First: Percentage job loss from peak during post WWII recessions (Calculated Risk):
Second: year-over-year delinquency rate changes, where red indicates an increased rate and green indicates a decreased rate (New York Federal Reserve):
Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts
October 09, 2009
Pretty charts. Ugly news.
A few pretty and devastating graphs.
First: Percentage job loss from peak during post WWII recessions (Calculated Risk):
Second: year-over-year delinquency rate changes, where red indicates an increased rate and green indicates a decreased rate (New York Federal Reserve):
Third: the current delinquency rate as of the second quarter of 2009, where a darker color indicates a higher rate (ibid):
First: Percentage job loss from peak during post WWII recessions (Calculated Risk):
Second: year-over-year delinquency rate changes, where red indicates an increased rate and green indicates a decreased rate (New York Federal Reserve):
September 16, 2009
"How to Write Well"
[Note: everything in the post except for this note, including the title, is taken directly from Greg Mankiw's Blog. Rather than linking to it I figure it is easier for me to just copy the text and cite the source. For those of you outside of the world of economics, Mankiw (sometimes referred to as variations on N. Gregory Mankiw) is a famous economist who headed the Council of Economic Advisers under Bush 43 from 2003 to 2005 and teaches at Harvard. The original post can be found here.]
When I was CEA chair, I sent the following guidelines to my staff as they started drafting the Economic Report of the President. A friend recently emailed me a copy, and I thought I would share them with blog readers. They are good rules of thumb, especially for economists writing for a general audience.
When I was CEA chair, I sent the following guidelines to my staff as they started drafting the Economic Report of the President. A friend recently emailed me a copy, and I thought I would share them with blog readers. They are good rules of thumb, especially for economists writing for a general audience.
ERP Writing Guidelines
- Stay focused. Remember the take-away points you want the reader to remember. If some material is irrelevant to these points, it should probably be cut.
- Keep sentences short. Short words are better than long words. Monosyllabic words are best.
- The passive voice is avoided by good writers.
- Positive statements are more persuasive than normative statements.
- Use adverbs sparingly.
- Avoid jargon. Any word you don’t read regularly in a newspaper is suspect.
- Never make up your own acronyms.
- Avoid unnecessary words. For instance, in most cases, change
o “in order to” to “to”
o “whether or not” to “whether”
o “is equal to” to “equals” - Avoid “of course, “clearly,” and “obviously.” Clearly, if something is obvious, that fact will, of course, be obvious to the reader.
- The word “very” is very often very unnecessary.
- Keep your writing self-contained. Frequent references to other works, or to things that have come before or will come later, can be distracting.
- Put details and digressions in footnotes. Then delete the footnotes.
- To mere mortals, a graphic metaphor, a compelling anecdote, or a striking fact is worth a thousand articles in Econometrica.
- Keep your writing personal. Remind readers how economics affects their lives.
- Remember two basic rules of economic usage:
o “Long run” (without a hyphen) is a noun. “Long-run” (with a hyphen) is an adjective. Same with “short(-)run.”
o “Saving” (without a terminal s) is a flow. “Savings” (with a terminal s) is a stock. - Buy a copy of Strunk and White’s Elements of Style. Also, William Zinsser’s On Writing Well. Read them—again and again and again.
- Keep it simple. Think of your reader as being your college roommate who majored in English literature. Assume he has never taken an economics course, or if he did, he used the wrong textbook.
September 04, 2009
Making the USA look great.
As you may or may not know, Iceland is one of few places in the world that has made the USA look financially responsible and risk-averse during the turmoil of the last few years. Basically, Iceland privatized and monetized its fishing industry in the 1970s, and the new-found free time allowed the country to turn into "[...] a machine for turning cod into Ph.D.’s." Unfortunately, this led many (extremely overconfident) Icelandic men to jump into finance with no training or experience; hilarity ensued, if hilarity can be equated to financial and economic ruin.
I recommend reading this (admittedly lengthy) article by Michael Lewis, written for the April 2009 issue of Vanity Fair: "Wall Street on the Tundra." Aside from describing the logic behind the rise and fall of Icelandic financiers and banks, this article supplies what I always desire in travel writing: a picture not only of the beautiful scenery and buildings of a country, but also of the personalities and idiosyncrasies of the population.
September 03, 2009
"Who Gains from President Obama's Stimulus Package...And How Much?"
