Asymptosis: Always Approaching

Month: May 2010

  • Inequality is Necessary for Growth, Right?

    I’m going to start this post with a proleptic response: No, nobody is suggesting a Maoist cultural revolution, forcing executives and professors to muck shit on collective farms. But I feel compelled to share the results from my latest, comparing income inequality to prosperity and prosperity growth in the fifty states. Contrary to the supply-sider…

  • Alex Tabarrok Does the Arithmetic on CDOs

    Update: I erroneously attributed the following post to Tyler Cowen instead of Alex Tabarrok. Fixed in the title. Marginal Revolution: The Dark Magic of Structured Finance. I’ll let you read it yourself, but here’s the takeaway. If the chance of underlying mortgages’ defaulting goes from 5% to 6% (a 20% increase), the probability of default…

  • Are We Facing an Exponential Rate of Decay?

    It never ceases to amaze me how tiny technical details can have massive implications. Here’s perhaps the biggest example I’ve ever seen. In a recent post I cited the 1987 Long-Term Capital Management hedge-fund fiasco, which occurred because they were assuming a normal distribution bell curve for financial events. “A one-in-five-hundred-year event on a normal…

  • One Thousand Words on Prosperity Growth

    Commenters on my cross-post over at Angry Bear have asserted among other things that real GDP/capita growth has been steady for more than a century. See? This proves, they assert, that the policy differences between Republicans and Democrats don’t really affect anything. My response was to point out how hard it is to eyeball important…

  • Presidents and Congress, Republicans and Democrats: Spending, Taxation, Debt, and GDP

    Cross-posted at Angry Bear. Thanks to yeoman’s work by Larry Bartels, Mike Kimel, and a host of others, we’ve seen that over many decades, the American economy has performed far better, by almost any measure, under Democratic presidents. Larry Bartels’ key graph mapping income growth by quintile, 1948–2005 (from page 33 of Unequal Democracy) is…

  • Taxes: Equity versus Efficiency? Not so Much

    Just following up on my recent post showing that progressivity in state taxes seems to have no significant relationship to prosperity: These findings suggest to me that the supposed tradeoff between equity and economic efficiency is a false choice (by this measure, at least). More equitable states (far more equitable) are just as prosperous, at…

  • Drowning the Baby with the Bathwater

    File under: Painfully Strained Mixed Metaphors. (Unless: “with” means “using.” But still.) The Norquististas want to make government small enough to drown it in a bathtub. Bruce Bartlett was there when the Republicans ginned up this ideology. He participated. And he takes it down here. In effect, STB became a substitute for spending restraint among…

  • Are Progressive States More or Less Prosperous? Not Really

    I posted recently about how profoundly regressive state and local taxes are, with my home state of Washington being the very worst. A new initiative proposal by Bill Gates Sr. to institute a state income tax on high earners (while reducing business and property taxes) prompted me to revisit the issue. My question: are states…

  • Largest Oil Spills

    I got curious about this. Here’s what WikiPedia says: ——————- Oil spills of over 100,000 tonnes or 30 million US gallons, ordered by tonnes[a] Spill / Tanker Location Date Tons of crude oil Reference Gulf War oil spill Persian Gulf January 21, 1991 1,360,000–1,500,000 [19][20] Ixtoc I oil well Gulf of Mexico June 3, 1979–March…