Russell Roberts's Blog, page 1527

Perry Edits Meyerson

This post from Carpe Diem's Mark Perry is too good not to reproduce here in its entirety (HT Frank Webb):

The Real Conundrum: Why the Hell Do We Care if China Manipulates Its Currency in Our Favor?

Here's a little editing fun of Harold Meyerson's article in today's Washington Post:

"This week, committees on both sides of Capitol Hill will plumb the conundrum of Chinese currency manipulation. The conundrum isn't that — or why — China is manipulating its currency: By undervaluing it, China is...

Finally, some evidence from Krugman

Paul Krugman (HT: Brad Delong, who cheers Krugman on) has been beating the drum for more government spending for a long time. And now he finally has the evidence that proves his point. The problem facing our economy isn't regime uncertainty or the dysfunctional housing market or the financial sector or government, generally. Nope. It's aggregate demand, the Achilles heel of capitalism:

I've said this before, but Catherine Rampell has a very nice chart making the point: if you ask businesses —...

The voice of reason vs. the voice of insanity

Maybe Edward DeMarco should be polishing his resume. The Washington Post reports:

The federal regulator of mortgage finance giants Fannie Mae and Freddie Mac raised concerns on Tuesday about the Obama administration's approach toward housing by questioning whether the government should continue to play a significant role in helping borrowers get home loans.

Edward J. DeMarco, acting director of the Federal Housing Finance Agency, became the first major voice within the government to express...

Escaping from Where to Where?

Here's my latest column in the Pittsburgh Tribune-Review.  It's on Cuba.

Do we need a new economics?

Paul Gregory says no. He says we just have to remember what we once knew. Very much worth reading.

Hayek and the Tea Party

Jonathan Rauch understands what makes the Tea Party powerful.

He writes in the National Journal:

Perplexed journalists keep looking for the movement's leaders, which is like asking to meet the boss of the Internet. Baffled politicians and lobbyists can't find anyone to negotiate with. "We can be hard to work with, because we're confusing," Meckler acknowledges. "We're constantly fighting against the traditional societal pressure to become a top-down organization." So why would anyone want to...

Some Links

Alberto Alesina writes in today's Wall Street Journal that cutting taxes rather than more government spending is the way to go if the wish truly is to restore vigor to the economy.  Here are his concluding paragraphs:

Europe seems to have learned the lessons of the past decades: In fact, all the countries currently adjusting their fiscal policy are focusing on spending cuts, not tax hikes. Yet fiscal policy in the U.S. will sooner or later imply higher taxes if spending is not soon...

What is to be done?

Those of us who are unimpressed with the effectiveness of using debt-financed government spending as a cure for the current state we're in are often asked, OK, so what should we do instead? Would I do nothing for the people who are unemployed?

In January of 2009, I suggested this plan for recovery. I like to think it would have done a better job than what we actually did, but there's no way of knowing. I think it's better than anything on the table now. But suppose it's not. Suppose it's...

The romance of government vs. the reality

David Brooks writes (HT: Arnold Kling):

The social fabric is fraying. Human capital is being squandered. Society is segmenting. The labor markets are ill. Wages are lagging. Inequality is increasing. The nation is overconsuming and underinnovating. China and India are surging. Not all of these challenges can be addressed by the spontaneous healing powers of the market.

Brooks wants a GOP that is open to activist government. There's only one problem. Which of those challenges Brooks lists can...

Ambiguous definitions

A lot of regressions get run using crime statistics. Maybe, just maybe, crime statistics are not so objective (HT: Damian Bickett):

For 17 months, New York police officer Adrian Schoolcraft recorded himself and his fellow officers on the job, including their supervisors ordering them to do all sorts of things police aren't supposed to do. For example, downgrading real crimes into lesser ones, so they wouldn't shop up in the crime statistics and make their precinct look bad.

The Washington Post ...