Economics Roundtable

|Peter Boettke|

Adam Smith finished that thought about government officials assuming an authority over the economic affairs as follows: "which can safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands ...

Please consider the Unemployment Weekly Claims Report for March 11, 2010.

In the week ending March 6, the ...

Some students wanted to attend the protest but may have faced possible retribution from their instructors.

“I support the rally but still need to go to my classes,” environmental economics major Alisa Rudnick said. “I will join in after my schedule allows, but I can’t compromise my education for it.”

Rudnick said ...

The $1 cigarette tax hike being proposed by some Georgia lawmakers would push cigarette sales out of state or into the black market, according to a new Tax Foundation report.

Read Tax Foundation Fiscal Fact, No. 215, "Georgia Should Refrain from Relying on Smokers to Fill Budget Hole."

Idaho may have scored lower in business friendly tax structure than its western neighbors Oregon and Washington in our State Business Tax Climate Index, but trends may change. While Oregon has no sales tax and Washington has no income tax (and not having a major tax is a big ...

[T]otal January exports of $142.7 billion and imports of $180.0 billion resulted in a goods and services deficit of $37.3 billion, down from $39.9 billion in December, revised.

Today Senate Banking Committee Chairman Chris Dodd (D., Conn.) issued the following statement on financial reform:

“On Monday, I will present to my colleagues a substitute to the original financial reform package, unveiled last November.”

“Over the last few months, Banking Committee members have worked together to try and produce a consensus ...

CBO has just released an estimate of the budgetary effects of the health bill, H.R. 3590, that passed the Senate on December 24. Today’s estimate differs from the estimate for a slightly earlier version of the legislation that we released on December 19 in that it encompasses all ...

The jury’s still out on the path of least resistance in the trend for initial jobless claims. Today’s weekly update is certainly a step in the right direction, although last week’s meager drop in new filings for jobless benefits falls far short of stellar, or convincing. The sluggish behavior of ...

The WSJ has an article about fears that suppliers in the US dairy industry have about cheap imports from New Zealand.� In response, they are lobbying Congress for protection.� Remember, it's often easier to persuade Congress to impose protectionist policies than it is to persuade consumers that your product ...

Binya Appelbaum has the latest news on the shape of the consumer financial protection legislation which is likely to come out of the Senate:

Payday lenders, pawnbrokers, car dealers and other companies that make loans but do not hold bank charters would be shielded from the scrutiny of a proposed ...

Is Twitter becoming less social and more of a news feed, where people just follow celebrities rather than interacting with their friends? Julianne Pepitone of CNN Money would have you think so:

A whopping 73% of Twitter accounts have tweeted fewer than 10 times according to a new report from ...

Here is David Ignatius:

My favorite analyst of bubble economies is David M. Smick, who predicted the U.S. financial mess in his book "The World Is Curved." He notes some worrying statistics: Until the global financial crisis, Chinese exports represented 43 percent of its gross domestic product. To make ...

The latest in the various ongoing attempts by the Jacksonville Jaguars to court interest, any interest, in their team from the local citizenry: guilt. Speaking to a gathering of business and community leaders at the Rotary Club of Jacksonville, former Jaguar standout lineman Tony Boselli exhorted people to get behind ...

I am all for eliminating earmarks to for-profit companies and for extending it to non-profits as well.� All discretionary money should be awarded on an open,�competitive basis, with oversight of the executive branch agencies by appropriate Congressional committees.� Earmarks have no place in federal spending, as a matter of principle.� ...

In the week ending March 6, the advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week's revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous ...

In recent weeks, policy makers from President Barack Obama to Federal Reserve Chairman Ben Bernanke have been taking extraordinary measures to remove what they see as a serious impediment to the recovery: A dearth of credit for the small businesses that many economists say must play a leading role in ...

One thing that I think we all agreed on in yesterday's panel on "too big to fail" was that many of the plans for a separate resolution authority are being driven toward a FDIC model by Treasury and the Fed, both are whom are more familiar with that ...

