The blogging economists are censoring

Theory is still undergoing revisions, and economists with large priors get real sensitive, so they start cherry picking comments. One thing bothering the Dismal Scientists is why did we have the recent rise in interest rates. The answer, as near as I can tell, is growth somewhere in the global economy.

But the possibility of growth now seems rather frightening, mainly because economists have figured out that we likely will hit a ceiling on growth. The same ceiling that has depressed yields since 1980, is still there. We are likely to hit the ceiling again and we do not know what that ceiling is.

 So what happens if we hit the ceiling? This time around, we will discover what the problem is. We are at zero interest rates, meaning it is very difficult to have negative growth and a dollar bill based money at the same time. So, it will be obvious what is out long term growth problem.

 I think the problem is trying to fit this big fat wart of a state called California into the American system, it won't fit anymore. So, methinks, most of the political class and a large plurality of economists are watching to see how DC and Sacramento interact when rates are high and Obamacare is moving forward. We are at the moment of truth. I think, on this thirty year problem we suffer from.