EconoPundit

Behave yourself, it's later than you think...

2010-02-11T07:14:00.002-06:00

Niall Ferguson warns us judgment day is coming sooner than we might expect. What's the best economic fallout shelter? I dunno. Gold maybe.

UPDATE: Meanwhile, over at Cato, they're insisting (persuasively I might add) the best way to save the euro is to not bail Greece out.

It makes you feel warm and comfortable, and nobody notices.

2010-01-26T09:33:00.001-06:00

David Brooks writes a good column. But tell me, why is writing a good column very much like wetting your pants in a dark suit?

Is there some cerification board out there somewhere?

2010-01-26T08:08:00.004-06:00

Hey, I'm just as respectful of authority as the next guy, but tell me -- is there some official agency somewhere that gets to decide things like this?

UPDATE: Is this the administration's reaction?

UPDATE II: Other reactions suggest the President has liquidated himself by performing a self-inflicted lobotomy. Who was it who said you couldn't make this stuff up?

UPDATE III: Okay -- it was funny at first but now it's getting truly repulsive. Not that I think anything should be censored or prosecuted, but still, the more I read this morning the more this all sounds like pure and simple political hate speech.

But the Left is supposed to know all about history I thought...

2010-01-24T09:14:00.003-06:00

David Michael Green's tirade against the Democrats, is lots of fun, but its grasp of history seems, well, sort of shaky:

[The Democratic Partis is] the same party that could run a decorated combat hero against a war evader in 1972, only to be successfully labeled as national security wimps.

Just to be sure, it then did the exact same thing again in 2004.

I don't get it. Was Nixon automatically a war evader because he was a Quaker, even though he did in fact serve in WW II? Maybe I'm missing something.

Didn't Mel Gibson star in one of them?

2010-01-24T08:23:00.001-06:00

Remember the "save the farm" social action movies of the 1980s?

What was that all about, anyway? Here's the answer.

What's wrong with the Financial Crisis Responsibility Fee?

2010-01-23T11:27:00.003-06:00

Other than the fact those who wrote it don't understand the finance sector, nothing.

The economics of modern fascism...

2010-01-23T09:35:00.004-06:00

Yes, this essay is old -- Robert Reich is of course no longer Secretary of Labor -- but it strikes us as even more relevant today than it was when it first appeared.

UPDATE: This, on the other hand, is current and just as relevant.

Orthodoxy gives way to Heterodox Economics

2010-01-12T06:56:00.001-06:00

The internal contradictions were too much. The system was no longer viable in its then-present form.

And the modern world emerged.

Climategate: a question...

2009-12-01T07:32:00.003-06:00

Nobody I can find has asked this yet. So, here goes:

Why weren't the raw data kept up to date as part of the ongoing program? Anyone working with time series data knows you don't just add a new number to the end of a series at the end of the month -- rather, the whole time series gets re-written, transferred from older storage formats to newer ones, re-cataloged if possible and appropriate, etc etc etc. This is PART OF YOUR JOB! How can anyone possibly throw out raw data to save space? What was judged more important?

Here's another extra-credit question: none of the participating governments threw out their data to save space I would venture to guess. Indeed, all have almost certainly recoded all necessary data series in the most up to date machine readable form, so reconstructing the lost data ought to be, if not an easy project, then at least a doable project.

So, let's get cracking!

UPDATE: Finally somebody else is saying something similar! Frankly it's about time!

Economics of End of Empire...

2009-11-30T06:51:00.002-06:00

The only thing I find surprising about this essay is the author's apparent discomfort with the article's predictions.

Dr. Antler says...

2009-11-17T07:31:00.004-06:00

No, I'm not a medical doctor, nor do I play one on TV. But even I can see the reported numbers in this Washington Post article make absolutely no sense.

1. According to the article, for every 1000 women screened there will be roughly 500 false positives. What? There's a 50 percent false positive rate?

