economics
razib | March 5, 2009Awesome chart from Calculated Risk:
Blue = current Bear Market
Gray = Great Depression Bear Market
Check out Google Trends for "Great Recession."
ddobbs | March 3, 2009Sort of.
Economist Edward Glasser, via Andrew Sullivan, makes it clear why they call static old industries "dinosaurs." This seems dead-on to me:
Across cities, there is a strong connection between an abundance of small firms and local growth. The last thing that the government should be doing is propping up big declining firms. Real innovations are far more likely to come from someone%u2019s garage, which is where Chester Carlson came up with the Xerox machine during the Great Depression.
The Big Three automakers pose real policy problems. The government is already on the hook for their…
mikethemadbiologist | March 1, 2009One good thing about the election is that I don't instinctively flinch every time the White House releases new policy initiatives. Case in point: tax expenditures. What's a tax expenditure?
Tax expenditures are "preferences and concessions in the income tax that [have] the nature of expenditure programs." In other words, when you can deduct an expense (or receive a refund for the whole cost), that is a tax expenditure. The mortgage interest deduction is also a tax expenditure: if we wanted, we could have the Treasury write you a check equal to the amount of the deduction.
I use that…
mikethemadbiologist | February 28, 2009From former Secretary of Labor, Robert Reich:
It's about time a presidential budget unequivocally redistributed income from the very rich to the middle class and poor. The incomes of the top one percent have soared for 30 years while median wages have slowed or declined in real terms. As economists Thomas Piketty and Emanuel Saez have shown, the top-earning one percent of Americans took home eight percent of total income in the 1970s; as recently as 1980, they took home nine percent. After that, total income became more and more concentrated at the top. By 2007, the top one percent took home…
razib | February 20, 2009One of the great things about the internet is that you can always look back. See the 5 star reviews for The Bush Boom: How a Misunderestimated President Fixed a Broken Economy. Pretty funny. Here's a sample:
Jeff and Larry have written a volume destined to stand alongside "The Hoover Miracle" and "Lyndon Johnson: Triumph in Vietnam". If you have to buy one book about a nonexistent phenonmenon this year, this is it. In the bizarro world there really is a Bush boom. But over there Larry Kudlow is a vegan with a ponytail delivering tofu pizzas for minimum wage.
That's a review which came out…
razib | February 20, 2009Over at The Atlantic. Shiller is the author of Irrational Exuberance, The Subprime Solution and Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global. As I've noted before, Shiller's specific arguments about the causal sequences behind manias and crashes leave a lot to be desired, but it seems entirely correct that he bet on the right horse when it comes to behavioral economics and the importance cognitive biases outside of the bounds of rationality in a market. The same phenomenon can be described from a different angle, such as Benoit Mandelbrot's The…
purepedantry | February 17, 2009Economic historian, Gregory Clark, details why times have changed for academic economists:
The current recession has revealed the weaknesses in the structures of modern capitalism. But it also revealed as useless the mathematical contortions of academic economics. There is no totemic power. This for two reasons:
(1) Almost no-one predicted the world wide downtown. Academic economists were confident that episodes like the Great Depression had been confined to the dust bins of history. There was indeed much recent debate about the sources of "The Great Moderation" in modern economies, the…
mikethemadbiologist | February 14, 2009In the midst of all of the financial turmoil, it's good to see that municipal bonds can be a good investment--especially if you bought them in 1868:
Anyone who has failed to keep track of a winning lottery ticket for all of 12 months may want to consider the efforts of 39 bondholders who have been safekeeping valuable, tissue-thin, New York City securities since shortly after the Civil War.
Next month, one of the bonds, issued in 1868 and thought to be one of the oldest active municipal bonds in the country, will come due. And the city stands ready to retire the debt incurred when Winston…
tlambert | February 12, 2009Eric Pooley writes about the consensus amongst economists on global warming. While they disagree on exactly what we should do, they agree on two things: the cost of inaction is much greater than the cost of action, and the cost of action is only about 1% of GDP. He concludes:
Journalists have missed the economic consensus partly because economists are such a querulous bunch--they argue bitterly among themselves even when they agree. When I asked Stavins about the Stern Review, for example, he criticized Stern's methodology and didn't mention that he concurs with most of Stern's broad…
purepedantry | February 12, 2009The Geithner Treasury plan for rescuing the banking system (more here) is getting panned on both sides of the aisle for being excessively vague.
Megan McArdle:
Tim Geithner reveals that the Treasury has a plan to fix the problems in our broken capital markets by . . . er . . . fixing them.
...
The Wall Street Journal adds that "critical details of the plan remained unanswered, despite the weeks of planning leading up to Tuesday's announcement." Plan? That's not a plan, it's a fervent wish.
