economics
mikethemadbiologist | May 22, 2010One of the things that bothered me about the 'stimulus' bill (other than it not being called an employment bill) is that there was a focus on things being 'shovel ready.' Not only did this imply that the depression* would be short-term (whereas un-, underemployment, and flat wages are largely ongoing structural problems), but 'shovel ready' also implied that keeping state and local budgets stable--not laying people off and cancelling orders with private contractors--was out of bounds (thanks Senator Nelson!). Atrios sums it up well:
I'm personally a bit tired of hearing about all of the…
mikethemadbiologist | May 21, 2010Contrary to what some might think, I'm not opposed to investment bank and bankers, I'm just opposed to the current crop of banks and bankers. But even more than usurious middle men, the guys who really make my head explode are the flat-out speculators--they serve, even on their best days, no useful purpose whatsoever. And thanks to the recent stock market computer glitch that caused the Dow to temporarily dive ten percent, speculators known as high-frequency traders are finally getting noticed (italics mine):
Depending on whose estimates you believe, high-frequency traders account for 40 to…
mikethemadbiologist | May 17, 2010One of the things that never ceases to amaze me is that our entire political class (both politicians and the mandarin hangers-on) still does not comprehend that the balance of accounts must sum to zero. That is, aggregate savings (all the stuff private entities, from corporations to individuals to non-profits, own) require government deficits (one way around this is trade surpluses, but we try to deal with the real world around here). It is impossible for the government and the entire private sector to both run surpluses. This isn't political theory or ideology, it's arithmetic.
So when…
mikethemadbiologist | May 6, 2010By way of Digby, we come across Atrios' excellent summary of the TARP program:
It's a little weird that reporters are hesitant to clearly spell out what happened. Basically the Fed printed a huge amount of money. Some of that money they used to do what TARP was originally supposed to do, buy up Big Shitpile at inflated prices. Some of that money they lent to banks at basically 0 interest. Of course there were plenty of other things they could have done with 2 trillion bucks, if preserving the executive compensation at megabanks wasn't thought to be crucial for the survival of the economy.…
illconsidered | May 3, 2010A = $6.08 billion
B = $75 million
Profits for the single last quarter for BP were 6.08 Billion dollars. Under current US law, their total liability for non-cleanup and containment damages is .075 Billion dollars.
Would any free market supporters like to defend this thinly veiled example of corporate welfare?
See also Things Break for some early estimates of how bad the worst case scenario could get, including implications for the entire US economy.
Like Katrina, global warming did not cause this disaster. But also like Katrina, it is an excellent illustration of issues relating to risk…
ddobbs | April 30, 2010
from The Everett Collection, via Vanity Fair
Notables I didn't get to. Blog posts, MSM stories, and tweets living together.
Fron the genomics front
NOVA | Ghost in Your Genes | PBS streams some of the Skip Gates program I mentioned in my post last week on the Genomes, Environments, and Traits conference.
What can you learn from a whole genome sequence? : Genetic Future ponders just the Lancet/Quake genome
Heritable, yes, which gene...another issue Razib drills down. He argues elsewhere that The origins of morality do not matter |
AP IMPACT: Testing curbs some genetic diseases -…
mikethemadbiologist | April 25, 2010I've always thought that the primary reason for tenure at the collegiate level was economic. Intellectual freedom notwithstanding, without academic tenure, universities would either have to pay more for their faculty or wind up with worse faculty. Consider an undergraduate who might have loans to pay off. Then add five to eight years during which, if he is lucky, he doesn't accumulate debt, but certainly isn't saving any money. Then add the post-doc (at least one) where, again, there's low wages and little savings. Follow that with five to nine years of running like hell, at which point…
mikethemadbiologist | April 24, 2010On April 28, there's a conference being held to counteract the conference held by the 'fiscally responsible' Peterson Foundation:
"The Fiscal Sustainability Teach-In Counter Conference will be the important event in Washington on April 28. Unlike the other meeting, this one will feature important work by honest scholars. It deserves at least equal attention, and very much more respect."--- James K. Galbraith, The University of Texas at Austin. [April 19, 2010 via email]
* * *The deficit hawks at the Peterson Foundation are at it again: attacking Social Security and Medicare with…
mikethemadbiologist | April 23, 2010Or, if you prefer, the housing bubble that started well before the onslaught of CDOs. First, let me point out for readers that ScienceBlogling Mark Chu-Carroll's description of the latest Vampire Squid Goldman Sachs scandal is perhaps the clearest and most concise description of the whole CDO problem. Having said that, CDOs weren't the fundamental problem. The fundamental problem was a housing bubble that existed before CDOs became rampant--although CDOs probably ran the bubble up further. But as I've noted elsewhere, housing prices were already wildly inflated .