I recommend everyone at least read this summary of a recent publication by two economists at The Levy Economics Institute of Bard College (summary taken from this website):
"In this Special Report, Levy scholars Ajit Zacharias, Thomas Masterson, and Kijong Kim provide a preliminary assessment of the 2009 American Recovery and Reinvestment Act (ARRA), a package of transfers and tax cuts that is expected to provide relief to low-income and vulnerable households especially hurt by the economic crisis, while at the same time supporting aggregate demand. By the administration’s estimate, ARRA will create or save approximately three and a half million jobs by the end of 2010; while the ameliorating impact of the stimulus plan on the employment situation is surely welcome, say the authors, the government could have achieved far more at the same cost by skewing the stimulus package toward outlays rather than tax cuts. Their analysis points toward the necessity for a comprehensive employment strategy that goes well beyond ARRA. The need for public provisioning of various sorts—ranging from early childhood education centers to public health facilities to the “greening” of public transportation—coupled with the severe underutilization of labor, naturally suggests an expanded role for public employment as a desirable ingredient in any alternative strategy."
If you are interested in reading the complete article (only four-and-a-half pages), it can be directly downloaded here.
"In this Special Report, Levy scholars Ajit Zacharias, Thomas Masterson, and Kijong Kim provide a preliminary assessment of the 2009 American Recovery and Reinvestment Act (ARRA), a package of transfers and tax cuts that is expected to provide relief to low-income and vulnerable households especially hurt by the economic crisis, while at the same time supporting aggregate demand. By the administration’s estimate, ARRA will create or save approximately three and a half million jobs by the end of 2010; while the ameliorating impact of the stimulus plan on the employment situation is surely welcome, say the authors, the government could have achieved far more at the same cost by skewing the stimulus package toward outlays rather than tax cuts. Their analysis points toward the necessity for a comprehensive employment strategy that goes well beyond ARRA. The need for public provisioning of various sorts—ranging from early childhood education centers to public health facilities to the “greening” of public transportation—coupled with the severe underutilization of labor, naturally suggests an expanded role for public employment as a desirable ingredient in any alternative strategy."
If you are interested in reading the complete article (only four-and-a-half pages), it can be directly downloaded here.
July 29, 2009
More articles.
1. "In Battle, Hunches Prove to Be Valuable" - This NYT article attempts to explain why, both physiologically and psychologically, some soldiers in war zones are significantly better than most at detecting dangerous situations (e.g. soldiers who are known for their ability to identify IEDs before detonation).
2. "In Study, Texting Lifts Crash Risk by Large Margin" - This NYT article discusses a study of truck drivers (based on eighteen months of taped observation) that shows that texting while driving increases the risk of a crash by up to twenty three times. The authors claim the pattern extends to non-commercial drivers as well. The research is currently undergoing peer review.
3. "Should Thursday be the New Friday? The Environmental and Economic Pluses of the 4-Day Workweek" - Scientific American discusses the potential benefits of four-day workweeks (e.g. four days of ten hours each instead of five days of eight hours each), citing Utah as an example of the savings that can be had: "Local governments in particular have had their eyes on Utah over the last year; the state redefined the workday for more than 17,000 of its employees last August. For those workplaces, there's no longer a need to turn on the lights, elevators or computers on Fridays—nor do janitors need to clean vacant buildings. Electric bills have dropped even further during the summer, thanks to less air-conditioning: Friday's midday hours have been replaced by cooler mornings and evenings on Monday through Thursday. As of May, the state had saved $1.8 million."
2. "In Study, Texting Lifts Crash Risk by Large Margin" - This NYT article discusses a study of truck drivers (based on eighteen months of taped observation) that shows that texting while driving increases the risk of a crash by up to twenty three times. The authors claim the pattern extends to non-commercial drivers as well. The research is currently undergoing peer review.
3. "Should Thursday be the New Friday? The Environmental and Economic Pluses of the 4-Day Workweek" - Scientific American discusses the potential benefits of four-day workweeks (e.g. four days of ten hours each instead of five days of eight hours each), citing Utah as an example of the savings that can be had: "Local governments in particular have had their eyes on Utah over the last year; the state redefined the workday for more than 17,000 of its employees last August. For those workplaces, there's no longer a need to turn on the lights, elevators or computers on Fridays—nor do janitors need to clean vacant buildings. Electric bills have dropped even further during the summer, thanks to less air-conditioning: Friday's midday hours have been replaced by cooler mornings and evenings on Monday through Thursday. As of May, the state had saved $1.8 million."
May 29, 2009
Shh, don't say anything - you don't want to jinx it!
Not sure how many of you have noticed, but the numbers that keep coming out on the economy are consistently pretty-bad-but-they-could be worse kind of numbers. Also not sure if you noticed, but the news has sort of just stopped talking about the economy ...
