Economics Roundtable

Whenever I write a blog entry advocating more and/or better regulation, the laissez-faire types, like Vincent Fernando, have a tendency to come out of the woodwork:

I believe we need to keep holding people responsible for their decisions and personal management…

While overdraft fees are quite high, at the same ...

In two of his Forbes columns, NYU's Thomas Cooley challenges - with data - the widespread misunderstanding that America's middle-class is disappearing.  Here, and then here.

(HT Greg Mankiw)  The Terry Fitzgerald work that Cooley mentions was mentioned here at the Cafe a while back.

I raise, though, ...

Business Pundit will be a little different in July. I’m going to spend the next couple of weeks sitting on an inflated device one mile beneath the earth. This is otherwise known as rafting the Grand Canyon, a once-in-a-lifetime trip that ...

Here's a look at what's being discussed during this short week in finance:

Should China's policy response to the crisis be geared toward short or long-term objectives? (East Asia and Pacific on the Rise)

Is total US unemployment higher than 9.5 percent?�Some are arguing it is closer to 16.5 ...

The stimulus package had two components, new spending and tax cuts. Everybody knew that the spending component would take time to put into place, six months or more for a lot of the infrastructure projects, and that meant that we needed something to increase demand and provide a bridge until ...

U.S. consumers made 675,351 bankruptcy filings in the first half, a 36.5 percent increase from a year ago, according to the American Bankruptcy Institute.

June filings by consumers totaled 116,365, up 40.6 percent ...

The employment report is often said to be a lagging indicator, but some elements look toward the future and those signals aren’t encouraging.

The length of the average workweek offers clues to when companies may begin hiring. Even if the rate of decline in jobs is moderating a bit from lows ...

The best of the rest of the economics web

TODAY'S recommended economics writing: • How did the ...

Not unique, but pretty awful

MANY people have complained during the recession that too much authority has been ...

Heidi Moore has 1,200 words on bank bonuses in The Big Money. But it being a holiday weekend and all, I know you can’t be bothered to read the whole thing. So here’s the shorter version:

All those bonuses can’t be coming from banking. But it turns out that ...

The Sydney Morning Herald reports on a gang of German senior citizens who kidnapped and tortured their financial adviser:

A group of wealthy pensioners has been accused of kidnapping and torturing a financial adviser who lost about $4 million of their savings.

The pensioners, nicknamed the “Geritol Gang” by German ...

The Mercatus Working Paper series now includes the following, co-authored with Gene Callahan:� "The Role of Ideal Types in Austrian Business Cycle Theory."� An earlier version was presented at the SEA meetings last November, as well as at the Wirth Institute Conference in October.� ...

The analysts added Bank of America (BAC) to their "Ten+ Aggressive Growth List," telling clients that the Charlotte, N.C.-based company is a good long-term investment ...

The analysts added Bank of America (BAC) to their "Ten+ Aggressive Growth List," telling clients that the Charlotte, N.C.-based company is a good long-term investment ...

The Federal Deposit Insurance Corporation on Thursday urged tough capital requirements on private ...

Guest blog from Economics Editor Peter Coy

Ouch. Merrill Lynch didn't pick the best time to upgrade its outlook for the U.S. economy. The research note on the upgrade hit my email inbox at 8:12 a.m.--minutes before the Labor Dept. announced a worse-than-expected decline of 467,000 jobs in June.

To be fair, ...

The grinding gloom of the June payrolls report shows why inflation fears are overdone, and why it’s a pretty safe bet the Fed’s policy stance faces no imminent changes.

The U.S. economy lost 467,000 ...

It's the realpolitik, stupid

PAUL KRUGMAN doesn't seem to be paying attention to the arguments opponents of carbon ...

There’s been a lot of noise about overdraft fees of late, or NSF fees as they’re known in the industry. (It stands for non-sufficient funds.) Bank of America will now assess such things ten times a day, and the NYT’s Eric Dash has a good overview of the ...

Michael Lewis is back in Vanity Fair, with a really good article about Joseph Cassano and AIG Financial Products. Or half of a really good article, at any rate — the second half of the story is fantastic, and gives by far the best English-language account of what happened at ...

Novavax, Inc. announced today that it plans to license its vaccine technology to Spanish pharmaceutical company ROVI, who will use it to develop pandemic and seasonal flu vaccines (including one for novel H1N1). ROVI will also establish Spain’s only in-border vaccine production ...

I can never get enough of these sorts of articles:

The June 2009 Employment Situation report for the U.S. is now out, and for us, that means it's time ...

In year-over-year measurements, the industry’s occupancy fell 8.7 percent to end the week at 65.4 percent. Average daily rate dropped 9.5 percent to finish the week at US$97.49. Revenue per available room for the week ...

