Asymptosis: Always Approaching

Category: Economics

  • Regulating the Ratings Agencies: Low-Hanging Fruit?

    Among all the furious post-almost-apocalyptic discussions of financial industry regulation (i.e. here, here, here, here, and here), I'm stunned how rarely people mention the single biggest leverage point: regulation of ratings agencies. If Moody's et al had rated mortgage-backed securities properly, we simply wouldn't be in the fix we're in now. Those securities would have…

  • Another Free-Market Straw Man

    I get so tired of reading these pointless free-market commentaries that do nothing but state the obvious and grind the axe. Today's find: William Easterly's Financial Times article, "Trust the development experts – all 7bn of them." Easterly ridicules a recent (rather impressive, though judicious and occasionally mealy-mouthed) World Bank report on development, arguing that…

  • Manzi (and Me) on Equality and Prosperity

    Jim Manzi was nice enough to drop me a note in response to one of my comments, and he pointed me to his National Review piece, “A more equal capitalism: preserving the free-market consensus.” I ended up writing some lengthy responses, and not being one to waste perfectly good copy, I decided to post them…

  • Europe vs. US: Who’s Winning?

    Update June 2012: See data through 2010 here. People love to cherry-pick statistics to show that the US, or Europe, is winning the growth game. That got me curious: if you look at all the possible growth periods, who’s ahead (most)? Short answer: no clear winner.  The results look pretty random. Over the longest periods,…

  • McCain’s Economic Advisor: More Taxes?

    A CNN Money article on the candidates’ advisors quotes McCain’s economic advisor Douglas Holtz-Eakin saying (as I read it) that we’re really going to have to raise taxes: The country’s "current fiscal policy is unsustainable, as even draconian restraint in the annual spending on defense and nondefense programs are insufficient to guarantee that the current…

  • Does Inequality Result in Prosperity?

    Lane Kenworthy lays out yet again the stunning rise in inequality in America since 1950, and especially during the period since the early eighties when supply-side economic thinking took effect. Meanwhile Greg Mankiw is presenting more don’t-worry-be-happy data. Supply-siders will tell you that we need to embrace or least tolerate this inequality, because it’s necessary…

  • Lane Kenworthy’s Big Idea

    Attributing the robust state of modern economies to the “free” market is like saying that Arabian stallions, champion Rottweilers, and freshly-picked sweet corn are the result of mutation. Would you and your family rather live with a wolf, or Good Dog Carl? That’s the thought I come away with after reading Lane Kenworthy‘s chapter on…

  • Consumption Inequality Revisited: Uh…Hello??

    Coming back to the Cox and Alm Cox article in the NYT, whose basic argument was that poor people spend 50% as much as rich people in America. Everyone’s good. Don’t worry. Be happy. I don’t know why it took me so long to realize this, and I’m utterly at a loss as to why…

  • Wealth and Innovation: The Freedom to Do Cool Shit

    If there’s (only) one thing that macroeconomists agree on, it’s probably that innovation and entrepreneurship are the driving forces behind the vast improvements in well-being that we have seen over the decades, and over the centuries. (It’s also what’s allowed for some of the most heinous acts imaginable. But still.) I pointed out in a…

  • Wacky Objections to an Obama Senate Bill

    Greg Mankiw links, apparently approvingly, to a VoxEU post by Willem Buiter and Anne Sibert savaging an Obama-sponsored bill in the Senate. (Cloyingly titled the Patriot Employer Act.) Felix Salmon has replied quite effectively, pointing out that the bill would not have the kind of disastrous effects the authors suggest, and that their objections are…

  • Equality and Prosperity: Can We Have Both?

    Yesterday, I (I hope) drove a final stake into the heart of the myth that small government creates national prosperity. I hope I also brought some backwards progressives to understand that the conservatives are right in one regard: economic growth has been the main engine that has made the poor–and everyone else–much better off by…

  • Small Government Spurs Growth? Economists Say No.

    Small-government conservatives’ most powerful economic argument–which progressives have failed to counter effectively in the minds of Americans–is that making government smaller results in faster economic growth. So, by this theory, small government makes all boats rise–rich and poor alike. It follows that progressives who argue for higher taxes and government spending are either foolish or…

  • Shopping is Good For America. Right?

    Harold Myerson today in the Washington Post bemoans America’s dependence on our own shopping as an engine of the economy. Household consumption accounts for 70% or our GDP. I checked his numbers and he got them right: Britain ranked second among nations in the Organization for Economic Cooperation and Development, at 61 percent, then came…

  • Paying More Taxes (again…)

    Without actually using the word “hypocrite” Megan McArdle makes the following assertion in her latest post on people who are in favor of higher taxes, Tax me more. In other words, they don’t so much want higher taxes on themselves, as to purchase the good “State coercion of other affluent people”. I posted the following…

  • The Reality-Based Community: Why I want to pay higher taxes

    Mark Kleiman responds nicely to Megan McArdle’s post saying that nobody wants to pay higher taxes. I’ve already explained why I’m willing to pay (higher) taxes: because it made me rich. And I want my kids to have the same opportunities I had. Related posts: Paying More Taxes (again…) My Patriotic Millionaires Pitch Weimar, Zimbabwe,…

  • Mankiw: Post Friedman Ergo Propter Friedman

    Andrew Schleifer (PDF) and Greg Mankiw share in a paean to Milton Friedman and the glorious growth and prosperity he has brought to all the poor and oppressed of the world. I'm kind of shocked, as I usually am when Professor Mankiw goes into Friedman adulation mode. Because he should know better than anyone: 1.…

  • U.S. Poverty: We’re #2!

    Lane Kenworthy rightly chastises Paul Krugman, correcting the belief that the U.S. has the highest poverty rate among affluent countries. We actually have the second-highest rate. Mr. Kenworthy is right that “relative” poverty measures are (my word, not his) garbage. They’re based on a percent of median income in each country, so a wildly rich…

  • New Federal Budget Blog: Just the Facts, Ma’am

    Here’s the kind of solid, factual information you can expect from rdavis: Anyone who’s not familiar with his federal-budget web site should take a look right now. He does yeoman’s duty presenting current and past budget numbers in very useful formats–both tables and graphs. He also provides some commentary and opinion, but it’s mostly solid…

  • “Usual and Customary”: Macro Effects?

    The NY State attorney general is investigating (NYT) health insurers for gaming the system on “usual and customary” charges. Turns out the database used to determine the charges is managed by Ingenix, which in turn is owned by UnitedHealth Group–one of the country’s biggest health insurers. The database is licensed to other insurers as well.…

  • Fiscal Stimulus: $336,000 Per Job. But…

    This one really made me think twice. Greg Mankiw does the arithmetic: $168 billion in fiscal stimulus will create 500,000 new jobs (according to Edward Lazear, chair of the Council of Economic Advisors). That’s $336,000 per job. You have to do some awfully long-term projections and assume some kind of mighty macro effects to justify…

  • Wealth Equality and Prosperity

    Amongst all the ruckus generated by the Cox and Alms’ piece in the NYT about consumption versus income inequality in the U.S., Lane Kenworthy has pointed out that they’re both utterly dwarfed by wealth inequality: It sure doesn’t seem fair. But if that level of wealth inequality creates greater economic growth for all, we shouldn’t…