So it should come as little surprise then, even with no indication of economic improvement, that consumer confidence numbers are on the rise - and fast! It seems that without hearing bad news about the economy all the time, people are actually starting to think it's improving (even I have to actively resist this trap). But then again, people thinking the economy is better could very well be all it takes to start the recovery.
Don't screw this up for us CNN.
So it should come as little surprise then, even with no indication of economic improvement, that consumer confidence numbers are on the rise - and fast! It seems that without hearing bad news about the economy all the time, people are actually starting to think it's improving (even I have to actively resist this trap). But then again, people thinking the economy is better could very well be all it takes to start the recovery.
Don't screw this up for us CNN.
May 20, 2009
"Bar-onomics"
[Update: Fixed source--New York Magazine, not The New Yorker]
[Note: I have simply copied and pasted the entire article (go here for original) from New York Magazine because it is so short.]
[Note: I have simply copied and pasted the entire article (go here for original) from New York Magazine because it is so short.]
So you want to open a bar, huh? A profitable bar? We asked four experts to run the numbers on a make- believe, 1,000-square-foot neighborhood pub in the East Village.
Start-Up Costs
Rent for six months while waiting on a liquor license: $49,800 (assuming $8,300 a month)
Liquor license and fees: $9,000
Equipment, construction, and demolition: $60,000
Signage: $1,000
Décor and glassware: $21,000
Training for six employees: $858
Initial liquor order: $6,000 (45 percent on beer, 40 percent on liquor, 5 percent on wine, 10 percent on mixers)
Sound system: $1,000
Emergency funds: $50,000
Misc.: $2,000
TOTAL . . . . . . . $200,658
Ongoing Monthly Costs
Rent: $8,300
Booze: $10,000
Insurance: $500
Misc.: $1,900
Staff pay: $1,720 (assuming 100 hours a week at $4.30 an hour)
Utilities: $1,320
Taxes and fees: $1,000
TOTAL . . . . . . . . $24,740
The Markups
Draft beer: $3.59 a pint
Bottled beer: $3.85 a bottle
Well liquor: $4.65 a pour
Top-shelf liquor: $3.35 a pour
Wine: $3.48 a glass
Break-Even Point
Amount you’d have to gross in 18 months before you start turning a profit: $645,978 (monthly expenses of $24,740 for 18 months, or $445,320, plus start-up costs of $200,658)
Number of customers required per night to reach $645,978 in 18 months (assuming $5 per average drink and 1.5 drinks per person): 160
April 16, 2009
Scary econ. graph of the day, part 2
Ask and ye shall receive, even the anonymous amongst us. The above graph, based on FDIC data, shows the percentage of FDIC insured financial institutions to fail or receive assistance each year between 1934 and 2007. I could not find data on the number of institutions insured beyond 2007, when there were 7,283 institutions, three of which failed and zero of which received assistance. In 2008 thirty institutions failed or received assistance, and assuming the number of institutions did not change from 2007 this gives us a failure plus assistance rate of 0.412%. In 2009 so far twenty-three institutions have failed, and, using the same method of approximation as was used for 2008, this give us a failure plus assistance rate for this year (so far) of 0.316%.
To directly answer the two anonymous concerns:
1. Graph is now in terms of percentage and the trend remains. By the way, I totally agree with this critique. Thanks for reminding me to keep everything in relative terms;
2. I agree that the high failure rate in the late 1980s and early 1990s likely lowered the number of banks in existence, thereby lowering the absolute number of failures in future years. (Am I wrong in thinking that this could push the percentage of failures either higher or lower depending on other factors? If the remaining banks are healthier overall the failure percentage will decline in the future, but if there are still a bunch of unhealthy banks just waiting to fail then the failure rate will rise.) It also must be recognized that in the late-1980s and early- to mid-1990s there was a big push for de-regulation that significantly increased the likelihood of bank mergers and thereby pushed the number of existing institutions down. In fact, "From 1980 to 1994, there was an average of 423 mergers per year—a total of 6,347 mergers, which amounted to 43 percent of all banks in existence in 1980" (source). I don't have an answer as to the effect of each of these forces, but you can see the overall trend clearly in this graph:
February 12, 2009
Articles!
A quick article dump to start the day’s blogging activities.
