Tuesday, March 31, 2009

African bloggers, financial literacy, global regulation, securitization software, car prices, and Geithner.

African bloggers have a conference. Let's hear it for continued development in Africa! May it become quicker and more widespread.

A journalist asks Felix Salmon about the importance of financial literacy. It's probably not really important for most people, says Salmon. That may be true to an extent, but I think it may be important for people to be financially literate enough to know what our government is doing to try to fix the current situation, and whether or not it's a good fix. After all, with so many commentators on current issues, shouldn't people have an idea of how their elected officials are really doing?

I have great respect for Dani Rodrik. Sometimes I agree with him, sometimes I don't, but he always makes me think. This is a thought on global financial regulation.

One of the guys who wrote some of the software turning mortgages into bonds talks about whether or not that was a good idea. I think it's a good read. He points out that securitization isn't a bad thing if it's done well.

You think housing prices are down? Well, car prices are down too! But, that's not really new.

Geithner's job performance numbers are split. The man's got a tough job! I think that it's too early to make a call on his job performance, but I'm still glad we've got such a highly qualified guy in charge at the Department of the Treasury. He was one of the favorites to get the job originally for a good reason, I think.

Monday, March 30, 2009

Family planning, the bottom, help for Geithner, protectionism, and defaults

As history has clearly shown a number of times, economics affects family planning.

A few pieces from Calculated Risk. Orders for durable goods rose in February. Truck tonnage also rose in February. The bottom of the recession may have arrived! Not that it necessarily matters much, anyways. We'll feel the effects of the recession for quite some time.

Thankfully, Geithner may be getting some help, soon. Helen Garrett has been nominated for the Assistant Secretary for Tax Policy, Michael Barr for Assistant Secretary for Financial Institutions, and George Madison for General Counsel.

Yet another piece warning against protectionist policies, ahead of the G20 summit. I hope the world leaders get the idea.

Credit card and school loan default rates are on the rise.

Sunday, March 29, 2009

Local stuff: UTMB, HOT lanes, and employment numbers

UT-Medical Branch is re-hiring 500 workers, showing the role of expectations and high risk. Due to the risks at the time, UTMB had to lay off the workers, but now the risk has apparently passed.

Houston might be converting many of its HOV lanes to HOT lanes. You can still drive on the lanes for free if you have a passenger, but you can now pay a toll to drive on the lane if you don't. Sounds good for economic efficiency, though I always figured the point of the lanes were to encourage people to carpool, save gas, and produce less smog. I guess we're less concerned about that, now.

Relatively speaking, Houston had pretty decent employment numbers in January.

Friday, March 27, 2009

Newspapers, teaching, multilateralism, data, and the Geithner plan

There has been a bill introduced to allow newspapers file as nonprofit organizations. You know public television? Public radio? Try public newspapers. The Tax Foundation says that this may mean the end of editorials, but I don't see that happening. Public television and radio often have commentaries by people that express their opinions, so editorials may take a different form.

A community college professor gives some thoughts on teaching basic economics. Her article is well worth the read, I think. When I try to explain the concepts they're supposed to be learning, I worry that the students are sometimes missing the point, so I think this might be a good way to try to drive the essentials home.

FT provides an article on the importance of economic and political multilateralism. I think most economists see things this way as well, which makes me wonder about the economic education of political "realists."

Mark Thoma tells us that economists need better (and faster) economic data. if people expect us to have better forecasts. I suppose it makes sense to have better data as technology gets better, right? In a somewhat related post, Steve Horwitz points out that importance of looking at the right data.

And, a NYT debate on the Geithner plan. Follow along to see thoughts by Brad DeLong, Simon Johnson, Paul Krugman, and Mark Thoma. It's certainly an interesting read.

Thursday, March 26, 2009

Macro stuff

Here's a fun new tool from the Federal Reserve. It's a dynamic map that will show you a variety of national data. You can compare states, MSAs, and more.

George Waters of Illinois State talks about the current state of macroeconomics, and how we view the current recession. (link to Thoma) I think many are becoming increasingly disenchanted with macroeconomic models, and I think that includes many macroeconomists. On a recent radio interview (I believe it was on NPR), an economist described what forcasters are doing right now as guesses. In general, they try to use past similar situations to estimate what will happen, but there aren't many past situations similar to today. Surely, if it were easy, everyone would be macroeconomists.

Over at voxeu.org, Philip Lane reminds macroeconomists not to forgot global issues. Domestic fixes to the crisis that don't take into account global imbalances may just lead to another crisis. I'm less paranoid than Lane, I think, but global imbalances are always important to consider.

Friday, March 13, 2009

Minimum wages, corn subsidies, wealth and GDP, health care, and chocolate

Here's a look at the effect of increasing the minimum wage... as many would expect, there's a fair amount of job loss, and mostly among the young.

The Business Pundit says that we should stop bailing out corn. Ah, to dream...

