Asymptosis: Always Approaching

Asymptosis: always approaching

  • Dang Those Bush Tax Cuts Really Worked!

    HT to Barry Ritholtz. Source. Related posts: Stockman: How the GOP Destroyed the U.S. Economy | The Big Picture Banks’ “Bigger Concern”: “Republicans will no longer defend Wall Street companies.” “Track Changes” on Fed Statements Sarah: On Target S&P 500 Earnings: The Most Depressing Graphic I’ve Seen This Year

  • The Best Argument Against Climate Legislation — And the Best Answers

    I’ve long lauded Jim Manzi for his cogent and convincing arguments against carbon taxes. He’s the antithesis of the “1998 was really hot! Look: it’s cooler now!” school of head-in-in-the-sand self-delusionists. Rather, he takes the 2007 IPCC report as the best available consensus scientific knowledge we have, and uses it to think through a clear-eyed,…

  • Is “Starve the Beast” Finally Working? At (Almost) the Worst Possible Time?

    Even as some vaguely sane voices on the right — notably former Reagan budget officials — are acknowledging that the thirty-year experiment in “starve the beast” has failed…it seems to be working. The austerity principle is finally taking hold — just when the opposite should be true. The basics of fiscal and monetary policy aren’t…

  • Trickle-Down Really, Really Works!

    Lane Kenworthy has updated his Best Inequality Graph with the latest data (through 2007): Hidden in the fine print, you’ll find proof positive that trickle-down works: middle-class incomes have risen by 1% a year since 1979! And poor people’s incomes have gone up by 0.4% a year. How can you argue with that kind of…

  • Intel’s Andy Grove, Refugee from Communism, Champions Centralized Economic Planning: “rebuild our industrial commons”

    If you’re like me, you hear your friends say this a lot about America: “we need to start making things again.” It seem intuitively correct, but there’s a pretty standard economic response: if we’re getting all the profits based on our knowledge and innovation, even though we’re not doing all the work, what’s the problem?…

  • Oh Woe, Alas and Alack, that “Credit Crunch.” Except…Not!

    Private Equity Firms Have Billions and Nowhere to Spend It I’ve mentioned this a few times before… The Sky Is Falling! Business Lending Down 1.2 Percent! Related posts: The So-Called Credit Crunch, Again Some More Should the Financial Sector Shrink? Bleg: Accounting for the Real Sector No Kidding: Loan Demand, Not Credit, Is the Problem…

  • Obama’s McMoment? McMaybe.

    Has anyone else noticed? McLellan. MacArthur. McChrystal. Makes me think of this post. As Sen. Jim Webb, D-Va., argues in his 2004 book, “Born Fighting: How the Scots-Irish Shaped America,” the Scots-Irish are a particularly pugnacious people, self-reliant and hyper-individualistic, who place honor above profit. … Once Democrats, Webb says the Scots-Irish created the “core…

  • Inequality is Necessary for Growth, Right?

    I’m going to start this post with a proleptic response: No, nobody is suggesting a Maoist cultural revolution, forcing executives and professors to muck shit on collective farms. But I feel compelled to share the results from my latest, comparing income inequality to prosperity and prosperity growth in the fifty states. Contrary to the supply-sider…

  • Alex Tabarrok Does the Arithmetic on CDOs

    Update: I erroneously attributed the following post to Tyler Cowen instead of Alex Tabarrok. Fixed in the title. Marginal Revolution: The Dark Magic of Structured Finance. I’ll let you read it yourself, but here’s the takeaway. If the chance of underlying mortgages’ defaulting goes from 5% to 6% (a 20% increase), the probability of default…

  • Are We Facing an Exponential Rate of Decay?

    It never ceases to amaze me how tiny technical details can have massive implications. Here’s perhaps the biggest example I’ve ever seen. In a recent post I cited the 1987 Long-Term Capital Management hedge-fund fiasco, which occurred because they were assuming a normal distribution bell curve for financial events. “A one-in-five-hundred-year event on a normal…

  • One Thousand Words on Prosperity Growth

    Commenters on my cross-post over at Angry Bear have asserted among other things that real GDP/capita growth has been steady for more than a century. See? This proves, they assert, that the policy differences between Republicans and Democrats don’t really affect anything. My response was to point out how hard it is to eyeball important…

  • Presidents and Congress, Republicans and Democrats: Spending, Taxation, Debt, and GDP

    Cross-posted at Angry Bear. Thanks to yeoman’s work by Larry Bartels, Mike Kimel, and a host of others, we’ve seen that over many decades, the American economy has performed far better, by almost any measure, under Democratic presidents. Larry Bartels’ key graph mapping income growth by quintile, 1948–2005 (from page 33 of Unequal Democracy) is…

  • Taxes: Equity versus Efficiency? Not so Much

    Just following up on my recent post showing that progressivity in state taxes seems to have no significant relationship to prosperity: These findings suggest to me that the supposed tradeoff between equity and economic efficiency is a false choice (by this measure, at least). More equitable states (far more equitable) are just as prosperous, at…

  • Drowning the Baby with the Bathwater

    File under: Painfully Strained Mixed Metaphors. (Unless: “with” means “using.” But still.) The Norquististas want to make government small enough to drown it in a bathtub. Bruce Bartlett was there when the Republicans ginned up this ideology. He participated. And he takes it down here. In effect, STB became a substitute for spending restraint among…

  • Are Progressive States More or Less Prosperous? Not Really

    I posted recently about how profoundly regressive state and local taxes are, with my home state of Washington being the very worst. A new initiative proposal by Bill Gates Sr. to institute a state income tax on high earners (while reducing business and property taxes) prompted me to revisit the issue. My question: are states…

  • Largest Oil Spills

    I got curious about this. Here’s what WikiPedia says: ——————- Oil spills of over 100,000 tonnes or 30 million US gallons, ordered by tonnes[a] Spill / Tanker Location Date Tons of crude oil Reference Gulf War oil spill Persian Gulf January 21, 1991 1,360,000–1,500,000 [19][20] Ixtoc I oil well Gulf of Mexico June 3, 1979–March…

  • Mankiw: Do Equity Analysts Create Prosperity?

    In my peregrinations I just came across an old 2006 post by Greg Mankiw. He describes the situation of: …a Harvard PhD in economics who left an academic job for a better-paying one in private equity. Based on the article, he seemed a bit wistful about leaving an academic job behind. At a higher tax…

  • Another Reaganomics Inflection Point

    The solid line (left scale) is the ratio of financial sector wages to private sector wages. The dotted line (right scale) is an index of financial regulation. From: 13 Bankers In 4 Pictures Related posts: The Global Great Depression: Then and Now Public vs. Private Debt: The Long View If Interest Rates Rise, We Can…

  • Does Unemployment Insurance Make People Lazy?

    Short answer: Yes. Slightly longer answer: Not very many people, and not much lazier. Rob Valletta and Katherine Kuang of the Federal Reserve Bank of San Francisco just released a new study of unemployment insurance and unemployment. This graphic stands out: People who quit their jobs or are just entering the job market aren’t eligible…

  • Where Did the Deficits Come From? From “Conservatives” of Course

    You already know this, but: Click image for source. Related posts: Yeah Right: Supply of Credit to Businesses Is a Big Problem 520 Traffic is Declining — Despite 15 Years of WSDOT Projections to the Contrary Did I Mention Mentioning that It’s the Health Care Costs, Stupid? More American Exceptionalism: Drowning the Baby in the…

  • Should the Financial Sector Shrink?

    The financial services industry seems to be x times larger than it needs to be to effectively service and lubricate the real economy that produces useful goods and services. (Arnold Kling is one of many that agree with me.) This suggests that the market is misallocating resources (both capital and human). It is also failing…