economics
mikethemadbiologist | January 28, 2011Washington Post columnist E.J. Dionne recently wrote this about Obama which puzzled me:
An Obama who roared straight ahead hit a political wall. This next Obama is using finesse and subtlety to get to the same place.
Roared straight ahead? Obama? Yes, he appointed two not-batshit-lunatic Supreme Court Justices. But economically, how different would he have been than a Republican? Maybe there would have been more tax cuts and less spending in the ARRA, but even Republicans would have done something. Consider:
What do the American economy and economic policy look like right now on that…
mikethemadbiologist | January 27, 2011It would be for the best.
First, some general thoughts. I had the distinct sense Obama was trying to run the clock out. He knew he had to say something, but has no room to maneuver. Thanks to his mediocre first two years and his enabling of conservative talking points (which one wonders if that's not strategic, but ideological), the Democrats lost control of the House and have been boxed into a corner rhetorically. Related to that, he set the stage over and over again to box Republicans in, but then he mostly chickened out and rarely offered concrete proposals that would put them in a…
mikethemadbiologist | January 25, 2011Last week, I mentioned how NY Times op-ed columnist and economist Paul Krugman has finally had his 'creationist moment': "the epiphany one realizes that, to creationists, words have no meaning, that they are not being honest." Well, a reader points us to yesterday's post on Krugman's blog, "The War on Demand." Krugman knocks down the arguments that the current depression isn't a result of inadequate demand, but what's really interesting is what he writes near the end:
It's kind of shocking if you think about it. Here we have a huge, hard-won intellectual achievement [the recognition that…
mikethemadbiologist | January 25, 2011To his credit, economist Brad DeLong "who stands here repentant" lists "five things that I thought I knew three or four years ago that turned out not to be true." I would like to visit each of them, since I think highlights economics' need for 'economic natural history' and sociology. Over to DeLong:
1) I thought that the highly leveraged banks had control over their risks.
My take on this is very different. First, my personal experience: back when I was a post-doc and living on Long Island, shortly after the turn of century (Eek....), I went to the bank for some other business, and they…
mikethemadbiologist | January 24, 2011Or not. By way of Paul Kedrosky, we come across this scintillating abstract:
UP OR DOWN? A MALE ECONOMIST'S MANIFESTO ON THE TOILET SEAT ETIQUETTE
JAY P. CHOI,â
This paper develops an economic analysis of the toilet seat etiquette. I investigate whether there is any efficiency justification for the presumption that men should leave the toilet seat down after use. I find that the "down rule" is inefficient unless there is a large asymmetry in the inconvenience costs of shifting the position of the toilet seat across genders. I show that the "selfish" or the "status quo" rule that leaves…
mikethemadbiologist | January 19, 2011I've written many times that everything you need to know about movement conservatism can be understood by observing creationists (not surprising, since the theopolitical right is a major element of the conservative movement). I'm glad to see NY Times columnist and economist Paul Krugman has finally reached his 'creationist moment': the epiphany one realizes that, to creationists, words have no meaning, that they are not being honest.
Let's jump to the end of Krugman's recent op-ed "The War on Logic" (italics mine):
The key to understanding the G.O.P. analysis of health reform is that the…
mikethemadbiologist | January 11, 2011Kevin Drum describes a question he threw out to his readers:
So how to get at the difference? Well, I figured one possible way is this: if you really were a fairly ordinary upper middle class wage earner making $100K per year, and you had a 50-50 chance of either joining the ranks of the elite or falling down to the bottom of the working class [making $30,000 per year, with no chance of improvement or aid from others], which seems further away to you? The answer from comments was loud and clear: the bottom of the working class. I didn't count, but I'd say only about 10% of commenters were…
mikethemadbiologist | January 3, 2011We typically don't think of money as technology, but money is very different than it used to be. Over at the Agonist, Bolo has two very good posts about the implications of having a fiat, non-gold standard currency, and in doing so, he gives a very good summary of modern monetary theory ('MMT') that is accessible to non-economists (Bill Mitchell and James Galbraith are great, but they aren't good explainers to a 'lay' audience; it's frustrating). For me, this is the key implication of MMT (italics mine):
1) The total amount of money is not constrained by some fixed amount of gold. Instead…
mikethemadbiologist | January 1, 2011The largest political battle, barring something really stupid coming along, in the next few months will be over the attempt to raise the federal debt limit. While it sounds boring, it's critical to every budget item, including science funding. Without increasing the federal debt limit, the U.S. would default on its debt (as well as be unable to pay for all of the allocated federal spending). Keep in mind this federal debt limit is absolutely artificial: since the U.S. has a sovereign and fiat currency, this is a self-imposed constraint. We could set the debt limit to any amount or even…
mikethemadbiologist | December 16, 2010I've written before about the municipal and state level fiscal crises that are occurring across the U.S. (and, yes, this was not only predictable, it was predicted). Well, now we have a new crisis: no more BABs. BABs is short for Build America Bonds program, and there are two types of BABs:
1) BABs that give the recipient (i.e., the bond purchaser) a federal tax credit--this subsidizes the purchase of the bond, making it cheaper.
