea. He’s from Moscow you know. Brin ses we are the new Amazon and they are the old Barnes and Noble”
But what will the students actually be doing? Napolitanokich envisages that students will play interactive business games. The point of the games is more to get the students to get to know each other, establish networks and friendships. In a business coup, Napolitanokich has partnered with Disney to produce interactive business games. Disney’s Club Penguin website has been a huge hit with the elementary school set. Kids get to choose an avatar in penguin form to play interactive video games and hang out with other avatar penguins in chat rooms. Napolitanokich envisages a similar scenario for the b school games. Preppy J Crew wearing MBA avatars will engage in strategic competition, negotiation and marketing and have time to relax in virtual bars and restaurants. Disney finds the model every promising and hopes to create connecting sites all the way from Club Penguin up the age ladder to Virtual MBA, training budding entrepreneurs in high school.
Of course, only so much can be achieved by networking remotely. Actual face-to-face communication is vital too. Napolitanokich envisages intense live-in weeks where flocks of virtual MBAs fly in to isolated resort locations for intense interactive teaching sessions. So, some professors are inescapable he admits. But they will be a new breed of hyper-profs, flying in and out for short trips, living everywhere and nowhere. Ciphers who facilitate and coordinate student-student interaction but otherwise get out of the way. The still young century welcomes a new model for education.
Hope it does not work out for Anton, otherwise I’m out of a job!
President Obama has used the Congressional recess to appoint Paul Krugman as Vice Chairman of the Federal Reserve system.
Obama spent the first year in office wooing centrists like Olympia Snowe. That strategy slowed down his reform agenda and did not pay off. The President had to rely on old hardball Chicago politics to pass healthcare reform. He has realized his hope of appealing to the center of the political spectrum is futile. And in any case, it’s the diehard party faithful that decide midterm elections. What better way to energize the base than by appointing their hero, the self-styled conscience of liberalism and economics Nobel Prize winner, Paul Krugman, to the Federal Reserve?
Krugman stands no chance of getting the 60 votes required to survive the usual Senate confirmation process. As his appointment has no direct impact on the budget, the arcane procedure known as “reconciliation”, that requires only a simple majority, cannot be used to give him an up and down confirmation vote. Ironically, Krugman will have a huge impact on the budget as he favors expansionary monetary and fiscal policy in recessions. A perpetually gloomy forecaster, Krugman almost always believes a recession is round the corner and for all practical purposes favors large budget deficits all the time. Even if reconciliation could be used, with moderate Democrats against him, it is not clear that Krugman could draw 50 votes. So, a recess appointment was the only possible strategy for Obama.
This is obviously a dangerous move for the President. He is used to hiding his liberal agenda behind the fig-leaf of bipartisanship. With the leaf removed, he feels naked and vulnerable. Obama has gambled that the extreme left must be brought out to retain the Democrats’ hold on Congress. With the Krugman appointment as a flashpoint, Obama risks losing moderates and perversely provoking the extreme right to turn out and vote.
The benefits and risks for Obama are clear but what’s in it for Krugman? He has long wanted to get his hands on the levers of economic policy. But at what cost? He will have to step down from his sinecure as a Times’ columnist. He will have to mothball his textbook, as Ben Bernanke did before him. Most of all, he may regret the demise of the speaking engagements that have helped to bankroll his many houses and apartments in America and beyond. A favorite of the Hollywood glitterati – Ben Affleck is a close friend – Krugman will now have to give up the organic-chicken-and-chardonnay circuit and attend regular Fed meetings in Washington D.C. A dream for a regular economist but perhaps a letdown for a media star like Krugman. Of course as a recess appointee, Krugman can only serve until the next Congress is seated – maybe that is just the right amount of time for him to substitute Ben Bernanke for Ben Affleck in his speed dial.
All in all, an intriguing appointment for all parties concerned.
Cheap Talk 