economics
mikethemadbiologist | April 3, 2008When the welfare debate was raging in the 80s and 90s, I never understood how a group with so little power--poor single women, often minority--were misperceived as having such a huge effect on society, while those who had the lion's share of power weren't to blame at all. More importantly, there was a bizarre assumption that whatever effects poor single women might have were entirely their fault.
In light of the collapsing Jenga Pile o'Shit known as the 'subprime' mortgage /foreclosure/ 'jingle mail'/ Bear Stearns crisis, blaming poor women does seem a little silly. I'm surprised the…
mikethemadbiologist | April 1, 2008I recently argued that, rather than sending out tax rebates to stimulate the economy, the money should be sent to state and local governments because they're hurting and will spend the money. Case in point, Boston's public schools:
The new superintendent of Boston's Public Schools (BPS), Carol Johnson, dropped a bombshell this past week, declaring that her department has discovered an unanticipated budget problem so severe that millions of dollars' worth of programs must be cut -- some schools may even be forced to close.
....According to the BPS and Menino's office, if no cuts are made,…
mikethemadbiologist | March 29, 2008In the land of the euro, the dollar is treated like a banana republic(an) currency. The devaluation of the dollar isn't such an awful thing: it was long overdue. We can't have a $9+ trillion dollar debt (almost half of which was accumulated in the last seven years), a humongous trade deficit, negative personal savings, and an economic recession, and still expect our currency to be worth something. But this is embarrassing:
The U.S. dollar's value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local…
mikethemadbiologist | March 28, 2008In the NY Times, economist Bruce Bartlett opposes the refund stimulus plan:
WITH unusual speed and cooperation last month, George W. Bush and Democrats in Congress agreed to a tax rebate set to be paid out beginning in May. Families will get checks for $300 to $1200 or more, and it is assumed that they will all rush out to spend this money immediately, giving retailers a boost that will raise economic growth.
Despite the bipartisan support for the rebate, few economists have supported the idea. They note that we have tried rebates in the past -- most recently in 2001 -- and there is no…
mikethemadbiologist | March 26, 2008Well, the Social Security Trustees Report is out, and, as has been reported every year since 1993, Social Security is still destined to collapse over three decades from the date of the release of the report--a unit of time I like to refer to as the Samuelson Unit after columnist and fucking moron Robert Samuelson. I point this out because, if the 1993 predictions had been accurate, we should have only seventeen years (give or take) until the Trust Fund is dry.
Yep, the pessimistic estimates keep on keepin' on. Unfortunately, our idiot press corps is unable to discern the basic facts of…
purepedantry | March 25, 2008Tyler Cowen of the blog Marginal Revolution writes in the NYTimes about how prices carry important information and how you need trading to establish the value of securities:
To understand the depths of the current crisis, let's go back to an apparently unrelated episode in economic thought: the socialist calculation debate. Starting in the 1920s, Ludwig von Mises, the leader of the so-called Austrian School of Economics, charged that socialism was unable to engage in rational economic calculation. Without market prices, he reasoned, no one knows how much economic resources are worth.
The…
mikethemadbiologist | March 22, 2008A few days ago, Timothy Egan wrote an op-ed for the NY Times about how universities should spend more on tuition relief:
Last year a record 76 American colleges passed the $1 billion mark in total endowments.
For all of that, you would think there would be some relief from tuition costs that have tripled in 20 years. Or that wealthy universities would be giving back, say, half as much as they are making every year. Or that they would not be charging $21,000 for an American student to live in a mud hut in Africa during a semester abroad. Or that they would give up their taxpayer-financed…
purepedantry | March 17, 2008(This is sort of a round-up of comment on the economics news. I don't have much to say about it yet.)
It would appear that the economy has just gone from bad to really bad, although if you wanted to be technical it was probably bad already. Prices just hadn't fallen to reflect the true magnitude of that badness until recently. Take the now-to-be-bought Bear Stearns. It's price was 70 dollars two weeks ago and about 170 a year ago. Did that market value simply vanish over two weeks? I rather doubt it. (Particularly considering that their New York office building is supposedly worth more…
mikethemadbiologist | March 10, 2008I've already covered the War on Beer, but now, pizza is taking it the chops too. Have they no decency? From the Back Bay Sun:
The changing economy is not only affecting the housing market and the prices at the pump - it's also taking a bite out of local pizza makers' profits. The rising costs of two key ingredients in the perfect pie - flour and cheese - have been making pizza joints around the Back Bay take a second look at their production costs and even their pizza prices.
"The costs are just getting crazy," says Doug Ferriman, who would know as the owner of Crazy Dough's Pizza at 1124…
mikethemadbiologist | March 9, 2008I'm not a fan of charter schools: they typically 'cherry pick' the best students, and then claim spectacular results (if they can do so at all), while paying teachers less and expected them to work even harder. However, here's one charter school trying something that I hope works--paying teachers more:
A New York City charter school set to open in 2009 in Washington Heights will test one of the most fundamental questions in education: Whether significantly higher pay for teachers is the key to improving schools.
