Asymptosis: Always Approaching

Category: Economics

  • “If you tax investment income what will people do? Stuff their money in the mattress?”

    Richard Thaler asks exactly the right question. This from the latest IGM Forum poll of big-name economists, on the effects of taxing income from “capital.” I’ve been over this multiple times before, but it’s nice to see the thinking validated by a real economist. If you’ve got money, there is no (practicable) alternative to “investing” it. (Those are irony…

  • 57% of Leading Economists are Not Worried About an Inflationary Wage/Price Spiral

    8% are. 23% are uncertain or have no opinion. I really like this IGM panel (check out the roster — pretty damned impressive, or at least credentialed), but I wish they didn’t post such wishy-washy, softball questions. I post this one because it’s not. The one I’d really like them to ask: A modern, prosperous…

  • The Money Confusion

    The always-brilliant J. W. Mason’s response to what in my opinion is a quite befuddled Mike Beggs review in Jacobin of David Graeber’s Debt: The First Five Thousand Years prompts me to tackle a subject that I’ve been worrying at for a long time: Money. I’ve been worrying at it despite (or because of) endless reading spanning…

  • Repeat After Me: Low Taxes (on Rich People) and Economic Growth Are Not Correlated

    Jared Bernstein tells us yet again what the data has been telling us forever (my bold): I agree with Chye-Ching Huang, who agrees with the Congressional Research Service, Len Burman, and me: over the long, historical record of special tax treatment for investment incomes and tax cuts to the top marginal tax rates, one simply doesn’t find significant correlations with…

  • Keynes: Pragmatist. Hayek: Utopian. Who Sez?

    …if you read about the tussle between the two great economists, you are struck by two things. First, how pragmatic a man John Maynard Keynes was. And second, how utopian the ideals of Friedrich Hayek are. This is odd, as each man attached himself to a polar opposite political philosophy: Keynes’s ideas were adopted by idealistic lefties,…

  • The Luddite Fallacy Fallacy

    I’ve spent a lot of time considering (here, here, here, and here) the notions of technological unemployment and the Luddite Fallacy: the idea that technologically driven productivity — machines — will replace, are replacing, human labor. I’d like to revisit that here. My basic conclusion: the Luddites were obviously wrong at the time. But they’re…

  • Laffer: Laughable As Always

    R Davis spends a whole lot of words (and numbers) explaining why Arthur Laffer’s latest WSJ editorial is false and ridiculous, but those who think about data — at all — really only need to read one line. Laffer’s key error — which a high-school statistics student could spot — is to: compare growth in…

  • No, Conservatives Aren’t Happier — Any More

    My small effort to ameliorate the disparity in Andrew Gelman’s headline: 1.5 million people were told that extreme conservatives are happier than political moderates. Approximately .0001 million Americans learned that the opposite is true. Andrew is commenting on Jay Livingston’s great takedown of David Arthur Brooks’ recent column asking “Who is happier about life — liberals or conservatives?”…

  • Red-Ink Republicans, Revisited and Reviled

    The post-New Deal Republican party has delivered endless strings of deficits and debt. That is their historic legacy to America, the bare fact on the ground that unfortunately requires endless repetition to impart the reality, and counter the tea-party fantasy of fiscally irresponsible Democrats. Also required is a catchy moniker that encapsulates that reality: Red-Ink Republicans…

  • Red-State Teat-Sucking Rendered Invisible. Conservatives Howl Tyranny.

    In response to this graphic in my reprised post from yesterday: Commenter rjs points us to this depressing Economist post — the government data source for this graphic has gone dark, part of the Obama administration’s cost-cutting measures. The real irony I discover, though, is to find right-wingers at The Heritage Foundation screaming about the Obama…

  • Karl Smith: Why Is The US Government Still Collecting Taxes? THE DEFICIT EARNS A PROFIT!!!

    I hesitate to excerpt from this because it says it all so well and so briefly. But: …the more taxes the US government collects, the more money it loses. When the US government declines to sell a 10 year Treasury bill at a real rate interest rate of –0.57 percent it is agreeing to pay,…

  • No, the Greeks Aren’t Lazy. The Germans Are.

    A lot of people out there seem to have the notion that Greece’s troubles are the result of laziness. That really doesn’t seem to be true. OECD: Average annual hours actually worked per worker 2000-2010 Germany 1473 1458 1445 1439 1442 1434 1430 1430 1426 1390 1419 Greece 2121 2121 2109 2103 2082 2086 2148…

  • Should the Fed Buy Munis?

    Mike Konczal floats a very interesting idea emailed to him by Richard Clayton, the Research Director of Change To Win (my bold for quick scanning). under Section 14 b 1 the Fed has the authority to purchase any obligation of a state or local government of 6 months maturity or less. This provision seems clearly to permit a mass…

  • What if the Doctor Market Was Like the Lawyer Market?

    Andrew Oh-Willeke points us to this, on the job market for lawyers: Slightly more than half of the class of 2011 — 55 percent — found full-time, long-term jobs that require bar passage nine months after they graduated, according to employment figures released on June 18 by the American Bar Association. I couldn’t find a comparable figure…

  • No Empire, Nation, or Dynasty Has Ever Collapsed Because its Working People Were Self-Indulgent and Lazy

    Or at least: In all the reading I’ve done, from Gibbon to Diamond to Acemoglu and Robinson and far beyond, I’ve never come across one. It’s not hard to find examples where you can at least reasonably attribute decline and fall to lazy, self-indulgent rich people. Of course, maybe this time is different. Related posts: Recessions…

  • Why Equality Drives Entrepreneurship and Innovation

    Coming at this question from my typical perspective: a business owner facing a national economy. You run a mid-sized business selling high-quality furniture. You’ve developed a new chair that’s better than the other chairs on the market. (Think: the Herman Miller Aeron Chair.) Say you’re planning to sell it for $700. (You can’t sell it…

  • How the Fed Destroyed its Credibility

    The Fed’s credibility is obviously important. If people believe that they can and will do what they say they’re going to do — and that it will have the desired effect — they can affect the the real economy (at least short-term) by just making promises — Open Mouth Operations. (Though they must actually do…

  • Recessions Are Nature’s Way of Keeping the Little Guy Down

    Or: Yes, The Rich Really Are Different You’ve all probably seen the depressing reports from the newly issued 2010 edition of the Fed’s triennial Survey of Consumer Finance, in particular the 39% drop in median household net worth, ’07-’10. Here’s a picture (click for larger): The well-off have done fine. In the greatest economic downturn…

  • It’s Called “Governing”

    While approximately 23% of the American public and roughly half of the political elite is hell-bent on dismantling and destroying the government that our founders and our predecessors have bequeathed unto us, using methods and theories that bear an uncanny resemblance to medieval bloodletting, I think it’s worth remembering that tens of thousands of people…

  • An Open Letter to Robert Barro

    Noahpinion points us to — and goggles in amazement at — Robert Barro’s latest op-ed in the WSJ. Why This Slow Recovery Is Like No Recovery  This prompts me to republish an open letter to Professor Barro that I posted some years ago. (To which, not surprisingly, I never received a reply.) It speaks volumes of Robert Barro’s “scholarship”…

  • The Macroeconomics of Chinese Kleptocracy

    Damn, Krugman beat me to this yesterday. I thought I would be bringing in a fascinating piece from the fringes of the Australioblogosphere. Bronte Capital: The Macroeconomics of Chinese kleptocracy. My basic take is the same as Paul’s: I have no idea whether this John Hempton piece on China is at all right, but it’s a terrific read,…