”Sarah Palin's $159,050 Conflict of Interest” - Todd Palin is currently racing a “snow machine” 1,971 miles across Alaska, during which his “Arctic Cat's powerful two-stroke engine will emit the same amount of hydrocarbons as an automobile driving from Chicago to San Francisco and back 150 times.” Fantastic. And it only gets trashier and more polluting. First, the pollution: “[During the race] Todd Palin will release as many cancer-causing and smog-forming pollutants as a Chevy Malibu driven around the Earth at its equator 28 times.” Now, the conflict of interest: the race is sponsored by “[…] the petroleum giants Tesoro and Conoco-Phillips; State Farm, Wells Fargo, Frontier Airlines, Alaska Airlines and the Alaska First National Bank.” You may be saying, “But you are not being fair. Maybe the Palins do not get a shady benefit from this.” Well, Todd is an annual competitor (seemingly surprising for a race with a field of 40 people willing to do this kind of evil to the environment) who has only one four times. “Once after Sarah was elected to the Wasilla City Council, once after she was elected mayor, the year she was appointed to the Alaska Oil and Gas Commission, and the year she was elected governor.” Okay, okay, maybe I jumped the gun. Sorry for trying to shame such an upstanding family.
“Video Games Are Good For Children – EU Report” - Nothing too surprising here, but it is nice to have confirmation of something I believe: An EU panel determined that "’video games can stimulate learning of facts and skills such as strategic thinking, creativity, cooperation and innovative thinking, which are important skills in the information society.’" Yay! An excuse to play more video games!
Unemployment as stimulus -
“A Novel Approach: Using Unemployment Benefits as a Means for Stimulus” – An interesting plan to maximize the benefits created by unemployment payments: instead of paying out cash to an unemployed person for a set amount of time provide that person with a voucher that subsidizes them as an employee. For example, assume Mr. Doe is unemployed and receives $200 each week in unemployment payments ant that were anyone to hire Mr. Doe it would cost that firm $500 each week, a (made-up) prohibitive amount. The likely outcome here is that he remains unemployed. But if Mr. Doe can suddenly walk into an interview and say, “Instead of costing you $500 each week I will only cost you $300 each week and the money that would have been my unemployment check is now paying the other $200 of the salary.” Obviously this has limitations (e.g. what happens when Mr. Doe’s salary is no longer subsidized?), but in the short term this plan creates a greater overall income, implying a greater overall level of consumption, for the same government investment. At the same time it increases the overall production level of the economy.
“Big Satellites Collide 500 Miles Over Siberia” – This story seems pretty ridiculous at first, though it does highlight the very real concern of the volume of junk orbiting Earth. Apparently a non-functional Russian satellite launched in 1993 and described as “[…] out of control” crashed into a commercial satellite launched in 1997, creating thousands of particles that will now orbit Earth waiting to smash into other man-made satellites. I can’t help but think of this as a case of modern space zombies in which each zombie (read: smashed satellite) spends the rest of its time trying to create more zombies (read: smash other satellites). For perspective on the dangers we are facing from orbiting junk only fifty-two years into man’s era of sending crap into space: “[…] orbital debris is now the biggest threat to a space shuttle in flight, surpassing the dangers of liftoff and return to Earth.” I will now officially swear off space flight until we have orbiting Roombas keeping me safe.
“Letting Scientists Off the Leash” - This is an interesting article written by a researcher at Stanford University who discusses the flaws in the way money for research is distributed. His main point is that the typically conservative review boards that approve funding for grant proposals do not fund very imaginative or risky research. This leads to a situation where most of the ideas we are pursuing are those that we are already sure we can turn into a profit, not those that could have a substantially larger impact but at the same time carry larger risks (in that they are more likely than the boring projects to have an outcome different from that discussed when the grant was proposed). I don’t know too much about this, but I do support the idea of devising a more efficient means of identifying and funding riskier and more creative research.
”Sarah Palin's $159,050 Conflict of Interest” - Todd Palin is currently racing a “snow machine” 1,971 miles across Alaska, during which his “Arctic Cat's powerful two-stroke engine will emit the same amount of hydrocarbons as an automobile driving from Chicago to San Francisco and back 150 times.” Fantastic. And it only gets trashier and more polluting. First, the pollution: “[During the race] Todd Palin will release as many cancer-causing and smog-forming pollutants as a Chevy Malibu driven around the Earth at its equator 28 times.” Now, the conflict of interest: the race is sponsored by “[…] the petroleum giants Tesoro and Conoco-Phillips; State Farm, Wells Fargo, Frontier Airlines, Alaska Airlines and the Alaska First National Bank.” You may be saying, “But you are not being fair. Maybe the Palins do not get a shady benefit from this.” Well, Todd is an annual competitor (seemingly surprising for a race with a field of 40 people willing to do this kind of evil to the environment) who has only one four times. “Once after Sarah was elected to the Wasilla City Council, once after she was elected mayor, the year she was appointed to the Alaska Oil and Gas Commission, and the year she was elected governor.” Okay, okay, maybe I jumped the gun. Sorry for trying to shame such an upstanding family.
