“As I said, we still don’t know whether these moves will work. But policy is, finally, being driven by a clear view of what needs to be done. Which raises the question, why did that clear view have to come from London rather than Washington?”
(Via NY Times op-Ed.)
Ideology is soft-think.
“But most people do not think like economists. When offered 10 percent or 20 percent or even 30 percent of the total, they are disgusted by the inequity — and willing to pay the price for that disgust by rejecting the offer.”
Talk about “bounded rationality!”
“The only thing that seems to be moving faster than the financial crisis is the policy debate. The latest development is a statement that summarizes what I think of as the emerging consensus from academic economists; it expresses concern about various aspects of both the Paulson plan in particular, and the policy process in general.”
Slow down. Take a breath everybody.
“So who is to blame? There’s plenty of blame to go around, and it doesn’t fasten only on one party or even mainly on what Washington did or didn’t do. As The Economist magazine noted recently, the problem is one of ‘layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role.’ Here’s a partial list of those alleged to be at fault:
- The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
- Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
- Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
- Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
- The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
- Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
- Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
- Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
- The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
- An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
- Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.”
I love freakonomics. Looking at the complete set of graphs breaks down each candidates’ tax plans. It clearly lays out the candidates’ priorities.
Obama has come of the points I would include, equity stakes, tax cuts to middle class spenders. But I would also:
What would you do?
“That’s right folks, it duplicates the functionality of the desktop version of iTunes.
Therefore, it was denied from sale in the app store. “
(Via Almerica Blog.)
Apple better wake up before it sees a repeat of the 90’s. Idiot move. Big time.
Presidential candidate Barack Obama once spoke to CNBC anchor Maria Bartiromo about the economy. Bartiromo made the usual comments an ideologically minded supply-sider might make, and Obama true to form, struck his usual centrist tone:
The one thing you can be assured of is I’m not going to be making these [economic] decisions based on ideology. I’m not a dogmatist…I believe in the market. I believe in entrepreneurship. I believe in opportunity. I believe in capitalism. And I want to do what works, but what I want to make sure of is it works for all America and not just a small sliver of America.
Obama does have quite the plan. It is a mixed bag to be sure, as anything political would be, but it is both a sound and refreshingly moral plan to help this economy work for all Americans. Instead of government spending per se, it consists of government investment, a key distinction from leftist ideological choices. It provides for targeted tax relief to the engines of our economy: the consumer and the more importantly small business. As a progressive he includes union protection, but departs from political pandering and opts for sensible regulation. See a pattern? I’ve said to my progressive/liberal friends that if they don’t get a pro-business, pro-growth policy that expresses their ideals and values, they might was well pack it in to conservatives whose policies smack of trickle down, faith based “economics.” No government in a free economy creates jobs. Businesses do and they don’t do so out of charity or good will. They do so out of necessity or incentive. So there has to be a system of carrots and sticks, that forces them to, as Taylor put it, “share in the surplus.” So to create jobs, you have to be pro-business in some way, and refreshingly Obama does not disappoint. More on this later.
“That gives Apple the opportunity to blow away users with a feature that would clearly differentiate its mobile line for years, more closely associate its Macs with the iPhone brand, and jump from today’s 8 to 10% of the US market to a figure closer to 30% within just a year. We already know Apple has 66% of the consumer-oriented retail market for machines above $1000 in the US; why not take the rest?”
(Via RoughlyDrafted Magazine.)
The idea is crazy enough to be true.