Add the IMF’s Olivier Blanchard to the list of economists who thinks central banks should rethink their commitment to super-low inflation:

IMF survey online: Central banks have chosen low inflation targets, around 2 percent. In your paper, you argue that maybe we should revisit this target. Why?

Blanchard: The crisis has shown that interest rates can actually hit the zero level, and when this happens it is a severe constraint on monetary policy that ties your hands during times of trouble.

As a matter of logic, higher average inflation and thus higher average nominal interest rates before the crisis would have given more room for monetary policy to be eased during the crisis and would have resulted in less deterioration of fiscal positions. What we need to think about now if whether this could justify setting a higher inflation target in the future.

Another factor that I think is worth taking seriously, is that it seems to me that very low inflation leads people to save too little. Most people suffer from some degree of “money illusion” so with inflation at 2 percent both the cost of borrowing money and the return to saving money appear lower than they would with inflation at 4 percent.

I’ve seen a fair number of links to Keith Bradsher’s article on China’s high-speed rail network and its interplay with their stimulus program followed by lamentations that ARRA’s steps in this regard were so meager. As you know, I’m a supporter of high-speed rail and I also think the stimulus was much too small. Back when Christina Romer was underestimating how bad the economy would get, she thought it was about $500 billion too small.

That said, I think it’s easy to let the shiny new trains crowd out more banal and more useful transportation policy ideas. Dollar-for-dollar, you’d almost certainly get more stimulus punch from mass transit operating subsidies to prevent fare hikes and service cuts than you would from building new trains. And in general it seems to me that there’s far too much talk about exciting new transportation technology and not enough about the humble city bus. Every city you go to in America—New York, LA, Chicago, DC, Pittsburgh, Miami, Philly, Boston, Albuquerque, whatever—is running a bus network that lots of people rely on. These people are often invisible because they tend to be poor, or young, or old. But it’s a lot of people. And simple things like installing GPS on the buses and putting these kind of signs on the shelters would make their lives a lot better:

And of course really simple things like buying more buses and hiring more drivers to provide more frequent service would also help. To get really wild and ambitious you can employ technology like paint to create bus lanes and police officers to enforce the bus lanes if you want to really go big, bus-wise. But honestly the littlelest things—visual display of arrival times, better bus shelters, more frequent service—can do a ton to make bus-riding a better way to get around. This would hardly revolutionize American life, but ineter-city high-speed rail isn’t going to change people’s daily lives either. And while intercity rail is going to be primarily used by fairly prosperous business travelers, better buses would make it a lot easier for economically struggle families.

Update on the status of Tai Shan:

All the Vets and staff at Bifengxia are very pleased with his progress and very happy he has come home to China. A Chief Veterinarian at Bifengxia stated, “Tai Shan had safely come back to Bifengxia. He is a brave boy, no any strangeness of the new home, eats local bamboo and fruits very well (but not panda bread), daily activities and spirits are well, in one word he is normal with all things, he looks very happy. All our staff are emotional on Tai Shan back. Many Chinese visitors waiting for see him.”

This constant business from the Chinese about Tai Shan going “back” to China (or Bifengxia specifically in this case) is very frustrating to me. This trip is the guy’s first time in China—he was born in the United States of America and never left the country until the Chinese had us send him over. Those were the rules we agreed to when China lent out its adult pandas, so fair’s fair and China’s claiming what they’re entitled to, but there’s no need to keep up the pretense that anyone’s going “back” to anywhere.

As a writer, I fundamentally would like to see writers paid more money. So in that sense I agree with Leon Wieseltier that it would be nice if writers were paid more money. But his whole article on that subject is nonsense from top to bottom.

To pick one thing I thought was particularly egregious:

Leave aside the question of the relation of blogging to writing, of posting to publishing. I wish to emphasize what the love songs omit: the economic and professional consequences of the cheap entropy of the web–its proletarianization of the writer. I wonder if people outside the besieged walls of the profession understand how little is earned with contributions to websites. The sums are scandalous.

Wieseltier works at a print magazine called The New Republic and he knows perfectly well that the researcher-reporters at The New Republic are paid less than entry level bloggers at, say, Think Progress. Indeed, they’re paid so little that The New Republic (a print magazine, I hasten to add) seems to have recently decided to relabel the salary as a “stipend” presumably because if the salary were a salary it would violate minimum wage laws. I don’t really understand how you could muster the lack of self-consciousness to be a top editor at that publication and then turn around and say that the sums “earned with contributions to websites” are “scandalous.”

Beyond that, I just don’t know what there really is to say on this issue. People are going to get paid what other people want to pay them. The New Republic exists because its owners are willing to subsidize a money-losing magazine. When they become less willing to subsidize losses, there need to be cutbacks. And it’s been a money-losing magazine forever, just as The Atlantic has. On the internet you have some sites (like the ThinkProgress family) that are supported by donors, and others that are supported by ad revenue. The staff gets paid what they get paid—in a nonprofit context it’s determined by donors’ willingness to support things, and in a for-profit context it’s determined by the volume of ad revenue that comes in. I don’t really know what whining is supposed to accomplish.

I assume everyone in the business wishes they could get a Wieseltierian setup and have a rich friend purchase an existing magazine with a good reputation and then let them run a hefty slice of it for decades. I wish someone would do that for me! But if wishes were ponies then beggars would ride. The rest of us are, I think, going to try to do a good job and attract an audience and work in an up-to-date medium.

Given that when a financial panic occurs the government needs to bail out many financial institutions, it makes a lot of sense to (a) enact regulation to make panics less likely and (b) make provision for necessary interventions to be done in an orderly manner that’s financed by fees on banks. In other words, less TARP more FDIC. So how are the banksters and their new best friends in the GOP fundraising community going to oppose that?

Easy! As Chait and Drum observe you put together an ad that just flat-out lies and claims that a bill to regulate banks is a big bailouty giveaway to banks.

It’s worth stepping back, though, to observe that the really big lie behind this whole thing—indeed, the lie behind a great deal of 2009-2010 political rhetoric—is the notion that somehow the underlying principle of intervening in financial panics is something Barack Obama made up one day and that we can put a stop to by putting some honest-to-God rightwingers in office. Note that TARP was supported by George W Bush, John Boehner, Mitch McConnell, John McCain, and Sarah Palin. Note that faced with a banking crisis, Ronald Reagan organized bailouts. The Bank of England did a bailout during the Panic of 1825. Angela Merkel and Nicholas Sarkozy did bank interventions during the current crisis, and the Nordic Banking Crisis of the early 1990s was also resolved through costly interventions.

This is just what happens. In life, there are sometimes banking crises. And banking crises lead to costly bailouts. There are different ways this bailing-out can be done, some that are better and some that are worse. And there are regulatory schemes that may prevent banking crises. And you can try to make it the case that bailout costs are ultimately borne by the financial services industry. But politicians who claim that if it were up to them they would provide bailout-free governance are just lying. Recall that a House GOP revolt did in fact initially lead to TARP failing, at which point the stock market crashed and the needed pro-TARP votes were delivered.