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Mark Thoma writes:

Economist's View: Bubble? What Bubble?: Here is Ellen McGrattan and Edward Prescott in 2000 telling everyone not to worry about a bubble in the stock market. They don't call them bubbleheads, but the message is clear:

...Is the current stock market value too high? Glassman and Hassett (1999) have argued that it is not. In fact, they have said that the market is undervalued by a factor of three. But others have expressed concern that the market is, indeed, overvalued. Federal Reserve Chairman Alan Greenspan (1996), for example, has suggested that the recent high value of the market may  reflect “irrational exuberance” among investors. Shiller (2000) has reiterated this concern and said that a 50 percent drop in the value is plausible....

Conclusions Some stock market analysts have argued that corporate equity is currently overvalued. But such an argument requires a point of reference: overvalued relative to what? In this study, we use as our reference point the predictions of the basic growth model that is the standard model used by macroeconomists today. We match up all the variables in our model with the U.S. national income and product account data. We find that corporate equity is not overvalued...

S&P 500, June 30, 2000 close: 1455
S&P 500, December 31, 2009 close: 1145
Consumer Price Index, November 2009/June 2000: 1.26

Real price decline: -37.5%

I score this one for Bob Shiller...

Jonathan Alter:

Alter: Dodd, Dorgan, and Discontent in the Senate: It's worked before. In 1993 then–House majority leader Richard Gephardt paid a call on a Republican backbencher named Newt Gingrich. Gephardt said: "We have a health-care plan. What's yours?" Gingrich said, "Our plan is to defeat your plan and win the next election." Which is what happened in 1994...

In 1989, Newt Gingrich was chosen by his Republican House peers to be Minority Whip--that is, the deputy to the Minority Leader Robert Michel. Gingrich's predecessor in the job was Dick Cheney--who left the job to become Secretary of Defense.

It is inappropriate to call Newt Gingrich in 1993 a "Republican backbencher." In fact, it is false.

Newt Gingrich in 1993 was the fourth most powerful Republican in the country, and the heir apparent to the House Minority leadership.

Are there no prisons? Are there no workhouses? Are there no fact-checkers?

Why oh why can't we have a better press corps?

C-O-N-N-E-C-T-E-D

We're using broadband, out on the net,
Wifi, living the ilife...

The Financial Times:

Living the iLife: For years, the consumer technology industry has been talking about the day when all devices would be hooked up to the internet. That day is now quickly arriving – with big implications for businesses in technology, entertainment and the media. At the annual Consumer Electronics Show in Las Vegas this week, it was not just smartphones, eReaders and other personal gadgets that connected to the web. Most TVs now yearn to get online, a change which threatens to disrupt the business models of pay-TV operators who have long profited from harnessing these boxes to their closed networks. Even cars are becoming platforms for digital entertainment, information and communications, as evidenced by Ford’s move to allow others to create applications that run on its systems – a move that echoes the approach taken by Apple with its iPhone app store.

This new world comes with new business rules.... Software, service and content all need to work in harmony to create the right experience for consumers – something that precious few (other than Apple) have managed.

One problem has been the slowness with which a balkanised consumer technology world has adapted to the open internet. Too often, incompatible devices fail to connect.... Content is locked up in media formats limited to particular platforms.... Enlightened self-interest is coming to the rescue. A group of entertainment and technology companies, known as the Digital Entertainment Content Ecosystem, has made headway in developing a format that lets media travel across devices while allowing its creator to control how it is used. New technologies also tend to open up as they evolve. Companies that pioneer markets often try to capitalise on early successes by letting others tap into their base of customers... what the consumer tech world needs now is more of [open standards]...