NYT reports that household wealth has fallen by trillions of dollars. To this, I'd like to emphasize two things. First, that household wealth was inflated beforehand, anyways. Secondly, that this has little to no direct effect on GDP, since GDP is "the market value of all final goods and services produced within an economy in a given period of time" (from Mankiw's textbook). That is, the 2009 GDP does not take into account changes of market values of things produced in other periods of time, by definition. The fall in household prices just means that houses were bad investments.

Professor Reinhardt explains the bit of stimulus money that goes to comparative effectiveness analysis in health care. There is no subversive plot.

A tax on chocolate in England? Oh no! Though, I'd imagine that the demand for chocolate is probably highly elastic, meaning the burden of the tax would fall primarily on suppliers. I can't imagine cacao bean farmers are wealthy enough to take such a hit to production, but I guess it depends on the size of the tax.

Posting may be spotty next week.

Thursday, March 12, 2009

Technology, the Fed, the global recession, hiring, and trade

Lynne Kiesling has some interesting posts on smart grid technology. I'm looking forward to this stuff in the future.

Ben Bernanke says that he is glad to work at the Federal Reserve. "Economics is only useful to the extent that it helps people..."--very true.

Academic hiring is down, unsurprisingly. People tend to think lawyers can still make money, but apparently law firms are laying off lawyers, too.

U.S. trade deregulation provided for around 25% of trade growth. Seem obvious? Well, maybe not to people who are advocating protectionist policies.

Global Recession Status map. On the other hand, Chavez says that the global recession has not affected Venezuela.

Another thought on the unit-root-vs-trend-stationary Krugram-Mankiw debate, this time from David Altig at the Federal Reserve Bank of Atlanta.

Research on the question: Does Money Bring Happiness? Some research says yes!

James Kwak provides Nationalization for Beginners.

Dani Rodrik on the problem with economists. He says we need to use multiple models, not just the one we believe.

Geithner starts to get some help. Geithner has been scrambling to get stuff done.

The IMF reports the costs of the financial crisis.

Tuesday, March 10, 2009

Buy American, recession woes, wine, African buses, and NCAA basketball

An article from the Detroit Free Press explaining why "Buy American" sentiments are bad for the economy.

Is death a victim of the recession? Eight states are considering getting rid of the death penalty, due to cost.

The wine competition at the Houston Rodeo brought in much less money than last year for the winning wines. That's why we call them luxury goods! The money goes to fund Texas college scholarships, so there's yet another example of education getting tougher in a recession.

Cote D'Ivoire is now producing buses, aimed at Africans. African transportation systems are known for their terrible buses, so this is meant to fix that. The post I link to says, "Not only are better buses now rolling out onto the roads of western Africa, Cote D'Ivoire is becoming better because of its entrepreneurial drive." However, I wonder if that "entrepreneurial drive" was already there, but now there's enough capital or credit available to justify the venture.

I'm surprised by this article, warning the Fed to not be so expansionary. Really? I think most are agreed that recession-fighting is more important, right now, than inflation-fighting. After all, we're still concerned about whether or not our same jobs will still be around, as the middle class shrinks.

NCAA basketball teams tend to lose a lot of money, with the median team having net loses of over $850,000. I wonder what incentives there are for universities to hold on to get basketball teams, or to hold on to them if they have them.

Monday, March 9, 2009

Unemployment rate, auto industry, Asia, morality, and business cycles

The unemployment rate is 8.1% nationwide, but in Houston it's--erm--"only" up to 6.5%.

James Hamilton at Econbrowser shows us some numbers on the auto industry. It looks like the industry has been faltering since June, those numbers are way down. I'm reminded of James Joyner's piece this past week celebrating the exit of manufacturing jobs. Still, I get the idea that the numbers are soft--domestic and import numbers are down. People have to start buying cars again eventually.

Sachs writes a Letter to the Editor at NYT, disagreeing with Krugman. According to Sachs, the global crisis isn't Asia's fault.

Here's an interesting discussion on the claim that morality is analogous to economics. I've been thinking about similar issues on and off--I even saw a book comparing economic and Christian principles. Although, I guess it isn't surprising that there are similarities in what different groups say will make us better off.

David Beckworth provides an industry-by-industry look at the employment numbers during the recession. Some of them have actually been growing! I don't think it's much of a surprise, but it's still worth a look.

CalculatedRisk talks about business cycle indicators, from lead to lag.

Friday, March 6, 2009

Time v money, manufacturing jobs, future cities, R&D, advertising, recessions, Economics degrees, and Latin American data

A study shows that advertisements that reference time are more appealing than those that reference money. Spending time with something is more appealing than spending money on something. On the subject of consumer appeal, prices that end in 9 are also more attractive, the NYT reports.

James Joyner won't miss manufacturing jobs. Good riddance! I think this similar sort of discussion occurs whenever we lose jobs in certain sectors... probably in any country.

