Greenspan’s Iron Law is that the sum of these two numbers is approximately constant, at least for the last half-century in the United States. That is a pretty fraught claim: it means that every time the United States adds a billion dollars to Social Security benefits or Medicare payments or unemployment insurance outlays we are forcing a billion-dollar reduction in family saving or in the retained earnings of business, or an increase in government deficits, or some combination of these. ... So what is the evidence for it? Nobel-prize winning economist Robert Solow finds Alan Greenspan's latest book to be ideologically driven and embarrassing, a pity for someone who, Solow writes, was, when looking at his whole tenure, a very good chairman of the Fed.
Of all the occupational golden ages to come and go in the twentieth century—for doctors, journalists, ad-men, autoworkers—none lasted longer, felt cushier, and was all in all more golden than the reign of the law partner. Noam Schreiber on The Last Days of Big Law: You can't imagine the terror when the money dries up. Former law partner Steven J. Harper, author of The Lawyer Bubble, believes the profession to be in existential crisis. Another former partner weighs in. Libertarian law professor Richard Epstein presents a more sanguine view.
Perhaps the most fruitful way to look at the debate between Morgenthau and Marshall that was carried on--largely below the surface, largely without explicit confrontation--at the end of WWII is that it was an attempt to figure out how to resolve call it two historical problems: the problem of European military culture, and the problem of modern industrial war. Economist Brad DeLong explains.
A massive shortage of gas all over New York and New Jersey is fueling hours-long lines stretching blocks or even miles. A big part of the problem has been power shortages to gas stations and refineries. Nevertheless, some argue that laws preventing gas prices from spiking in response to the disaster ("price gouging") are making things much worse, discouraging businesses from staying open in tough conditions and preventing entrepreneurs from profiting from any clever ways of increasing supply. Others admit gouging has some advantages, but still consider it ethically dubious. Gouging seems to be happening informally regardless.
The American people “should be enraged by the broken promises to Main Street and the unending protection of Wall Street” writes Neil Barofsky, former Inspector General of the Troubled Asset Relief Program in his new book, Bailout, about his time in that office. His trenchant criticisms of Washington egos, moneyed interests, and political games has some calling him an "idealistic alien" and others vehemently defending him. Treasury Secretary Timothy Geithner comes off particularly poorly in Bailout, unsurprising in light of his well-known feud with Barofsky over the efficacy of the bailouts. (previously)
This is why I don't give you a job. Hungarian blogger Jakab Andor breaks down the numbers and explains why taxes and regulations make it highly unappealing for him to start a small business employing people in Hungary. He also argues that these same factors make women and older people particularly unappealing prospects. His comments generated quite a bit of controversy (warning: most comments in Hungarian), to which he responded with an offer.
Why Not a Negative Income Tax? "What kind of program could help protect every citizen from destitution without granting excessive power to bureaucrats, creating disincentives to work, and clogging up the free-market economy, as the modern welfare state has done? [Nobel-prize winning economist Milton] Friedman’s answer was the negative income tax, or NIT."
What Good is Wall Street? Think of all the profits produced by businesses operating in the U.S. as a cake. Twenty-five years ago, the slice taken by financial firms was about a seventh of the whole. Last year, it was more than a quarter. (In 2006, at the peak of the boom, it was about a third.) In other words, during a period in which American companies have created iPhones, Home Depot, and Lipitor, the best place to work has been in an industry that doesn’t design, build, or sell a single tangible thing.
Paul Krugman attacked professional macroeconomists (previously). John Cochrane, an economist at the University of Chicago, returns the favor, arguing that Krugman deeply misrepresents current economic ideas because he's abandoned economics as a "quest for understanding" in favor of trying to be the "Rush Limbaugh of the Left."
Peter Wallison, an economist who arguably predicted the housing crash and bailout in 1999 explains his current views on the crash: "Other players...played a part" but "...government policy over many years--particularly the use of the Community Reinvestment Act and Fannie Mae and Freddie Mac to distort the housing credit system-- underlies the current crisis."
Stickk.com allows people to undertake commitment bonds: promises that they will do something (lose weight, quit smoking, etc.) or else forfeit a pre-determined amount of money to a charity. Either the honor system or a referee can be used to decide if the goal is met. The idea is related to Nobel prize-winner Thomas Schelling's concept of strategic precommitment. More here, here, and here.
A new U.S. Treasury Report (press release) reports that tax returns from 1996 to 2005 show that income mobility in the U.S. is "considerable," with rising earnings, and top earners who often stumble. The WSJ crows. Pew releases its own research (reports, press release) on income inequality today with a multi-decade outlook, but summarizes the findings as that American families' income mobility is still highly dependent on their parents' position. Forbes and a The New Republic blog try to reconcile the reports. Meanwhile, blacks appear to be downwardly mobile.
The Happy Planet Index presents an alternative to GDP for measuring standard of living. It ranks countries by measuring life expectancy and self-reported life satisfaction against an "ecological footprint" needed to support that country's lifestyle. The press release claims that well-being is not based on high levels of consumption, but many don't agree. Full report in PDF here. Vanuatu tops the charts, while Zimbabwe and Swaziland lie at bottom. Critiques here, here, here, and here. A critique of happiness indices generally here.