unpaid thoughts on the dismal science

Friday, October 04, 2002  
Paul Krugman offers his suggestions on salvaging the economy in "My Economic Plan".
10:29 PM

In "Uneven Trade", Jacob Sullum points out that the U.S. government uses subsidies, quotas, and tariffs to steal from the poor and give to the rich:
Cotton is just one of many markets where U.S. and European governments intervene to give domestic producers an unfair advantage. In addition to agricultural subsidies, which amount to more than $12 billion a year in the United States, producers in poor countries face tariffs and quotas that make it difficult, if not impossible, for them to compete.

7:12 AM

Thursday, October 03, 2002  
In The Good Governors Guide, Stephen Moore touts his latest Fiscal Policy Report Card on America’s Governors". Elsewhere on my site, I have a page compiling the results of previous report cards. I'll update it with the latest grades soon.
10:45 PM

Wednesday, October 02, 2002  
Found via Argmax.com, here's a copy of Al Gore's prepared remarks on the economy, given today at the Brookings Institution.
8:24 PM

Robert Shapiro asks "Will an Iraq war hurt the economy?" in "The Cost of Toppling Saddam":
While a war with Iraq won't much affect overall growth and investment, at least directly, it will breed more uncertainty about the future, which usually drives businesses and consumers to delay some large investments and purchases. This would mean slightly slower growth in the short run that could offset the modest stimulus from the higher military spending. Once we win—and assuming the victory comes fairly easily—a brief surge of investment and purchasing could follow. But much of this effect could be offset, too, by tighter credit conditions from higher budget deficits. Like most wars, this one could also affect exchange rates, and here we're likely to benefit. The United States is the No. 1 safe haven for foreign capital. Trouble anywhere draws funds to our markets, strengthening the dollar and pushing down our interest rates.
Of course, ex-Clintonite Shapiro sees the real problem:
Even if the war on Saddam and terrorism costs $300 billion—double the higher estimates—that will still be less than one-fifth of the 10-year cost of the president's tax cut and barely one-third the cost of the president's other defense spending increases.
Tax cuts, i.e., allowing people to keep their own money, are "costs"?
7:15 PM

Tuesday, October 01, 2002  
Paul Krugman talks about "Dealing with W". No, it's not another Bush-bashing column, it's about the possibility of a double-dip (a "W") recession:
But it's starting to look as if the interest rate cuts weren't enough. I don't need to tell you about the stock market. Economic indicators strongly suggest that the economy is either sliding into a double-dip, "W-shaped" recession — bet you thought I was talking about the guy in the White House — or close enough as makes no difference. Bond markets are clearly predicting that the Fed will have to cut interest rates again. What if the Fed, like the Bank of Japan, goes all the way to zero and finds that it still hasn't turned the economy around?
I still don't buy the notion that we are at risk for a Japan-style stagnation. Japan's economy is so rigid compared to ours that if you believe the standard neo-Keynesian explanation for business cycles of sticky prices/sitcky wages, you don't need any mysterious economic malady to explain Japan's problems.
10:07 PM

Monday, September 30, 2002  
Well, I'm back, finally. I had a very nice week off from slaving away for the man and managed to attend my first ever "blog meet" with The Superintendent of Cold Spring Shops (a.k.a., Stephen Karlson, NIU economics professor). The blogfest was held at Fatty's on Lincoln Highway a week ago tonight. Great Questions of Economics posed, but not answered:
1. Is the cost of college really going up?

2. Is the federal interstate highway system more or less socialistic than light rail?

3. Just how smart is Deirdre N. McCloskey?
Many more topics than can be easily listed here were discussed as well. All in all, The Superintendent was a very interesting conversation partner.
11:14 PM