The school, which will run from fifth to eighth grades, is promising to pay…
mikethemadbiologist | March 8, 2008By way of ScienceBlogling Joseph, we learn of yet another way the collapse of the housing market will increase your state and local taxes (or require cuts in services). When investors stopped buying certain municipal bonds, the interest rates on the bonds skyrocketed--that is, it will cost cities and states more money (i.e., tax dollars) to pay back these loans. Not because the loan holders did anything wrong, but simply because investors just didn't want to play. Now, to add insult to injury, Wall Street investors are charging additional fees to purchase these loans:
The collapse of the…
mikethemadbiologist | March 7, 2008By way of the Burned Over District, we find out that there is a global hopps shortage:
A worldwide shortage of a key beer ingredient, hops, is causing beer prices to spike, beer batches to be delayed, and talk of your favorite pale ales being forced to (gulp) mellow out.
Already, in Charlotte, retailers are reporting that beers from smaller, "craft" breweries have risen about $1 per six-pack this year, with more increases coming as brewers pass on the cost of a five- to tenfold increase in hops prices.
That's if the brewers can find any hops at all.
So whom do we invade to fix this?
mikethemadbiologist | March 4, 2008I've written before about how the Collapse of the Jenga of Shit (aka the 'subprime' loan crisis) has raised the price of borrowing money--which is paid for with higher state and local taxes--due to the collapse of bond insurers and a liquidity crisis in municipal bonds. Now your property and sales taxes can take another hike courtesy of ratings agency like Standard & Poor's, Moody's Investors Service, and Fitch Ratings. From the New York Times (italics mine):
If they are right, billions of taxpayers' dollars -- money that could be used to build schools, pave roads and repair bridges --…
mikethemadbiologist | March 3, 2008In the most recent edition of the New England Journal of Medicine, there is a perspective piece by Sara Rosenbaum that bluntly describes how the Bush Administration's opposition to S-CHIP (the State Children's Health Insurance Program) is based on ideology and not economic cost (italics mine):
Why would the President veto bipartisan legislation that does precisely what he insisted on -- namely, aggressively enroll the poorest children? One might blame the poisonous atmosphere that pervades Washington these days, but other important social policy reforms have managed to get through.
One answer…
mikethemadbiologist | February 29, 2008One piece of infection control legislation moving (slowly) through Congress is the Healthy Hospitals Act, H.R. 1174 (it's so slow that it's, erm, an act of 2007). H.R. 1174 would amend "the Social Security Act to require public reporting of health care-associated infections data by hospitals and ambulatory surgical centers and to permit the Secretary of Health and Human Services to establish a pilot program to provide incentives to hospitals and ambulatory surgical centers to eliminate the rate of occurrence of such infections."
There are many good provisions in this legislation:
Hospitals…
purepedantry | February 28, 2008This is just for Kara. A really common textbook for introductory economics classes is Greg Mankiw's. In the first chapter, he lists 10 principles of economics.
This guy has translated them into terms lay people can understand. Heads up: people are stupid. Just so you know what to expect... (video below fold)
Hat-tip: Megan McArdle
mikethemadbiologist | February 25, 2008And shifts much of the other aid packages over to grants:
Brown University is eliminating tuition for students whose parents earn less than $60,000, after decisions by fellow Ivy League universities to bolster financial aid as their endowments grow.
The university, in Providence, R.I., said on Saturday that it also planned to substitute grants for student loans in the financial aid packages of students whose families earned less than $100,000 a year. The new program cuts reliance on loans for all students regardless of family income, the university said in a statement posted on its Web site.…
mikethemadbiologist | February 22, 2008I think Republicans want to be cast as cartoon villains. In California, Republicans have twice prevented a Democratic measure (supported by Republican governor Schwarzenegger) that would fix a loophole that allows yacht owners to avoid paying their sales tax.
Really. Keep in mind this isn't an additional tax (a luxury tax), but simply applying the same sales tax that most people who can't afford yachts pay on other goods. Dday writes:
You have the Republican Party prioritizing the interests of yacht owners. Is there any better expression of the conservative movement in our new Gilded Age?…
mikethemadbiologist | February 18, 2008Lest the humanities feel neglected, the Republican War on Art keeps chugging along. In Bush's 2009 budget, the arts take massive hits across the board, with the sole exception of much needed maintenance funding of the Smithsonian. But first, by way of the Boston Phoenix, let's look at the most unconscionable part of the budget:
...nothing exemplifies the right wing's embrace of public ignorance more than its opposition to funding arts education in the schools. This position is beyond primitive. Even cave dwellers probably delighted in the animal figures they painted on their walls; not Bush…
mikethemadbiologist | February 17, 2008A couple of weeks ago, I described how the collapse of bond insurers meant that it will be harder and more expensive for state and local governments to float bonds, which means you'll get fewer government services and have to pay higher taxes, mostly property taxes, for them. Well, Bit Shitpile just keeps rollin' on (italics mine):
The credit crisis paining Wall Street is reaching out across the nation, afflicting municipalities, hospitals and cultural touchstones like the Metropolitan Museum of Art.
In recent days another large but obscure corner of the financial world has come under acute…