2) BABs that give the issuer (the state or local government) a subsidy of 35% of the interest. This lowers the amount the state or local government has to pay…
mikethemadbiologist | December 14, 2010For anyone trying to make a living at blogging, including our Seed Media Overlords, one of the major hurdles is the poor pay of internet advertising compared to magazine and newspaper advertising. This is an accurate assessment of the problem (italics mine):
I think the evidence for this dynamic is weaker than a lot of people suspect. As far as I can tell, it's all based on Google. GOOG showed up and provided contextualized ads to consumers and a model that allowed advertisers to only pay for purchases that were "working". This is pretty much the only way they make money, and they make a lot…
stoat | December 13, 2010 Tim Worstall has written a book, and not only that, he sent me a copy to review. So I have. And this is it.
It is a Slim Tome, as I believe delicate lady poets are wont to publish; yours for £6.74 off Amazon. Being slim is good; far too many books now are bloated and turgid.
First the Good News (if you're Tim, or are thinking of buying it): the book is worth reading and will stimulate your thinking about the interface between economics and climate change; or possibly greenery in general.
On the other hand, if you're looking for an excuse not to read it, you'll find one. You could get hung…
mikethemadbiologist | December 13, 2010Or for that matter, any of the other tax cut silliness or fiscal austerity madness. Because to lower unemployment to where it was in early 2007 over the next eighteen months, that's what we'll have to do. The Slacktivist lays out the numbers:
Now, from 2007 through early 2009 the American economy saw some 8 million or so layoffs. These people were not fired, they were laid off.
The arithmetic involves large numbers, but it is not complicated. The economy gained 8 million unemployed workers and lost 8 million job openings. Those 8 million people could not just go get another job because…
mikethemadbiologist | December 11, 2010Merry Christmas! Guess who would see their taxes increase as a result of the Obama-McConnell plan? Well:
The wealthiest Americans will also reap tax savings from the proposal's plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.....
In fact, the only groups likely to face a tax increase are those near the bottom of the income scale -- individuals who make less than $20,000 and families with earnings below $40,000.
Contrast this with who gets new tax cuts--this is not keeping the Bush cuts, but adding a whole new set of…
mikethemadbiologist | November 29, 2010Last week, I discussed the butchering by Stanley Fish of an economic explanation for why college costs are high--and, as importantly, where all of that money goes. Robert Archibald and David Feldman offer a good response to their critics in The NY Times, but this is the key point (italics mine):
We would like to thank Stanley Fish for allowing us to respond to reader comments regarding his column about our new book. Reading them felt like working through the worst set of course evaluations a professor ever received.
The power of the dysfunction narrative was on full display in the…
mikethemadbiologist | November 28, 2010Or, at least, don't obey Massachusetts law and receive the healthcare they are entitled to. Esterline Technologies demonstrates that much of what passes for 'rational business decision making' is actually ideology combined with petty personal vendetta. From Yves Smith:
This story illustrates how far some companies are willing to go to preserve their bottom lines and assert their right to operate in an unfettered manner, even when that includes breaking the law and violating contracts...
Esterline is in the process of shuttering its Tauton manufacturing operation, Haskon Aerospace, which…
mikethemadbiologist | November 20, 2010Keep in mind that this GE plant primarily makes parts for defense contracts--these jobs are provided by a guaranteed contract:
General Electric Co. has made an unusual offer to the state: Give us $25 million in tax credits, and we won't cut any more than 150 positions at our aircraft engine plant in Lynn.
The conglomerate has already cut the Lynn plant's workforce by 600 jobs and could cut 150 more. But General Electric said that if it receives the state aid to help fund a $75 million retooling of the plant, it would maintain the remaining 3,000 jobs for six years.
If you're thinking this…
mikethemadbiologist | November 16, 2010Following on yesterday's post about the use of the "OOH! SHINY PEBBLE!" trick by focusing on deficit reduction, we find that, over at TPM, Rotwang nails the deficit reduction misdirection hooey too:
I beg you all to not get embroiled in the bankrupt pastime of figuring out how to balance the budget. That is what all the very serious people, the economic royalists of The Washington Post ("If you don't get it, you've got a quarter!"), the ignorant television talking heads, and now a parade of bankrupt commentators and commissions would have us do. This is the ultimate sucker's game.
Amen.…
mikethemadbiologist | November 14, 2010I'll have more to say about the report put out by the chairmen of the National Commission on Fiscal Responsibility and Reform, but this section, found on page 6, "Our Guiding Principles and Values", indicates the lunacy and moral bankruptcy of the commission*:
Bring spending down to 22% and eventually 21% of GDP.
How is this a principle? It's just a fucking number.
Why can't the Magick Number be 23 percent? Or twenty six percent? Hell, every European country with the exception of Switzerland spends more than thirty percent of its GDP on government functions.
We should spend what we need to…
mikethemadbiologist | November 14, 2010This should be the new Democratic talking point about tax cuts:
We need to change the thinking. Taxes are not too high. Incomes are too low. If you are having problems paying your taxes then you need a raise, not a tax cut. Democrats need to practice this response to anyone talking about tax cuts. The sooner Republicans realize that talking about tax cuts leads people to want and think they deserve a raise, the sooner they will stop talking about them and we can have some sanity in our economic discussions.
I like this, since it mirrors my experience.
Really long-time readers will remember…