Asymptosis

Everyone has their two bits worth. Mine: Aside from the whole thing being incredibly vague and relying far too much on the Secretary's "discretion," this passage from the CBO's description is egregious.

…the federal budget
would not record the gross cash disbursements for purchases of troubled
assets (or cash receipts for their eventual sale), but instead would
reflect the estimated net cost to the government of such purchases
(broadly speaking, the purchase cost minus the present value, adjusted
for market risk, of any estimated future earnings from holding those
assets and the proceeds from the eventual sale of them).

It is license for intentional obfuscation of the very worst sort, and an invitation to
government and corporate lying, cheating, stealing, and collusion.

Just give us the facts, please. You can give us a prettied-up version as well, but without the basic numbers we can draw no conclusions as to the veracity of that version.

If there’s one thing people would like more of these days, it’s stability. When the economy rockets up one year, then plummets or stagnates the next, it’s bad for everyone—especially those farther down the income scale, who have less recourse in face of national and global events that are completely beyond their control.

This got me wondering: over the course of decades, which is more stable—the U.S., with low taxes and limited social spending, or Europe, with it’s larger social support systems and higher taxes?

Here’s the answer, gauged by one big-picture measure—annual growth/decline in GDP per capita:

Short answer, the U.S. economy is far more volatile. In 25 out of 30 five-year periods, the EU was more stable. For the 35-year period ’71–’06, U.S. economic volatility has been 48% higher than Europe’s.

Europe’s greater stability may or may not be a result of its social policies. (Though there is good reason to think it is.) But whatever the cause, it sure would be nice to import a good-sized hamperful, if such things are exportable.

Not on Kiva.

This site lets you make direct micro-loans to small businesspeople across the world.

The only problem, right now: there aren't enough loan requests to match all the willing lenders. You basically have to lurk, hitting refresh constantly, to make a loan before a new requested loan gets fully subscribed (like, within minutes).

I just came across this graph that I created a while ago, and never got around to posting.

Trickle-down theorists would have you believe that inequality is necessary for growth and prosperity, or even that inequality causes growth.

But in the decades after their theories took sway, growth declined.

It came after therefore it was caused by? You decide.

I think Arnold Kling's commentary pretty much says it all:

Now which political party is it, exactly, that's supposed to know something about finance and economics? To make sensible, judicious, reasoned judgments about the economy?

Some people think the McCain bailout/debate maneuvering has positioned him to trap Obama:

So here:

Checkmate.

It looks like this:

Kathleen Parker, to be precise:

It
was fun while it lasted.

Palin’s recent interviews with Charles Gibson, Sean Hannity, and now
Katie Couric have all revealed an attractive, earnest, confident
candidate. Who Is Clearly Out Of Her League.

Greg Mankiw posted the views of a surrogate (his "smart friend") to dis the Paulson/Dodd bailout compromise (buy assets, get warrants/equity as well). His friend addresses the plan on its merits. But when David Leonhardt replied , also addressing the plan's central issues, Mankiw changes tack, arguing that it will screw up the auction process:

Good point—undeniably true. But even more to the point, Mankiw is not arguing any of the points raised by his smart friend (refuted by Leonhardt). He's raising a new, somewhat mechanical, objection.

Much better use of his time and fine mind: figuring out an auction/pricing process that would work.

Very quickly here because I have to run out the door, you'll have to google for your own links:

Senate Banking Committee Chairman Chris Dodd has proposed an alternative to Hank Paulson's "just trust me" blank-check bailout proposal.

Simply put:

If Treasury (that means you and me) buys $1 worth of trash assets from a company, Treasury (you and I) gets those assets, plus $1 of equity (stock or senior debt) in that company.

So the companies get the bailout cash they need now, but in return they give us–at no immediate cash cost to themselves–a potential upside down the road. But believe me–because their own shares are being diluted–they're gonna be saying "ouch."

Companies don't have to take the deal, of course. They actually have to request it. If they're on the verge of bankruptcy, the choice is clear:

Take it or leave it.

This solves the fundamental problem with the Paulson plan: either he pays too much for the assets (which bails out the financial institutions), or he pays too little (which is good for the taxpayer, but doesn't solve the problem).

With the Dodd plan, even if we pay too much, we've got that equity to make up for it.

Now: which party is it that understands market discipline?

The economics bloggers–who have been uniformly ravaging the Paulson plan for obvious reasons–are starting to coalesce around the Dodd plan. Watch for more in the course of the day.