“Video Games Are Good For Children – EU Report” - Nothing too surprising here, but it is nice to have confirmation of something I believe: An EU panel determined that "’video games can stimulate learning of facts and skills such as strategic thinking, creativity, cooperation and innovative thinking, which are important skills in the information society.’" Yay! An excuse to play more video games!
Unemployment as stimulus -
“A Novel Approach: Using Unemployment Benefits as a Means for Stimulus” – An interesting plan to maximize the benefits created by unemployment payments: instead of paying out cash to an unemployed person for a set amount of time provide that person with a voucher that subsidizes them as an employee. For example, assume Mr. Doe is unemployed and receives $200 each week in unemployment payments ant that were anyone to hire Mr. Doe it would cost that firm $500 each week, a (made-up) prohibitive amount. The likely outcome here is that he remains unemployed. But if Mr. Doe can suddenly walk into an interview and say, “Instead of costing you $500 each week I will only cost you $300 each week and the money that would have been my unemployment check is now paying the other $200 of the salary.” Obviously this has limitations (e.g. what happens when Mr. Doe’s salary is no longer subsidized?), but in the short term this plan creates a greater overall income, implying a greater overall level of consumption, for the same government investment. At the same time it increases the overall production level of the economy.
“Big Satellites Collide 500 Miles Over Siberia” – This story seems pretty ridiculous at first, though it does highlight the very real concern of the volume of junk orbiting Earth. Apparently a non-functional Russian satellite launched in 1993 and described as “[…] out of control” crashed into a commercial satellite launched in 1997, creating thousands of particles that will now orbit Earth waiting to smash into other man-made satellites. I can’t help but think of this as a case of modern space zombies in which each zombie (read: smashed satellite) spends the rest of its time trying to create more zombies (read: smash other satellites). For perspective on the dangers we are facing from orbiting junk only fifty-two years into man’s era of sending crap into space: “[…] orbital debris is now the biggest threat to a space shuttle in flight, surpassing the dangers of liftoff and return to Earth.” I will now officially swear off space flight until we have orbiting Roombas keeping me safe.
“Letting Scientists Off the Leash” - This is an interesting article written by a researcher at Stanford University who discusses the flaws in the way money for research is distributed. His main point is that the typically conservative review boards that approve funding for grant proposals do not fund very imaginative or risky research. This leads to a situation where most of the ideas we are pursuing are those that we are already sure we can turn into a profit, not those that could have a substantially larger impact but at the same time carry larger risks (in that they are more likely than the boring projects to have an outcome different from that discussed when the grant was proposed). I don’t know too much about this, but I do support the idea of devising a more efficient means of identifying and funding riskier and more creative research.
February 10, 2009
Possibly the best sentence I've read in all my studies of economics
Judge: Why does a man like you have to pay for sex?
Charlie Sheen: I don't pay them for sex. I pay them to leave.
Charlie Sheen: I don't pay them for sex. I pay them to leave.
February 05, 2009
Bart's Morning Thoughts (None of them stolen from other posts!)
Walgreens
Gains in efficiency are always impressive, but not this impressive. Walgreens has created a warehouse that is twenty percent more efficient than any of its other plants. Their secret? Disabilities. The warehouse is designed to use the disabilities of workers for gain. For example, a lot of their IT work is done by those with Asperger syndrome because many with the disease become fascinated by technology and can understand it very well. Walgreens was inspired by one of its executives who feared the permanent dependence of his son on caretakers. Now it seems as if the son may be able to not only find work but to excel in it. I hope to see this scaled up soon, because this seems to be the employment equivalent of price discrimination: get the most benefit (read: production) out of each and every person by considering their individual circumstances, desires, and needs. Bravo, Walgreens.
Pakistan
To bring you down from the high provided by that new-age feel-goodery Walgreens I bring you “The Gunmarkets of Pakistan.” (So far as I can tell the guys who made the video consider gunmarkets to be an actual word. Whatever.) The host of the video had his Pakistani mother make a few phone calls to her friends, who were able to arrange for the host to enter the most dangerous regions of Pakistan to buy weapons. The video catalogues the trip to visit the weapons producers of the region (read: villagers making Kalashnikovs by hand).
