9 ms·

Economist Bob Mundell has died

28 points by RickJWagner 6y ago

Causality1 6y ago
To clear some inevitable confusion, Zeus in this context is intended as a compliment. Bob Mundell is not a libertine with jealousy and anger issues.
billiam 6y ago
A man whose 1960s ideas were ideal for the seventies and helped destroy our economic system in the 1990s while enabling the billionaire winner take all society of today.
- pessimizer 6y ago
  Honoring a man who never got anything right. A man whose predictions were never bore any material fruit, but justified everything billionaires were going to do anyway.
- hindsightbias 6y ago
  After the stimulus bills of 2020 one would think everyone is a Keynesian (maybe excluding Rand Paul, he probably voted against it).
  - dragonwriter 6y ago
    The 2020 COVID relief wasn’t as much argued on Keynesian stimulus terms as, say, the 2009 ARRA stimulus, but more as disaster relief.
    - hindsightbias 6y ago
      They just don't want to use the K word.
    - imtringued 6y ago
      It goes both ways. The government closed businesses, but also gave them resources to stay in business. You can argue it was Keynesian, but you can also argue it wasn't. However, pretty much everything Biden did, was Keynesian.
- dang 6y ago
  Substantive critique is welcome, but please don't post rhetorical ideological drive-bys to HN. It leads to shallower, more repetitive, and nastier internet discussion—all of which is uninteresting. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
galago 6y ago
He also created some wild oil paintings. https://media.gettyimages.com/photos/economist-robert-mundell-is-photographed-touching-up-one-of-his-may-picture-id170078201?s=612x612 https://media.gettyimages.com/photos/economist-robert-mundel...
tw04 6y ago
The Zeus of economics? I'd say the last 50 years of wage stagnation for the working class and the massive increases in wealth inequality might call some of his theories into question...
- nickelcitymario 6y ago
  I think it was meant to convey the impact he had on economics, not as a vote of confidence for those contributions.
pydry 6y ago
>Somehow Keynesianism—and monetarism—limped into the 1970s, saying you can manage domestic demand and supply, and therefore growth and employment, by adjusting taxes and spending and the money stock in a country, even though Mundell’s field-defining articles of the previous two decades had shown that capital movements will overwhelm all efforts at domestic authorities to fine-tune their way to a desired result. It's weird the way this article determinedly avoids considering the notion that a hypothetical country (let's our hypothetical country "China") could impose capital controls to avoid being overwhelmed by inflows and outflows of capital and manage effective domestic growth by adjusting taxes and spending. This disproves Keynesianism, apparently. It's like saying that it is impossible to build anything next to the sea because it will be destroyed by waves.
- jariel 6y ago
  Capital controls come with huge costs, it's another form of import/export controls. Imagine being told the part you need to manufacture your car is 4x the normal price because of intense focus on capital controls, or worse, that you can't get it.
  - pydry 6y ago
    Imagine being Thailand in 1997: the stock market plunges 75% in one day, GDP contracts ~10%, a wave of bankruptcies, poverty and inequality skyrocketing while the government has to go begging to the IMF, accepting any and all demands that they make, no matter how unpopular. You're better off being China.
    - jariel 6y ago
      ? That crisis was literally started by misguided attempts at currency controls (!) i.e. Thai pegging their currency to USD and unable to 'hold the wall against the sea' so it eventually came crashing in. So yes, Thailand 1997 demonstrates very effectively one of the challenges with currency controls. Currency controls come with a cost, that has to be considered.
quickthrowman 6y ago
Hopefully supply-side economics is the next to die. It didn’t work in the Reagan 80s, and it didn’t work in the 2010s in Kansas [0] Laffer and this guy that died are a total joke. Their theories exist to give political cover to politicians who aim to line the pockets of the rich. [0]https://en.m.wikipedia.org/wiki/Kansas_experiment https://en.m.wikipedia.org/wiki/Kansas_experiment
- JumpCrisscross 6y ago
  > Laffer and this guy that died are a total joke Laffer curves are empirically corroborated [1][2]. For most taxes, there is a point past which raising the tax rate starts decreasing revenue. The problem was politicians defining a made-up number as that point and voters going along with it. [1] https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.475.7051&rep=rep1&type=pdf https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.47... [2] https://www.sciencedirect.com/science/article/abs/pii/S030439321100064X https://www.sciencedirect.com/science/article/abs/pii/S03043...
  - jayd16 6y ago
