1. Some people might think that Bryan Caplan is ranking how reasonable people are, but he is actually ranking how many of the same priors these people share with him.
2 Felix Salmon points us to a fund that is designed to go long tail risk, the kicker is that they expect to lose 12% to 18% in non-tail event years. It is unclear how much the truly provides diversification benefits for hedge fund investors, since its correlation with funds trying to make steady returns via the opposite method may be too close to negative one. At the very least, it may hedge them against the tail risk in funds that they don't know are producing a majority of their returns via the opposite strategy.
3. Scott Sumner uses ideas similar to Krugman's reply to the ECB's pro-austerity positions to critique Krugman's uncritical examination of the Eichengreen, et al, study on depression multipliers. Since that is one too many links, the basic summary is that the ECB found time periods when fiscal austerity was associated with recovery. However, Krugman believed that these examples of austerity working occurred in tandem with either a shirt towards trade surpluses or a weaker monetary policy. The ECB didn't control for these positive factors when discussing how austerity might help, since the whole world can't go into a trade surplus nor can they devalue their currency against everyone else. However, Sumner points out that the same critique of ignoring monetary stimulus applies to many of the depression multipliers calculated in the Eichengreen, et al, study.
The combination of the ECB view and Krugman's critique makes a good case for a compromise of monetary stimulus and fiscal responsibility. The main problem with this approach is that it doesn't serve the interests of either major party in any way. The democrats would rather find arguments for stimulating the economy with spending, and the republicans would prefer tax cuts. Furthermore, the republicans are very suspicious of any form of inflationary monetary policy, as they correctly recognize that it is a tax on capital while the democrats would worry that pushing for monetary stimulus, which will raise asset prices, will make them look like friends of the rich on Wall Street.
4. Greg Mankiw has an article in the New York Times on the Trilemma of International Finance. The idea is that a country can have two of the following: Openness to flows of international capital, monetary policy as a tool to stabilize the economy and stability in the currency exchange rate.
Three major players made three different choices:
US: Openness and monetary policy
China: Monetary policy and currency stability
Europe's monetary union: Openness and currency stability (The Bundesbank.. I mean ECB has until recently only been there to preserve price stability, as opposed to the Fed's mandate to "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.")
Due to these fundamental different economic choices, when there is dialogue between these countries they are often talking past each other because they are assuming that their choice is the optimal one. However, when the ECB got involved in the Greek bailout and the preemptive bailout of the other PIIGS they moved towards the US's choice. If China starts to float their currency, they'll move towards either Europe or the US, although that seems like it will be a very slow process.