The FBI’s “Most Wanted List” will turn 60 years old this sunday. It’s success rate had been impressive: 463 of the 494 fugitives on the list since 1950 have been caught, which adds up to a 94% success rate.

What does the future hold for the program? Social networking:

As technology ...

My favorite is number seven:

Pencils made from the carbon of human cremains. 240 pencils can be made from an average body of ash - a lifetime supply of pencils for those left behind.

Each pencil is foil stamped with the name of the person. Only one pencil can be ...

Google recently released some major improvements in its public data efforts. If you click on over to Public Data, you will find a much broader range of data sets including economic information from the OECD and World Bank, key economic statistics for the United States, and some education statistics ...

Readers Question: how will central bank may increase the supply of money in economy?

The money supply is the total amount of money available in the economy at a particular point in time. A narrow definition of money involves notes and coins. A broader definition includes cash plus bank and building ...

There’s always a fascination with the richest people in the world. Apparantely, according to Forbes, the richest person in the world is now a Mexican called Carlo Slim Helu. According to IMF statistics his wealth of $53.5bn is roughly equal to the GDP of both Sudan $57bn and Slovenia $54bn ...

The NYT reports that opponents of a measure that would save money by putting private lenders out of the government guaranteed student loan business warn that it could cost jobs. This is of course true.

Suppose there is an efficient computer company that sells computers for $500 each and an ...

In a discussion of the future of Fannie Mae and Freddie Mac the Washington Post noted that the government had committed $125 billion to cover their losses. While the article reports that these losses have been a major political issue, it would have been useful to point out that ...

The Washington Post reports that Senator Gregg does not know why the government is spending money to create jobs. According to the Post, Mr. Gregg said of a jobs bill:

"Why do we keep doing this? .... Why do we keep passing debt on to our children? Why do ...

. . . demand curves are negatively�sloped.

A new study that followed participants for 20 years shows both weight and risk for diabetes decreased for people in communities where fast food prices increased.

The study also showed when prices fell, consumption, weight, and diabetes risks rose.

(Link via Chris ...

(p. 32) "I was in search of a one-armed economist, so that the guy could never make a statement and then say: "on the other hand.""

Source:

Harry S. Truman as quoted in: Keyes, Ralph. The Wit & Wisdom of Harry S. Truman. New York: ...

Dan Gross:

What "Government Takeover"?, by Daniel Gross: There have been lots of absurdities in the debate—such as it is—about health care reform. There's the hypocrisy of people dependent on government-run health care complaining about government-run health care. And now comes the Republican canard that the current health care reform ...

[F]oreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 308,524 U.S. properties during the month, a decrease of 2 percent from the previous month but still 6 percent above the level reported in February ...

The momentum for a ban on naked CDS is getting stronger. Germany and France on Wednesday called on the European Union to consider banning speculative trading in credit default swaps and set up a compulsory register of derivatives trading, the FT reports. Angela Merkel and Francois ...

We are all very lucky that David Broder is not in charge of fiscal policy, he thinks it's a good idea to balance the budget in a recession:

What the states could teach Washington about budgets, by David S. Broder, Commentary, Washington Post: ...The record of the Washington politicians is ...

The major hospital network Miami relies on for trauma care is close to insolvency and could be cut off by suppliers. Executives for Jackson Health System surprised its governing board Tuesday by saying the nonprofit is near or already ...

My column from yesterday's The Fiscal Times shows what's ahead when the spending reductions begin.

Reducing Spending Cuts More Than Waste, Fraud and Abuse
Mar 10, 2010

Those who have demanded and supported cuts in federal spending over ...

[T]he Panel remains unconvinced that bankruptcy was not a viable option in 2008. In connection with the Chrysler and GM bankruptcies, Treasury might have been able to orchestrate a strategic bankruptcy for ...

Washington report: Democrats seen likely to nominate wet candidate in 1932; strategy will be to hold the "solid South" and add large Eastern states, where wet stand would appeal; ...

Carlos Slim is #1 on the Forbes wealthiest list, with $53.5 billion, up $18.5 billion in 12 months — Forbes

Alex Ross with the definitive take on applause between movements — RPS (Alex and I have been blogging this since at least 2003)

Google Maps Finally Adds Bike Routes ...