Guest blogger Peter Coy will be filling in for me for the next two weeks while I am taking a vacation (at home and in Scotland). You may know Peter as the writer of many of BW's economics cover stories and as a main contributor to the Hot Property blog. ...

Susan Davis reports on politics.

Republicans are using today’s report on further U.S. job losses and the highest unemployment rate, 9.5%, in 25 years to criticize President Barack Obama’s administration on its fiscal policies.

(For more on the job losses, read this WSJ story.)

“It’s time for Democrats to admit that more ...

A roundup of economic news from around the Web.

Economists and others weigh in on the larger-than-expected drop in nonfarm payrolls.

What we buy when times are hard

TIME'S Cheapskate blog is collecting a list of goods that have ...

Several sources, including our friends over at Bankruptcy Beat, are reporting that Michael Jackson's mother, who has been awarded temporary custody of her three grandchildren, might have trouble gaining final custody because of a 1999 bankruptcy filing. Washington attorney Beth Kaufman is quoted as saying, "I think it would ...

I’ll be on CNBC once, maybe twice, in the 2 PM EDT hour today.  I expect to talk about today’s employment report, maybe toward the top of the hour.  They may also have me comment on the President’s Rose Garden remarks, which are expected sometime in the 2 — 2:30 ...

Nina Munk’s VF article on Harvard’s endowment isn’t online, but the précis is, and it seems that Larry Summers takes a particular beating, being blamed for $1 billion in losses on interest-rate swaps, as well as for meddling with Harvard Management Company’s investment strategies and ultimately, with Bob Rubin, ...

Paul Wilmott has words of wisdom for anybody in the financial-services industry who’s putting a model together:

At every stage of valuation and model development you must be asking questions about risk and robustness. It is dangerous to come up with some fancy model and only afterwards start asking questions ...

OK! Magazine’s latest issue shows a post-heart attack Michael Jackson on the cover. Tabloid rags are always pushing past the fringes of decency to grab reader attention, but this goes too far. It would have been acceptable if Michael Jackson had survived. But please, OK! Mag, remember the man as ...

Crain’s Chicago Business has a sweet story about a potential Ferrara Pan Candy Co./Kraft Foods chocolate war:

Feeling betrayed by Kraft Foods Inc. after the nation’s largest foodmaker killed a partnership with his family’s Ferrara Pan Candy Co., Mr. Ferrara ...

From the Energy Collective:

Ps vs Qs in Green Inc:

If the nation’s goal is to reduce greenhouse gas emissions and promote the development of clean energy, is it easier to do this by managing the price of emissions and renewables, or by fixing the amount by which they are to be reduced (emissions) ...

Exogenously imposing the institutions of the French Revolution apparently had a beneficial impact on Western Germany. This is one of the conclusions of�this very nice Vox article based on this paper by Acemoglu, Cantoni Johnson and Robinson, �(available as an NBER working paper here).� They argue that�

'French-induced ...

The quip “There are three kinds of lies:  lies, damn lies, and statistics” is variously attributed to Benjamin Disraeli or Mark Twain.   What should the public make of government statistics, such as the monthly ...

After this morning's report, here are four unfortunate facts about the job market.

1) Manufacturing jobs are falling at their fastest rate since 1946, down -12.2% over the past year.

2) Private sector jobs outside of manufacturing are also falling at their fastest rate since 1946, down -4.0% over the past ...

As job losses accelerated in June, the unemployment rate ticked up 0.1 percentage point to 9.5%, the highest level since August 1983.

But another more comprehensive gauge of unemployment ...

Unemployment stubbornly rising

THE American labour market has apparently stalled out while trying to pull out of its ...

Europe's foolish immigration policies

My COLLEAGUE wrote about European attitudes to immigration a couple of days ago, and ...

The pundits are shocked, shocked to learn that jobs are still being lost. But there's really nothing surprising in today's jobs report for June, released this morning by the Bureau of Labor Statistics. Recessions have a habit of doing that, and for longer than the crowd expects. Disappointing and ...

Marginal product is the additional "output," however measured, when some input is added to the production process, holding all other inputs constant in their usage. "Uncle John" at Tigerboard has a post that indicates he understands the meaning of marginal product in team sports:

I just found this 1998 photograph of KRM. He’s standing between The Moustache, on the left, who has just taken over as deputy chairman, president and chief operating officer of News Corp for a total first-year comp package which could be more than $40 ...

Call it the access arbitrage. As I noted in May, if you’re a senior editor at a major news publication, you can expect regular meetings with VIPs up to and including heads of state, substantially all of them off the record. You have lots of access, but very little ...