Ryan Hahn talks about cities of the future, sparked by Tim Harford. In my undergraduate years, I spoke in class of future cities as well. When the world becomes "too crowded," we'll just start building up or down. Massive towers of people and communities. Worried about land for food? The towers will have greenhouses. Worried about energy? Cover the towers in solar panels (there are certainly a myriad of energy solutions). This, of course, is an imagination of the extremely distant future, forced into existance by strong price incentives.

A discussion at the Angry Bear about R&D spending in the new budget. Technological progress drives economies, so I hope the money goes to good projects.

Southwest Airlines has sold adverising space to Sports Illustrated--on the side of their planes. This has got to be a marketing gimmick of some sort. Certainly, the people inside the plane can't see the advertisement, and you can't really see the side of a plane very well while it's in flight. You probably can't even see it from inside the airport! The only time this gets viewed is by the very limited number of people who can see the plane as it's coming in our leaving.

More on the recession: The NY Fed predicts an end by the end of the year, based on historical empirical evidence. Managers are more likely to take a pay cut, but lower workers have a harder time finding a replacement job. Menzie Chinn weighs in on the Mankiw-Krugman-DeLong unit root v trend stationary debate. I thought the debate got a little too personal when Mankiw dared Krugman to wager some of his Nobel money on the issue. As if there would even be a clear end to the data! Robert Waldmann laments on the implausibility of macroeconomic arguments. The Everyday Economist quotes anti-New-Keynesians.

The SCSU Scholars comment on how awesome a major Economics is. I agree it's pretty awesome, though I'd agrue that a major in Math gives you more options than Economics does (though, Math may be the only major which gives more career options than Math). I've been thinking that a restructuring of Economics programs may be a good idea, though. At least at my university, I think there should be more of a focus on political science and math. We give the students too many pure-economics classes to take, and they don't get much insight into how economics plays in the real world and what economics is like at the professional level.

Anyways, here's some great Latin American and Caribbean data.

Thursday, March 5, 2009

Houston Rodeo, ESE, marginal taxes, protectionism, and popular kids

The Houston rodeo is feeling the effects of the recession.

There is now an Economics Search Engine. It sounds like a very useful thing, but I haven't tried it out yet. (I'm having trouble with the link provided, so maybe you'll also have better luck with this one)

Jonathan Chait has some fun with people who believe they'll be better off by keeping their incomes under $250k.

A couple of World Bankers worry that trade protectionism is rising. I hope any trend doesn't last. (Edit: another Voxeu.org article on a similar subject, but a bit more broad)

Popular kids make more money, says some research. An extra two percent for every extra friend. I wonder what Bill Gates would say about this.

Wednesday, March 4, 2009

Blogging, eating, and assorted stuff

Another interesting piece on blogging in economics from the Economist. Departments are typically measure prestige in their research output, but blogging reaches more people faster. Also, schools may have a comparative advantage in blogging rather than in research.

Should I be less amused when bankers are eating at McDonald's?

Contrary to what might be implied in Michael Mandel's article, Bloomberg reports that Texans will not be eating out less.

James Hamilton at Econbrowser attempts to put a trillion dollars in perspective for us. He reports that the IRS collected a trillion dollars in income taxes in 2006. So, imagine having to pay that much in income taxes.

I'm a sucker for silly. This post from the World Bank explains to us why we shouldn't fear ghosts. Thanks for clearing that up for us, Ryan Hahn. Ghostly revenge makes me feel safer.

The Secretary of Energy predicts rising demand for oil over the next two decades.

Houston is apparently the second largest home-building market in the nation. Katy's doing pretty well!

Tuesday, March 3, 2009

Business as usual

Michael Mandel reports that, during the recession, we're consuming less food. Strictly speaking, we're spending less money on food. This probably means that people are buying less expensive food, but you wouldn't think it's the second biggest cost cut we're making--after all, everyone has to eat.

Ed Glaeser argues that we shouldn't try to help the auto industry. This is a common economic argument, actually. After all, if a company is going under--particularly a large one--there's probably a good reason for it. They're somehow not efficient enough to survive the market, and helping them out is a waste of money.

How's this for developmental news? Over 60% of the world now uses cell phones. I expect everyone around me to have a cell phone, it's strange to me that almost 40% of people don't use cell phones. And, developed nations account for 66% of cell phone usage. That's even more weird to me!

Intel wants to push its Atom processor (which currently runs my netbook) into other devices. Hooray for low cost processors! I love it when innovation and competition drive down prices.

Monday, March 2, 2009

Romer on the recession

Christina Romer with a piece defending (pdf) her position on the stimulus plan. It seems like she believes in a larger than research indicates, for one. It's an interesting ten-page read that also covers why they decided to stimulate aggregate demand directly, why it is directed at a large number of programs, and why there are programs included that people don't traditionally associate with needing stimulus (I hear that last issue talked about a lot). I'm impressed with the fact that she put her reasoning under public scrutiny, as if she were part of the public discourse. It's certainly a breath of fresh air, I think.

In that same vein, I really like the fact that there are so many government blogs: CBO, OMB, Whitehouse, and more, I'm sure.

Robert Waldeman talks about the value that is left in the IS-LM model.