Assorted Links (10/5/2010)

Here’s a list of articles that I have been reading lately:

Evidence of Solar Scientists Raise Fears of Imminent Ice Age “New study by American solar experts identifies a sharp fall in sunspot activity since 2007 that fits the hallmarks of a soon arriving ice age.” (This is not an Onion article! Hat tip to my Baylor colleague Dave VanHoose for pointing it out to me…).

The Bill Gates Income Tax

“In the Wall Street Journal, Arthur Laffer writes that if Washington’s most famous billionaires are really worried about their state’s finances, they’d write personal checks to the government and leave everyone else alone.”

Review & Outlook: ‘Essential’ Bailouts

Notwithstanding political rhetoric to the contrary, this article explains how the recently passed Dodd-Frank financial regulatory reform law enables a “new” system of bailouts. Specifically, “…under the new law, firms deemed too big to fail by the new Financial Stability Oversight Council can be protected from bankruptcy, if regulators so desire, and instead put into an alternative process managed by the FDIC. The idea is to provide the firm with taxpayer cash that would not be available in a bankruptcy, and then try to recover the taxpayer’s money over time from sales of the company’s assets.”

Book review: Adam Smith

“Jeffrey Collins reviews Adam Smith: An Enlightened Life, by Nicholas Phillipson.”

How to Cut Carbon Emissions

This video is quite graphic in its violence and ironically comes off as rather Orwellian. Apparently one is only entitled to adopt what the filmmaker defines as the “consensus” (groupthink) opinion, and if you happen to deviate in any way from this opinion, then no pressure… you die a gruesome death… See for the Guardian’s (not surprisingly) favorable assessment of the video in an article entitled “There Will be Blood”.

The Trade and Tax Doomsday Clocks

“Donald Luskin writes in The Wall Street that tariffs against China and failure to extend the Bush-era tax cuts would repeat the worst mistakes of the Great Depression.”

Big Tax Breaks Beget Small Investments – Why the American Jobs Creation Act lowered taxes but failed

“The American Jobs Creation Act (AJCA) of 2004 temporarily lowered the tax rate paid on income that American firms bring back from their foreign subsidiaries to the United States. Congress said it gave businesses this tax break in order to stimulate domestic investment, and indeed, during the two year window more than $300 billion was repatriated to the United States in response to the law. However, according to research by Mitchell Petersen, a professor of finance at the Kellogg School of Management, many of the firms made little incremental domestic investment. In addition, the law resulted in a substantial tax savings for many multinational businesses and a huge loss to the U.S. Treasury.”

Valuing the Government Guarantee – Determining the U.S. government’s liability for Fannie Mae and Freddie Mac

Not surprisingly “Fannie and Freddie are enormous obligations for the U.S. government.” Two Northwestern University finance professors (Robert McDonald and Deborah Lucas) derive a set of empirically robust estimates to this effect!

First Among Equals? – Prime ballot position improves a candidate’s chances of winning office

“Specialists in the mechanics of voting have long recognized that the order in which candidates’ names appear on a ballot influences voters’ decisions. Typically, candidates listed at the top of a ballot earn a greater share of the vote than they would receive in any other position, regardless of their policies and personalities… the first listing on the ballot also increases a candidate’s chances of actually winning office—by almost five percentage points.”

A Man for All Factions

“President Obama has managed the difficult feat of alienating both sides of the Democratic Party at the same time.”