Rather than reaching the needy, up to half of Somalia’s food aid ends up in the pockets of radical militants, corrupt bureaucrats and local businessmen, and local UN staff, according to an article in this morning’s New York Times on the findings of a new UN report.

The report, which ...

A popular research topic at the Bank of Canada over the past few years has been price-level targeting: committing to a path for the level of core CPI, not just to its rate of inflation. The idea here is that standard inflation targeting forgets and forgives past deviations ...

From the inbox:

As a WEAI member, we wanted you to be the first to know that a new paper by Paul Krugman has just become available in Economic Inquiry through Wiley Interscience Early View. This hilarious paper, “The Theory of Interstellar Trade,” will appear in the Miscellany section of the ...

We have now embedded our new approach to stress testing into our normal supervisory ...

Richard J. Ablin is the University of Arizona research professor who discovered the prostate-specific antigen (PSA) test in 1970. Today, in a New York Times op-ed, he decried the misuse of that test by health care monopolies to drive up profits with promises of catching prostate cancer early. ...

Today, the Senate turned to the Federal Aviation Administration authorization, H.R.1586. The last four-year authorization expired September 30, 2007. What caused this 2½ year delay? Congress couldn't agree on how to apportion the excise and ticket taxes to pay for a desperately needed modernization of the ...

The other day I commented on a blogger's suggestion that it might be better to default on the debt than raise taxes. In the course of doing some research on debt default I came across the following article in which a friend of mine, Chris Whalen, actually made a serious ...

Yesterday, Gawker Media truncated its RSS feeds, and former Gawker editorial honcho Lockhart Steele immediately tweeted that “the only thing that excited me about Gawker’s RSS truncation was picturing @felixsalmon’s head explode when he heard the news”. I’m well known as a vocal defender of full RSS feeds, ...

Tyler Cowen at Marginal Revolution provided a link the other day of "state tax oddities."� My favorites include:

Total credit-card debt outstanding dropped by $93 billion, or almost 10%, over the course of 2009. Is that cause for celebration, and evidence that U.S. households are finally getting their act together when it comes to deleveraging their personal finances? No. A fascinating spreadsheet from CardHub breaks that ...

Pennsylvania State Police have recently taken to armed raids of bars offering an unregulated level of consumer choice:

As in armed raids conducted last week against three Philadelphia taprooms, the State Police alleged that the targeted beers were not properly registered with the state Liquor Control Board for sale in ...

|Peter Boettke|

I was thinking of something catchy to say, but my sheer joy with the facts of the situation required instead just a straightforward statement --- Chris Coyne has accepted our offer to join the economics faculty here at GMU starting next fall. �He will be the "Baldy" ...

|Peter Boettke|

I did an interview today with Scott Nystrom at Self Directed Investor. �It is on their website for roughly the next 24 hours, and then after that will be in their interview archives.

Thanks Scott for the great opportunity.

Total consumer credit outstanding expanded by $5 billion in January after contracting 15 of the previous 17 months. Consumer credit outstanding includes revolving and nonrevolving credit. Revolving credit is mostly credit card debt, and nonrevolving credit includes loans for items such as vacations, autos, and boats. Even with the ...

From the Associated Press:

Calling himself a realist, Gov. Pat Quinn on Wednesday scaled back his proposal to raise income taxes, shifting to a call for an increase of just one percentage point to be used solely for preventing deep cuts to education.

The rest of Illinois' ...

Former Federal Reserve Chairman Alan Greenspan will be the star witness at a hearing of the congressional panel looking into causes of the financial crisis, according to people familiar with the situation.

The Financial Crisis Inquiry Commission’s three-day session in early April gives commission members a rare opportunity to quiz the ...

Occasionally, I have links to Amazon products on this blog.� If you click on the link and then buy that product or another product during your click-thru visit, I get a cut of the sale.� In other words, I am an Amazon affiliate.� It's not very lucrative to me since ...

Via the Freakonomics blog comes this picture of water usage in Edmonton during the Gold Medal game in the 2010 Winter Olympics.

