1. Megan McArdle points out that the Obama administration may be appointing an agenda driven researcher to the consumer financial protection agency. If Obama wants to throw a bone to someone who has fought the progressive fight in trying to bend public opinion towards the creation of the agency, Elizabeth Warren looks like the obvious choice. However, if Obama is still in the mood to appoint competent technocrats over political allies, he may want to think twice about picking her. 2. Scott Sumner highlights a 2001 Pimco article by Paul McCulley about "opportunistic disinflation". This is the theory that the Fed should not try to control inflation outright but that they should take advantage and lock in the decreased inflation expectations that occur after positive supply shocks and recessions by tightening before inflationary expectations return to prior levels. Scott's view it that this opportunistic disinflation policy is procyclical and therefore leads to the monetary policy mistake of allowing a deflationary downturn to get much worse than it should and that this policy exacerbated the recent recession. To me, this type of approach suggests that the reason the Fed doesn't do more is that it isn't confident that it can easily fine tune inflation expectations, only stabilize them. It could also be that it is politically easier for the Fed to shift inflation expectations when it is not clear to everyone that they are shifting policy. Either way, taking the policy of "opportunistic disinflation" seriously leads to a better understanding of Fed policy. 3. David Henderson analyzes a famous Keynesian's prediction of post WWII economic collapse. The collapse, predicted due to a drastic drop in government spending, showed up in GDP (which includes private spending) but not in private consumption. The 1945-1947 economic performance is on anecdote that suggests that austerity isn't always going to have knock on effects of large negative multipliers.