Category Archives: Assorted Links

Assorted Links (10/2/2010)

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

Basel III and Risky Banking Behavior: Too Little, Too Lenient, Too Late?

knowledge.wharton.upenn.edu

“…a repeat of the financial crisis requires much more than the Basel III reforms. Moral hazard, or the tendency to take risks in hopes of government bailouts if things go wrong, is still a problem.”

Why is Obama sending troops to Afghanistan?

www.washingtonpost.com

“What kind of commander in chief sends troops to war announcing a fixed date for their withdrawal?”

The Twister of 2010

online.wsj.com

“America’s political landscape will never be the same, writes Peggy Noonan.”

Notable & Quotable

online.wsj.com

“At some point, …we will have the academic version of September 15, 2008-as parents no longer choose to take on $200,000 in debt to send their children to 4-year liberal arts schools, in which they will be likely indoctrinated that they should oppose the very American institutions that created the wealth and freedom that fuel their colleges and pay their faculties.”

The Broadway-Buffalo Divide

online.wsj.com

“In The Wall Street Journal’s Cross Country column, Fred Siegel writes that Gothamites who disparage Carl Paladino would do well to understand why other New Yorkers voted for him.”

Charles R. Schwab: Enough With the Low Interest Rates!

online.wsj.com

“In the Wall Street Journal, Charles R. Schwab writes that Fed policy punishes savers without making credit more readily available.”

Healthamburglar

online.wsj.com

“The Wall Street Journal on what happened when McDonald’s met ObamaCare.”

The Weekend Interview with Eric Cantor: ‘Things Could Get Pretty Messy’

online.wsj.com

“In The Wall Street Journal, Steve Moore interviews Eric Cantor, the man who would be the next House majority leader, on the GOP agenda and working with Obama.”

Black Churches and the Prosperity Gospel

online.wsj.com

“In The Wall Street Journal, Pastor DeForest Soaries Jr. says that depending on miracles as a financial strategy is a dangerous way to live.”

Echoes of the Great Depression

online.wsj.com

“In The Wall Street Journal, former U.S. Senator Phil Gramm notes that as in the 1930s, policy uncertainty and hostility to business have retarded recovery. At least this time around the political price for economic failure promises to be swift.”

In Elizabeth Warren We Trust?

online.wsj.com

“In The Wall Street Journal, George Mason University Professor Todd Zywicki says the unaccountable head of the new Consumer Financial Protection Bureau has repeatedly used shoddy data to push policies she favors.”

Assorted Links (9/30/2010)

Here’s a list of articles that I have been reading (and videos that I have been viewing) lately:

Chinese Company’s Device Turns IPod Into IPhone – Video

www.bloomberg.com

“Bloomberg’s Margaret Conley reports on Yosion Technology’s Apple Peel 520. A Chinese company is trying to overcome copyright restrictions before releasing a device that can provide Apple Inc.’s iPod Touch with iPhone functions.”

Review & Outlook: Department of Disinformation

online.wsj.com

“The Wall Street Journal on Kathleen Sebelius’s North Carolina fairy tale.” This is the WSJ’s followup to HHS Secretary Kathleen Sebelius’s WSJ article from yesterday entitled “Health Insurers Finally Get Some Oversight” (see http://bit.ly/9Z62E1), which helps provide some context…

The Pelosi-Reid Deficits

online.wsj.com

“In The Wall Street Journal, Steve Moore says to blame Congress, not presidents Bush or Obama, for our perilous fiscal situation.”

Review & Outlook: Blaming the Voters

online.wsj.com

“The Wall Street Journal writes that Democrats embrace the Chris Farley school of political motivation.”

Europe’s Social Safety Net and the Jobless U.S. Recovery

nytimes.com

“If the United States expands its social safety net, Americans might enjoy some of the European lifestyle, or recover the jobs lost during this recession, but not both, an economist writes.”

Why Obama Needs Fox News

foxnews.com

“…it would be far worse for Obama if there was no Fox News, because then he’d only have the American people to get mad at. There is no Republican adversary right now, and without Fox News–who’s left?”

Obama Calls Fox News a `Destructive’ Channel – NYTimes.com

nytimes.com

The president tells Rolling Stone that Fox News promotes a point of view that is “destructive” to the growth of the United States.

Obama Rolling Stone interview: three awesome bits

www.csmonitor.com

Yes, yes, President Obama talks about plans for energy policy and so forth in his interview with Rolling Stone magazine. But the intriguing bits include attitudes about … his socks?

Social Media Revolution 2

www.youtube.com

Social Media Revolution 2 is a refresh of the original video with new and updated social media & mobile statistics that are hard to ignore.

2010 Nobel Memorial Prize in Economics Pool

harvard.edu

Every year in early October the Nobel Prize Committee honors a few select individuals who have made tremendous contributions to science and society. Shortly afterwards they hand out a prize in Economics. Continuing an annual tradition, the Harvard Department of Economics is hosting the world’s most accurate prediction market—The Nobel Pool.

Daily Presidential Tracking Poll – Rasmussen Reports

www.rasmussenreports.com

Capture

“The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 29% of the nation’s voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-three percent (43%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -14 (see trends)… Only 34% of voters believe last year’s economic stimulus plan helped the economy. A plurality holds the opposite view.”


