This is really good. Macro policy summarized in two pictures:
Showing posts with label LP. Show all posts
Showing posts with label LP. Show all posts
Thursday, March 7, 2013
Macroeconomics in two pictures (from Greg Mankiw)
This is really good. Macro policy summarized in two pictures:
Thursday, November 8, 2012
Some post-election cheer and encouragement
Some post-election cheer and encouragement
EXCERPT:
"His election has revealed that the American people chose someone who wants the US to be more like Europe–more statist and paternalistic. I have heard people who feel like giving up. If we can’t beat this guy, it’s over. We’re on the road to serfdom. Could be. But I think the glass is more half-full than half-empty. So here is some cheer for those of you who are pessimistic about the future.
"Yes, a little over half of the people who voted, a little over 60 million people, thought Obama deserved a second term. But about 59 million (the combined Romney and Gary Johnson votes) disagreed. That’s pretty close. Politics is winner-take-all, a zero-sum game. But those totals tell you just how close it was and how little it will take to change the outcome.
EXCERPT:
"His election has revealed that the American people chose someone who wants the US to be more like Europe–more statist and paternalistic. I have heard people who feel like giving up. If we can’t beat this guy, it’s over. We’re on the road to serfdom. Could be. But I think the glass is more half-full than half-empty. So here is some cheer for those of you who are pessimistic about the future.
"Yes, a little over half of the people who voted, a little over 60 million people, thought Obama deserved a second term. But about 59 million (the combined Romney and Gary Johnson votes) disagreed. That’s pretty close. Politics is winner-take-all, a zero-sum game. But those totals tell you just how close it was and how little it will take to change the outcome.
Saturday, September 22, 2012
Tuesday, July 31, 2012
Milton Friedman's Centenary - by Thomas Sowell
Milton Friedman's Centenary | RealClearPolitics
EXCERPT:
"No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him. As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman's course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting."
EXCERPT:
"No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him. As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman's course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting."
Thursday, July 19, 2012
You Didn't Sweat, He Did - WSJ.com
You Didn't Sweat, He Did - WSJ.com
Obama may be God's gift to comedy, but Romney is right that the philosophical stakes here are serious. The president's remark was a direct attack on the principle of individual responsibility, the foundation of American freedom. If "you didn't build that," then you have no moral claim to it, and those with political power are morally justified in taking it away and using it to buy more political power. "I think that when you spread the wealth around, it's good for everybody," Obama said in another candid moment, in 2008.
This isn't even Obama's only such revelatory comment of the past week. Politico.com reports that the president, in an interview with WTOL-TV of Toledo, Ohio, let the mask slip again when asked about the ObamaCare mandate tax. "It's less a tax or a penalty than it is a principle--which is you can't be a freeloader on other folks when it comes to your health care, if you can afford it," he said.
Of course this is a dodge. The administration claimed that the mandate was not a tax for political purposes but was a tax for legal purposes. Chief Justice John Roberts tied himself in knots to accept the argument Obama is now running away from. Between them, the solicitor general and the chief justice look as if they were too clever by 1.
What's objectionable about Obama's comment, however, is not "tax" or "penalty" or even "principle." It's the way he uses the word "freeloader."
Normally we think of a freeloader as somebody who sponges off others, which in the context of public policy means the government. A freeloader is an able-bodied welfare recipient, or someone who fakes a disability to collect Supplemental Security income, or who waits until his unemployment runs out before looking for a job.
Associated Press
Now, think about how the ObamaCare mandate tax is structured. As Roberts noted in his opinion for the court in NFIB v. Sebelius, "It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status."
The only people who pay the ObamaCare mandate tax are people who make a living. Actual freeloaders are exempt. What Obama calls a freeloader is someone who makes his own money and pays his taxes but does not spend his money in the government-approved way.
The Obama campaign hotly disputes Romney's contention that the president meant what he said. A "fact check" from the Obama-Biden "Truth Team" (formerly Attack Watch) claims that Romney "is taking President Obama's words out of context" to produce "a complete distortion." Here is the full context, as presented by the Truth Team:
That's bunk, and not only because "business" is more proximate to the pronoun "that" and therefore its more likely antecedent. The Truth Team's interpretation is ungrammatical. "Roads and bridges" is plural; "that" is singular. If the Team is right about Obama's meaning, he should have said, "You didn't build those."
Barack Obama is supposed to be the World's Greatest Orator, the smartest man in the world. Yet his campaign asks us to believe he is not even competent to construct a sentence.
