"The forces of the market are just that: They are forces; they are like the wind and the tides; they are things that if you want to try to ignore them, you ignore them at your peril, and ... if you find a way of ordering your life that is compatible with these forces, indeed which harnesses these forces to the benefit of your society, that's the way to go." -- Arnold Harberger, University of Chicago Economist
Monday, August 31, 2009
Economists Are Split on Inflation - 8/31/09 WSJ.com
Half of 266 members of the National Association for Business Economics surveyed in August said the Fed's decisions to increase the money supply won't lead to inflation in the next few years, the NABE said Monday. Some 41% disagreed, though, citing 'lagged effects of policies now in effect,' 'monetization of the debt' and 'ineffective exit strategy' as their primary concerns.
The economists overall said they expect inflation excluding food and energy to average 3% from 2014 to 2018. 'This may reflect their view that an excessively stimulative fiscal policy and a complicated exit from its quantitative easing policies over the medium term will result in the Fed tolerating a higher level of inflation than it desires,' the NABE report said. The Fed aims to keep inflation between 1.5% and 2%.
Recent debate over the Fed's strategy for reducing its large holdings of government bonds and mortgage-backed securities has centered on timing. If the Fed waits too long to bring the programs to a close, the economy runs the risk of inflation. But if it attempts to wind them down too soon, while the economy is still weak, it could hinder the recovery....
Wednesday, August 26, 2009
Monday, August 24, 2009
Policy Makers Seek to Learn From 1937's Stalled Comeback - WSJ.com
"The Great Depression was W-shaped. The stock-market collapse led to a steep economic decline. But by 1933, the economy had rebounded. Then a series of monetary and fiscal blunders drove the country back into a deep recession at the end of 1937.
That episode is at the heart of the debate over how quickly the government and the U.S. Federal Reserve should unwind the emergency measures they have taken to fend off a Depression-like contraction."
Wednesday, August 19, 2009
Obama on Government-provided health care and the post office - Bloomberg.com
"Impromptu Obamanomics is getting scarier by the day. For all the president’s touted intelligence, his un-teleprompted comments reveal a basic misunderstanding of capitalist principles.
For example, asked at the Portsmouth town hall how private insurance companies can compete with the government, the president said the following:
“If the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining -- meaning taxpayers aren’t subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do -- then I think private insurers should be able to compete.”
... Government programs aren’t self-sustaining by definition. They’re subsidized by the taxpayer. If they were self-financed, we’d be off the hook.
Llewellyn Rockwell Jr., chairman of the Ludwig von Mises Institute in Auburn, Alabama ... put it this way in an Aug. 13 commentary on Mises.org:
“The only reason for a government service is precisely to provide financial support for an operation that is otherwise unsustainable, or else there would be no point in the government’s involvement at all....”
Tuesday, August 18, 2009
The Panel - WSJ.com
Monday, August 17, 2009
Households Start to Rival the Chinese in Treasury Market - WSJ.com
But that has obscured an important change: The market for Treasury bonds is now more reliant on U.S. buyers -- including the Federal Reserve after its recent buying spree -- than the Chinese.
China held $801.5 billion in Treasury debt at the end of May. The Fed at that time held about $598 billion, although that has now risen to $704 billion. The latest figures for U.S. households, from the first quarter, showed holdings of $643.9 billion -- more than double the $266.6 billion in the fourth quarter of 2008."
Friday, August 14, 2009
YouTube - Reagan - A great 1964 speech!
Thursday, August 13, 2009
Charles Murray: Tax Withholding and a Separate Payroll Tax Hide the True Burden of Government - WSJ.com
Yes, you read it right: 1% of American families paid 40% of America's personal taxes.
The families in the rest of the top 5% had family incomes of $160,000 to $410,000. They paid another 20% of total personal income taxes. Now we're up to three out of every five dollars in personal taxes paid by just five out of every 100 American families.
Turn to the bottom three-quarters of the families who filed income tax returns in 2007—not just low-income families, but everybody with family incomes below $66,500. That 75% of families paid just 13% of all personal income taxes. Scott Hodge of the Tax Foundation has recast these numbers in terms of a single, stunning statistic: The top 1% of American households pay more in federal taxes than the bottom 95% combined."
Wednesday, August 12, 2009
Lead Limits and Penalties Hurt Businesses - WSJ.com
Tuesday, August 11, 2009
Don’t Ruin Venture Capital Firms by Over-Regulation - WSJ.com
No venture capital firm has asked to be bailed out, and none are too big to fail. As hard as it is for regulators to understand, the nature of venture capital is such that it should not even aspire to be a low-risk enterprise."
Saturday, August 8, 2009
Data Mining Isn't Good Bet for Investors - WSJ.com
By tossing in U.S. cheese production and the total population of sheep in both Bangladesh and the U.S., Mr. Leinweber was able to 'predict' past U.S. stock returns with 99% accuracy."
'You Are Terrifying Us' - Peggy Noonan - WSJ
Friday, August 7, 2009
Cash-strapped Cuba says toilet paper running short
Thursday, August 6, 2009
Utopia Versus Freedom - Thomas Sowell
Tuesday, August 4, 2009
Buyers Brace for New Wave of Sales - Size of Treasury Auctions Last Week Took Many by Surprise - WSJ August 3, 2009
"After having to swallow a record $200 billion in new debt in just three days, the market for Treasurys is anxiously awaiting news this week on how much more is coming its way.
The Treasury Department is scheduled to issue a quarterly update Monday about its forthcoming borrowing needs. Wednesday, it will announce a series of auctions to be held next week, this time for three-year, 10-year and 30-year notes and bonds.
Few doubt the numbers will again be big, as the government seeks to finance a record budget deficit and to fund a continuing effort to stimulate the recession-bound economy.
The Treasury announcements are "going to set the tone for any new debt, to show how they are going to deal with the massive amount they still have to sell," said Jim Vogel, a strategist at FTN Financial.
Mr. Vogel said the large two-year, five-year and seven-year auctions "caught people off guard" last week.
Both the two-year and the five-year auction saw big declines in their bid-to-cover ratios and a drop in indirect bidders, which stoked fears that foreign central banks are losing interest in buying Treasurys. Such concerns could be heightened by the dollar, which dropped sharply Friday....
Saturday, August 1, 2009
GDP advance estimate, Q2 2009
The economy is coming closer to the end of recession based on the advance estimate for second quarter GDP. The economy contracted in the second quarter by only 1.0 percent, following a revised 6.4 percent drop in the first quarter. The second quarter was close to the market consensus for a 0.7 percent dip. Today's report contains historical benchmark revisions to GDP. The previous estimate for the first quarter decline was 5.5 percent.
Weakness in the current quarter was almost offset by component strength. Pulling down GDP in the latest quarter were business fixed investment, housing, personal consumption, and inventories. Strength was found in a sharp narrowing in the trade gap and a rebound in government spending."
The current recession (Dec. 2007 - ?)
"The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months."
Recession and Business Cycle Dates
"A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion."