Category: Economics
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Do Lower-Taxing States Grow Faster? No.
Following up on yesterday’s post comparing state tax rates and prosperity (answer: higher-taxing states are more prosperous [or vice versa. <g>]), I wondered about the same comparison with prosperity growth. Again I used median household income, because it’s a good measure of widespread prosperity, a.k.a. The American Dream. Here’s the story: In aggregate, there’s no…
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Are Low-Taxing States More Prosperous? No. QTC.
Regular readers will remember my posts comparing prosperous countries — tax rates versus prosperity and prosperity growth — and will remember that they’re largely uncorrelated: lower taxes don’t correlate with faster economic growth. (See Related Links at the bottom of this post for much more.) But what about states? Are low-taxing states more prosperous? I…
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Stockman: How the GOP Destroyed the U.S. Economy | The Big Picture
The headline speaks for itself. The author is one of the smartest financial bloggers in the game, author of Bailout Nation. I can’t resist quoting this: I suspect brain damaged partisans of the left suffer from somewhat different cognitive deficits than brain damaged partisans of the right. I would add that the brain damaged partisans of the…
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Washington State Income Tax (Initiative 1098): Who’s Affected?
Updated. See below. Again, Aug 12. There’s been some debate going back and forth recently on how many Washington State taxpayers will be affected by the proposed income tax. The two sides have done a good job of providing the source data (you can follow their links), but the debate’s been inconclusive because: 1. Single filers…
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Dang Those Bush Tax Cuts Really Worked!
HT to Barry Ritholtz. Source. Related posts: Stockman: How the GOP Destroyed the U.S. Economy | The Big Picture Banks’ “Bigger Concern”: “Republicans will no longer defend Wall Street companies.” “Track Changes” on Fed Statements Sarah: On Target S&P 500 Earnings: The Most Depressing Graphic I’ve Seen This Year
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The Best Argument Against Climate Legislation — And the Best Answers
I’ve long lauded Jim Manzi for his cogent and convincing arguments against carbon taxes. He’s the antithesis of the “1998 was really hot! Look: it’s cooler now!” school of head-in-in-the-sand self-delusionists. Rather, he takes the 2007 IPCC report as the best available consensus scientific knowledge we have, and uses it to think through a clear-eyed,…
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Trickle-Down Really, Really Works!
Lane Kenworthy has updated his Best Inequality Graph with the latest data (through 2007): Hidden in the fine print, you’ll find proof positive that trickle-down works: middle-class incomes have risen by 1% a year since 1979! And poor people’s incomes have gone up by 0.4% a year. How can you argue with that kind of…
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Intel’s Andy Grove, Refugee from Communism, Champions Centralized Economic Planning: “rebuild our industrial commons”
If you’re like me, you hear your friends say this a lot about America: “we need to start making things again.” It seem intuitively correct, but there’s a pretty standard economic response: if we’re getting all the profits based on our knowledge and innovation, even though we’re not doing all the work, what’s the problem?…
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Oh Woe, Alas and Alack, that “Credit Crunch.” Except…Not!
Private Equity Firms Have Billions and Nowhere to Spend It I’ve mentioned this a few times before… The Sky Is Falling! Business Lending Down 1.2 Percent! Related posts: The So-Called Credit Crunch, Again Some More Should the Financial Sector Shrink? Bleg: Accounting for the Real Sector No Kidding: Loan Demand, Not Credit, Is the Problem…
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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…
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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…
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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…
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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…
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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…
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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…
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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…
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Mankiw: Do Equity Analysts Create Prosperity?
In my peregrinations I just came across an old 2006 post by Greg Mankiw. He describes the situation of: …a Harvard PhD in economics who left an academic job for a better-paying one in private equity. Based on the article, he seemed a bit wistful about leaving an academic job behind. At a higher tax…
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Another Reaganomics Inflection Point
The solid line (left scale) is the ratio of financial sector wages to private sector wages. The dotted line (right scale) is an index of financial regulation. From: 13 Bankers In 4 Pictures Related posts: The Global Great Depression: Then and Now Public vs. Private Debt: The Long View If Interest Rates Rise, We Can…
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Does Unemployment Insurance Make People Lazy?
Short answer: Yes. Slightly longer answer: Not very many people, and not much lazier. Rob Valletta and Katherine Kuang of the Federal Reserve Bank of San Francisco just released a new study of unemployment insurance and unemployment. This graphic stands out: People who quit their jobs or are just entering the job market aren’t eligible…
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Where Did the Deficits Come From? From “Conservatives” of Course
You already know this, but: Click image for source. Related posts: Yeah Right: Supply of Credit to Businesses Is a Big Problem 520 Traffic is Declining — Despite 15 Years of WSDOT Projections to the Contrary Did I Mention Mentioning that It’s the Health Care Costs, Stupid? More American Exceptionalism: Drowning the Baby in the…
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Should the Financial Sector Shrink?
The financial services industry seems to be x times larger than it needs to be to effectively service and lubricate the real economy that produces useful goods and services. (Arnold Kling is one of many that agree with me.) This suggests that the market is misallocating resources (both capital and human). It is also failing…