America in an Age of Open Field Politics


www.american.com


“This year’s Republican success will likely prove to be no more permanent than the 2006–2008 Democratic successes were.”

Assorted Links (9/27/2010)

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

It’s Easier to Be Brilliant than Right

www.american.com

“There is a danger with intellectual brightness. It is to overemphasize and develop a bias for cleverness, quickness, facility with data, and the ability to persuade.”

Curb Corruption or Lose the War in Afghanistan

online.wsj.com

“In The Wall Street Journal, former CIA official Rufus Phillips says that association with the agency has given some Afghan officials impunity, threatening Gen. David Petraeus’s counterinsurgency strategy.”

How to Grow Out of the Deficit

online.wsj.com

“In The Wall Street Journal, Hoover Institution fellow Edward Lazear says that limiting spending increases to inflation minus 1% would balance the budget in less than a decade.”

Jeffrey Goldberg is Fidel’s Latest American Dupe

online.wsj.com

“In The Wall Street Journal, Americas columnist Mary Anastasia O’Grady notes that the Atlantic Monthly’s Jeffrey Goldberg is not the first American journalist to cuddle up to Castro.”

The Regulation Tax Grows

online.wsj.com

“In The Wall Street Journal, Lafayette College economists Nicole V. Crain and W. Mark Crain say that federal regulatory burdens, not Chinese competition, are responsible for the decline of U.S. manufacturing.”

The Seduction of the Tea Partiers

nytimes.com

“Will the rhetoric of the House Republicans’ Pledge to America win over Tea Party members?”

The Weekend Interview With Tony Blair

online.wsj.com

“In the Wall Street Journal, Global View columnist Bret Stephens interviews former British prime minister Tony Blair, who defends the West and Third Way politics.”

Tax Cuts and Revenue: What We Learned in the 1980s

online.wsj.com

“In The Wall Street Journal, Richard Rahn says that supply-siders never argued that all tax cuts pay for themselves. But the evidence is clear that lower rates on high earners do produce more revenue over time.”

Jim Towey: Pastors For ObamaCare? – WSJ.com

online.wsj.com

“In the Wall Street Journal, the leader of George W. Bush’s faith-based initiatives office writes that if the office is going to be used as a propaganda unit by President Obama, it might as well be shut down.”

Book Review: John Kenneth Galbraith, the Non-Economist’s Economist

online.wsj.com

“James Grant reviews Galbraith: The Affluent Society & Other Writings, published by the Library of America.”

Assorted Links (9/24/2010)

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

Adoption Season for Evangelicals: A Biblical Mandate to Help Children, Especially Those in Foster Care

online.wsj.com

“Naomi Riley writes in The Wall Street Journal Houses of Worship column about growing numbers of evangelicals who are adopting children out of foster care in particular, and who see it as a Biblical mandate to give children their love and care.”

How Seniors Will Pay for ObamaCare 

online.wsj.com

“John C. Goodman writes in The Wall Street Journal that seniors will bear the brunt of ObamaCare’s costs. in many areas, Medicare Advantage enrollees will lose about one-third of their health insurance benefits. The cuts will finance new subsidies for younger people.”

Memo to Hawking: There’s Still Room for God

online.wsj.com

“In The Wall Street Journal, the philosopher Roger Scruton writes that neither Kant nor Einstein thought physics explained everything.”

Why Business Bashing Has Flopped

online.wsj.com

“In the Wall Street Journal, Potomac Watch columnist Kimberley A. Strassel writes that former CEOs and Wall Street vets are holding up well against Democratic attacks.”

The Enraged vs. the Exhausted

online.wsj.com

“If you thought the 1994 election was historic, just wait till this year, writes Peggy Noonan.”

Getting Lehman Profoundly Wrong 

www.american.com

“The bankruptcy of Lehman Brothers is widely misunderstood: We have inverted a morality tale about individual recklessness to become one about collective culpability through inaction.”

Still No Good News for ObamaCare

www.american.com

“ObamaCare addresses every healthcare problem, with every solution further centralizing power and decision making in Washington. The promises do not come cheap.”

Moderate Republicans and the Ratchet Effect

www.american.com

“While the Left claims to want bipartisanship and compromise, the incremental clicks of the ratchet only go in one direction: toward European-style social democracy.”

Visigoths at the gate?

www.washingtonpost.com

“Fear-over-hope rides again, this time with Dems warning darkly about ‘the Republican Tea Party.’”

The Decivilizing Effects of Government

mises.org

“If there is anything that government is actually good at doing, it is destroying things. Strangely, love for this destruction has become a popular cause, revealed in the push for “sustainability” and the banning of technologies that improve our lives.”

Economics One: Senate Budget Committee Reopens Debate on Policy and the Crisis

johnbtaylorsblog.blogspot.com

Here is Stanford’s John Taylor’s assessment of the American Recovery and Reinvestment Act of 2009: “Rather than predictable, the policy has created uncertainty about the debt, growing federal spending, future tax rate increases, new regulations, and the exit from the unorthodox monetary policy. Rather than permanent, it has been temporary and thereby has not created a lasting economic recovery. And rather than pervasive, it has targeted certain sectors or groups such as automobiles, first time home buyers, large financial firms and not others. It is not surprising, therefore, that the policy response has left us with high unemployment and low growth. Given these facts, the best that one can say about
the policy response is that things could have been even worse, a claim that I disagree with and see no evidence to support.”

Life After the Home Buyer Tax Credit

economix.blogs.nytimes.com

“Aside from the rush to meet the deadline, the credit seems to have had very little impact on the housing market, an economist writes.”

Killing the Extremist Idea that Threatens America: Counter Fear with Freedom

www.thepublicdiscourse.com

“Wahhabi teachings have been present in American mosques for decades (they were exported here by our Saudi friends and allies). And yet, American Muslims have seemed relatively immune, certainly in comparison to their counterparts in Western Europe, who have been far more easily radicalized.”

The Empire strikes back

www.voxeu.org

“The role of financial institutions in the global crisis has led to a consensus that financial regulation must change. This column argues that the banking lobby, far from depleted, has struck back with a vengeance. It has managed to postpone the much needed regulation for a time when the need for it will be forgotten.”

Competition and stability in banking | vox – Research-based policy analysis and commentary from lead

www.voxeu.org

“With the recent wave of bank bailouts and mergers, competition in the sector has surely been affected. This column introduces a new Policy Insight arguing that a trade-off between regulation and competition in the banking sector, while complex, does exist. The optimal policy requires coordination between regulation and competition policy depending on the level of competition in the market.”

Did France cause the Great Depression? | vox – Research-based policy analysis and commentary from le

www.voxeu.org

“A large body of research has linked the gold standard to the severity of the Great Depression. This column argues that while economic historians have focused on the role of tightened US monetary policy, not enough attention has been given to the role of France, whose share of world gold reserves soared from 7% in 1926 to 27% in 1932. It suggests that France’s policies directly account for about half of the 30% deflation experienced in 1930 and 1931.”

That Sinking Feeling, Again

cfo.com

“The latest Duke/CFO survey shows CFOs’ optimism about the economy declining to recession levels.”

Corporate CEOs unhappy with Obama – MSN Money

moneycentral.msn.com

“Corporate leaders are slamming the president over taxes and the uncertain effects of his policies, and the executives’ siege mentality is holding back the economy.”

Obama, Warren and the Imperial Presidency

online.wsj.com

“In the Wall Street Journal, Yale Professor Bruce Ackerman writes that the Senate should vote on all senior appointments within 60 days. But the president should give it a chance to vote.”

Governments Hand Out Report Cards – The Numbers Guy

blogs.wsj.com

“Increasingly, government agencies are grading schools, vehicles and restaurants. Not everyone uses the same grading curve.”

Elizabeth III

online.wsj.com

“The Wall Street Journal writes that President Obama’s decision Friday to put Elizabeth Warren in charge of the new Consumer Financial Protection Bureau while avoiding Senate confirmation and, for that matter, any political supervision shows a lot of chutzpah.”

Rauf and Islam’s Encounter with America

online.wsj.com

“In The Wall Street Journal, Fouad Ajami says a majority in the Arab world object to building the mosque near Ground Zero.”

GOP, Tea Party Unity Spells Defeat for Obama

online.wsj.com

“In The Wall Street Journal Mississippi Governor Haley Barbour writes that Republicans should be grateful tea partiers did not run as third-party candidates and split the antistatist vote.”

Republicans Gain Ground Among Independents

online.wsj.com

“In The Wall Street Journal, Douglas E. Schoen and Heather Higgins report on a new poll of political independents. Independent voters are leaning Democratic but a majority still have an unfavorable view of the Republican Party.”

The GOP Will Not Back Down from the Fight Over Tax Cuts.

online.wsj.com

“In The Wall Street Journal, Republican House whip Eric Cantor says that roughly half of all small business income in America will face a higher rate if Democrats don’t continue all of the Bush tax cuts.”

Many Are the Errors

www.american.com

“Perhaps Paul Krugman believes that by labeling other economists as politically extreme, he can undercut their credibility. But his is badly weakened by the myriad errors he makes.”

Elizabeth III

online.wsj.com

“The Wall Street Journal writes that President Obama’s decision Friday to put Elizabeth Warren in charge of the new Consumer Financial Protection Bureau while avoiding Senate confirmation and, for that matter, any political supervision shows a lot of chutzpah.”

Assorted Links (9/17/2010)

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

Shultz, Boskin, Cogan, Meltzer and Taylor: Principles for Economic Revival – WSJ.com

online.wsj.com

“In The Wall Street Journal, George P. Shultz, Michael J. Boskin, John F. Cogan, Allan Meltzer and John B. Taylor write that our prosperity has faded because policies have moved away from those that have proven to work. Here are the priorities that should guide policy makers as they seek to restore more rapid growth.”

The Prisoner’s Dilemma Makes a Reality TV Appearance – NYTimes.com

freakonomics.blogs.nytimes.com

“Once in a while, something happens in the real world that brings a flurry of e-mail to the Freakonomics office. If, for instance, the Prisoner’s Dilemma, or at least a version thereof, makes an appearance on a network TV show.”

Sizing Up Austan Goolsbee, Nominee to Head White House Council of Economic Advisers

economix.blogs.nytimes.com

“President Obama’s nominee as chairman of the Council of Economic Advisers combines sophisticated economics research with a keen appreciation of public policy, an economist writes.”

The game theory of ATM locations – Mind Your Decisions

mindyourdecisions.com

“It’s interesting because the authors show how game theory principles can be used by banks to optimize ATM location. The key is that banks should not only consider a location’s demographics, but it should also consider how other banks are locating their ATM’s. This is particularly useful in a city where a bank will want to serve its customers but also reach other bank’s customers and get fees.”

Two Cheers for the Clean Air Act

www.american.com

“This week marked the 40th anniversary of its passage with scarcely any observance of the magnitude of progress under the legislation.”

A Poverty of Statistics

www.american.com

“Our official poverty measure is measuring the wrong thing.”

The Backlash Myth

nytimes.com

Contrary to popular belief, this week’s Tea Party victories haven’t hurt the electoral prospects of Republicans in November.

Scientific Capitalism – Project Syndicate

www.project-syndicate.org

“To understand how we got ourselves into our current economic mess, complicated explanations about derivatives, regulatory failure, and so on are beside the point. The best answer is both ancient and simple: hubris – in this case, that of modern mathematical economics, which claimed to have devised a set of scientific tools that could really predict human behavior.”

Economic Conditions Snapshot, September 2010

www.mckinseyquarterly.com

“Two years after the economic crisis, executives’ confidence has returned—albeit tenuously—suggesting a better ability to cope with and manage economic volatility. A Economic Studies article by McKinsey Quarterly.”

SSRN-Regulating the Shadow Banking System by Gary Gorton, Andrew Metrick

ssrn.com

Here’s the abstract for this paper by Professors Gorton and Metrick: “The “shadow” banking system played a major role in the financial crisis, but was not a central focus of the recent Dodd-Frank Law and thus remains largely unregulated. This paper proposes principles for the regulation of shadow banking and describes a specific proposal to implement those principles. We first document the rise of shadow banking over the last three decades, helped by regulatory and legal changes that gave advantages to the main institutions of shadow banking: money-market mutual funds to capture retail deposits from traditional banks, securitization to move assets of traditional banks off their balance sheets, and repurchase agreements (“repo”) that facilitated the use of securitized bonds in financial transactions as a form of money. All of these features rely on an evolution of the bankruptcy code that allows securitized bonds to be used as a form of privately created money in large financial transactions, a usage that can have significant efficiency gains and would be costly to eliminate. History has demonstrated two successful methods for the regulation of privately created money: strict guidelines on collateral (used to stabilize national bank notes in the 19th century), and government-guaranteed insurance (used to stabilize demand deposits in the 20th century). We propose the use of strict rules on collateral for both securitization and repo as the best approach for shadow banking, with compliance required in order to enjoy the safe-harbor from bankruptcy.”

Why Does Government Grow and Grow and Grow?

www.american.com

“If Americans prefer smaller government, why does it continue to grow?”

The Myth of a Return to Clinton-era Taxes

www.american.com

“The claim that the president’s plan would only take the top tax rates back to Clinton levels isn’t quite right. Here’s why.”

The Day After Tomorrow

www.nytimes.com

“Republicans are riding a wave of revulsion about what is happening in Washington. But once things settle down, what about the conservative future?”

Charles Krauthammer – The Buckley rule

www.washingtonpost.com

“If DeMint and Palin care about the GOP keeping the Senate, they should stump for O’Donnell.”

Alberto Alesina: Tax Cuts vs. ‘Stimulus’: The Evidence Is In – WSJ.com

online.wsj.com

“In the Wall Street Journal, Harvard University economist Alberto Alesina writes that a review of 200 fiscal adjustments in 21 countries shows that spending discipline and tax cuts are the best ways to spur economic growth.”

The Sources of Liberal Intolerance

www.thepublicdiscourse.com

“American conservatives frequently complain that American liberals are intolerant—a striking paradox for a political movement whose very name suggests a respect for freedom. In their political rhetoric, liberals frequently resort to demonization, claiming, for example, that those who oppose same-sex marriage are animated by irrational hatreds.”

Obstacle to Deficit Cutting: A Nation on Entitlements

online.wsj.com

“Efforts to tame the U.S. deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives benefits, more than at any time in history.”

American Thinker: Retirement Fund Trillions Lure Government Grabbers

www.americanthinker.com

All I can say is, don’t cry for me Argentina…

America the Progressive

www.american.com

“The U.S. Social Security program is already among the most progressive in the world. Both liberal and conservative reformers would make it more so.”

Review & Outlook: Kathleen Sebelius Has a List – WSJ.com

online.wsj.com

“The Wall Street Journal on political thuggery from HHS.”

Arthur Brooks and Paul Ryan: The Size of Government and the Choice This Fall – WSJ.com

online.wsj.com

“In The Wall Street Journal, Arthur Brooks of the American Enterprise Institute and Paul Ryan, a Congressman from Wisconsin, say that Americans overwhelmingly prefer small government and low taxes to the alternative. Yet they’ve been given big government, one program at a time.”

Amar Bhidé: Don’t Expect Much From the R&D Tax Credit

online.wsj.com

“In the Wall Street Journal, Amar Bhidé of Tufts University writes that Apple does little of the kind of research that would be eligible. Nor do the thousands of companies that develop applications and accessories for iPhones and iPads.”

The Obama Administration and the Treatment of Human Embryos « Public Discourse

www.thepublicdiscourse.com

“Until every human being created in the image and likeness of God is protected in law and cared for in life, we shall not weary, we shall not rest. And, in this the great human rights struggle of our time and all times, we shall overcome.” With these words, the late Richard John Neuhaus concluded his last major pro-life address.”

Assorted Links (9/10/2010)

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

Are Counterfeit Drugs Really 10% of All Drugs? – The Numbers Guy – WSJ

blogs.wsj.com

“An oft-repeated claim that 10% of drugs in the world are counterfeit appears to be ill-founded.”

Trennert: Treasurys and the Danger of Short-Term Debt – WSJ.com

online.wsj.com

“In The Wall Street Journal, Jason Desena Trennert says that more than 60% of U.S. debt is set to mature within the next three years.”

Kevin Hassett and Glenn Hubbard: Obama Discovers Incentives – WSJ.com

online.wsj.com

“In The Wall Street Journal, Kevin Hassett of the American Enterprise Institute and Glenn Hubbard of Columbia University say the president’s proposals to cut taxes on business investment are a welcome departure fro Keynesian stimulus.”

Henninger: A President’s Class War – WSJ.com

online.wsj.com

“In the Wall Street Journal, Wonder Land columnist Daniel Henninger asks: Where on the income scale does Mr. Obama divide the country between us and them?”

Peter Ferrara and Larry Hunter: How ObamaCare Guts Medicare – WSJ.com

online.wsj.com

“In The Wall Street Journal, Peter Ferrara and Larry Hunter make the case that ObamaCare cuts to Medicare reimbursements threaten the health care of senior citizens.”

Assessing the Terrorist Threat

www.bipartisanpolicy.org

“This report by members of the BPC’s National Security Preparedness Group details how the terrorist threat has evolved since the attacks in 2001, including the development of homegrown networks and the increasingly diverse and decentralized nature of terrorism.”

Does Drinking in College Affect Your Grades? – NYTimes.com

freakonomics.blogs.nytimes.com

“To some people, the following conclusion should be filed under “Duh.” But even they might appreciate the empirical rigor undertaken by Scott E. Carrell, Mark Hoekstra, and James E. West in a new working paper called “Does Drinking Impair College Performance? Evidence from a Regression Discontinuity Approach”.


A Symposium: What Should the Federal Reserve Do Next? – WSJ.com


online.wsj.com


“A prolonged period of near-zero interest rates and unprecedented asset purchases by the Fed has failed to return the U.S. economy to robust growth or make an appreciable dent in our unemployment problem. It is now commonly asserted that the Fed is out of ammunition. Is it?”


To Expand Private Sector, Let Government Shrink, an Economist Says – NYTimes.com


economix.blogs.nytimes.com


“Military spending was not what ended the Great Depression, and now only gets in the way of expanded private-sector employment, an economist writes.”


HHS Explicitly Threatens the Insurance Lobby


swampland.blogs.time.com


“After claims from insurance companies that they plan to dramatically increase premiums this year because of the Affordable Care Act, the White House fired off a threat to the industry’s main lobbying group today.”


Insurers Pin Rate Hikes on Health Law


online.wsj.com


“Insurers nationwide plan to raise premiums on some Americans as a direct result of the health overhaul as soon as next month, complicating Democrats’ efforts to trumpet their signature achievement ahead of elections.”


Who Is Austan Goolsbee?


online.wsj.com


“Obama’s choice of Austan Goolsbee to succeed Christina Romer as the head of the CEA represents a change of personality at the top of the board, if not a shift in policy.”


Pop Quiz: How Do You Stop Sea Captains From Killing Their Passengers? : Planet Money : NPR


www.npr.org


“A story about 17th century sea voyages gets at the heart of economics: Get the incentives right, and you can do anything.”


U.S. Rebukes Health Insurers


online.wsj.com


“The Obama administration on Thursday told health insurers that it will track those who enact unjustified rate increases and may block those companies from a new marketplace for insurance coverage.”


Mixing Economics With Politics – Room for Debate – NYTimes.com


www.nytimes.com


“Can Obama’s tax cut package promote a faster recovery?”



The Effects of Fiscal Stimulus: Evidence from the 2009 ‘Cash for Clunkers’ Program


www.ssrn.com


Here’s the abstract for this paper: “A key rationale for fiscal stimulus is to boost consumption when aggregate demand is perceived to be inefficiently low. We examine the ability of the government to increase consumption by evaluating the impact of the 2009 “Cash for Clunkers” program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.”

For what it’s worth, I made similar points last fall on this blog – see http://bit.ly/2i6wNq and http://bit.ly/aDH3oG

Rogue Wave Prediction Spares Ships, Sailors : Discovery News

news.discovery.com

“Lighthouses may safeguard ships from the shore, but light waves could keep them out of harm’s way in the open ocean.”