    Agreed. Its not controversial that at a 100% tax rate, work would not be done, and at a 0% tax rate no tax will be collected. The issue has always been using these points to extrapolate any policy you want because where you land on the curve or even the shape of said curve IS up for debate.
- gradys 6y ago
  I don't have comment on the legacy of supply-side economics and and how successful e.g. Reagan's economic policy was, but it looks to me like we have more of a supply-side issue right now than demand-side. We have shortages of semiconductors, congested ports, all of the supply issues with early COVID PPE, absurdly low housing supply in the most desirable places to live, and so on.
  - ohazi 6y ago
    The "supply side" of "supply side economics" is a red herring. The theory has less to do with what actually affects the supply of goods at any given time and more with the theory that lowering taxes and decreasing regulation always necessarily results in more supply and lower prices even when it clearly doesn't. The theory ignores everything else that affects supply and only focuses on complaining about taxes and regulation.
dragonwriter 6y ago
> Somehow Keynesianism—and monetarism—limped into the 1970s, saying you can manage domestic demand and supply, and therefore growth and employment, by adjusting taxes and spending and the money stock in a country, even though Mundell’s field-defining articles of the previous two decades had shown that capital movements will overwhelm all efforts at domestic authorities to fine-tune their way to a desired result. On the one hand is an attractively reasoned theoretical argument as to why it can’t ever work. [0] On the other side is the repeated, concrete experience that it does work. [0] Although, even per the article, it doesn’t show that in the case of “a solitary global economic hegemon”, which might, even if it was otherwise completely correct, be a pretty important limitation to its applicability to late-20th and early-(as in so far)-21st Century US policy.
- Judgmentality 6y ago
  My comment is a tangent, but I just love sharing this paraphrase whenever I can: Socialism is something that works in theory but doesn't work in reality. Wikipedia is something that doesn't work in theory but works in reality. Ideas are great, but ultimately what matters is reality.
  - WC3w6pXxgGd 6y ago
    Socialism doesn't even make sense in theory.
  - heterodoxxed 6y ago
    If Wikipedia editors were regularly getting merc'd by CIA-funded contras, we'd be talking about how Wikipedia only works in theory too.
    - adwn 6y ago
      Are you suggesting that the reason socialism doesn't work is that the CIA regularly kills, well, who exactly? The proponents of socialism? Hardly, they'd be assassinating 24/7 without making a dent. EDIT: To clarify, I'm not claiming that the CIA didn't murder socialist leaders. My point is that you can't look at all the failed socialist experiments and conclude that socialism would have succeeded if only the CIA hadn't murdered any socialist leaders.
mr-wendel 6y ago
The trick with economics is to realize that 99% of all discussion is about a particular flavor of economics. It's almost always about theory and implementation, not principles and abstractions. Inevitably, there is also a significant political aspect that is often (but not always!) overlooked. Even if there is a "raw" theory of economics that describes the "what" in a universally agreeable way it'll never tell us the "why" and "how" of it, let alone how politics should (or should not) be intertwined with the issues.
dale_glass 6y ago
What a strange metaphor. Why Zeus? Zeus is known for using violence to get whatever he wanted, and screwing anything that moved (despite being married)
throw0101a 6y ago
Paul Krugman tweeted this article that he wrote in 1999: > Later Mundell would broaden this initial insight by proposing the concept of the “impossible trinity”; free capital movement, a fixed exchange rate, and an effective monetary policy. The point is that you can’t have it all: A country must pick two out of three. It can fix its exchange rate without emasculating its central bank, but only by maintaining controls on capital flows (like China today); it can leave capital movement free but retain monetary autonomy, but only by letting the exchange rate fluctuate (like Britain–or Canada); or it can choose to leave capital free and stabilize the currency, but only by abandoning any ability to adjust interest rates to fight inflation or recession (like Argentina today, or for that matter most of Europe). * https://slate.com/business/1999/10/o-canada.html https://slate.com/business/1999/10/o-canada.html * Via: https://slate.com/business/1999/10/o-canada.html https://slate.com/business/1999/10/o-canada.html
bigbillheck 6y ago
More a Typhon than a Zeus.
BlueTemplar 6y ago
Hmm, and not a mention of the US reaching peak conventional oil production around 1970, which pushed trade balance in the red, and was the main reason behind the stagflation and the end of the gold standard...

