economics
purepedantry | August 17, 2007Milton Friedman and Anna Schwartz, in their seminal work A Monetary History of the United States, 1867-1960 (1963), argued that the policies of the Federal Reserve led to the Great Depression. These policies included cheap money during the 20s followed by a precipitous contraction in the money supply during the recession of the late 20s and early 30s. They argue that this prolonged what would have been a relatively short recession. Their view contrasts Keynes's argument view that the because of a liquidity trap, monetary policy by the Federal Reserve would be ineffective at staving off a…
kcontreary | August 15, 2007As Winston Churchill once said: "Democracy is the worst form of government, except all those other forms that have been tried from time to time." While still humorous in its construction, this statement is hardly controversial in this day and age, when most of the world is (at least in name) governed "by the people". But Bryan Caplan, an adjunct scholar at the Cato Institute and associate professor of economics at George Mason University, would like us to revisit our belief in democracy as the ideal form of government, if not in fundamentals, then certainly in scope. He has written a book…
mikethemadbiologist | August 15, 2007By way of archcrone (via skippy), I came across this McClatchy article which discusses the massive inflation in food prices:
The Labor Department's most recent inflation data showed that U.S. food prices rose by 4.1 percent for the 12 months ending in June, but a deeper look at the numbers reveals that the price of milk, eggs and other essentials in the American diet are actually rising by double digits.
Already stung by a two-year rise in gasoline prices, American consumers now face sharply higher prices for foods they can't do without. This little-known fact may go a long way to explaining…
purepedantry | August 10, 2007Nicholas Wade reports in the NYTimes about a UCD professor, Gregory Clark, and his theory of the Industrial Revolution. His answer is that high fertility rates in the upper classes caused them to steadily supplant lower classes. They brought productive values with them such that when the population reached a critical mass of individuals with middle class breeding so to speak, the Industrial Revolution occurred:
A way to test the idea, he realized, was through analysis of ancient wills, which might reveal a connection between wealth and the number of progeny. The wills did that, but in…
mikethemadbiologist | August 3, 2007Once again, Michigan congressman John Dingell has decided to side with Detroit automakers who continue to resist entering the 21st century. The House has scrapped legislation that would raise fuel efficiency standards...to those less than Europe and Japan:
Speaker Nancy Pelosi, Democrat of California, decided not to allow a vote on an amendment requiring cars and light trucks sold in the United States to achieve a fleet average of 35 miles per gallon by 2019. The measure, similar to one the Senate passed in June, drew fierce opposition from automakers and dealers, the United Automobile…
mikethemadbiologist | August 3, 2007Last week, Joe Nocera had an excellent piece in the NY Times about how college loans became so exorbitant. Nocera first relates his own college loan experience--in 1974:
...I was constantly falling behind on my payments. The bank that administered my federally guaranteed loans would send a stern notice whenever I got too far behind, which would prompt me to cobble together a few payments by skipping some other bill. Then I would start falling behind again.
Though I found the situation onerous at the time, what strikes me now is how benign it actually was. My bank probably didn't make a dime…
mikethemadbiologist | August 2, 2007Once again, Robert Samuelson tries to argue that Social Security is DOOOMMMEEDDD! one Samuelson Unit from now. Samuelson falls back on his old standby--lumping Social Security and Medicare together. Mark Thoma explains:
The main problem is rising medical costs, and unlike the misplaced emphasis on Social Security in the last election, there is a lot of focus on health care reform in the political debate this time around. Samuelson seems to have completely missed the connection between health care reform and his pet column peeve, hence his claim that the problem is being ignored in the…
mikethemadbiologist | July 31, 2007By way of Brad DeLong, I came across a post by Tyler Cowen that discusses 'fast track' article review:
-sounds like grants to mehttp://delong.typepad.com/sdj/2007/07/academic-journa.htmlhttp://www.marginalrevolution.com/marginalrevolution/2007/07/economic-i…
More insidious, in my view, is the gradual morphing of the referees from evaluators to anonymous co-authors. Referees request increasingly extensive revisions. Usually these represent improvements, but the process takes a lot of time and effort, and the end result is often worse owing to its committee-design. Authors, knowing referees…
mikethemadbiologist | July 30, 2007Romney has been so good for Massachusetts. Imagine what he can do for the country. From the Boston Globe:
On all key labor market measures, the state not only lagged behind the country as a whole, but often ranked at or near the bottom of the state distribution. Formal payroll employment in the state in 2006 was still 16,000 or 0.5 percent below its average level in 2002, the year immediately prior to the start of the Romney administration. Massachusetts ranked third lowest on this key job generation measure and would have ranked second lowest if Hurricane Katrina had not devastated the…
mikethemadbiologist | July 17, 2007A couple of days ago, I blogged about the Laffer curve. Hilzoy brilliantly skewers the idiotic Wall Street Journal piece that 'supported' the Laffer curve:
Brilliant. Go read the whole thing.
mikethemadbiologist | July 16, 2007Over the weekend, there was a lot of discussion of those ridiculous conservative faithtank graphs that were rerun in the Wall Street Journal. Several of my fellow ScienceBloglings have debunked the analysis that claims these data support the Laffer curve, although my favorite criticism is by Brad DeLong who points out that to prove something the editorial writers like (the Laffer curve), the Wall Street Journal editors use the the Norwegian data, and to weaken something they don't (increased corporate taxes lead to increased tax revenue), they remove the same data.