The Higher Education Bubble: Ready to Burst? – Rasmussen Reports™

www.rasmussenreports.com

This article, written by the American Enterprise Institute’s Michael Barone, sees a “higher education bubble” forming as a consequence of excessive government subsidies to higher education. While that is a very interesting idea unto itself, what caught my eye in Barone’s article is his reference to the American Council of Alumni and Trustees’ website, located at http://whatwilltheylearn.com/. This website ranks colleges and universities according to their graduation rates and whether they require courses in composition, literature, foreign languages, U.S. history, economics, mathematics and science For what it’s worth, my university (Baylor) is one of only 16 colleges and universities to make the American Council of Alumni and Trustees’ “A” list (see http://whatwilltheylearn.com/a-list for ACAT’s “A” list, http://whatwilltheylearn.com/criteria for ACAT’s rating criteria, and http://bit.ly/drnZ3M for Baylor’s “report card”). 

Divided by a Two-Track Economy – WSJ.com

online.wsj.com

“For American business, it’s a two track economy, with global players getting big boosts from fast-growing foreign markets, while companies focused on the U.S. are hemmed in by recession-scarred consumers.”

NZ Earthquake » Insurance Industry Blog

www.iii.org

“A 7.0-magnitude earthquake that struck near Christchurch on New Zealand’s South Island early Saturday follows major earthquakes in Baja (California), Chile, Haiti and China earlier this year.”

The Gospel of Wealth

www.nytimes.com

“The betrayal of the age of excess has made us hungry for a new code reconciling material and spiritual longings.”

Arti$ts and the Market

www.american.com

“Many in the art world cling to the myth that financial gain does not motivate artists. This is not only bad economics, but bad art history.”

Deciphering the Liquidity and Credit Crunch 2007-2008

www.aeaweb.org

Here’s a link to a (free) Journal of Economic Perspectives article by Princeton economics professor Markus K. Brunnermeier, entitled “Deciphering the Liquidity and Credit Crunch 2007-2008”.

Assorted Links (9/4/2010)

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

Amity Shlaes: How Government Unions Became So Powerful – WSJ.com

online.wsj.com

“In The Wall Street Journal, Amity Shlaes of the Council on Foreign Relations explains how the American workforce became divided between vulnerable private-sector workers and protected public-sector workers.”

Review & Outlook: Postcard From the NHS – WSJ.com

online.wsj.com

“The Wall Street Journal on Dr. Berwick’s health-care model at work.”

Is Your University Complying With the New Textbook Law? – NYTimes.com

freakonomics.blogs.nytimes.com

“University students are returning to campuses throughout the country. It is a migration that raises my spirits – seeing the energetic, eager faces tackling another course in contracts or intellectual property. But this year something is different. For the first time, a federal law has taken effect which requires “institution[s] of higher education receiving Federal financial assistance” to provide students with information on textbook pricing.”

‘Clunkers,’ a classic government folly

www.boston.com

From the Department of Unintended Consequences: This article from the Boston Globe documents the effect of last fall’s “Cash for Clunkers” program on prices in the used car market today. Apparently used car prices are now higher because “…your Uncle Sam decided last year to destroy hundreds of thousands of perfectly good automobiles as part of its hare-brained Car Allowance Rebate System …or, as most of us called it, Cash for Clunkers. That was the program under which the government paid consumers up to $4,500 when they traded in an old car and bought a new one with better gas mileage. The traded-in cars – which had to be in drivable condition to qualify for the rebate – were then demolished: Dealers were required to chemically wreck each car’s engine, and send the car to be crushed or shredded…In short, Washington spent nearly $3 billion to raise the price of mobility for drivers on a budget.”

What Kinds of Tax Cuts are Best?

jeffreymiron.com

“With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.”

Interest rates and the US housing boom: A call for more research

www.voxeu.org

“The debate over the cause of the US housing boom and bust is far from concluded. This column questions the explanation that low interest rates were a critical factor, arguing that it sits uneasily alongside theories of household behaviour and historical evidence. With the causes remaining uncertain, the authors call for more research in this area.”

A Lifetime of Career Changes – The Numbers Guy – WSJ

blogs.wsj.com

“Though it’s often said that the average American will have seven careers in a lifetime, there is no statistical support for that figure.”

Elaine Chao: Another Unhappy Labor Day – WSJ.com

online.wsj.com

“In the Wall Street Journal, former U.S. Labor Secretary Elaine Chao writes that Americans are aware of the folly of Washington’s economic policies.”

Michael Boskin: Summer of Economic Discontent – WSJ.com

online.wsj.com

“Stanford University’s Michael Boskin writes in The Wall Street Journal that the Obama administration’s ‘summer of recovery’ has fizzled in almost every way imaginable. The growth rate is less than half what it was at this stage after the 1974-75 and 1981-82 recessions.”

Joe Queenan: Goodbye to the Clichés of Summer – WSJ.com

online.wsj.com

“In the Wall Street Journal, satirist Joe Queenan writes that somewhere among Julius Caesar, Edgar Degas, Lady Godiva and Lady Gaga, the word ‘legacy’ got hijacked.”

Where Columbia Beats Harvard: On the Battlefield of Curricula – WSJ.com

online.wsj.com

“James Piereson writes on The Wall Street Journal’s Taste page that away from the sports arena, Columbia beats Harvard on the battlefield of curricula. Excerpted from a longer version of his original article in the September issue of The New Criterion.”