28 points by RickJWagner 6y ago

To clear some inevitable confusion, Zeus in this context is intended as a compliment. Bob Mundell is not a libertine with jealousy and anger issues.

billiam 6y ago

A man whose 1960s ideas were ideal for the seventies and helped destroy our economic system in the 1990s while enabling the billionaire winner take all society of today.

pessimizer 6y ago
Honoring a man who never got anything right. A man whose predictions were never bore any material fruit, but justified everything billionaires were going to do anyway.
hindsightbias 6y ago
After the stimulus bills of 2020 one would think everyone is a Keynesian (maybe excluding Rand Paul, he probably voted against it).
- dragonwriter 6y ago
  The 2020 COVID relief wasn’t as much argued on Keynesian stimulus terms as, say, the 2009 ARRA stimulus, but more as disaster relief.
  - hindsightbias 6y ago
    They just don't want to use the K word.
  - imtringued 6y ago
    It goes both ways. The government closed businesses, but also gave them resources to stay in business. You can argue it was Keynesian, but you can also argue it wasn't. However, pretty much everything Biden did, was Keynesian.
dang 6y ago
Substantive critique is welcome, but please don't post rhetorical ideological drive-bys to HN. It leads to shallower, more repetitive, and nastier internet discussion—all of which is uninteresting. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

galago 6y ago

He also created some wild oil paintings. https://media.gettyimages.com/photos/economist-robert-mundell-is-photographed-touching-up-one-of-his-may-picture-id170078201?s=612x612 https://media.gettyimages.com/photos/economist-robert-mundel...

tw04 6y ago

The Zeus of economics? I'd say the last 50 years of wage stagnation for the working class and the massive increases in wealth inequality might call some of his theories into question...

nickelcitymario 6y ago
I think it was meant to convey the impact he had on economics, not as a vote of confidence for those contributions.

pydry 6y ago

>Somehow Keynesianism—and monetarism—limped into the 1970s, saying you can manage domestic demand and supply, and therefore growth and employment, by adjusting taxes and spending and the money stock in a country, even though Mundell’s field-defining articles of the previous two decades had shown that capital movements will overwhelm all efforts at domestic authorities to fine-tune their way to a desired result. It's weird the way this article determinedly avoids considering the notion that a hypothetical country (let's our hypothetical country "China") could impose capital controls to avoid being overwhelmed by inflows and outflows of capital and manage effective domestic growth by adjusting taxes and spending. This disproves Keynesianism, apparently. It's like saying that it is impossible to build anything next to the sea because it will be destroyed by waves.

jariel 6y ago
Capital controls come with huge costs, it's another form of import/export controls. Imagine being told the part you need to manufacture your car is 4x the normal price because of intense focus on capital controls, or worse, that you can't get it.
- pydry 6y ago
  Imagine being Thailand in 1997: the stock market plunges 75% in one day, GDP contracts ~10%, a wave of bankruptcies, poverty and inequality skyrocketing while the government has to go begging to the IMF, accepting any and all demands that they make, no matter how unpopular. You're better off being China.
  - jariel 6y ago
    ? That crisis was literally started by misguided attempts at currency controls (!) i.e. Thai pegging their currency to USD and unable to 'hold the wall against the sea' so it eventually came crashing in. So yes, Thailand 1997 demonstrates very effectively one of the challenges with currency controls. Currency controls come with a cost, that has to be considered.

quickthrowman 6y ago

Hopefully supply-side economics is the next to die. It didn’t work in the Reagan 80s, and it didn’t work in the 2010s in Kansas [0] Laffer and this guy that died are a total joke. Their theories exist to give political cover to politicians who aim to line the pockets of the rich. [0]https://en.m.wikipedia.org/wiki/Kansas_experiment https://en.m.wikipedia.org/wiki/Kansas_experiment

