MetaFilter posts tagged with economics

Peak Rock was reached in 1965

acb — Wed, 11 Nov 2009 16:20:26 -0800

US Crude Oil Production vs. Rock Music Quality, by year. Is Rockism the cultural equivalent of Hubbert Peak Theory?

On use vs. exchange value: we must be careful about what we pretend to be

kliuless — Sat, 31 Oct 2009 08:24:13 -0800

Asset inflation, price inflation, and the great moderation
Economists ~~as penance~~ have been trying to locate the origins of the great chain of causation that has led us to our present situation -- the worrying conclusion is that problems remain -- imbalances precipitated by a labour supply shock [1,2] and/or (the rise of) machines [1,2] have not gone away and continue to persist in decimating the ('developed world's) middle class, as evidenced by high and rising unemployment, which has led to a crisis in central banking itself. moreover, paraphrasing george washington, "the government's entire strategy now is to cover up how bad things are." iow, if there isn't a middle class 'civil rights' movement already, there should be...

Standing on a hill in my mountain of dreams

shakespeherian — Wed, 28 Oct 2009 07:39:47 -0800

Is California finished?

Superfreakonomics: It's getting hot in here.

afu — Sun, 18 Oct 2009 20:22:58 -0800

The Freakonomics follow up, Superfreakonomics, contains a chapter on climate change that lives up to the best selling contrarian style of authors Steven Levitt and Stephen Dubner. However actual climate scientists were not pleased with the chapter. According to the Union of Concerned Scientists, the book "repeats tired global cooling myths," "unfairly trashes climate models" and "advocates rolling the dice on unproven technology" among other faults. They have also been accused of misquoting climate scientist Ken Caldeira. Levitt and Dubner respond to their critics, Global Warming in SuperFreakonomics: The Anatomy of a Smear. Full critique from climate progress 1 2 3 4 5

Scrimping on the Future

kliuless — Sun, 18 Oct 2009 09:12:03 -0800

Information is stimulus, confusion is contraction.

The Gervais Principle

East Manitoba Regional Junior Kabaddi Champion '94 — Fri, 16 Oct 2009 09:47:36 -0800

The Gervais Principle, Or The Office According to “The Office”. Warning: link may evoke baleful despair!

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009

jfricke — Mon, 12 Oct 2009 05:13:26 -0800

Surprise, surprise. It's a girl - for the first time. Elinor Ostrom ("for her analysis of economic governance, especially the commons") and Oliver E. Williamson ("for his analysis of economic governance, especially the boundaries of the firm") have won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009.

Small is Beautiful

adamvasco — Sun, 04 Oct 2009 08:31:11 -0800

Most of Africa, India and the developing world depends on innovative and inventive people coming up with ways to make a living with no cash and next to no resources. Fritz Schumacher ( wiki ) was an internationally influential economic thinker with a professional background as a statistician and economist whose 1973 book "Small is beautiful" - Economics as if People Mattered; is among the 100 most influential books published since World War II ( Review ). There are links to several articles, Essays and Videos on the Schumacher Society webpage including the Essay "Buddhist Economics". He was a founder of the Charity Practical Action. ( Related 1; 2 )

“He who controls the money supply of a nation controls the nation”: James Garfield

Mutant — Sat, 03 Oct 2009 04:31:04 -0800

The First Bank of the United States was Americas first attempt at forming a Central Bank. Inaugurated by Congress in 1791, it was followed by The Second Bank of the United States, which was dissolved in 1836.

And then The United States of America was without a Central Bank for 77 years. Those were hardly halcyon years; as US States and banks shared responsibility for printing money, inflation, asset volatility, market crashes and even depressions were common, for example The Financial Panic of 1837, The Panic of 1857, The Panic of 1873 (aka "The Long Depression"), The Panic of 1893, and the Panic of 1907. Central Banks serve two very important groups of customers: they provide banking services both to the government as well as retail, commercial and investment banks. Also, as recent events have shown, the importance of their role as "lender of last resort" in time of financial stress (systemic as well as specific) can not be underestimated. Regardless, suspicion of Central Banking is very high in post bailout America, leading to a variety of demands ranging from requests for an audit of The Federal Reserve, to more extreme views that The Federal Reserve should be abolished altogether. But if not The Fed then who would control the nation's money supply?

Economist attacks Krugman as superficial and partisan.

shivohum — Mon, 28 Sep 2009 09:42:26 -0800

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."

As bad as inflation is deflation is much, much worse

Mutant — Sun, 27 Sep 2009 10:38:24 -0800

Why is deflation far worse than inflation? After all, prices are falling, goods and services get cheaper, what's not to like? Modern Central Bankers are well armed to wage war against inflation; high interest rates effectively slows the circulation of money, extinguishing inflation as the United States did by raising the Fed Funds rate to a record 20% in 1981. But these same tools don't apply to deflationary scenarios, as nominal interest rates can not be cut below zero, a barrier recognised by Fed Chairman Ben Bernanke who in 2004 concluded ¹ "the nominal policy interest rate may become constrained by the zero lower bound." [ .pdf ] And one must not underestimate the destructive power of deflation; as deflation pressures drive down prices, as the demand for goods and services first drops, then accelerates as businesses layoff workers, leading to further declines in wages even as unemployment rises. As deflationary expectations take hold defaults on loans of all types rise as the value of assets plummets and banks first curtail then totally stop lending, leading to the emergence of a vicious cycle much Japan's deflationary spiral. Adding to contemporary deflationary pressures, we know bank lending is declining, even among firms receiving government funds. So the question is how can we incentivise banks to begin lending again? Harvard Economist Greg Manikw has an idea - penalise banks for hoarding cash by canceling a percentage of currency held dormant in reserve and not lent to consumers and businesses; effectively achieving negative interest rates. In a similar vein, last July Sweden starting charging interest for funds held dormant by banks, effectively penalising institutions for hoarding cash and driving an increase in personal sector lending, while The UK considers the same approach. Will Bernanke and The Fed follow suit? ¹Bernanke, B., S., Reinhart, V., R., Sack, B., P., 2004, "Monetary Policy Alternatives in the Zero Bound" Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, D.C.

Hyperinflation in Zimbabwe wasn't all it appeared to be

Mutant — Tue, 22 Sep 2009 04:58:55 -0800

First Zimbabwe formally abandoned their currency, then received assistance from The IMF, and now now we're seeing inflation in that nation easing to an acceptable rate of 0.04% per month. So it's fair to ask, is hyperinflation in Zimbabwe is a thing of the past? There are five criteria seen in every documented case of hyperinflation; specifically

The population keeps most wealth in non financial assets
Any financial wealth is held in non local currency, and prices are quoted in that currency
Sales on credit explicitly price in expected inflation
Wages and interest rates are explicitly linked to inflation
Inflation of over 100% during a three year period is documented

So what was really behind Zimbabwe's remarkable - and devastating - hyperinflation? No, it wasn't imprudent monetary policy, nor was it unwise fiscal policy, it was something more base and easily understood. Hyperinflation in Zimbabwe was mostly caused by corruption, government officials and insiders enriching themselves at the cost of others. But amid all this good news, Zimbabwe's ruling elite don't like losing power, and there are genuine fears a return to the "bad old days" is just a matter of time.

Wonder what this will do for book sales?

up in the old hotel — Tue, 15 Sep 2009 08:08:44 -0800

Bin Laden's Reading List for Americans “After you read the suggested books, you will know the truth, and you will be greatly shocked by the scale of concealment that has been exercised on you:"

The Israel Lobby and U.S. Foreign Policy by John Mearsheimer and Stephen Walt. Previously on Metafilter.
Palestine: Peace Not Apartheid by Jimmy Carter
According to the translation, “The Apology of a Hired Killer.” The book is said to have been written by “a former CIA agent who lived in two cultures, whose conscience was awakened in his third decade and decided to say the truth despite threats.” While there seems to be no book of that title and description, bin Laden may have been reading Confessions of an Economic Hit Man by John Perkins.

In Wal-Mart's Image

acb — Mon, 14 Sep 2009 02:00:58 -0800

How Wal-Mart's values are shaping America's economy -- and why this is a very bad thing:

Around the time that the young Sam Walton opened his first stores, John Kennedy redeemed a presidential campaign promise by persuading Congress to extend the minimum wage to retail workers, who had until then not been covered by the law. Walton was furious. Now the goddamn federal government was telling him he had to pay his workers the $1.15 hourly minimum. Walton's response was to divide up his stores into individual companies whose revenues didn't exceed the $250,000 threshold. Eventually, though, a federal court ruled that this was simply a scheme to avoid paying the minimum wage, and he was ordered to pay his workers the accumulated sums he owed them, plus a double-time penalty thrown in for good measure. Wal-Mart cut the checks, but Walton also summoned the employees at a major cluster of his stores to a meeting. "I'll fire anyone who cashes the check," he told them.

On this labour day...

kliuless — Mon, 07 Sep 2009 09:13:11 -0800

Social mobility, income inequality and wealth disparities. BONUS

After a 30-Year Run, Rise of the Super-Rich Hits a Wall: Over the last two years, the rich became poorer, and they may not return to their old levels of wealth anytime soon.
Household Debt to Net Worth Ratio Spiking - "While the richest were impacted the most in $ terms, the lower to middle class tend to have more of their net worth stashed in real estate (i.e. their home). Thus, while the financial markets rebounded in 2009, it is likely that the lower to middle class didn't reap the reward (housing has continued to fall). Thus, when data is updated for 2008 and 2009 (though too early to judge where we'll end up this year), expect the discrepancy to be even wider."
Poverty, growth, and sustainability - "Getting out of poverty means, among other things, having access to more of society's resources for the sake of consumption: better diet, healthcare, education, transportation, housing, clothing, and other goods... Now consider the environmental side of the coin."
Thin Value, Thick Value - "Profit through economic harm to others results in what I've termed 'thin value'. Thin value is an economic illusion: profit that is economically meaningless, because it leaves others worse off, or, at best, no one better off. When you have to spend an extra 30 seconds for no reason, mobile operators win -- but you lose time, money, and productivity. Mobile networks' marginal profits are simply counterbalanced by your marginal losses. That marginal profit doesn't reflect, often, the creation of authentic, meaningful value. Thin value is what the zombieconomy creates."
Life Inc. - "about money as a medium, and the way centralized currency and corporate capitalism were accepted as given circumstances of business, rather than inventions of particular people at a particular time... how the world became a corporation"
The Size of the Bush Tax Cuts vs. the Cost of Health Care Reform - "Tax cuts for the wealthy come before health care for the uninsured."
Health Care That Works - "Until the mid-19th century, firefighting was left mostly to a mishmash of volunteer crews and private fire insurance companies. In New York City, according to accounts in The New York Times in the 1850s and 1860s, firefighting often descended into chaos, with drunkenness and looting. So almost every country moved to what today’s health insurance lobbyists might label 'socialised firefighting'. In effect, we have a single-payer system of public fire departments... Throughout the industrialised world, there are a handful of these areas where governments fill needs better than free markets: fire protection, police work, education, postal service, libraries, health care. The United States goes along with this international trend in every area but one: health care."
Professor Paul Krugman at war with Niall Ferguson over inflation - "One of them is a 'poseur'. The other is 'patronising'. One suffers from 'verbal diarrhoea'. The other is a 'whiner'... Those accusations were slung round in an increasingly bitter public row between two of the world’s most distinguished commentators on global finance and economics, professors Paul Krugman and Niall Ferguson, of Princeton and Harvard, respectively. It started as an argument about bond prices. But last week it blew up into a row about racism, printing money, spending our way out of recession, and the fate of the global economy." [1,2]
Why the Growing Level of U.S. Debt May Not be Inflationary - "The future level of the debt in the U.S. is not a worry if we get effective health care reform (rising health care costs are the major source of projected future deficits)."

btw, labor day (American) "originated in Canada [...President Grover] Cleveland was also concerned that aligning a US labor holiday with existing international May Day celebrations would stir up negative emotions linked to the Haymarket Affair."

If Paul Krugman Was So Right

kliuless — Thu, 03 Sep 2009 20:00:24 -0800

How Did Economists Get It So Wrong? - The Great Recession was the result not only of lax regulation in Washington and reckless risk-taking on Wall Street but also of faulty theorizing in academia. Can economists learn from their mistakes? (via mr & ev) bonus :P

Government as Risk Manager
Keynesian reforms could stop us falling into more economic foxholes
On the "Course" to a New Normal
"Because I Said So..."
Too much of a very good thing
U.K. Wants Bank Buffers, Not Bonuses
Making Greed Good
Greed & The Other Seven Deadly Sins
White House to Propose Big Reserves at Banks
It's not the regulators, it's the politicians
The systemic threat posed by megabanks
Shrinking banks
All Those Arrows
Fool's Gold
The Value Every Business Needs to Create Now
What good is finance?
What Is Finance, Really?
The Nature of Modern Finance
Can We Afford Health Care Reform? We Can't Afford Not to Do It.
Why Paying for Health Care Reform Is Difficult and Essential
Health Care Lie #493: Rationing
Examining the Public Option in Health Care Reform
The Divisions in the White House Over Health-Care Reform - "hinge on Sen. Olympia Snowe"
What Leverage Do Republicans Have on Olympia Snowe?
Health Insurers vs. Big Corn? - "[If] health insurers can no longer pick and choose their clients, and throw sick people out, they will develop a much stronger interest in prevention, which is to say, in changing the way America feeds itself. When health insurers realize they will make thousands more in profits for every case of type II diabetes they can prevent, they will develop a strong interest in things like corn subsidies, local food systems, farmer's markets, school lunch, public health campaigns about soda, etc."
The Rotten Core - "Late empires are known for several things: a self-obsessed, self-serving governing class, small over-reaching wars that bankrupt the Treasury, debt that balloons until retreat from global power becomes not a choice but a necessity, and a polity unable to address reasonably any of these questions - or how the increasing corruption of the media enables them all."
$9 trillion -- what, me worry?
Obama on Bernanke - "his 'bold, persistent experimentation' has brought our economy back"

that is all!

Good enough or just cheap crap?

Harald74 — Tue, 01 Sep 2009 02:01:57 -0800

Robert Capps, Wired senior editor, has an article up called The Good Enough Revolution: When Cheap and Simple Is Just Fine. It explores what happens when an established product meets a competitor that has most of the features at fraction of the price. Think hi-fi vs MP3s, A-10 bombers vs Predator drones or landline vs Skype. From the article:

"To some, it looks like the crapification of everything. But it's really an improvement. And businesses need to get used to it, because the Good Enough revolution has only just begun."

Sometimes When You Give, You Get Back

saulgoodman — Mon, 31 Aug 2009 07:57:34 -0800

TARP investments yield 15% returns. Almost trom the start, critics characterized the TARP program that first began under the Bush administration and that continued through early this year under President Obama as a taxpayer funded giveaway, while government officials insisted it was a long-term investment program whose initial costs would eventually turn a profit as economic recovery began. Now the NY Times reports that the program has already yielded $4 billion in profits, and a separate report reveals that related Federal Reserve loan programs aimed at economic stabilization have returned $14 billion in profits.

Japan's New Day

Marisa Stole the Precious Thing — Sat, 29 Aug 2009 08:03:41 -0800

Japan's opposition party, The Democratic Party of Japan (DPJ), is projected to win a landslide victory tomorrow, ending the 52-year reign of the Liberal Democratic Party (LDP). Furthermore, according to a survey conducted by the popular Asahi Shimbun newspaper, the DPJ could win a two-thirds majority, enabling them to roll legislation through the Diet unabated. Despite the projections, the two parties are still battling hard. Washington is following these elections very closely, because of the man who could be the next prime minister, Yukio Hatoyama. In an op-ed piece for the New York Times, Hatoyama criticizes US economic and foreign policy, and says that while "the Japan-U.S. security pact will continue to be the cornerstone of Japanese diplomatic policy", that "we must continue to build frameworks for stable economic cooperation and security across the [East Asian] region", including the development of a single pan-Asian currency. In addition, Hatoyama has been vocal about his opposition to public officials visiting Yasukuni Jinja, a Shinto shrine honoring fallen Japanese soldiers, including numerous war criminals - a move that could smooth relations with China and Korea. Gerald Curtis, a Japanese politics expert who teaches at Columbia University, sums up the sea change within the Japanese electorate thusly: "The DPJ will almost certainly win the majority — without a coalition partner. This is a huge, huge change. ... The public was waiting for a chance to show their dissatisfaction, which is why they had no election, because [Shinzo] Abe, [Yasuo] Fukuda and Aso knew that they would lose. So, they put it off until the very last moment. And lo and behold, they're going to lose."