Scott Brown: Want Middle East Peace? Deny Iran Nukes – WSJ.com

online.wsj.com

“In the Wall Street Journal, Sen. Scott Brown of Massachusetts writes that Israeli-Palestinian talks are good, but Tehran’s nuclear drive continues.”

The Small Business Tax Hike and the 97% Fallacy

online.wsj.com

“In the Wall Street Journal, Kevin A. Hassett and Alan D. Viard of the American Enterprise Institute write that the president’s plan to raise top marginal rates is holding back the very people who should be leading the economic recovery.”

Charles Krauthammer – Our distracted commander in chief

www.washingtonpost.com

“Obama sees the war in Afghanistan as an unwanted interference with his true vocation.”

The Mosque’s Lesson on Loyalty

www.thepublicdiscourse.com

“Liberal charges of xenophobia reveal more about those making them than about those at whom they are aimed. This is not to say that those charges are merely cynical, that they are used only as weapons against the left’s political enemies. These charges, though misplaced, are sincerely made. And precisely because of their sincerity they shed light on contemporary liberalism, which is powerfully inclined to see xenophobia where it does not exist—or at least to regard as xenophobic thoughts and actions that most non-liberals regard as normal and just.”

The Generation That Can’t Move On Up: The Growing Gap Between Young Working-Clas

online.wsj.com

“Andrew Cherlin and W. Bradford Wilcox write on the Wall Street Journal Taste page about new statics and surveys that show a widening gap, both economic and social, between young people from working-class families, and the middle class.”

Bret Stephens: The Paula Abdul Theory of Foreign Policy – WSJ.com

online.wsj.com

“In the Wall Street Journal, Global View columnist Bret Stephens writes that self-esteem does not make for good policy (or singers).”

The Costs of War, Continued – NYTimes.com

economix.blogs.nytimes.com

“As the Afghanistan conflict drags on, the costs of expected veterans’ benefits become a smaller fraction of the total cost of the conflict, an economist writes.”

Incentives Work for Pigeons. Can They Motivate American College Students? — The Amer

www.american.com

“How to improve the academic atmosphere of contemporary high schools and colleges.”

How to Tell When a CEO Is Lying – NYTimes.com

freakonomics.blogs.nytimes.com

“In a nifty piece of forensic analysis, two researchers claim to have figured out how to tell when executives are lying. David Larcker and Anastasia Zakolyukina analyzed 30,000 conference calls between 2003 and 2007 to see if certain “tells” during the call were associated with earnings that were later “materially restated.”


Build America Bonds


www.nber.org


Here’s an interesting research paper from the National Bureau of Economic Research which provides a detailed assessment of the extent and nature of the federal subsidy given to state and local governments in the form “Build America Bonds” that were offered as part of the 2009 American Recovery and Reinvestment Act: “In 2009, BABs offered an average yield of 3.69 percent. The federal subsidy brought down the cost of borrowing for states and local governments to 2.32 percent.”

Assorted Links (8/30/2010)

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

How Dismal is the Fiscal Future For America and Europe? Becker – The Becker-Posner Blog

www.becker-posner-blog.com

Here’s Nobel Laureate Gary Becker’s views on the possibility of a (developed economies) debt crisis: “Posner lays out clearly many of the present and future solvency and default risks to the United States federal government. He bases some of the analysis on a valuable recent Morgan Stanley report with the provocative title “Ask Not Whether Governments Will Default, but How”.”

O’Grady: Kirchner’s Assault on the Press – WSJ.com

online.wsj.com

“In the Wall Street Journal, Americas columnist Mary Anastasia O’Grady writes about the Argentine president’s campaign to silence the country’s two most influential daily newspapers.”

Mark Helprin: The World Trade Center Mosque and the Constitution – WSJ.com

online.wsj.com

“In the Wall Street Journal, Mark Helprin of the Claremont Institute writes that proponents have a right to build the mosque, but no American can be forced to pour concrete or cross a picket line of grieving families.”

Robert Barro: The Folly of Subsidizing Unemployment – WSJ.com

online.wsj.com

“In the Wall Street Journal, the economist Robert Barro of Harvard writes that his calculations suggest the jobless rate could be as low as 6.8%, instead of 9.5%, if the Obama administration hadn’t extended jobless benefits to 99 weeks.”

Paul Rubin: Ten Fallacies About Web Privacy – WSJ.com

online.wsj.com

“In the Wall Street Journal, Paul Rubin of Emory University writes that we are not used to the Internet reality that something can be known and at the same time no person knows it.”

Life-Insurance Coverage Wanes for U.S. Households – WSJ.com

online.wsj.com

“Nearly a third have no policies, a combination of the financial pressures on middle-income families and a reticence to purchase insurance due to the high cost of some policies and the hardball tactics used by some agents.”

ABREAST OF THE MARKET: The Decline of the P/E Ratio – WSJ.com

online.wsj.com

“As investors fixate on the global forces whipsawing the markets, one fundamental measure of stock-market value, the price-to-earnings ratio, is quietly shrinking, both in size and importance.”