2. According to the article, 33 unnecessary biopsies result from roughly 500 false positives. What? Out of all women told they may have a serious illness only seven in every hundred follow up with additional investigation? What?

I could go on, but you see my point. There are major numeric sins of numeric omission evidenced in this article.

UPDATE: Am I certifiably paranoid to thing the above-mentioned Washington Post article bears some relationship to the events reported in this article?

Disposable-Income-Free Recovery?

2009-10-30T08:23:00.002-05:00

DPI appears to be turning into a lagging indicator. As this chart from FRED shows, even though GDP grew, disposable personal income did not.

For a quick summary of steps required to get from GDP to DPI click here.

Back to Ditko...

2009-09-16T08:42:00.001-05:00

First read this.

Then read this.

Why our world doesn't resemble Fritz Lang's "Metropolis"...

2009-09-16T08:33:00.004-05:00

References for this article: (a) monopolistic power may be an exclusively sociopolitical construct, and (b) monopolistic power is (for reason (a) above) historically quite likely to give way to more competitive forms of socioeconomic organization.

In other words: Marx's law of increasing concentration has it completely backwards.

UPDATE: Indulge your penchant for Utopian fantasy for one moment. Imagine a world in which property rights to all (electronic) medical records reside with the patient -- and, in this very same world, we can order computer software with an inexpensive electronic interface that plugs our car into our laptop and tell us in simply everyday language whether anything is wrong. Wouldn't it be fun, nice, and (yes) less expensive?

Shifting the cost curve up by shifting the supply curve back...

2009-09-16T06:55:00.003-05:00

This disturbing article is dated 2005 -- if I can find anything more recent and more authoritative, I'll post it in an update.

This even-more disturbing article appears in today's Investors' Business Daily. If even one in ten of the polled doctors makes good on his or her declared intention to retire early, the upshot is "health care reform" will generate the most disastrous labor shortage (i.e. shortage of doctors) in American history.

UPDATE: An advantage of the current debate is the way it has mainstreamed at least some understanding of the "47 million uninsured" internal statistics. Case in point (about which we've been arguing with friend and family for years): just how many of the "47 million" might suffer personal financial damage owing to an individual mandate?

Bureau versus Business...

2009-09-14T08:23:00.002-05:00

Via Instapundit, an essay purporting to show how and why the public option will resemble the IRS.

Let's briefly review the difference between two alternate forms of what Max Weber called "modern rationality" (or, uh, something like that).

A business has goals and meets these goals by (a) dealing with the public and (b) earning a profit by doing so. If condition (b) is not met the business ceases to exist. The point here is that this form of organization has a kind of a life of its own, a culture, a means of (in effect) "staying alive" through the repetition of certain procedures.

A bureau also has goals and meets these goals by (a) dealing with whomever it is designed to deal with (sometimes the public, sometimes others) and (b) establishing and maintaining credibility with its overseer (whomever that may be).

The problem here is a bureau's main method of establishing credibility is to expand both its mandate and its physical size. Whereas a business automatically fails if its goals are not met, a bureau automatically expands under the same circumstances.

Thus we're really afraid of any upcoming creation of Fannie Med and Freddie Quack.

Sooner than global warming, more serious...

2009-09-04T07:45:00.002-05:00

Via Instapundit, a sobering article on why default is likely.

Islanders: pray for return of the cargo planes...

2009-09-01T08:51:00.003-05:00

At Huffington Les Leopold says:

These benefits did not fall from the sky or from the generosity of their employer. Verizon workers won these benefits by uniting with each other and with their union, the Communications Workers of America. They fought a series of strikes over the past three decades (with Verizon and with the companies that preceded it) to secure their benefits and to hang onto them against stiff company assaults.

But isn't this a mentality that might claim cargo cults actually work? If these wonderful benefits can actually be generated by strikes, wouldn't GM workers have absolutely nothing to worry about?

Why do we use such a silly name for the problem?