By JAMES TARANTO
"If you've got a business, you didn't build that." If the World's Greatest Orator turns out to be a one-term president, it is likely to go down as the most memorable utterance of his career. Mitt Romney certainly hopes that happens. HotAir.com's Ed Morrissey has highlights of Mitt Romney's response, in a speech yesterday at Irwin, Pa.:The idea to say that Steve Jobs didn't build Apple, that Henry Ford didn't build Ford Motor, that Papa John didn't build Papa John Pizza, that Ray Kroc didn't build McDonald's, that Bill Gates didn't build Microsoft, you go on the list, that Joe and his colleagues didn't build this enterprise, to say something like that is not just foolishness, it is insulting to every entrepreneur, every innovator in America, and it's wrong.
And by the way, the president's logic doesn't just extend to the entrepreneurs that start a barber shop or a taxi operation or an oil field service business like this and a gas service business like this, it also extends to everybody in America that wants to lift themself [sic] up a little further, that goes back to school to get a degree and see if they can get a little better job, to somebody who wants to get some new skills and get a little higher income, to somebody who have, may have dropped out that decides to get back in school and go for it. . . . The president would say, well you didn't do that. You couldn't have gotten to school without the roads that government built for you. You couldn't have gone to school without teachers. So you didn't, you are not responsible for that success. President Obama attacks success and therefore under President Obama we have less success and I will change that.
I've got to be honest, I don't think anyone could have said what he said who had actually started a business or been in a business. And my own view is that what the President said was both startling and revealing. I find it extraordinary that a philosophy of that nature would be spoken by a president of the United States. It goes to something that I have spoken about from the beginning of the campaign. That this election is, to a great degree, about the soul of America. Do we believe in an America that is great because of government or do we believe in an America that is great because of free people allowed to pursue their dreams and build our future?There's a website called didntbuildthat.com with a variety of hilarious treatments of the Obama philosophy. Of course, whoever's running the site didn't build that. As he acknowledges, Al Gore did. And hey, remember Julia, Barack Obama's composite girlfriend? At 42, she starts a Web business. Under President Obama, she didn't build that.
Obama may be God's gift to comedy, but Romney is right that the philosophical stakes here are serious. The president's remark was a direct attack on the principle of individual responsibility, the foundation of American freedom. If "you didn't build that," then you have no moral claim to it, and those with political power are morally justified in taking it away and using it to buy more political power. "I think that when you spread the wealth around, it's good for everybody," Obama said in another candid moment, in 2008.
This isn't even Obama's only such revelatory comment of the past week. Politico.com reports that the president, in an interview with WTOL-TV of Toledo, Ohio, let the mask slip again when asked about the ObamaCare mandate tax. "It's less a tax or a penalty than it is a principle--which is you can't be a freeloader on other folks when it comes to your health care, if you can afford it," he said.
Of course this is a dodge. The administration claimed that the mandate was not a tax for political purposes but was a tax for legal purposes. Chief Justice John Roberts tied himself in knots to accept the argument Obama is now running away from. Between them, the solicitor general and the chief justice look as if they were too clever by 1.
What's objectionable about Obama's comment, however, is not "tax" or "penalty" or even "principle." It's the way he uses the word "freeloader."
Normally we think of a freeloader as somebody who sponges off others, which in the context of public policy means the government. A freeloader is an able-bodied welfare recipient, or someone who fakes a disability to collect Supplemental Security income, or who waits until his unemployment runs out before looking for a job.
The sweat of his brow made America great.
The only people who pay the ObamaCare mandate tax are people who make a living. Actual freeloaders are exempt. What Obama calls a freeloader is someone who makes his own money and pays his taxes but does not spend his money in the government-approved way.
The Obama campaign hotly disputes Romney's contention that the president meant what he said. A "fact check" from the Obama-Biden "Truth Team" (formerly Attack Watch) claims that Romney "is taking President Obama's words out of context" to produce "a complete distortion." Here is the full context, as presented by the Truth Team:
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business, you didn't build that. Somebody else made that happen. The Internet didn't get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.The Team then explains: "The President's full remarks show that the 'that' in 'you didn't build that' clearly refers to roads and bridges--public infrastructure we count on the government to build and maintain."
That's bunk, and not only because "business" is more proximate to the pronoun "that" and therefore its more likely antecedent. The Truth Team's interpretation is ungrammatical. "Roads and bridges" is plural; "that" is singular. If the Team is right about Obama's meaning, he should have said, "You didn't build those."