A very good article on health care economics

kliuless — Tue, 18 Aug 2009 06:40:28 -0800

How American Health Care Killed My Father After the needless death of his father, the author, a business executive, began a personal exploration of a health-care industry that for years has delivered poor service and irregular quality at astonishingly high cost. It is a system, he argues, that is not worth preserving in anything like its current form. And the health-care reform now being contemplated will not fix it. Here’s a radical solution to an agonizing problem. (via mr) BONUS -Health Care Spending and PCE -Consumer Driven Health Care Plans -4 Points on Health Care -A Public Option Isn't a Curse, or a Cure [also btw Thaler vs. Posner] -'A Plan to Swissify America' (P.Krugman) -Why We Need Health Care Reform (B.Obama) -Health 2.0 could shock the system (E.Dyson) -Mont. Clinic Aims to Deliver Top-quality Care for Less -Cleveland Clinic Chief: Lower Care Costs Must Be Focus in Reform Efforts -Healthcare lessons -The world's worst healthcare reforms

Freakanomics on used bike prices

fixedgear — Mon, 17 Aug 2009 15:10:37 -0800

Bicycle Inflation in Paradise? Freakanomics looks at used bike prices in Portland. Interesting reading.

The downside of the online gold rush – riches for some, “slavery” for most

joeclark — Thu, 06 Aug 2009 16:27:13 -0800

How the myth of Silicon Valley is really like a “gold rush.” Riches for some, “slavery” for many, says Toronto technology commentator Jesse Hirsh, who also takes aim at the ethic of waste built into Web ideology as expressed in Chris Anderson’s Free. (Video of presentation.) From the liveblog: “[Kevin] Kelly [of Wired]’s critiques sold a false mythology of a frontier where anyone can create a business plan. This mythology is that of a biological techno-utopia, a hive. Problem: There are many worker bees, but only one queen bee.... The idea of the Long Tail is a meme within the California ideology. It’s meant to engender complacency about being in the lower ranks [of] the Long Tail. It’s more of the same: A lucky few get all the cheese.”

Tyler Cowen on why it's OK to pay for sex

reenum — Wed, 22 Jul 2009 15:18:25 -0800

Tyler Cowen on why it's OK to pay for sex The rest of the debate can be found here.

These guys play rough

littlerobothead — Wed, 22 Jul 2009 09:02:26 -0800

There's no way we get all this stuff and everything is done fair and square and everyone gets treated right. A Chinese employee of Foxconn, entrusted with fourteen (maybe sixteen) prototype iPhones misplaced one before they could be shipped; what followed was his detainment and torture at the hands of company police, and his eventual suicide. Shanghaiist has confirmed the story. Fake Steve weighs in.

Expensive gasoline is good for you

acb — Wed, 22 Jul 2009 03:58:36 -0800

The author of a new book on how rising oil prices will change America makes the claims that higher gasoline prices will make the country healthier and safer. Christopher Steiner asserts that, for every $1 that gasoline prices rise, obesity rates drop by 10% (as people walk more and eat out less). As for "safer", that comes in when high gasoline prices force police out of their cruisers and onto bicycles and foot patrols, where they can interact more closely with their communities. And here is a summary of claims Steiner makes in his book about other consequences of high oil prices. Some are things that have been discussed before (inner cities becoming affluent and suburbs becoming slums, for example, fewer plastic knick-knacks and a renaissance in rail transportation), while others (such as mass migration to the south as heating homes in the north becomes prohibitively expensive) are less so. All in all, Steiner's assessment, whilst heralding radical changes, seems upbeat and entirely non-apocalyptic.