Dr. Death
Let’s finish off with a slightly less depressing story: Dr. Death has been found, but he is already dead. After escaping Germany in the 1960s (yes, the 1960s, not the 1940s) Dr. Aribert Heim was able to make it to Cairo, where he lived out his life under an adopted name and converted to Islam (Assumedly he converted from Nazism?). The NYT found this out by recovering a briefcase full of Heim’s personal documents and correspondence. It seems this may herald the end of Nazi-hunting, as the Simon Wiesenthal Center considered Heim to be their top target and was about to up the reward for Heim’s capture to $1.3M. It kind of creeps me out when Dr. Death is referred to fondly as “Uncle Tarek.” Let me know if it does the same for you.
Gains in efficiency are always impressive, but not this impressive. Walgreens has created a warehouse that is twenty percent more efficient than any of its other plants. Their secret? Disabilities. The warehouse is designed to use the disabilities of workers for gain. For example, a lot of their IT work is done by those with Asperger syndrome because many with the disease become fascinated by technology and can understand it very well. Walgreens was inspired by one of its executives who feared the permanent dependence of his son on caretakers. Now it seems as if the son may be able to not only find work but to excel in it. I hope to see this scaled up soon, because this seems to be the employment equivalent of price discrimination: get the most benefit (read: production) out of each and every person by considering their individual circumstances, desires, and needs. Bravo, Walgreens.
Pakistan
To bring you down from the high provided by that new-age feel-goodery Walgreens I bring you “The Gunmarkets of Pakistan.” (So far as I can tell the guys who made the video consider gunmarkets to be an actual word. Whatever.) The host of the video had his Pakistani mother make a few phone calls to her friends, who were able to arrange for the host to enter the most dangerous regions of Pakistan to buy weapons. The video catalogues the trip to visit the weapons producers of the region (read: villagers making Kalashnikovs by hand).
Dr. Death
Let’s finish off with a slightly less depressing story: Dr. Death has been found, but he is already dead. After escaping Germany in the 1960s (yes, the 1960s, not the 1940s) Dr. Aribert Heim was able to make it to Cairo, where he lived out his life under an adopted name and converted to Islam (Assumedly he converted from Nazism?). The NYT found this out by recovering a briefcase full of Heim’s personal documents and correspondence. It seems this may herald the end of Nazi-hunting, as the Simon Wiesenthal Center considered Heim to be their top target and was about to up the reward for Heim’s capture to $1.3M. It kind of creeps me out when Dr. Death is referred to fondly as “Uncle Tarek.” Let me know if it does the same for you.
Morning Thoughts
I strongly disagree with the President's decision to cap executive pay at $500K for (some) bailout recipients. I certainly think he has the right - you want our money, we make the rules - but I think something like $5 million would have been fine. Like it or not, some of these "executives" are not actually spawn of Satan and some of them are very talented. Why would they work for $500K if they could get $10M elsewhere? Especially if they, say, have taken out a mortgage based on future expectations of salary. And I'll just say it - if you're a powerful, wealthy person living in New York City, $500K is not a lot of money.
So, it's clearly written from the perspective of a whiner, but this article about Obama capping total compensation at $500K when his total compensation is quite a bit higher was actually worth reading.
Glenn Beck is willing to go all-in on Obama being a Communist. The last 15 seconds are classic.
Tim Geithner did know he owed the other half of the Social Security and Medicare taxes (if you don't know, US employers pay half of these taxes and you pay the other half. Americans working for int'l organizations are still on the hook for the whole thing even though their employer won't pay it. Geither claims that missing this was the mistake in question). How do we know he knew? He applied - and received - reimbursement for the taxes from the IMF. He later acknowledged a failure to pay the taxes, but didn't actually pay them until his nomination was dicussed. It's all right here in this brochure. (For the record, I don't put a lot into the "rough estimate of $600B" that the article mentions.)
PS - As I was labeling this post, it just made me realize - I want to make it clear that I know I've switched from using "bailout" to using "stimulus", even though the media's switch was arbitrary/socialist.
PPS - I know I've been a little overboard about this recently, but I stand by my "incorrect" ordering of quotation marks and commas above. I used to refer to the "Government Bailout" but I've never referred to the "Stimulus, Package" so I see no reason to put the comma inside the quotation mark.
PPPS - In the first paragraph I said $500K isn't a lot of money for wealthy, powerful New Yorkers. But it's really not a whole lot of money for anyone. Think of it this way, New Yorkers - the proportion of my income that goes to rent is 5.5% before taxes and 7.4% after taxes. Divide your rent by those numbers to see what your income would be if your rent was the same as it is now but it only took the same amount of your income as mine does. My figures do not include utilities.
