Economics Roundtable

This week’s Business Spectator column.  If you would like to receive an unedited version by email on Fridays, let me know and I will put you on the distribution list.  Email info at institutional-economics dot com.

Michael Perelman recalls his time as a student of Wolfgang Stolper:

Two Degrees of Separation: Reflections on Stolper and Schumpeter, by Michael Perelman : A few months ago, I was asked to write an article about my experiences as an undergraduate student of Wolfgang Stolper, probably based on a ...

Federal Reserve Chairman Ben Bernanke asked Congress to accelerate the date when the Fed can pay interest on reserves, a power that would give it better control over interest rates and more leverage to battle the credit crunch.

I just threw away hard copies of about 18% of all of the contingent valuation method papers ever published between 1976 and 2002. I'm trying to avoid any implication that this is a symbolic act.

Nobel Peace Prize winner Muhammad Yunus outlines steps that need to be taken to solve the world's food crisis:

Solving the food crisis, by Muhammad Yunus, Commentary, Comment is Free: The global food crisis is a dire reality for millions of the world's poor and a major test for the ...

Rice prices remain high, however, although world production is up a little bit (data on rice). Hat tip to Carpe Diem.

The Senate voted overwhelmingly on Thursday to approve a five-year, $307 billion farm bill, sending it to President Bush for what is expected to be his futile veto. The 81-to-15 Senate vote, like the 318-to-106 House vote on Wednesday, attracted ...

Like a lot of small-scale entrepreneurs, Cathy Osborne worries that she'll go out of business if fuel prices rise above $4 a gallon. Not because she won't be able to buy gas at that price, but because she won't be able to sell ...

EconomistMom doesn't seem to think that carbon tax (or cap-and-trade auction) revenues must be paired with reductions in income and corporate taxes in order to generate a little bit of efficiency in this crazy world:

The point is, like the fact that economists universally (across the political and ideological ...

[W]e have some significant challenges ahead of us. And while some credit markets may be stabilizing, families, communities, and the economy continue to suffer.

Frankly, things may get ...

"In general, most markets are pretty tough. We're still seeing pricing pressure out there and I think for the foreseeable future we're still going to see it."
Beazer Homes CEO Ian McCarthy on conference call, May 16, 2008

"I don't think we're ...

The Energy Department said it will not sign contracts for new shipments of 76,000 barrels of oil a day for the six-month period beginning July 1. ... The reserve is 97 percent full, holding 701 million barrels of crude.

Federal Reserve officials have been chatting more about what to do about bubbles, but some are arguing that the central bank should look more closely at its own role in creating bubbles through both supervisory and monetary policy.

Policymakers have basically reaffirmed the orthodox view ...

Senate Banking Committee Chairman Christopher Dodd (D., Conn.) had high praise for Federal Reserve Chairman Ben Bernanke, saying the central bank chief has been a responsive advocate for consumers during the recent credit turmoil.

AMSTERDAM - Top executives of Dutch multinationals are threatening to move their headquarters abroad if they keep getting criticized over their salaries. They feel insulted and want more appreciation for their work.... The former chairman of insurer Aegon, Kees Storm ... is very outspoken about the ...

GE looks as though it'll sell off its appliances business, and John Gapper wonders

why GE is not prepared to invest enough in the business to turn it into a global powerhouse when it clearly expects someone else to buy it for that reason.

I think the answer is ...

Manias can persist even though many smart people suspect a bubble, because no one of them has the firepower to successfully attack it. Only when skeptical investors act simultaneously -- a moment impossible to predict -- does the bubble pop.

...Mr. Bernanke hired finance experts who had broad interests and were eager to work with ...

The Washington Post has a great article today that explores the reasons why empowering women eliminates the cycle of poverty, particularly in post-conflict Rwanda. It’s hard to imagine the lives Rwandan women have lead, hard to relate to a circumstance where you have no rights, no standing, and no ...

As this morning's Wall Street Journal reports:

About 500 of the largest public companies in the U.S. would be required to "tag" data in financial reports starting this year, with smaller companies following over the next two years, under ...

As usual onFridays, from  Raj Nallari and Breda Griffith's lecture notes.

Theoretical considerations of gender inequality and economic growth (3)

read more

As it did when the housing bubble began to burst, California is leading the way in the next leg: a consumer bust.

Squeezed by rising unemployment, inflation in food and energy costs and plunging home ...

Lender's goof slams credit scores: And the fix didn't work well, either: Sallie Mae's latest foul-up

Phillips: Tighter Sale, Fewer Fireworks

Philly's $100 Cheesesteak: "On average, five or six customers order it per night."

I am a jelly donut: Krugman's coming to Berlin. I never see him in ...

GE looks as though it'll sell off its appliances business, and John Gapper wonders

why GE is not prepared to invest enough in the business to turn it into a global powerhouse when it clearly expects someone else to buy it for that reason.

I think the answer is ...

Welcome to the Friday, May 16, 2008 regularly scheduled edition of On the Moneyed Midways, the blogosphere's only weekly review of the best posts to be found from the ...