JumpCrisscross 6y ago
> Laffer and this guy that died are a total joke Laffer curves are empirically corroborated [1][2]. For most taxes, there is a point past which raising the tax rate starts decreasing revenue. The problem was politicians defining a made-up number as that point and voters going along with it. [1] https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.475.7051&rep=rep1&type=pdf https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.47... [2] https://www.sciencedirect.com/science/article/abs/pii/S030439321100064X https://www.sciencedirect.com/science/article/abs/pii/S03043...
- jayd16 6y ago
  Agreed. Its not controversial that at a 100% tax rate, work would not be done, and at a 0% tax rate no tax will be collected. The issue has always been using these points to extrapolate any policy you want because where you land on the curve or even the shape of said curve IS up for debate.
gradys 6y ago
I don't have comment on the legacy of supply-side economics and and how successful e.g. Reagan's economic policy was, but it looks to me like we have more of a supply-side issue right now than demand-side. We have shortages of semiconductors, congested ports, all of the supply issues with early COVID PPE, absurdly low housing supply in the most desirable places to live, and so on.
- ohazi 6y ago
  The "supply side" of "supply side economics" is a red herring. The theory has less to do with what actually affects the supply of goods at any given time and more with the theory that lowering taxes and decreasing regulation always necessarily results in more supply and lower prices even when it clearly doesn't. The theory ignores everything else that affects supply and only focuses on complaining about taxes and regulation.

dragonwriter 6y ago

> Somehow Keynesianism—and monetarism—limped into the 1970s, saying you can manage domestic demand and supply, and therefore growth and employment, by adjusting taxes and spending and the money stock in a country, even though Mundell’s field-defining articles of the previous two decades had shown that capital movements will overwhelm all efforts at domestic authorities to fine-tune their way to a desired result. On the one hand is an attractively reasoned theoretical argument as to why it can’t ever work. [0] On the other side is the repeated, concrete experience that it does work. [0] Although, even per the article, it doesn’t show that in the case of “a solitary global economic hegemon”, which might, even if it was otherwise completely correct, be a pretty important limitation to its applicability to late-20th and early-(as in so far)-21st Century US policy.

Judgmentality 6y ago
My comment is a tangent, but I just love sharing this paraphrase whenever I can: Socialism is something that works in theory but doesn't work in reality. Wikipedia is something that doesn't work in theory but works in reality. Ideas are great, but ultimately what matters is reality.
- WC3w6pXxgGd 6y ago
  Socialism doesn't even make sense in theory.
- heterodoxxed 6y ago
  If Wikipedia editors were regularly getting merc'd by CIA-funded contras, we'd be talking about how Wikipedia only works in theory too.
  - adwn 6y ago
    Are you suggesting that the reason socialism doesn't work is that the CIA regularly kills, well, who exactly? The proponents of socialism? Hardly, they'd be assassinating 24/7 without making a dent. EDIT: To clarify, I'm not claiming that the CIA didn't murder socialist leaders. My point is that you can't look at all the failed socialist experiments and conclude that socialism would have succeeded if only the CIA hadn't murdered any socialist leaders.

mr-wendel 6y ago

The trick with economics is to realize that 99% of all discussion is about a particular flavor of economics. It's almost always about theory and implementation, not principles and abstractions. Inevitably, there is also a significant political aspect that is often (but not always!) overlooked. Even if there is a "raw" theory of economics that describes the "what" in a universally agreeable way it'll never tell us the "why" and "how" of it, let alone how politics should (or should not) be intertwined with the issues.

dale_glass 6y ago

What a strange metaphor. Why Zeus? Zeus is known for using violence to get whatever he wanted, and screwing anything that moved (despite being married)

throw0101a 6y ago

Paul Krugman tweeted this article that he wrote in 1999: > Later Mundell would broaden this initial insight by proposing the concept of the “impossible trinity”; free capital movement, a fixed exchange rate, and an effective monetary policy. The point is that you can’t have it all: A country must pick two out of three. It can fix its exchange rate without emasculating its central bank, but only by maintaining controls on capital flows (like China today); it can leave capital movement free but retain monetary autonomy, but only by letting the exchange rate fluctuate (like Britain–or Canada); or it can choose to leave capital free and stabilize the currency, but only by abandoning any ability to adjust interest rates to fight inflation or recession (like Argentina today, or for that matter most of Europe). * https://slate.com/business/1999/10/o-canada.html https://slate.com/business/1999/10/o-canada.html * Via: https://slate.com/business/1999/10/o-canada.html https://slate.com/business/1999/10/o-canada.html

bigbillheck 6y ago

More a Typhon than a Zeus.

BlueTemplar 6y ago

Hmm, and not a mention of the US reaching peak conventional oil production around 1970, which pushed trade balance in the red, and was the main reason behind the stagflation and the end of the gold standard...