Barack Obama is supposed to be the World's Greatest Orator, the smartest man in the world. Yet his campaign asks us to believe he is not even competent to construct a sentence.
Sunday, July 15, 2012
Wednesday, February 8, 2012
Friday, February 3, 2012
The Federal Reserve's Crony Capitalism | James A. Dorn | Cato Institute: Commentary
The Federal Reserve's Crony Capitalism | James A. Dorn | Cato Institute: Commentary
EXCERPT:
"The Federal Reserve’s decision to release forecasts for short-term interest rates is supposed to clarify monetary policy and reassure the public. By keeping the federal funds rate close to zero for three more years, and switching from shorter to longer-term securities, the Fed hopes to spur investment and growth. The problem is that manipulating interest rates and allocating credit to favored parties fosters crony capitalism, not market liberalism."
COMMENT:
This article covers a lot of ground but it's worth reading. It's a good statement of the objections that can be made to current Fed policy. Keep in mind, though, that it doesn't attempt to give Chairman Bernanke's side of the story.
EXCERPT:
"The Federal Reserve’s decision to release forecasts for short-term interest rates is supposed to clarify monetary policy and reassure the public. By keeping the federal funds rate close to zero for three more years, and switching from shorter to longer-term securities, the Fed hopes to spur investment and growth. The problem is that manipulating interest rates and allocating credit to favored parties fosters crony capitalism, not market liberalism."
COMMENT:
This article covers a lot of ground but it's worth reading. It's a good statement of the objections that can be made to current Fed policy. Keep in mind, though, that it doesn't attempt to give Chairman Bernanke's side of the story.
Sunday, May 1, 2011
Saturday, April 30, 2011
Saturday, February 26, 2011
Monday, February 21, 2011
Saturday, November 6, 2010
Fed Treads Into Once-Taboo Realm - WSJ.com
EXCERPTS:
"The Federal Reserve will print money to buy nearly as much U.S. Treasury debt in the next eight months as the U.S. government will issue.
The Fed's decision this week to buy $600 billion more of U.S. Treasury debt is setting off a debate about the risks of a central bank entwining its policies so tightly with the government's fiscal fortunes. The Fed is essentially lending enough money to the government to fund its operations for several months, something called "monetizing the debt."
In normal times, this is one of the great taboos of central banking because it is seen as a step toward spiraling inflation and because it risks encouraging reckless government spending.
The central bank is betting these aren't normal times. Financial markets Thursday responded warmly to the Fed move, but outspoken critics of the policy issued full-throated critiques.
"The Federal Reserve will print money to buy nearly as much U.S. Treasury debt in the next eight months as the U.S. government will issue.
The Fed's decision this week to buy $600 billion more of U.S. Treasury debt is setting off a debate about the risks of a central bank entwining its policies so tightly with the government's fiscal fortunes. The Fed is essentially lending enough money to the government to fund its operations for several months, something called "monetizing the debt."
In normal times, this is one of the great taboos of central banking because it is seen as a step toward spiraling inflation and because it risks encouraging reckless government spending.
The central bank is betting these aren't normal times. Financial markets Thursday responded warmly to the Fed move, but outspoken critics of the policy issued full-throated critiques.
Friday, November 5, 2010
YouTube - Quantitative Easin'
If you'd like a non-technical explanation of the Fed's new policy, try this.
Saturday, October 23, 2010
China Bashing is for Losers - Shikha Dalmia - Uncommon Sense - Forbes
EXCERPTS:
"The idea that selling abroad creates jobs at home and buying abroad destroys jobs at home is an old mercantilist fallacy that Adam Smith handily refuted more than 200 years ago. Back then it at least had intuitive plausibility, but today it is obviously false given that the manufacturing chain spans the whole globe. Indeed, under the intricate global division of labor that currently exists, the whole idea of “Made in China” is largely a bureaucratic fiction.
Think about the IPod, for instance. It is designed in America and its 451 parts are made in dozens of different countries. But just because it is finally assembled in China, it officially counts as a Chinese import and therefore a contributor to America’s trade deficit — never mind that the Chinese add only $4 to the IPod’s $150 final value. Imposing duties on IPods to slash the deficit, then, won’t just cost Chinese jobs in Beijing assembly plants, but American jobs in Cupertino (Apple’s headquarters) computer labs.