Michael R. Crittenden reports on the housing market.

Federal policy makers need to “come to grips” with the reality of the housing market and embrace broader, more aggressive proposals to prevent the growing number of foreclosures, a top banking regulator said Friday.

“Frankly, things may get worse before they get better. As ...

Economists and others weigh in on the unexpected 8.2% increase in housing starts last month.

The Federal Reserve’s five-month-old program to auction billions in cash to banks hasn’t been a credit crisis cure-all, yet economists say it warrants a permanent place in the Fed’s toolbox.

Fed officials this week publicly praised the program, known as the Term Auction Facility, and one official pushed ...

The Business Research Center at Indiana University (BRC) has recently issued an extensive ...

Lender's goof slams credit scores: And the fix didn't work well, either: Sallie Mae's latest foul-up

Phillips: Tighter Sale, Fewer Fireworks

Philly's $100 Cheesesteak: "On average, five or six customers order it per night."

I am a jelly donut: Krugman's coming to Berlin. I never see him in ...

The rise in food prices and the costs it generates have been aggravated, some say, by policies of import liberalization and subsidy removal which the World Bank and economists advocated around the developing world in the 1980s and later.  If developing country policies supporting food crops had not been dismantled, ...

In his new book, Reappraisals, Tony Judt claims we live in an "age of forgetting".  We regard history, he says, not as something that has shaped us, but rather a litany of error and delusion from which we have escaped into sanity. And because our economy is undergoing the ...

Ezra Klein points out that, at least in the context of mass transit, if you build it, they will come.

Driving is often a drag. Given a viable alternative, I’ll happily choose the competitor. There’s this tendency to ascribe Americans’ low use of public transit to some sort of ...

You could get season tickets to Minnesota Timberwolves games for as low as $43 next year.

Instead, it came from the fact that next year one might be able to spend $43 for SEASON TICKETS to see an NBA team. Maybe this has been out there for a while, but the “Pay ...

I sent this letter a few days ago to the Washington Post.  I truly don't get the faith that so many people have in politicians and in politics.

The Post's dean of political analysts, David Broder, today unwittingly reveals two malignancies of politics ("The Price of Delay," May 11). First, ...

Econmagic

Charts

Bloomberg News


IT’S NOT EASY TO SIZE UP THE influence of the index funds. But based on their known cash commitments in certain commodities, and the commodity indexes their prospectuses ...

How does one pay for a $340 million beer? With a half-a-billion-dollar banknote, of course.

This is the fourth set of high denomination notes to be issued this year, the first being in January when a 10 million dollar note was put into circulation. The next was ...

The Adam Smith Institute reports that Edinburgh councillors have sold the great economist's house to Heriot-Watt University:

They chose the ??800,000 bid over a higher offer, on the grounds that the University would make the building more accessible to the public. The University plans to restore the house ...

A roundup of economic news from around the Web.

In the waning minutes of his only TV debate with Democratic incumbent Jimmy Carter in 1980, Ronald Reagan looked straight into the camera and asked, "Are you better off than you were four years ...

I kinda love the new advertising campaign from UniCredit. Here's the copy from the ad above:

Success stories have always started with someone doing things differently and not saying "Maybe", but "Definitely". So jump, rabbit, jump! This is the ...

How does one pay for a $340 million beer? With a half-a-billion-dollar banknote, of course.

This is the fourth set of high denomination notes to be issued this year, the first being in January when a 10 million dollar note was put into circulation. The next was ...

The Adam Smith Institute reports that Edinburgh councillors have sold the great economist's house to Heriot-Watt University:

They chose the ??800,000 bid over a higher offer, on the grounds that the University would make the building more accessible to the public. The University plans to restore the house ...

At long last, some good news from a pair of front-line economic reports.

Housing starts and new housing permits popped higher last month, the Census Bureau advises. After more than two years of nearly nonstop declines, robust increases in April in these two critical housing surveys lend fresh reason ...

Intellectual Property Watch has posted the following story - Bush Administration Presses On For Patent Reform Bill This Year:

Despite an apparent stalemate on patent reform in the United States Congress, the Bush administration is ...

Several years ago I hosted Deirdre McCloskey's visit at GMU.  A condition of her visit was that she speak not only to the economics department, but also that she has the opportunity to meet with various women's groups and also the Gay, Lesbian and Transgender Alliance on campus.  ...

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, NATIONAL MARINE FISHERIES SERVICE, Miami, FL

The National Marine Fisheries Service (NMFS) has a position for a marine economist with the Social Science Research Group at the Southeast Fisheries Science Center in Miami, FL.  The position will be open through June 6, 2008, and will be ...

Not to brag, but (from UK News ...):

A recent study regarding the rankings of doctoral programs in economics in the U.S. spotlights the high quality of the Department of Economics at the University of Kentucky’s Gatton College of Business and Economics.

The study, published in the April ...

Slightly weird news:

Obesity contributes to global warming, too.