Dean Baker lays out the…
emjohnson | April 22, 2010A new study shows that chimps sacrifice their own advantage if they earned it unfairly.Image: Owen Booth / Creative Commons
Fairness is the basis of the social contract. As citizens we expect that when we contribute our fair share we should receive our just reward. When social benefits are handed out unequally or when prior agreements are not honored it represents a breach of trust. Based on this, Americans were justifiably outraged when, not just one, but two administrations bailed out the wealthiest institutions in the country while tens of thousands of homeowners (many of whom were…
mikethemadbiologist | April 21, 2010For most people reading this blog, especially the scientists, budgets matter. Not only is most of the cool science stuff you read about here funded by government funds, but, unless you're independently wealthy, you're going to need an uncut, untouched by Peter Peterson Social Security. Regarding budgets and deficit spending, we constantly hear about 'responsible fiscal policy'--that is, we can't engage in deficit spending (I've dealt with this silliness here and here). But political wishes notwithstanding, unless we want to reduce our savings (the stuff individuals and businesses own), we…
jstemwedel | April 19, 2010Over at the DrugMonkey blog, PhysioProf noted that a push to increase NIH postdoctoral fellowship stipend levels by 6% may have the effect of reducing the number of postdoctoral positions available.
To this, the postdoctoral masses responded with something along the lines of, "Hey, it's possible that there are too damn many postdocs already (and fighting for those rare tenure-track positions in a slightly less crowded field might be better)," and "Being able to pay my damn bills might significantly improve my quality of postdoctoral life." There were also the expected mentions of the fact…
sastyk | April 13, 2010To make up for yesterday's frivolity, today I am going to be very, very serious, and deal with weighty serious things. There will be no levity - not from me, and certainly not from my very serious readers. In fact, if I detect signs of levity from any of you, especially those of you with sad proclivities towards levity (Risa, Edson, Lora...I'm talking to you!), you will be publically denounced from my pulpit (I have to go build a pulpit now.)
More practically, I'm going to try and catch up on some things people have asked me to write about, many of which are more serious and require more…
mikethemadbiologist | April 11, 2010In fact, it didn't even require much in the way of theory. As financial reform legislation moves its way through the legislative process, we're going to hear a lot of claims along the line of "No one could have predicted this." Which makes me wonder if we're going to militarily occupy Wall Street for a decade too. Of course, this is bullshit, and economist Dean Baker calls out this ersatz 'consensus':
Yeah, it's all really really complicated. Except it isn't.
Nationwide house prices had diverged from a 100-year long trend, increasing by more than 70 percent in real terms. There was no…
mikethemadbiologist | April 8, 2010I was going to call this review "Naked Came the Economist", but ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism by Yves Smith of Naked Capitalist is too well written. ECONNED can be divided in two major sections. The first part deals with the flawed economic assumptions that led to the collapse of Big Shitpile and other economic fun times. The second part provides a natural history of what happened, while, at the same time, relating it to the flawed economic assumptions. To deal with the last part first, it's a very good description, although those…
mikethemadbiologist | April 6, 2010Recently, some people have been asking if Wall Street, Big Shitpile and the other elements of the Great Pandimensional Economic Clusterfuck of 2008-2009 would have been as bad if women were more common on Wall Street. My answer: absolutely not. What follows are some personal experiences as to why I think this.
Many years ago (OK, around 2000), when people, by and large, still respected Wall Street and investment bankers*, I was often told I was being wimpy for putting most of my 401(k) money into U.S. securities and bonds (GIRLIE MAN!), instead of stocks and other high-risk, high-yield…
sastyk | April 2, 2010I'm a day late with Nate Hagen's piece, but I just have to link here - it has a beauty and elegance I really admire, and Id do wish him the very best of luck in his new venture. In fact, I'm starting to think that maybe I can cash in too!
OK - here it is in a nutshell - though I used to think the main problem with economic theory was that it ignored biology on the demand side and ecology on the supply side, I now see the reality is that neither biology nor ecology has incorporated enough economic theory. Basically, my efforts at falsification of positive economics even down to the day to day…
razib | March 23, 2010In this diavlog with Glenn Loury the behavioral economist Sendhil Mullainathan recounts the results of an experiment.
- If given the option of paying $100 for an item vs. $80 for an item, but in the second case having to go across town for the item, respondents choose $80 and going across town
- If given the option of paying $1000 for an item vs. $980 for an item, but in the second case having to go across town for the item, respondents choose $1000 and not going across town
This the result of a heuristic bias whereby we seem to perform comparisons as percentages, and not the absolute value…
cagapakis | March 23, 2010I read R.C. Lewontin's Biology as Ideology: The Doctrine of DNA over the weekend and was struck in particular by one line in his wonderful diatribe against biological determinism and reductionism:
"Intellectuals in their self-flattering wish-fulfillment say that knowledge is power, but the truth is that knowledge further empowers only those who have or can acquire the power to use it."
This is something that was really hard to read at first, especially as someone who is overeducated and clearly spends a lot of time thinking about educating other people about science. But I realized that it…
emjohnson | March 20, 2010RaceWire is reporting that Thomas Hagan, one of three men convicted for the assassination of Malcolm X (and the only to plead guilty), was released after his 17th attempt at parole yesterday. Hagan, at the time of the murder, was known as Talmadge X and was a militant member of the Nation of Islam.
According to The New York Times:
Mr. Hagan said in a 1977 affidavit that he and several accomplices . . . decided to kill Malcolm X because he was a "hypocrite" who had "gone against the leader of the Nation of Islam," Elijah Muhammad. Mr. Hagan said that after one man shot Malcolm X in the chest…