"The idea that selling abroad creates jobs at home and buying abroad destroys jobs at home is an old mercantilist fallacy that Adam Smith handily refuted more than 200 years ago. Back then it at least had intuitive plausibility, but today it is obviously false given that the manufacturing chain spans the whole globe. Indeed, under the intricate global division of labor that currently exists, the whole idea of “Made in China” is largely a bureaucratic fiction.
Think about the IPod, for instance. It is designed in America and its 451 parts are made in dozens of different countries. But just because it is finally assembled in China, it officially counts as a Chinese import and therefore a contributor to America’s trade deficit — never mind that the Chinese add only $4 to the IPod’s $150 final value. Imposing duties on IPods to slash the deficit, then, won’t just cost Chinese jobs in Beijing assembly plants, but American jobs in Cupertino (Apple’s headquarters) computer labs.
Saturday, July 3, 2010
The Rational Optimist, by Matt Ridley: A book excerpt - Your Olive Branch News
The Rational Optimist, by Matt Ridley: A book excerpt - Your Olive Branch News
Comment:
Given the economic problems that the country faces at the moment, it's easy to lose perspective on where we stand today relative to the past. If reading the news gets you down and you could use some encouragement, you really should read this entire excerpt from The Rational Optimist. It demonstrates that we really do have a tremendous number of things for which to be thankful. It also shows that we should think long and hard about how our economic system works, and about the ways in which it has enriched our lives, before we make major changes which may lead to consequences very different from what were intended.
Comment:
Given the economic problems that the country faces at the moment, it's easy to lose perspective on where we stand today relative to the past. If reading the news gets you down and you could use some encouragement, you really should read this entire excerpt from The Rational Optimist. It demonstrates that we really do have a tremendous number of things for which to be thankful. It also shows that we should think long and hard about how our economic system works, and about the ways in which it has enriched our lives, before we make major changes which may lead to consequences very different from what were intended.
Monday, May 31, 2010
The minimum wage law and its effect on poor people - who do you think is right?
EXCERPT from a statement by Congressman Eni Faleomavaega (representative from the territory of American Samoa in the United States Congress since 1989) in a response to an article by economist Walter Williams:
"...shame on Walter Williams for asking ‘Which is preferable for the Samoan worker – being employed at $3.25 an hour or being unemployed at $5.25?'
“What is preferable is to do right by poor people. Anything less, including ‘breathtakingly stupid’ comments which imply that poor people should be treated like second class citizens have no place in public debate.”
COMMENT:
I encourage you to read the entire statement posted by Congressman Faleomavaega, then read the article by Walter Williams that provoked the congressman's outrage.
Questions:
Is Williams suggesting that poor people should be treated like second-class citizens?
Why is Williams opposed to raising the minimum wage? Is it because he wants to help businesses and keep poor people poor, or is it because he believes that the consequences of raising the minimum wage will harm the poor people the congressman for whom he is professing concern?
For each of these writers, ask yourself, "is he giving me a thoughtful analysis of the consequences which can be expected to result from a higher minimum wage, or is he simply expressing a desire that poor people be better off without considering whether a higher minimum wage will actually make those people better off or worse off?
"...shame on Walter Williams for asking ‘Which is preferable for the Samoan worker – being employed at $3.25 an hour or being unemployed at $5.25?'
“What is preferable is to do right by poor people. Anything less, including ‘breathtakingly stupid’ comments which imply that poor people should be treated like second class citizens have no place in public debate.”
COMMENT:
I encourage you to read the entire statement posted by Congressman Faleomavaega, then read the article by Walter Williams that provoked the congressman's outrage.
Questions:
Is Williams suggesting that poor people should be treated like second-class citizens?
Why is Williams opposed to raising the minimum wage? Is it because he wants to help businesses and keep poor people poor, or is it because he believes that the consequences of raising the minimum wage will harm the poor people the congressman for whom he is professing concern?
For each of these writers, ask yourself, "is he giving me a thoughtful analysis of the consequences which can be expected to result from a higher minimum wage, or is he simply expressing a desire that poor people be better off without considering whether a higher minimum wage will actually make those people better off or worse off?
Thursday, May 27, 2010
Thursday, May 20, 2010
Economists Without Borders
Eleven states import much of the coal that they use from other states. Is this a problem for which a solution should be sought? This short letter makes an important point that applies to many issues, such as the foreign trade deficit the U.S. has with China and many other countries.
EXCERPT:
"It’s wholly unscientific to treat political borders as defining any relevant or meaningful boundaries for economic transactions.
EXCERPT:
"It’s wholly unscientific to treat political borders as defining any relevant or meaningful boundaries for economic transactions.
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