So, it's clearly written from the perspective of a whiner, but this article about Obama capping total compensation at $500K when his total compensation is quite a bit higher was actually worth reading.
Glenn Beck is willing to go all-in on Obama being a Communist. The last 15 seconds are classic.
Tim Geithner did know he owed the other half of the Social Security and Medicare taxes (if you don't know, US employers pay half of these taxes and you pay the other half. Americans working for int'l organizations are still on the hook for the whole thing even though their employer won't pay it. Geither claims that missing this was the mistake in question). How do we know he knew? He applied - and received - reimbursement for the taxes from the IMF. He later acknowledged a failure to pay the taxes, but didn't actually pay them until his nomination was dicussed. It's all right here in this brochure. (For the record, I don't put a lot into the "rough estimate of $600B" that the article mentions.)
PS - As I was labeling this post, it just made me realize - I want to make it clear that I know I've switched from using "bailout" to using "stimulus", even though the media's switch was arbitrary/socialist.
PPS - I know I've been a little overboard about this recently, but I stand by my "incorrect" ordering of quotation marks and commas above. I used to refer to the "Government Bailout" but I've never referred to the "Stimulus, Package" so I see no reason to put the comma inside the quotation mark.
PPPS - In the first paragraph I said $500K isn't a lot of money for wealthy, powerful New Yorkers. But it's really not a whole lot of money for anyone. Think of it this way, New Yorkers - the proportion of my income that goes to rent is 5.5% before taxes and 7.4% after taxes. Divide your rent by those numbers to see what your income would be if your rent was the same as it is now but it only took the same amount of your income as mine does. My figures do not include utilities.
February 04, 2009
December 17, 2008
Good Article on Economy
There's nothing particularly outstanding about the content of this article, but as I read it, I realized I wish all economic articles were written this way. It assumes the reader doesn't have a Ph.D. in economics but is smart enough to grasp an outline of the ideas. I really appreciate that, and apparently I'm not alone in wishing more articles struck the balance.
December 12, 2008
Two Bailout Proposals
OK, so I didn't even read the first one. It apparently says that only two automakers should get bailout money, based on whoever will bid the lowest price. More interesting than the idea? The source. What's Eliot Spitzer doing back in the news?
Another idea ... Why do the taxpayers have to cough up this dough? How about the government does a 401(k)-style match, essentially a subsidy for investing in the automakers specifically, so that most of the money is still coming in from the private sector? Administratively complicated, but theoretically superior, at least as far as I can tell.
Another idea ... Why do the taxpayers have to cough up this dough? How about the government does a 401(k)-style match, essentially a subsidy for investing in the automakers specifically, so that most of the money is still coming in from the private sector? Administratively complicated, but theoretically superior, at least as far as I can tell.
December 10, 2008
Homework
OK I need your help. I've basically got the go-ahead to implement some sort of voluntary office competition, in which whoever reduces their utility bills the most wins a prize.
Unfortunately, I have not been able to out-do all of the logistical complications. First, you obviously have to go by percentage since we don't all live in the same-sized houses. But do you go month-by-month? If so, I could write off every other month by putting my heat on 85 degrees and easily winning the following month. And creating a baseline represents difficulties ... ideally we would compare all the bills for 12 months of 2009 to 12 months of 2008, but that's too administratively complex.
So I'm throwing my hands up. Ideas?
Unfortunately, I have not been able to out-do all of the logistical complications. First, you obviously have to go by percentage since we don't all live in the same-sized houses. But do you go month-by-month? If so, I could write off every other month by putting my heat on 85 degrees and easily winning the following month. And creating a baseline represents difficulties ... ideally we would compare all the bills for 12 months of 2009 to 12 months of 2008, but that's too administratively complex.
So I'm throwing my hands up. Ideas?
What is the Republican Party to do? (Part 47)
If you remember my superboring lecture way back in the day, I compared the left-right spectrum of politics to ice cream stands along a beach.
Looking at the senate, let's start from the left. First off, there's a lot of Democrats. Secondly, there's quite a spectrum of them. There's your Schumers and Kennedys, sure, but there are also Landrieus and Byrds. So let's imagine that the Democrats start at the far left (say point 0) and extend halfway over (point 50).
The Republicans? Well, there's not very many, as you know, and you may also know that the Republican senators who lost were pretty moderate. The ones left are much more often the DeMints and the Chamblisses of the world. So if you start at the far right (point 100) and extend left, you'd probably only go, say, 30 points over (to point 70).