Obese and overweight people require more fuel to transport them and the food they eat, and the problem will worsen as the population literally swells in size, a team at the London School of Hygiene & Tropical Medicine says.

But don't ...

Floyd Norris today finds one of the worst bonds ever underwritten: a securitization, by Merrill Lynch, of second-lien mortgages mostly originated by Ownit. The kicker? When the bond was sold, Ownit had already gone bust, a victim of the fact that far too many of its loans were delinquent ...

I kinda love the new advertising campaign from UniCredit. Here's the copy from the ad above:

Success stories have always started with someone doing things differently and not saying "Maybe", but "Definitely". So jump, rabbit, jump! This is the ...

Federal Reserve Board Governor Frederic Mishkin again repeated the Greenspan "who could have known" mantra in reference to the housing bubble. In a speech presented yesterday, Mishkin attributed the financial crisis associated with the housing bubble to a breakdown in underwriting standards and distorted incentives, but asserted that:

"These problems ...

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 978,000. This is 4.9 percent above the revised March rate of 932,000, but is 34.3 percent below ...

Justin Lahart has a front-page article today on a group of economists studying bubbles at Princeton. It's a perfectly interesting piece, marred only by relative weakness on the monetary-policy front. Given that the piece is illustrated with a dot portrait of Ben Bernanke, I wanted more than just this:

...

Evan Newmark has a very smart take on CBS's acquisition of CNet. The main problem with CBS, he says, is that it's a profitable but slow-growth company saddled with a public listing. Since no public company CEO is happy mapping out a future of slow yet profitable growth, Les ...

Floyd Norris today finds one of the worst bonds ever underwritten: a securitization, by Merrill Lynch, of second-lien mortgages mostly originated by Ownit. The kicker? When the bond was sold, Ownit had already gone bust, a victim of the fact that far too many of its loans were delinquent ...

In the recent hearing on mortgage servicing, the Senators probed Countrywide's chief executive for loan administration, Steve Bailey, on exactly how mortgage servicers (distinct from the owners of the mortgage) make their profits. Mr. Bailey confirmed the description in my article of the three ways that servicers ...

Thomas Frank of the Wall Street Journal offered a rather harsh analysis of the economic boom that was the past two decades.

It is, in other words, a political disaster, with tax cuts, trade agreements, deregulatory measures, and enforcement decisions all finely crafted to benefit one part of ...

Working for yourself can be great. You often work on projects of your choice, set your own hours, and enjoy the flexibility to take a break whenever you feel like it. Right?

When I left the world of working for someone else for good, I thought I’d miss it. I secretly ...

Justin Lahart has a front-page article today on a group of economists studying bubbles at Princeton. It's a perfectly interesting piece, marred only by relative weakness on the monetary-policy front. Given that the piece is illustrated with a dot portrait of Ben Bernanke, I wanted more than just this:

...

Evan Newmark has a very smart take on CBS's acquisition of CNet. The main problem with CBS, he says, is that it's a profitable but slow-growth company saddled with a public listing. Since no public company CEO is happy mapping out a future of slow yet profitable growth, Les ...

That would be a question that few readers of this NYT article could answer. The article describes the rapid growth of solar power in Germany, a country that gets relatively little sunlight.

It notes that government mandated subsidy are a major factor, telling readers that these subsidies. The article reports ...

Does anyone recall seeing the news reports that GDP grew 0.15 percent in the first quarter of 2008? Probably not, as a convention GDP growth in the United States is always expressed as annual growth rate, not the actual growth in a quarter.

This raises the question as to why the ...

Dani Rodrik argues that development strategies emphasizing good governance instead of specifically targeting binding constraints on growth are unlikely to be effective:

Getting Governance Right Is Good for Economic Growth, by Dani Rodrik, Project Syndicate: Economists used to tell governments to fix their policies. Now ...

Tyler Cowen:

Retail loyalty card programs, by Tyler Cowen: From some time ago, Kevin Drum reports:

I really loathe retail loyalty card programs.

These programs serve two functions. First, they are a form of price discrimination. Buyers who are willing to collect and ...

". . . Certainly it's true that conservatism's founding era is over, and that the Soviet Union's collapse and socialism's profound discrediting count as its triumphs. But socialism is a perennial heresy, sure to reassert itself in one statist form or another when the free economy, in its typical oscillations, ...

From some time ago, Kevin Drum reports:

I really loathe retail loyalty card programs. 

These programs serve two functions.  First, they are a form of price discrimination.  Buyers who are willing to collect and show the cards pay lower prices while the "I can't be bothered with this ****" types ...

On a conference call with conservative bloggers this afternoon, John McCain launched what may be his most direct attack yet on Barack Obama's national security credentials, saying flat out that Obama is incapable of ...

What causes bubbles? Here's one set of views:

Bernanke's Bubble Laboratory, by Justin Lahart, WSJ [Open Link]: First came the tech-stock bubble. Then there were bubbles in housing and credit. Chinese stocks took off like a rocket. Now, as prices soar on every material ...

Federal Reserve Chairman Ben S. Bernanke said financial markets ...