I’m basically an Apple guy, but for the past few months I’d been using a Motorola Atrix running Android, and then just on Friday switched back and got an iPhone 4S and I want to unleash some fanboy time.

At the end of the day, I think the comparison illustrates that Apple’s theory of vertically integrated systems creates superior results. You can see this in the fact that there’s actually quite a lot to like about Android. Its notification system is better, even after iOS 5′s upgrades to this aspect. The basic organization of the desktop so that your default screen is “in the middle” rather than “on the far left” like in iOS is better. The Google-branded aps in Android are fantastic, and that’s no trivial thing given how central email and maps are to the smartphone experience. Widgets are very cool. Swype keyboard is very cool. Lots of cool stuff. But. But. But. But.

When the iPhone first came out, a lot of people were skeptical about an all-touch product. Seemed hard to use. And it was a bit hard to type on it for the first couple of days or so. But you quickly got the hand of it and it actually turned out to work amazingly well. This wasn’t like fiddling with some nonsense ATM touchscreen. You could touch, grab, swipe, flick, pinch, whatever with extraordinary responsiveness. If Apple couldn’t have made the screen work so well, they presumably wouldn’t have made the damn phone. Or, alternatively, people had been talking about an “iPhone” for years but we didn’t get one until Apple figured out how to make the screen work. Then the iPhone, by succeeding, created this whole new category of all-touch smartphones. And yet for all its virtues, Android can’t consistently deliver that basic original iPhone experience of a really good really responsive touchscreen. They’re years behind. And I think it may just not be possible to do unless you’re writing specific code for specific hardware and working closely with suppliers all up and down the chain. I tweeted that I didn’t like Android’s screen responsiveness and a bunch of folks tweeted back “that’s a hardware issue, don’t blame Android.” But who cares?

At any rate, I hope the Kindle Fire turns into a huge success. We need gadget competition and this “the screen doesn’t really work” thing is a really fatal flaw in a platform with so many other good attributes.

Mitch McConnell says that halting teacher and firefighter layoffs might be nice but it’s a “local” problem so the federal government shouldn’t do it.

Local government is a local problem. But the problem with local government employment is that it costs money. At the moment for localities to raise funds to pay teachers and firemen is quite costly. Households and small firms are in a fragile state, and taxing then at higher rates to support public service could be very damaging. The federal government, by contrast, can currently borrow money at negative seven-year real rates. When you borrow money, normally you pay inflation. Medium term federal borrowing can currently be done at a negative interest rate. That means it’s very very very cheap for the federal government to borrow money. Consequently, where “local” problems are being caused by lack of money, it makes a ton of sense for the federal government to step in and take advantage of its access to free money.

I’m reading on right-wing blogs that it was somehow “deceptive” of me to post accurate statistical information about the fact that the private sector labor market is showing okay growth while the public sector labor market is deteriorating. You see, net private sector job losses since the start of the recession have been larger! This is true, which is why I never said otherwise. That’s for the very good reason that the total scale of government employment is pretty small relative to private sector employment:

We have, in other words, many more people working at CVS than the DMV. Which is great. That’s your modern day mixed market economy. Most people work in the private sector. That means the scale of private sector shifts is almost always going to outweigh the scale of whatever’s happening in the public sector. But look at growth rates and zoom in on the Obama era:

When the President was inaugurated, we were already in a steep recession with giant private sector job losses. At the time, the government sector was doing its normal non-cyclical thing. The rate of private sector losses slowed, and since the beginning of 2010 private sector employment has been enjoying slow-but-steady growth. It turns out, however, that once you look past the spikes around the census that these private sector gains are being partially offset but steady job losses in the public sector.

In a normal time, you might think of this as “crowding in.” Reduced government spending frees up funds for private purposes. And reduced government employment frees up personnel for private purposes. But that’s not a plausible interpretation of today’s events with high unemployment and lots of economic slack. Nobody is saying “God, my company really needs to hire some janitors but there are no unemployed people around to hire; if only they’d lay off some of the guys who mop floors at the local federal building I’d be able to expand.” Instead what’s happening is people are saying “hey—my company sells goods and services at a profit, so I’d expand operations if some of these unemployed people were hired to repair roads and this had more money to spend at my shop.”

JVH wants me to respond to the “Austrian” critique of monetary stimulus:

How do you respond to libertarian critiques of stimulus through the central bank? I’m really very ignorant of this, but as far as I know, the standard libertarian argument is that central bank policy can set interest rates below what they should be in the free market. The end result is a supply of investment that overshoots demand, creating a bubble. When people realize that these investments aren’t working out, we get a crash and we’re in a worse mess than we started. I’ve heard this proffered as one explanation of the current crisis. What do you think of the argument?

So of course central banks can make money too lose. If you have a central bank with discretion, the central problem is that the discretion will sometimes be misused.

That said, as an explanation of recessions this makes very little sense. Paul Krugman called it the “hangover theory” and did a very comprehensive takedown over a decade ago. As a critique of counter-cyclical policy, though, the main question you have to ask yourself is how can malinvestment actually make a society worse off? It’s clear how malinvestment can make a society worse off than it otherwise could have been. China, for example, has a lot of distortionary policies in place that cause Chinese firms to over-invest in production for the US market and underinvest in production for the Chinese market. China would be better off with a somewhat different set of factories geared to make a somewhat different set of goods for a somewhat different set of customers. But it’s not like the malinvestment is so terrible that they’d be better off with no factories at all.

Similarly it’s clear that the housing boom of the early oughts left us over-supplied with houses in certain locations. In particular we overbuilt houses in the Inland Empire in Southern California, in the suburbs of Las Vegas, Phoenix, and Miami and in some parts of the Florida Gulf Coast. That misallocation of resources is unfortunate. It would have been better to expend that manpower and material on other things. But it’s not as if the existence of some houses that never should have been built is currently immiserating anyone. We’re not facing a national shortage of building material or something. It’s just waste. A sunk cost that you have to write off and move forward. The nature of a market economy is that at any given time a lot of entrepreneurs are going to be coming up with terrible ideas and suckering morons into backing their investment. The fact that a full employment economy will feature lemons and white elephants is just an inevitable fact of life, not a reason to fear full employment.