Is there any question how…
kcontreary | July 14, 2007Anyone who has traveled in Europe before and after the introduction of the euro can appreciate how easy tourism is made by the common currency (haggling with the guys in money change booths was never my idea of vacation). But a recent paper by Benn Steil in Foreign Affairs goes even further, arguing that the adoption of regional or multi-state currencies is better for economic development than the cornucopia of national currencies used in the world today.
Time was, Steil recalls, it was said that three things were necessary in order to be a "real country": an airline, a stock exchange, and…
mikethemadbiologist | July 5, 2007The FTC has released a report calling for the end of net neutrality (FTC's pdf report here*). What does that mean? Well:
The Federal Trade Commission (FTC) has decided to abandon net neutrality and allow telecoms companies to charge websites for access.
The FTC said in a report that, despite popular support for net neutrality, it was minded to let the market sort out the issue.
This means that the organisation will not stand in the way of companies using differential pricing to make sure that some websites can be viewed more quickly than others. The report also counsels against net…
mikethemadbiologist | June 10, 2007I'm usually loathe to rip into a top-notch economist like Brad DeLong, especially when he titles his post "An Unrealistic, Impracticle, Utopian Plan for Dealing with the Health Care Opportunity." But several things bothered me about that post.
What I've never understood about the entire healthcare debate is the need to invent completely new plans. My take on this is ultimately pragmatic: find a system that provides universal coverage and good healthcare and institute it. Much of Europe--including the dreaded French--have very good healthcare. Translate the damn documentation, slap a big…
mikethemadbiologist | May 10, 2007More scary food news from China: Chinese catfish have been found to contain fluoroquinolone residues. Fluoroquinolones are medically important antibiotics and include ciprofloxacin ("Cipro") and enrofloxacin (which has been banned from agricultural use in the U.S.). Not only can fluoroquinolones be toxic and cause allergic reactions, but this means that China is probably still misusing these vital antibiotics. From the Clarion Ledger (italics mine):
Catfish contamination at some Mississippi grocery stores could indicate a much larger problem with the safety of imported foods, state…
mikethemadbiologist | May 8, 2007Senator Obama earned a lot of points in my book today because he took the leadership of the U.S. auto companies to task for being such retrograde, anti-progress morons. From the NY Times (italics mine):
In a speech that hit hard at the failings of Detroit automakers, Mr. Obama, a Democratic presidential candidate, said Japanese companies had done far better than their Detroit counterparts to develop energy efficient vehicles....
"For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in…
mikethemadbiologist | May 8, 2007Or socialist. Or maybe just Swedish. By way of Ezra Klein, I came across these polling data collected by Ruy Teixeira:
If you hold both of these views (and arguably, even just one), you are an economic liberal. Not a moderate, but a liberal. I realize many people don't want to be called liberals, but these positions have historically been identified as liberal. And guess what? Liberals hold liberal positions. If you want to call yourself Martian, that's fine, but you're a liberal Martian.
There seems to be more of us too (liberals, not Martians): the majority--not a plurality, a…
mikethemadbiologist | May 2, 2007Tristero has an interesting multiple choice exam for everyone. I have a minor problem with one answer, however (italics mine):
(B) Advocating the privatization of Social Security as a means of resolving a very real but overblown problem - as favored by the Bush administration and conservatives in Congress - looks increasingly foolish and indefensible.
As I've argued before, Social Security will most likely go bankrupt one Samuelson Unit from now. Given that the Samuelson Unit is always 30-38 years from the time of measurement, and requires the tanking of the U.S. economy for an…
purepedantry | May 1, 2007I live in Manhattan, and it has always been a source of fascination how prices got so exorbidant. While I am somewhat protected from market forces -- I live in school-subsidized housing -- even with the help I have a room only slightly wider than my mattress and a shower just about big enough to stand sideways in.
Anyway, Free Exchange had this great post on why is so ridiculous here in Manhattan:
The problem, after all, is just as pronounced in New York's the rental market. The current vacancy rate for apartments in Manhattan is less than 1%. Rents of several thousand dollars a month for…
mikethemadbiologist | May 1, 2007...that it kills a great punchline. You see, companies are actually trying to buy the Brooklyn Bridge. That's what Business Week says, anyway.
Ian Welsh, at the Agonist, comments:
I don't understand why this is even considered. You don't put basic infrastructure like this in private hands, because it allows monopoly pricing. They will squeeze the most money out of it they can, and that will be the majority of the surplus value produced by the roads. Since they will set the cost to maximize profits, it will be above what a proportion of the population and a proportion of businesses can…