Paul Krugman:
An old joke from my younger days: What do you get when you cross a Godfather with a…
mikethemadbiologist | February 11, 2009...does it make a sound? On Sept. 18, 2008, the banking system almost collapsed--no, really. A while back, I noted that there are at least two classes of media bias: one involves the interpretation of a set of agreed upon facts, while the other involves decisions as to what those facts are, or, even if something happened (an aside: while this was not controversial to the science-oriented commenters, this distinction is apparently beyond the ken of at least one journalism professor).
Anyway, this story, unearthed by C-SPAN, falls into the latter category (in the video, go to the 2:05 mark…
ddobbs | February 11, 2009A former: drug rep explains :
Samples are the number one influencer of the prescribing habits of doctors, and I proved this with my last pharma company, which was a very small one, where doctors could request samples simply by faxing in a form off of the company%u2019s website. I became the third best rep in sales out of 200 within six weeks, and never made one call on a doctor%u2019s office. I mailed these forms anonymously instead to the offices in my territory.
Dan A.
At DrugRepTime, hat tip to PharmaGossip.
ddobbs | February 10, 2009Reader Jay, in a comment on my post about health-care costs tanking the economy, raises an interesting question about the sorts of standardized medical records that would be needed to evaluate efficacy (and therefore economic efficiency) of various treatments:
The idea is clearly to have standardized health-care records systems so that data can easily be aggregated and analyzed [he writes, quoting my post.]
That's a shift in priorities, away from records centered around benefit to the patient, a subtle but not insignicant difference. Broad based statistical research involves, though…
mikethemadbiologist | February 10, 2009Describing a recent economics hire by the Council for Foreign Relations, Paul Krugman wonders if the CFR will hire a creationist to run their science policy group (I actually think they'll hire an anti-vaccinationist as a public health person, or a global warming denier before they get to a creationist). It's been fascinating to watch Krugman's evolution (so to speak) on how he responds to the lunatic right, and to see his repeated use of the creationist metaphor.
I think Krugman, far more than most pundits, caught on mcuh earlier than most to the conservative penchant for, well, lying,…
ddobbs | February 9, 2009The Times' Economix blog has a good post by Alan Krueger on the need toinclude patients' lost time in estimates of health-care costs.
After waiting more than an hour in a doctor's waiting room, a friend of mine once presented his doctor with a bill for his time..... Although it doesn't currently enter into our national statistics, the time that patients spend getting health care services should be reflected in the way we calculate America's national health care expenditures.....Time spent interacting with the medical system could be used for other activities, like work and leisure. Moreover…
ddobbs | February 8, 2009The health-care system's maddening inefficiencies -- high per-capita spending with poorer overall health outcomes; tens of millions uninsured and tens of millions more underinsured; insane-making battles with insurers to get reimbursements you're entitled too -- are reason enough to spur reform.
But "The Big Fix," David Leonhardt's marvelous-but-long piece on the fiscal crisis in last week's Times Magazine, argues that these inefficiencies are a) a prime example of a vested elite's ability to manipulate the economy for its own good and b) one of the most serious obstacles to the nation's…
mikethemadbiologist | February 8, 2009Before I get to the ongoing calamity, the economic impact of a nation-wide viral epidemic in horses in 1872 is worth considering (italics mine):
During the late 19th century, the American economy relied on horses the way it depends on gas today. Horses unloaded cargo from ports, transported goods from city to city, worked the farms, supported the army, and served as the emergency vehicles of choice. Without them, the American workforce would have ground to a halt.
And that's exactly what happened in 1872, when an estimated 99 percent of all horses in America contracted equine influenza. The…
purepedantry | February 8, 2009Check out this video by reason.tv below the fold.
If you find it hard to achieve and maintain growth, maybe Stimulis is right for you.
purepedantry | February 6, 2009This guy has clearly not read about the broken window fallacy:
Times were so tough for window repairman Timothy Carl Klenke, police say, that he decided to take proactive measures: He armed himself with a slingshot and began cruising around the city, shattering at least five windows and car windshields as he went.
"The statements he gave to officers led them to believe he was out to drum up business and was prepared to go out and do some more damage," Redlands police spokesman Carl Baker said Tuesday.
Witnesses reported seeing Klenke, 50, driving around in his Honda in the areas where the…
kcontreary | February 6, 2009Robert Barro is interviewed in The Atlantic about his views of the stimulus plan (see also a recent WSJ piece here). All in all, he is not a fan:
The Atlantic: And I take it from the Wall Street Journal piece you wrote last week... well, the piece is just specifically about measuring multipliers, but I take it that you are fairly skeptical in general that fiscal policy will boost aggregate demand.
Robert Barro: Right. There's a big difference between tax rate changes and things that look just like throwing money at people. Tax break changes have actual incentive effects. And we have some…