Archive for February, 2009
« Previous EntriesPoint of Clarification: The Economic Report of the President, 2009
Submitted by Econbrowser
Misinformation in the talk-show world. From today’s Rush Limbaugh show (which is titled “A Teachable Moment on Tax Hikes”):
CALLER: Thank you for taking my call. I just wanted to point out something to you about your comments on taxing, and Obama’s own economic advisors agree with you, and it’s in a report that [...]
Another Market-Based Healthcare Solution
Submitted by CARPE DIEM
The No Insurance Club is the creation of an Arizona physician. The annual individual membership fee is $480 for up to 12 physician visits ($680 covers up to 16 visits per family). Most services during the office visits are free, including immunizations. Generic prescriptions are $4 or less.
HT: John Goodman
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Housing Prices and Wealth Loss
Submitted by Businomics Blog
Home prices are down again. The Case-Shiller home price numbers are pretty grim:
This leads naturally to wondering about the impact of such a massive loss of homeowner wealth. But my friend Randy Pozdena, who blogs occassionally over at The Ornery Economist, offers these insights:
The Case-Schiller index is not the one I would [...]
Paycheck Loans Not Affected by the Credit Crunch
While the World’s economic problems have frozen many credit markets, making it more difficult to refinance mortgages, get a car loan, or open a new credit card account, one class of lender seems to be doing fine: paycheck lenders (otherwise known as cash advance lenders, or payday lenders). Paycheck loans are short term, small dollar [...]
Cartoon of the Day: Fiscal Child Abuse
Submitted by CARPE DIEM
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THE GREAT UNWINDING
Submitted by The Capital Spectator
No one expected good news, and the expectations were met.
Today’s update on 2008’s fourth-quarter GDP was ugly, the ugliest in 25 years, in fact. The economy contracted by 6.2% at a real, annualized seasonally adjusted pace in the last three months of 2008. That’s much deeper than the 3.8% decline originally [...]
Consensus Economic Forecasts
Submitted by Businomics Blog
A couple of folks have asked if my forecast, described here, is out in left field. That prompts me to offer a comparison of my economic outlook to two survey averages. The Wall Street Journal surveys (subscription required) 54 professional forecasters, mostly from financial institutions. The National Association for Business Economics surveys [...]
Goin’ to Kansas City: Economics Blogger Forum
Submitted by CARPE DIEM
I’m blogging from the Minneapolis-St. Paul airport, which is getting hammered with a snowstorm that is supposed to be the biggest of the year. If the weather cooperates, I’ll leave shortly for the Economics Blogger Forum in Kansas City, sponsored by the Kauffman Foundation.According to the Kauffman Foundation:
Economic growth is a process [...]
DESPERATELY SEEKING EQUILIBRIUM
Submitted by The Capital Spectator
The first priority for repairing the economy, or at least for stopping the bleeding is returning prices to something approximating equilibrium. There’s still more work to do, as suggested in the inflation forecast embedded in the spread between the nominal and inflation-indexed 10-year Treasuries.
As our chart below reminds, the market is [...]
Not Nonsense (House Prices)
Submitted by Econbrowser
Remember this graph?
Figure 1.7: from IMF’s September Global Financial Stability Report.At the time (October 21, 2007), some observers were arguing that (i) the mortgage crisis was containable, and (ii) unlikely to cause a recession.
One comment, responding to another reader’s predictions, went as follows: “In other words, you are predicting a fall of 50% [...]
Despite Slowdown, Productivity, Wages Are Rising
Submitted by CARPE DIEM
This is the Age of the Incredible Shrinking Everything. Home prices, the stock market, G.D.P., corporate profits, employment: they’re all a fraction of what they once were. Yet amid this carnage there is one thing that, surprisingly, has continued to grow: the paycheck of the average worker. Companies are slashing payrolls: 3.6 [...]
Obama’s School Choice
Submitted by CARPE DIEM
President Obama made education a big part of his speech Tuesday night, complete with a stirring call for reform. So we’ll be curious to see how he handles the dismaying attempt by Democrats in Congress to crush education choice for 1,700 poor kids in the District of Columbia. The omnibus spending bill [...]
How Homebrewers Revolutionized American Beer
Submitted by CARPE DIEM
For Do-It-Yourself brewers, Prohibition lasted until 1978. But once unleashed, they revolutionized the industry.
If you’re looking for a textbook example of how government can stifle innovation and discourage productive activity, even when operating in Regulatory Lite mode, the story of home brewing in America should hit the spot.