Or, as the newser website quipped "Canada Peed in Unison ...

What to make of BofA’s decision to abolish overdraft fees on debit-card purchases? Josh Duboff says it’s “kind of undeniably great”, James Kwak says it’s a good thing, and the Center for Responsible Lending says that it’s a GOOD thing. Only Kevin Drum spies a ...

Perhaps the title is a�rhetorical question, but I felt obliged to ask it after seeing the latest parody of a World Bank initiative. If you've been ignoring CNN, you may have missed the�news that the World Bank Institute recently launched a massively multiplayer game called Evoke�designed ...

Township officials expressed frustration that several unions representing Moorestown government workers have not agreed to reopen contract negotiations.

Last month, township council asked the ...

Former Enron adviser Paul Krugman takes note in his New York Times column of what he calls "the incredible gap that has opened up between the parties":

Today, Democrats and Republicans live in different universes, both intellectually and morally.

"What Democrats believe," he says "is what textbook economics ...

When it comes to the government's budget plans, we know that Gordon Brown does not always tell it entirely straight. Remember last summer, when he was still refusing to utter the word "cut"? But listening to him today, you have to say he's consistent.

Fake businesses are to be used to lessen the impact of the recession on high streets in North Tyneside.

With 140 empty shops in the borough, council bosses think they have come up with a unique way of ensuring shopping areas remain as vibrant as possible.

The rest ...

Bank of America has become the first financial institution to stop overdrafts, not just overdraft fees, from debit cards. That means that the bank won’t let you withdraw more money than you have in your debit-linked bank account. ...

The unemployment rate decreased in nine U.S. states in January and climbed in 30, signaling the thawing of the labor market is not broad-based.

The jobless rate in Michigan ...

Florida's special python hunting season has begun.

From Monday until April 17, anyone with a hunting license who pays for the $26 permit can take them on state-managed lands around the Everglades in South Florida.

Florida officials have taken a more aggressive stance against the invasive species in the past year, creating ...

The Board of Directors of the North American Association of Fisheries Economists is pleased to announce that the site of the next NAAFE Forum will be Honolulu, Hawaii. Forum organizers will be Dr. Pingsun Leung of the University of Hawaii, ...

Okay, here is tonight’s rule:

The assumption of normality for asset price changes is wrong in virtually every financial market setting.  The proper distributions are fatter tailed and more negatively skewed.

Normality allows researchers to publish, regardless of the truth.

Normality allows risk managers and regulators to pretend that adequate reserves are ...

In this week's Tax Policy Podcast, Tax Foundation President Scott Hodge interviews Idaho Rep. Marv Hagedorn, who has introduced a tax reform plan to cut the state's personal and corporate income tax rates over 10 years. The bill would eliminate state's seven personal income tax brackets, bringing ...

Mark Perry took a closer look at the most recent series of federal minimum wage hikes and their apparent effect upon teen unemployment levels. Here is the bottom line from his analysis:

See the full interactive graphic.

Thirty states and the District of Columbia recorded unemployment rate increases in January from a month earlier, while states registered rate decreases, the Labor Department said. But in a sign ...

Greeks are bracing for a long and deep recession ahead as it begins to dawn on them that the cost of fixing the country’s public finances will entail years of economic hardship and high unemployment.

In recent public opinion polls, but also in the media, the business community, and even in ...

The global equity market has cast a long influence on regional stock markets in recent years. Whether it was a bull market on steroids or the opposite effect, the gravitational pull of a broad-minded definition of the world’s equity market has been a major force in moving narrower slices of ...

I've recently written some posts on the craft brewing industry relative to the macrobrewers like InBev-owned Anheuser Busch and MillerCoors.� While the cheaper macro brews have been hurting as of late, the more expensive craft brews have seen remarkable growth.� See here, here, here and here.

Can House Democrats trust the Senate not to foul up a two-bill strategy for health care reform?

No.

While most of the public discussion focuses on the procedural challenges particular to reconciliation, a more important point is being overlooked.  The hardest part of ...

