Month: October 2012
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Mitt Romney in the Big Banks’ Pocket? Pas Possible
From OpenSecrets, hat tip to John Sides at The Monkey Cage: Cross-posted at Angry Bear. Related posts: The Myth of the “Independent” Voter The Macroeconomics of Chinese Kleptocracy Screw the Rich to Protect Super-Rich Campaign Contributors? John Galt, “Genocidal Prick” Do Savers “Take Resources out of Society”?
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Deep and Long: Private Debt and Financial Recessions
While he (uncharacteristically) doesn’t explain or deploy it terribly well, Paul Krugman points to some very excellent research on the relationship between private debt levels and the depth and duration of (especially financial-crisis-driven) recessions. The Schularick/Taylor Vox EU article is here. The Jorda/Schularick/Taylor paper is here (PDF). I think the work is excellent in large part because JS&T…
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“No, the shareholders don’t own the corporation”
The excellent Justin Fox makes the excellent point that I have made many times: that nobody in the ecosystem of publicly traded companies — including shareholders — is anything like a business owner. And no, the shareholders don’t own the corporation — they own securities that give them a not very well-defined stake in its earnings, and the…
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Amazon and Apple: The Myth of the Rational Market?
Can anybody explain this to me? AAPL AMZN Price/Earnings 15.15 302.68 That’s a 20:1 ratio. Yes, Amazon has a lower price to revenues ratio, by a 2:1 margin. AAPL AMZN Price/Sales 4.06 2.06 And presumably at some point Amazon can turn the prices-versus-market-share dial away from gaining market share/maximizing revenue and toward price and profits.…
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Should Central Banks Burn All Their Government Bonds?
In June of 2008, Ron Paul made a radical proposal: the Fed should simply burn all the U.S. Treasuries it’s currently holding, reducing the government (U.S. Treasury) debt by $1.6 trillion, or about 10%. (Yes: bonds held by the Fed are counted as part of “Debt Held by the Public,” even though the government basically…
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Why Unwinding QE Won’t Matter
Ashwin Parameswaran nails it once again. If you want to understand how the modern financial/monetary system actually works, run don’t walk to read this post. His key insight: Just as the East India Company could access cash on the back of their government bond holdings in the 18th century, any pension fund, insurer or bank can do…
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Adam Smith on Corporatism
As a many-times business owner, I noted a couple of years back that in the ecosystem of publicly traded companies, there is nobody who thinks, acts, has incentives like, or is really anything like a real business owner. I’m pleased to find that Adam Smith agrees with me (emphasis mine): The trade of a joint stock…
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“If you tax investment income what will people do? Stuff their money in the mattress?”
Richard Thaler asks exactly the right question. This from the latest IGM Forum poll of big-name economists, on the effects of taxing income from “capital.” I’ve been over this multiple times before, but it’s nice to see the thinking validated by a real economist. If you’ve got money, there is no (practicable) alternative to “investing” it. (Those are irony…
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Did Global Warming “Stop” Sixteen Years Ago?
An acquaintance of mine who’s very statistically savvy (and quite conservative) posted the following link on Facebook today. I replied as follows (I’ve replaced a link here with a clickable image): As a statistics guy, you know way better than most how important sample size is. There was a 30-year plateau in the HADCRUT data, mid-40s…
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GDP, Prosperity, The Wealth Effect, and Marginal Propensity to Consume
Comes to mind: the one about the two British ladies who meet at the Ascot races. “My dear,” says the first. “What a lovely hat. Where did you get it?” “Oh darling,” says the second, looking somewhat pained, “don’t you know, we have our hats.” It comes to mind as I ponder the rather grudging and tepid suggestions…