Economy

Worth Reading
September 14, 2009

Philly public library system on the brink of closure. John Cochrane responds to Krugman, who fires back. David Warsh: "On the evidence so far, it is Robert Lucas, not Paul Krugman, who has been more nearly correct." How Glenn Beck betrays conservatives by attacking Cass Sunstein.  Only 25% of economists say employers should provide health insurance for full-time workers. Intrade odds for health plan passage in '09 are falling. Delinquencies on securities tied to commercial real estate are ratcheting up.    

Why Are Currency Traders Now Borrowing Dollars?
September 14, 2009

For years the term "carry trade" was synonymous with the Japanese yen. Because of the country's zero-interest rate policy, traders borrowed yen on the cheap and purchased higher yielding assets in other countries and markets, pocketing the difference. But in recent weeks, a key borrowing rate for the dollar -- the 3-month Dollar Libor -- has fallen below the 3-month Yen Libor. That means the dollar has added "carry trade currency" to its other titles: safe haven and world's reserve currency.

Stop the Tax-Vetting Madness
September 11, 2009

Now this is getting ridiculous. From the Journal: President Barack Obama's nominee for the top international post at the Treasury Department has been sidetracked by a Senate committee's investigation into her personal tax returns. Lael Brainard, nominated in March as Undersecretary for International Affairs, is the latest Obama appointee to be tripped up by the Senate Finance Committee. Of particular concern is Ms.

Worth Reading
September 11, 2009

The man behind AIG's implosion, Joseph Cassano, may face charges. Why have wages for college grads been falling?  The recession may have ended but official word may not arrive until 2010. Does the Fed have too much influence over the economics profession? The Economist: No smoking gun on oil speculation. Securitization is alive and kicking.

Did the Welfare State Kill God?
September 11, 2009

Why did church attendance drop in Western Europe during the 20th century? An agnostic/atheist-type like me might speculate that increases in income, education, and urbanization made it easier for people to think and act for themselves and break away from the authority of the church. But then why did religiosity in the U.S. -- which saw similar increases in income, education, and urbanization -- stay flat over the 20th century?

Wall St. Reform Moves Up the Priority List
September 11, 2009

So says Mike Allen in today's Playbook: EXCLUSIVE: OBAMA WILL PROD CONGRESS TO SPEED WORK ON HIS PLAN FOR FINANCIAL REGULATORY REFORM. Financial reregulation has moved from third on the White House agenda, after energy/climate, to second, in part because it’s viewed as more attainable. House Financial Services Committee Chairman Barney Frank is moving sections and may get several key ones to floor votes this fall, although Senate action may not come until next year. Very interesting, and smart.

The Right and Wrong Way to Obsess Over the Rich
September 11, 2009

Yesterday’s Wall Street Journal had a front-page story about the declining fortunes of the wealthy, marking a recent burst of journalistic interest one of my three favorite economic classes.

Did Tight Monetary Policy Cause the Crisis?
September 11, 2009

In his NYT mag piece, Paul Krugman blames macroeconomists for believing the world behaved as well as the math behind their models. His solution? To re-embrace Keynes. But in a provocative counterpoint on VoxEU, Scott Sumner says looking back to Keynes won't solve the problem.

Worth Reading
September 10, 2009

A decade's worth of income gains for Americans has been wiped out. Two top-notch accounts from Bloomberg on the global effects of Lehman's collapse. The FT has one too. Alaska spends more per pupil than any other state. Up to 12% of the gender wage gap is due to men working more dangerous jobs. Is a 2% inflation target too low?

American Litigiousness, Distilled
September 10, 2009

From the Journal's story on the declining fortunes of the wealthy (about which more later): "At law firms, billings ballooned earlier this decade, and law-firm salaries accounted for 1.5% of all U.S. salaries in 2007, twice the share in 1980, according to Economy.com." Actually, while part of that increase was surely the stuff of conservative legal nightmares, I'm guessing a big (bigger?) chunk was boom-related. Financial engineering requires legal work, lots of it.  

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