This is how information about projections ought to be presented—in terms of probability—figure 2-3 of the CBO’s latest report:

According to the text, these confidence bands actually understate the uncertainty. They say that “If the potential errors in the current
forecast are similar to the errors in CBO’s forecasts published between 1976 and 2006, the probability is 90 percent that real GDP will
fall in the shaded area of the graph” but that due to the unusual nature of present circumstances, “larger errors are more likely to occur than usual.”

Harold Pollack gives us the good news about the new team at the Office of National Drug Control Policy (“drug czar”):

Things are looking up, though. The new Drug Czar, Gil Kerlikowski combines the credibility of a big-city police chief with a solid reputation for pragmatic and decent law enforcement practices. More important are those being brought in to back him up, particularly on clinical and scientific matters beyond the Chief’s personal experience.

Sources report that Tom McClellan will be Kerlikowski’s deputy director, and second-in-command. McLellan’s appointment is part of a weird pattern of hires made by the Obama administration: Appoint people who actually know what they are talking about rather than ideologues or the President’s smiling and funny roommate from boarding school.

The more you think not just about the administration’s big policy objectives on health care and energy, but also the large number of good people already in the place throughout the administration poised to do excellent work on dozens of second- and third-tier issues, the more frustrating it becomes to realize how it could all easily be brought down by poor handling of the banking crisis.

Here’s a nice primer from the Financial Times on quantitative easing. When trying to understand this, it’s worth keeping in mind that the name “quantitative easing” is very non-descriptive and I have no idea how it got this label. So don’t try to think about what those words might mean, just pay attention to the description of what it is.

Meanwhile, Larry Kudlow finds the inflationary potential of this move so terrifying that he’s setting money on fire which, as Ryan Powers observes, is actually illegal:

Spurring Kudlow’s inflationary expectations is, however, actually part of the idea. One problem the US economy is having right now is that even though I’d kind of like to buy a new MacBook and have the money in my bank account to pay for a new MacBook, I’m not buying a new MacBook. Why? Well, because I don’t really need one, and I keep having this feeling that they’re going to start being discounted soon once Apple realized that nobody wants to buy their super-expensive laptops amidst a cataclysmic recession. I have, in other words, deflationary expectations. These kind of expectations, when widespread, become self-fulfilling as all kinds of spending on non-necessities collapses. Change those to inflationary expectations and I think, hey, I’d better buy that today because it’ll cost more next week. And that helps the economy grow.

Obviously, this is the kind of thing that can be taken too far. And it is true that if aggressive Fed policy succeeds in returning us to growth, we will soon enough need to deal with the prospect of problematic inflation—either in the sense that the level might get too high, or that we might see increases of an accelerating character. Which is certainly a good reason to wish we hadn’t gotten into this situation. But it’s not a good reason to eschew the methods that are most likely to get us out of it.