This leaves a 20-pt gap (again, everything is obviously quite arbitrary) from points 50-70 that is up for grabs. I'm not sure if I've presented this in a manner that makes any sense, but if so, you'll see that the Republicans have the option of moving to the right (and into obscurity) or taking up some of that middle, at least for now. If they don't move at least in the short run, there's gonna be a long night in store for them in November 2010.
Looking at the senate, let's start from the left. First off, there's a lot of Democrats. Secondly, there's quite a spectrum of them. There's your Schumers and Kennedys, sure, but there are also Landrieus and Byrds. So let's imagine that the Democrats start at the far left (say point 0) and extend halfway over (point 50).
The Republicans? Well, there's not very many, as you know, and you may also know that the Republican senators who lost were pretty moderate. The ones left are much more often the DeMints and the Chamblisses of the world. So if you start at the far right (point 100) and extend left, you'd probably only go, say, 30 points over (to point 70).
This leaves a 20-pt gap (again, everything is obviously quite arbitrary) from points 50-70 that is up for grabs. I'm not sure if I've presented this in a manner that makes any sense, but if so, you'll see that the Republicans have the option of moving to the right (and into obscurity) or taking up some of that middle, at least for now. If they don't move at least in the short run, there's gonna be a long night in store for them in November 2010.
Corruption in Government: What to Do?
Why did this all happen? In my opinion, the answer is simple.
As governor of a state like Illinois, I'm sure you frequently meet with some of the most powerful people in the country. And some of the richest. And you probably help a lot of those rich people become richer (not necessarily in corrupt ways). Yet the governor of Illinois makes a salary of $150,000, more or less. And what was he trying to get? In real terms, not very much: a position with a salary of $300,000 (and other stuff, sure, but really not that much - not a $120M no-bid contract anyway).
In one of my econ classes we studied Singapore or Hong Kong or somewhere like that, wherein government employees were given huge salary increases. The result? There was more competition for government jobs so better individuals ended up getting the positions. Also, since salaries were already high, the temptation for corruption was less because (1) it took more money to even be worth it and (2) the fear of losing one's job made it even less likely the person would want to engage in corrupt activites.
So my counter-intuitive solution is to pay these guys more. Because if one of the most powerful people in the state is only making $150,000, what else should we expect to happen?
Also, by the way, Blagojevich is under no legal pressure to resign his seat, and could even appoint a senate replacement today, should he desire.
As governor of a state like Illinois, I'm sure you frequently meet with some of the most powerful people in the country. And some of the richest. And you probably help a lot of those rich people become richer (not necessarily in corrupt ways). Yet the governor of Illinois makes a salary of $150,000, more or less. And what was he trying to get? In real terms, not very much: a position with a salary of $300,000 (and other stuff, sure, but really not that much - not a $120M no-bid contract anyway).
In one of my econ classes we studied Singapore or Hong Kong or somewhere like that, wherein government employees were given huge salary increases. The result? There was more competition for government jobs so better individuals ended up getting the positions. Also, since salaries were already high, the temptation for corruption was less because (1) it took more money to even be worth it and (2) the fear of losing one's job made it even less likely the person would want to engage in corrupt activites.
So my counter-intuitive solution is to pay these guys more. Because if one of the most powerful people in the state is only making $150,000, what else should we expect to happen?
Also, by the way, Blagojevich is under no legal pressure to resign his seat, and could even appoint a senate replacement today, should he desire.
December 09, 2008
Stimulus/Rebate
I've heard from a number of source, not the first of which is this one, the following bailout proposal. Since the $350B left to spend in the bailout package is approximately equal to two months of federal government income, just have a two month holiday on all taxes of all forms.
This sounds totally reasonable, but the same way a flat-dollar rebate (though there were adjustments to fix this) is extremely progressive, this tax holiday would be extremely regressive. Many poor Americans pay no tax at all (and I suppose the shut off valve for taxes wouldn't take away earned income tax credits ...) and of course those who pay the most in taxes would see the most benefit. So of course conservatives are all over this but don't be fooled - it's a (thinly) veiled regression of the tax code.
This sounds totally reasonable, but the same way a flat-dollar rebate (though there were adjustments to fix this) is extremely progressive, this tax holiday would be extremely regressive. Many poor Americans pay no tax at all (and I suppose the shut off valve for taxes wouldn't take away earned income tax credits ...) and of course those who pay the most in taxes would see the most benefit. So of course conservatives are all over this but don't be fooled - it's a (thinly) veiled regression of the tax code.
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