Assorted Links (8/28/2010)

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

The Emerging Markets’ Century — The American, A Magazine of Ideas

www.american.com

“Whereas public debt levels in many major industrialized countries will soon exceed 100 percent of GDP, those in the major emerging market economies generally range between 40 to 50 percent of GDP.”

Catholics and the Cosmos: Thinking About Souls and Human Origins, and What Pius XII Said About Evolution

online.wsj.com

“In The Wall Street Journal’s Houses of Worship column, John Farrell writes about the 60th anniversary of Pope Pius XII’s 1950 encyclical on Christianity and the theory of evolution and asks whether advances in science call for more discussion in the church.”

Arnold Schwarzenegger: Public Pensions and Our Fiscal Future – WSJ.com

online.wsj.com

“In The Wall Street Journal, California Governor Arnold Schwarzenegger challenges the State Assembly in Sacramento to bring rising pension costs under control.”

The $31 Billion Revenue Fantasy – WSJ.com

online.wsj.com

“The Wall Street Journal writes that those who make $200,000 a year are 3% of all taxpayers but pay 52% of all income taxes.”

Spreading Hayek, Spurning Keynes – WSJ.com

online.wsj.com

“Peter J. Boettke is emerging as the intellectual standard-bearer for a revival of the Austrian school of economics.”

We Just Don’t Understand – WSJ.com

online.wsj.com

“Americans look at the president and see a stranger, writes Peggy Noonan.”

Fiscal policy: Is economics a right-wing conspiracy? | The Economist

www.economist.com

“I’LL admit it, I am ambivalent about whether we need more fiscal stimulus and still think it’s too early to tell how effective the last one was. I dare to voice my concerns and I get labelled “a conservative economist”. But my worries are based on my professional training—my fields were public finance and macro—more than any political agenda.”

An Updated Guide to the EconoTwitterverse – Real Time Economics – WSJ

blogs.wsj.com

” An updated and expanded list of econ-related tweeps, from journalists to economists.”

Peter Berkowitz: The Death of Conservatism Was Greatly Exaggerated – WSJ.com

online.wsj.com

“In The Wall Street Journal, Peter Berkowitz says that liberals completely misread the election of Obama as the death knell of conservatism. Instead, the president’s progressive agenda has led to a revival of conservatism.”

Charles Krauthammer – The last refuge of a liberal

www.washingtonpost.com

“The only hope for liberals is to play the race card.”

Obama’s Illegal Stem-Cell Policy « Public Discourse

www.thepublicdiscourse.com

“A year and a half ago, when President Obama signed his executive order funding embryo-destructive stem-cell research, I argued in The Weekly Standard that he was perpetuating a needless stem-cell war, that his decision was “bad ethics, bad science, and bad politics.” Add “bad law” to the list.”

Gone 20 years, Stevie Ray Vaughan stands forever tall in Austin

www.austin360.com

“The Austin music community woke up on Aug. 27, 1990 20 years ago today with a piece of its soul gone.”

Assorted Links (8/26/2010)

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

Biden’s Prediction: Inside Information or Pure Bluster? – NYTimes.com

freakonomics.blogs.nytimes.com

Stephen Dubner provides the latest from the prediction markets on the midterm elections – 75% likelihood of a Republican House, while the Dems will most likely retain Senate control (however, with a substantially diminished majority).

Dismal Tidings for Congressional Democrats – Politics – The Atlantic

www.theatlantic.com

Here’s the latest handicapping effort (on the upcoming midterm election) from the Atlantic’s Megan McArdle…   

Putting Teachers to the Test: The Debate Over Value-Added – The Numbers Guy – WSJ

blogs.wsj.com

“Value-added measures have many problems, but some researchers and advocates say these teacher-evaluation tools based on student test scores, may be better than the alternative.” 

Labor Laws Make Finding Work More Laborious — The American, A Magazine of Ideas

www.american.com

“Policies designed to protect workers reduce the incentive to become better-educated.”

When Economic Policy Became Social Policy — The American, A Magazine of Ideas

www.american.com

“The recent Treasury Department conference is further proof we will never get out of this housing mess until we are ready to face facts.” 

Why Small Businesses Aren’t Hiring — The American, A Magazine of Ideas

www.american.com

“In the recoveries from the previous two recessions, small businesses led job creation. This time, however, small businesses aren’t hiring. Here’s why.”

George Melloan: The Fed Can Create Money, Not Confidence – WSJ.com

online.wsj.com

“In the Wall Street Journal, George Melloan writes that inflation—or stagflation—remains the more serious danger than deflation.

Grace-Marie Turner: Putting the Brakes on ObamaCare – WSJ.com

online.wsj.com

“Grace-Marie Turner writes in The Wall Street Journal that a Republican Congress can help tee up the eventual repeal of President Obama’s unpopular health-care reform law.”

The financial crisis seen through free-market eyes

www.dallasnews.com

“How long will it take this time before governments understand that overreacting to the crisis and imposing disproved Keynesian remedies will dampen and delay economic recovery? The answer depends on the ability of free-market economists and commentators to communicate their narrative of the crisis.”

Who’s ObamaCare’s Daddy? – WSJ.com

online.wsj.com

“The Wall Street Journal writes that now even liberals are denying paternity.”