2009-08-30T11:16:00.005-05:00

Paul Rosenberg angrily indicts the economics profession with the rather uninformed notion that all-powerful regulators were napping rather than regulating:

The fact that this bubble was clearly visible as early as 2002, and that significant negative consequences of a collapse were already foreseeable, is a powerful indictment of the failure of the economics profession as well as the rest of economic establishment--the real estate lenders, the wider financial sector that gobbled up mortgaged-based securities, the regulators, who were busy doing their Rip Van Winkle imitations, the business and financial press--you name it, they were all in fail mode.

We might smile affectionately at Rosenberg's misunderstanding of economics' basic principles were it not for his angry nearly-encyclopedic tabulation of quarter truths. Deregulation, Reagan, trickle-down theory, tax cuts -- all these he says caused a housing crisis that ought to have been prevented by wise and stalwart regulators.

What he doesn't seem to know is bubbles have been well understood as near-impossible to to stop -- for a wide variety of reasons -- since the seventeenth century. And, since then, everyone has also known nothing but a bubble's eventual "bursting" (whose accurate timing remains an economic-theoretic-holy-grail) can bring them to an end.

All this, of course, is why we call them "bubbles" in the first place.

What to do?

2009-08-28T10:05:00.003-05:00

Banks are more concentrated than ever. 40% of all savings deposits are in J.P. Morgan Chase, Bank of America and Wells Fargo. 50% of all mortgages, as well as two thirds of all credit cards, are issued by these three plus Citigroup.

Interesting -- the numbers reflect some need for regulation, no?

The problem is the numbers were in large part created by regulation. These are the "too-big-to-fail" institutions, proving that what you get when you save institutions that are too big to fail is institutions that are even bigger than too-big-to-fail!

UPDATE: If you can somehow manage to avoid hyperventilation you'll probably agree these numbers aren't really so disturbing or unusual. Some highly competitive industries can be shown to be comprised of as few as two firms with an 80% market share, and many others competing nicely for the remaining 20%. The United States represents a huge marketplace. A simple 5% US market share is actually a very large number in everyday terms.

He invented Spider Man and Dr. Strange

2009-08-27T12:57:00.002-05:00

I've just learned my childhood hero Steve Ditko is (a) alive and (b) a follower of Ayn Rand. You might call his masterpiece, "The Unchecked Premise," a comic book adaptation of the basic principles underlying Atlas Shrugged.

New business cycle speaks...

2009-08-27T07:31:00.003-05:00

Via Instapundit, Doctor Doom speaks his mind.

It seems to me Roubini is using a metaphor he doesn't really need -- borrowing to pay interest on public (or private) debt is obviously unsustainable. No need call it a Ponzi scheme to win readers over or capture their attention.

His strongest argument -- that inflation as well as inflationary expectations are nearly impossible to halt once they've taken hold -- is seriously weakened by the simple fact we've not yet had a runaway inflation preceded by a well-known historical incidence of just such an event. In 1972 we were arguing over simple price-ignorant Keynesian models versus Milton Friedman's exotic notion monetary elements are primarily responsible for sustained price movements. Now monetarism is so familiar its very terminology needs to be explained to students.

In short: since we know now what we didn't know then, outcomes will be different.

Quote of the day...

2009-08-26T17:49:00.002-05:00

Howard Dean:

The reason tort reform is not in the [health care] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that's the plain and simple truth...

Culture of poverty returns...

2009-08-26T07:35:00.005-05:00

in (once) Great Britain.

By the way, a quick review of the numbers says that (very) roughly 9% of the population now live in households comprised entirely of the unemployed.

UPDATE: Meanwhile, elsewhere in the economy...

UPDATE II: And elsewhere, we see how the "public option" is working out by looking here and here...

True, these are all anecdotes -- but we're now in a battle of anecdotes, aren't we?

NYT debunks peak oil...

2009-08-25T09:05:00.002-05:00

Peak oil is a myth -- this must be true considering the source.