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Media Infiltrations: Republicans and the Populist Temptation  Wall Street Journal February 9, 2010 Why Taxing Stock Trades Is a Really Bad Idea Wall Street Journal January 6, 2010
"What has been your worst blogging experience? "That's a guy who actually stalks me on the Web and once stalked me personally." "I'm saying this...guy's a jerk."
 The Happy Body Aniela and Jerzy Gregorek What I'm listening to:  Langley Schools Music Project What I'm watching:  Star Trek What I'm playing:  Speed Racer Order these from Amazon.com at Amazon's normal low prices... and a fraction of your order goes to help support this site. Thanks!
Thanks to Irwin Chusid, public editor.
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Chronicle of the Conspiracy
Join us as we discover, document, expose and challenge the bad people, the bad institutions and the bad ideas that stand in the way of wealth creation -- and show you how to fight back!
Saturday, January 17, 2009
MODERN MONOPOLY CARDS Since everyone wants to compare today to the Great Depression, let's go all the way and revamp those little orange and yellow cards from the Depresssion-era game "Monopoly" to match today's depressed conditions. From Radio Free New Jersey:
And my personal favorite...
Thanks to Jameson Campaigne for the link.
Posted by Donald L. Luskin at 3:15 PM |
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Thursday, January 15, 2009
SHOULDN'T THAT BE: "GOV'T AID HOPED FOR"? From Reuters:Bank of America, Citigroup sink; gov't aid fearedNope, that's correct. As I've been saying now for quite a while...
Posted by Donald L. Luskin at 3:52 PM |
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MORE ON DELONG'S NASTINESS Greg Mankiw slaps Jabba the Economist, with his usual velvet glove approach:
Eugene Fama is a stimulus skeptic. In fact, he is even more skeptical than I am. I am willing to concede that many Keynesian effects work in the short run, although I prefer monetary policy to fiscal policy and, within fiscal policy, I prefer the use of tax instruments to government spending as a tool for short-run demand management...Thanks to reader Rohit Dewan.Brad DeLong takes me to task for not taking Fama to task:
No, Greg. It's not an endorsement of any model. It's just a mistake. Fama mistakes the NIPA savings-investment accounting identity for a behavioral relationship that constrains the behavior of investment: when the government deficit goes up, Fama says, private investment must go down by the same amount.This post reflects a fundamental difference between Brad's approach to the world and mine. When I read others' work, I try to read between the lines and put it in the best possible light. In particular, when I read the work of an economist as distinguished as Eugene Fama, I am reluctant to jump to the conclusion that I am vastly smarter than he is.When the government deficit goes up, private savings could go up by more--and private investment could increase. Private savings could go up by less--and private investment would fall by less than the rise in the government deficit. Private savings could remain unchanged. Or private savings could fall. Determining which of these is most likely to happen would require a model of the economy of some sort--and Fama does not have one: all he has is an accounting identity that he does not understand.
Posted by Donald L. Luskin at 12:57 PM |
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Wednesday, January 14, 2009
YOU CALL THIS AN ARGUMENT? The fattest economist alive attacks me and others here -- calls us "ethics-free hacks" -- for no better reason than that we disagree with him that Keynesian-style government spending is the best way to "stimulate" the economy. How sad that Brad DeLong has no capacity to argue the matter on the merits of either theory or practice. It's all just name-calling, presumably because DeLong actually has no substantive arguments he can offer. Here's Don Boudreaux's take, thanks to reader Ray Mahr:The charge is outrageous, for a number of reasons. ...on the economics of the matter, opposing such a stimulus package -- for macroeconomic reasons or for public-choice reasons or for both reasons -- is hardly a sign of economic dementia. It's possible, again, that the stimulus reflects good economics and that opposition to the stimulus (such as is expressed by my colleague Dick Wagner, by Ed Lopez, and by other economists listed by DeLong) reflects weak economic reasoning. But to treat Keynesian fiscal stimulus as beyond-question appropriate -- to treat economists who reject Keynesian theory and policy as buffoons -- is simply nonsense. Or worse: such treatment seems like the actions of a political hack.
Posted by Donald L. Luskin at 5:26 PM |
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IF OBAMA CAN DO IT, SO CAN I And so can you. Now that's audacity.
Thanks to David Duval.
Posted by Donald L. Luskin at 5:16 PM |
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Monday, January 12, 2009
DON'T WORRY, DON'T WORRY Wonkette can calm down. Yes, the Intrade futures contract is showing a better than 50% probability of an economic depression in 2009. But it's only because the rules for settling the contract contain a silly error. They define depression thus:For expiry purposes a depression is defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters. This is calculated by adding together the published (annualized) GDP figures (as detailed below). If these annualised figures add up to more than -10.0% over four consecutive quarters then the contract will expire at 100.The problem is that if you add four quarterly change-figures that are already each annualized, you will get a far larger cumulative result than the actual change over a four-quarter period. Suppose there are four successive quarters each showing an annualized 2.5% decline in GPD. Intrade will add those together and get 10%. But over the year, the annual decline in GDP will acually be 2.5%.Expiry will be based on official quarterly GDP figures reported by the U.S. Department of Commerce (Bureau of Economic Analysis, Table 1.1.1, "Percent Change From Preceding Period in Real Gross Domestic Product") as reported by the BEA.
Posted by Donald L. Luskin at 10:57 AM |
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Sunday, January 11, 2009
WIN SOME, LOSE SOME The New York Times "DealBook" reports,Shirley M. Tilghman, Princeton’s president, disclosed Thursday that the university’s endowment, which was valued at $16.3 billion at the end of June 2008, had lost 11 percent of its value through the end of October.Reader David Duval notes, "Maybe they've been taking Paul Krugman's investment advice."But the loss is probably far worse than that. Half of the endowment’s investments are illiquid, meaning that they have yet to be marked to depressed market prices. Once the university reassesses all of its marks at the end of its fiscal year this summer, it could be looking at a 25 percent decline in its assets, the university said.
Posted by Donald L. Luskin at 10:49 PM |
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A SARBANES-OXLEY WITCH-HUNT COMES TO AN END The New York Times reports (and this must have been a difficult story to write, as it involves a CEO who is not a crook)...
Federal prosecutors said Friday that they had dropped charges against David A. Stockman, the former budget director in the Reagan administration, in connection with his role in the bankrupt auto parts maker Collins & Aikman...Mr. Stockman’s lawyer, Elkan Abramowitz of Morvillo, Abramowitz, said: “I think that because of Sarbanes-Oxley, independent directors are forced to come to quick judgments as to whether to conduct an internal investigation into alleged misconduct or forward the result to a government organization. Too often these investigations are hurried and come to quick judgments.”My DC-insider friend "Mick Danger" comments,“In this case we were able to demonstrate that there never was a crime committed by Mr. Stockman in his efforts to try and save the company,” Mr. Abramowitz said...
Mr. Abramowitz said he was particularly impressed that when the United States attorney’s office was shown that it had made a mistake, it acknowledged it.
I knew David Stockman when he served in Congress and as Reagan's budget director. I respected him some days, winced at him on others and grew to distrust him.He is as bright as a Coast Guard Cutter's searchlight. He's also arrogant and nearly friendless. Now add innocent. This may temper overzealous prosecutions, regulations and false-alarms.
Posted by Donald L. Luskin at 10:42 PM |
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