Go read CFTC head Gary Gensler’s speech on regulating credit default swaps: it’s by far the best thing written on the subject to date. He’s absolutely right about pretty much everything, and it would be amazing if the Europeans, who seem much keener to start regulating these animals than ...

Writing in Investor’s Business Daily, Robert Higgs documents the fact that private investment is drying up in the U.S. – and he explains why.  Here’s a key selection:

Unfortunately, while private investment is the engine of economic growth, government spending (despite what generations of Keynesian economists have asserted) is the ...

Here’s the abstract of George Selgin’s excellent new article, “Central Banks as Sources of Financial Instability,” published  in The Independent Review:

The present financial crisis shows how central banks can fuel the financial booms that make severe busts possible. Unfortunately, theoretical discussions of central banking badly neglect its role in ...

In this post, I disagreed with Menzie Chinn and argued that CBO estimates of the impactof the stimulus are not estimates. Charles Steele writes in a comment:

CBO’s approach *is* an analysis of what stimulus actually did; such analysis necessarily requires a counterfactual, based on an underlying model of what ...

Google opened the Google Apps Marketplace, where businesses can install and purchase a variety of apps, last night. The beauty of the Google Apps Marketplace (not to be confused with the Andriod store) is that all apps ...

Image: Educate-yourself.org

Seven US states are investigating market abuse by seed giant Monsanto. Attorneys general in Ohio, Texas, Virginia, Iowa, Illinois, and two more states are investigating Monsanto’s competitive practices. The US Justice Department is also ...

|Peter Boettke|

As a parent, and also as a coach working with young men for the past few decades, I have tried to always preach the values taught to me by my parents and the coaches/teachers that I admired growing up and in college. �One of the wisdoms ...

From CNN.com:

Lots of people, especially those trying to battle high utility bills, believe in energy-efficient homebuilding.

But there's something holding green technology back: It simply costs more to include it than it adds to resale value.

Appraisals for newly built green homes do not fully reflect the cost of green technology, ...

Five years after the need for a cleanup was recognized by the state legislature, the state Environmental Management Commission is hammering out a strategy to ...

North Carolina's teachers and state employees can expect another year without a pay raise.

Gov. Bev Perdue said that, while salaries will remain flat in the coming budget year, she aims to pay back the 1/2-percent pay cut that state workers and teachers received last year in ...

Teaching Philosophy:

John Whitehead does the best that he can in the classroom.

Our new report on Amazon tax laws has received wide coverage, including from the Associated Press, CNet, CBS, Instapundit, TaxProf, Tax Analysts, the Denver Post, Daily Finance, Affiliate Marketing Blog, CPA Trendlines, the Performance Marketing Association, Tertium Quids,

Thirty states and the District of Columbia recorded over-the-month unemployment rate increases, 9 states registered rate decreases, and 11 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in ...

A roundup of economic news from around the Web.

Representative Paul Ryan (R-WI) has responded to the Tax Policy Center's�analysis of�the revenue portion of his Roadmap for America's Future. TPC found Ryan's�major�tax restructuring would likely raise significantly less revenue than he expected and�would substantially�lower taxes for high-earners. In his response, Ryan suggests he'd be willing to adjust ...

Can House Democrats trust the Senate not to foul up a two-bill strategy for health care reform?�

No.

While most of the public discussion focuses on the procedural challenges particular to reconciliation, a more important point is being overlooked.� The hardest part of the Pelosi/Reid strategy is trying to enact one ...

A front page story in this morning’s Washington Post explains why DC’s legalization of gay marriage has been good for the DC economy:

As the first same-sex couples married in Washington on ...

Martin Wolf says no.� For instance:

But Germany can be Germany – an economy with fiscal discipline, feeble domestic demand and a huge export surplus – only because others are not.

To be sure, Greece is unlikely to end up as "like Germany."� But in this argument -- which I'm ...

I now have in front of me the final issue (vol. 10 no. 3) of Imprints, currently subtitled “egalitarian theory and practice” but originally “a journal of analytical socialism”. Conceived in Dunkin Donuts Piccadilly Circus branch in 1995, and launched in London during Euro 96 (we crowded round a ...