Here' my answer to my pop quiz; it's in the form of a letter-to-the-editor that I sent yesterday to the Washington Post:

Writing in today's New York Times, Nicholas Kristof argues that we're not as frightened of climate change as science counsels that we should be, and that our fear's inadequacy is rooted in our evolutionary past.  We are, Kristof correctly says, evolved to fear immediate, visible threats and not so much ...

From 1995 to 2008, the annual US trade deficit with China grew from $34 to $266 billion, accounting for virtually all of the increase in the US non-oil deficit from $44 to $282 billon.

The neverending debate over taxing gas or taxing miles�drones on:

The idea of shifting [from a gas consumption tax] to a by-the-mile tax has been discussed for years, but it now appears to be getting more serious attention. A federal commission, after a two-year study, concluded earlier this ...

I�could�have�written�this�sort�of�post�myself�but�
the�opportunity�costs�would�have�been enormous (National Climate Change Policy):

Like any legislation, the�Waxman‑Markey bill�has its share of flaws, but its cap-and-trade system has medium and long‑term targets for reducing greenhouse gas emissions that are sensible, ...

Nonfarm payroll employment continued to decline in June (-467,000), and the unemployment rate was little changed at 9.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job losses were widespread across the major industry sectors, with large declines ...

Invisible hand:
Mother of inflated hope,
Mistress of despair!

The sour economy is giving an unconventional economics professor new reasons to spread his wisdom: Economists should learn to write haiku poetry.

Haiku, writes Stephen T. Ziliak from Roosevelt University in Chicago (the poem that starts this post is one of ...

Usually I try not to blog points which already have occurred to everyone, even if those points are true and important.� But today I will do so.

First, the idea of an employer mandate for health care is a tax on hiring labor in a time when, if anything, the hiring ...

We’ve had various versions of the case for and against the use of (micro)economic rational actor models in the social sciences lately, so I thought I would way in with my version of the case against. It has three main elements

First, most rational actor models assume that ...

It's easy for Very Smart People to poke fun at the likes of television pitchmen such as the late Billy Mays.  But John Stossel explains why such disdain is unwarranted.

The internet has made life better in an inconceivable number of ways, but at the same time there are still some things that spark nostalgia for pre-internet days. Recently I got to thinking about the mail order catalog. While it still exists, the catalog has definitely faded into the background ...

This is from an article in the St. Petersburg Times Newspaper on Sunday.

The Business Section asked readers for ideas on, “How Would You Fix the Economy?”

I think this guy nailed it!

Dear Mr. President,

Please find below my suggestion for fixing America ’s economy. Instead of giving billions of dollars to companies ...

Anil Kashyap is one of our leading researchers on banks.  His book with Takeo Hoshi on the evolution of the Japanese corporate finance is a must read on the twists and turns that built a great economy and then laid it low.  And he has many ...

A News 8 investigation found that hundreds of aircraft mechanics have been brought into the United States to work at aircraft repair facilities.

Insiders ...

Readers Question: How does Global Economy Depend on Stock Market?

The stock market is often a reflection of what is happening in the economy. The stock market does have an impact on the economy, but, it is only one of many factors.

If the economy goes into recession or if there is ...

David Skeel takes on the conventional wisdom regarding the bailout of Bear Stearns, with the benefit of 15 months of hindsight, and questions the wisdom of now institutionalizing "bailout in lieu of bankruptcy:"

But the bailouts [of Mexico and LTCM] are remembered as successes. The lesson ...

The White House yesterday did something that should truly warm the hearts of deficit hawks everywhere: it threated to veto the 2010 military authorization bill over two big spending issues -- the F22 and the alternate engine for the F35.

A little background.  Although both of these programs were questioned ...

This afternoon, the Congressional Budget Office estimated the public debt will soar from 41% of GDP at the end of FY08 to 60% at the end of FY10 without any policy changes and that the federal government is on an "unsustainable" fiscal policy path.  Once the economy is on ...

I'll leave it to the residents of the great state of South Carolina to decide whether their governor remains in office, and to the governor's wife to decide whether the marriage continues.

But, as a partner in a large public relations firm, I have no problem saying that the governor's communications ...

Wall Street Journal columnist James B. Stewart can’t have it both ways.

In a column in yesterday’s WSJ, Stewart, says that the ...

You don't have to like the climate bill that was approved last night by the House to be impressed by the White House's ability to get it passed. The bill 219-212, with eight Republican votes in favor.

The margin was narrow but isn't the big story.  The ultimate political value ...

I still remember an interview with Liberace from what must be close to 30 years ago in which he explained how he had become so flamboyant.  It all started when he appeared on stage for a piano concert in a white dinner jacket instead of a black tuxedo.  ...

I had three reactions to yesterday's cap-and-trade vote, two of which came from The New York Times article that I read this morning and one of whi