Reason Magazine.
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How Big is $787 Billion? What Would It Buy?
Submitted by CARPE DIEM
The latest estimates for the stimulus package are about $787 billion, a number so mind-numbing large it’s hard to even imagine a number of that size.Yesterday’s “The Gartman Letter” puts it in perspective for us:$787 billion would buy 4.6 million homes here in the US at the most recent median price of [...]
THE CAPITAL SPECTATOR ON THE ROAD
Submitted by The Capital Spectator
Next month, your editor will visit the City of Brotherly Love to discuss a few topics that will be familiar to readers of these digital pages: asset allocation and rebalancing.
On March 19, at 11 a.m., I’ll be speaking in Philadelphia on strategic portfolio issues large and small at the local NAPFA [...]
The Bernanke rally
Submitted by Econbrowser
Tuesday’s stock market rally was pretty impressive. But can the mere words of the Federal Reserve Chair actually produce a 4% increase in the value of the U.S. capital stock?
“Stocks up as Bernanke says recession to end in ‘09″, declared the AP headline. But Andrew Leonard (hat tip: Mark Thoma) read the fine [...]
Home Prices in Q4 2008: More than 50% of U.S. States Showed Positive Growth in Home Prices
Submitted by CARPE DIEM
The OFHEO Price Index data was just released for the fourth quarter of 2008 and my friend and co-author at the Mackinac Center for Public Policy, James Hohman, points out the following:
There were 28 states that had positive quarterly growth in house prices for the fourth quarter of 2008, including Michigan.
There [...]
Signs of Life: Economy’s Worst May Have Passed
Submitted by CARPE DIEM
PORT WASHINGTON, N.Y. (MarketWatch) — Although you wouldn’t know it from the behavior of the stock market, the economic outlook is turning just a bit less gloomy. Prosperity may not be just around the corner, but statistical evidence is mounting to suggest that the worst of this recession may soon be past.
Irwin [...]
Big Labor and The Ultimate Anti-Stimulus Plan
Submitted by CARPE DIEM
President Obama and his advisers insist that they place national economic recovery over every other policy objective. However, when it comes to labor policy, they support measures that economic history indicates would significantly hinder such recovery, like the Employee Free Choice Act, the Lilly Ledbetter Fair Pay Act and the Public Safety [...]
WHY RISK (ALLOCATION) MATTERS
Submitted by The Capital Spectator
Bear markets are painful, but they’re also educational. It’s debatable if the crowd ever learns anything in the money game, but the lessons are there just the same.
One of the lessons from the recent and current correction is that portfolios that appeared diversified were in fact far more concentrated than casual [...]
Labor Market Dynamism Brings Us Net Gains
Submitted by CARPE DIEM
From March 2008 to June 2008, the number of job gains from opening and expanding private sector establishments was 7.3 million, and the number of job losses from closing and contracting establishments was 7.8 million, according to data on Business Employment Dynamics released today by the Bureau of Labor Statistics.
Opening and [...]
A Deficit in Clear Thinking About The Trade Deficit
Submitted by CARPE DIEM
There is a great deficiency in the way even otherwise well-informed pundits like Washington Post columnist Robert Samuelson think and write about the so-called “trade deficit.”
Don Boudreaux explains.
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Is A Van Produced in Alabama Really an Import?
Submitted by CARPE DIEM
The Honda Odyssey below is built in Lincoln, Alabama. Can this really qualify as an “imported” vehicle?
From the Detroit News comes this article “Auto Team Drives Imports: Fed Task Force Has Few New U.S. Cars,”
The vehicles owned by the Obama administration’s auto team could reflect one reason why Detroit’s Big Three [...]
The Output Gap: Neoclassical Synthesis, New Classical and New Keynesian
Submitted by Econbrowser
It has been interesting to me how much excited commentary has been elicited by my posts on output gaps. [0], [1], [2], [3] I had thought the subject fairly uncontroversial, especially my reliance upon the CBO measure, which is calculated in a conventional manner, and is an object well-understood in mainstream macroeconomics (take [...]
TALKING ABOUT TARGET DATE FUNDS ON THE INSIDE VIEW PODCAST
Submitted by The Capital Spectator
Target date funds have become popular in recent years because they offer one-stop shopping for managing the asset allocation challenge. If you’re retiring in, say, 2030, you can buy a target date fund to oversee your asset allocation with your retirement date in mind.
But as today’s episode of The Inside View [...]