Basic economics: Increasing the fine for delaying flights will result in fewer delayed flights.

Under new federal guidelines that take effect next month, airlines can be fined up to $27,500 per passenger if a plane is stuck on the tarmac for longer than three hours.

Intended Consequence: Increased fines will ...

Colby Itkowitz at The Morning Call digs into Senator Arlen Specter's annual tradition of introducing a flat tax bill, most recently in March 2009 just before he switched from Republican to Democrat. Specter appears to be sticking by the position.

The article correctly points out that while flat taxes ...

The Market Composite Index, a measure of mortgage loan application volume, increased 0.5 percent on a seasonally adjusted basis from one week earlier. ...

The Refinance Index decreased 1.5 percent the previous week and the seasonally adjusted Purchase ...

Anirvan Banerji, director of research at Economic Cycle Research, joins the News Hub to discuss why he believes the U.S. economy will experience more frequent recessions ahead.

Kevin Drum asks a good question about the background blogger briefing at Treasury:

Having read a few posts from the bloggers in question, what I want to know is: Did they really learn anything? Did Geithner and the anonymous SAOs say anything interesting that they wouldn’t have said on the ...

The proposed Consumer Financial Protection Agency was supposed to regulate payday loans -those extremely high interest rate short term loans- but it now appears that it may not. This could turn out to be a good thing for consumers, since the best way to help payday borrowers might be ...

Manpacks.com.

Their motto is:

Get a subscription service for your socks, t-shirts, and�underwear. Starting at just $7. Delivered to your door every 3 months.

One of their slogans is: "Free Your Mind."

For the pointer I thank Kathleen Fasanella.

A few weeks ago, following the Australian Agricultural and Resource Economics Society conference in Adelaide I drove with my Risk and Sustainable Management Group colleagues David Adamson and Sarah Chambers to Melbourne, going by way of the Murray River. David and Sarah had been to the Coorong in a ...

The Aid Watch request for reader submissions for Best and Worst of Aid was our experimental attempt to use informal social networks to collect and spread stories about good and bad aid projects. In retrospect, it was only a partial success: we got a lot of submissions that couldn’t be ...

The NYT reported that China and India both signed an agreement to limit their greenhouse gas emissions. The article cites unnamed analysts who complained that the new commitment by China and India falls short of the terms of the agreement.

The article neglected to mention that on a per ...

Morning Edition introduced an interview with George Soros by saying that the United States is still recovering from a financial meltdown. This is wrong. The reason that we have near double-digit unemployment is that we had an $8 trillion housing bubble that collapsed. The financial crisis was secondary.

This is ...

Anyone seriously interested in controlling health care costs would be actively discussing alternatives to patent protection for financing the development of prescription drugs and medical equipment. Everyone who has taken even an intro economics class knows that there will be horrible waste and corruption when goods can sell for hundreds ...

The NYT reports that the Fed is debating whether much of current unemployment is due to a skills mismatch between workers and the available jobs as opposed to simply a cyclical shortfall in demand. It is worth noting that the assertion of skills mismatch is a predictable behavior of ...

Daniel Little shares his notes:

Rawls on Marx; December 1973, by Daniel Little: John Rawls taught a course on the history of political philosophy throughout much of his career at Harvard University. The course contained his description and analysis of the most important figures in modern political philosophy, including Mill, ...

At MoneyWatch:

Why Do Federal Reserve Board Seats Remain Unfilled?, by Mark Thoma

The administration has not taken full advantage of the opportunity to shape monetary policy during the crisis.

Readers Question: Hello can you please tell me what the disadvantages of using interest rates would be for the economy?

Interest rates can be both beneficial and damaging for an economy. Essentially it depends on how they are used.

For example, if an economy is overheating (with inflation increasing), a rise in ...

Germany and France, working with Luxembourg and Greece, are planning a joint anti-speculation initiative to galvanise action by the European Commission to tighten regulation of derivatives trading, and in particular of CDS in the sovereign debt markets, the FT reports.� Angela Merkel called on Tuesday for ...