Home ownership and the financial crisis

In the Wall Street Journal, an Australian says that not everyone should own a home, and explains the link between owning a home and the current financial crisis. She brings up a very valid point, and it's certainly worth a read. A lot of economists, in analyzing the financial crisis, having been showing rent-to-own ratios (or whatever term they happen to use) from the housing industry--this is very likely what's at the heart of those graphs. (h/t Mankiw)

Moving onwards.

I've created a page on my website that includes links to some of the best commentary about the financial crisis around. With so much opinions on the matter, it's difficult to keep up with it all, difficult to figure out what's useful, and it kind of crowds out other interesting pieces of information. I'll keep that page updated with information or links to information, and try to keep this blog for other stuff (though, chances are there will be interesting financial crisis news I'll want to mention on here as well).

Robert Waldmann, on the Angry Bear, refutes the claims of the previously mentioned physicist. While Waldmann brings up good points, I don't think he refutes all of the claims with satisfaction. In a similar vein, a University of Houston physicist writes "What Economists should learn from Econophysics."

Now for a few links from Dani Rodrik. He's a Harvard professor specializing in developmental issues. He points to a useful site for development data. But, he's sometimes silly, such as linking this economics rap (I'm kind of impressed). He also sometimes takes on fellow Harvard professor Greg Mankiw. He also has a number of posts pointing out that subsidies can lower prices, not raise them (depending on whether the country is a net importer or a net exporter). MyC4 looks like a Kiva-type site. That's good stuff. And, a ranking of econoblogs, updated with data from the past 90 days. The other common ranking I knew of is here.

Here is a video archive of London School of Economics lectures. Nice stuff. I'll eventually make a webpage with economics podcasts and videos.

Phil Izzo at the Wall Street Journal tells us that most lawmakers don't have economic educations. Well, I think we all knew that already, but it's particularly pertinent when they're trying to fix a financial crisis.

It's interesting to note the net present value of a JD. I wish I could also find the study that shows the incidence of JDs in various countries.

I Bits is an interesting blog, and Laura Holson tells us that wireless broadband boosts economies.

Lastly, a couple of Slate articles I meant to post on here a long time ago. A discussion about automobile subsidies, and a commentary on Obama's law exams he used to give.

Enjoy!

Some recommended articles, not just about the financial crisis.

I'm not very familiar with Capital Chronicle, but they have an interesting article of some compiled for and against arguments of the original Paulson Plan. Though it failed, I think it's important to know why everyone wasn't gung ho about it.

While it didn't make huge news, the Fed pumped $630 billion dollars into the economy. Let's hope that has a positive effect and that it doesn't end up hurting the Fed.

A physicist makes the case for new models of economics, such as computer modeling as opposed to mathematical modeling.

You think you pay a lot in taxes? In the United States, taxes rates used to get above 90% for a pretty long time. Those weren't necessarily bad times, either.

Political Calculations points out that stocks are still doing okay--there hasn't been a collapse. We're not in panic mode, despite some pretty strong setbacks.

A look at price increases in New York City over the past 40 years. It seems quite interesting, at least. Prices for food went up less than I expected.

Professor Hal Varian makes the case that piracy doesn't kill an economy, it just requires different business models. Rather, he made the case four years ago but more people still need to know.

Dean Baker points out that the stock market is not the economy. A lot of people have been freaking out about stocks lately.

UPDATE: I have a bunch of these things, so there'll probably be more updates to this thread.

Steve Sailer tells why minority lending didn't contribute to this mess (I've heard people say such government regulations and pressure are the original source). He also provides some interesting background information.

And, another compilation of blurbs from pundits.

At Marginal Revolution, they have a lot of interesting commentary. These from Tyler Cowen: Best and Worse Case Scenarios, his summary on the crisis, he points out that the FDIC coming into the picture is a brilliant idea (one that should've been thought of earlier, maybe), and he's my original source of the minority lending issue. Oh, and he also points to a new blog by Chicago economist Casey Mulligan, with some interesting but wordy commentary. He could use some better formatting too.

The economy and presidential politics according to Dilbert.

Well, not exactly. Scott Adams, creator of Dilbert, polled AEA economists.

The CNN report.
Adams posts about it on his blog. 1, 2.

The gist? Economists favor Obama on the majority of issues. Also, economists tend to be Democrats, though Independent economists also favor Obama.

I'm not surprised Education is the top issue for economists (I'm sure, that most AEA economists work in academia is a factor), but I am surprised that number two is Health Care. Do we have a lot of geriatric economists? I would have thought international trade, energy, and innovation would be bigger issues for economists.

Still, interesting stuff.

Houston: We're so great.

According to the Department of Labor, Houston has seen the second strongest job growth in the past 12 months. That's really good!

And, if you weren't impressed by that, there's a new book out to tell people why Houston's great. I wonder how widely it'll be distributed.

There are apparently projects to make the city more green, too, at affordable prices. Interesting!

In other news, ConocoPhillips is getting out of retail gas.

Economics is all about how everything is linked to everything else. If you cut taxes for the poor, they can more easily afford education, meaning a more educated populous, meaning a higher skilled workforce, and thusly higher GDP (just as an example). Hurricane Gustav may have hurt parts of Louisiana, but it's also affected the shrimping industry.

Some side thoughts.

Professor Brad DeLong asks why universities still have large lectures. My contribution: professors don't feel textbooks do an adequate enough job of explaining material. This is partly due to limited space in textbooks, which are a function of production costs. Authors have to find a balance between precision and clarity in the span of 800 pages. However, online textbooks don't have this restriction. An online textbook could be written to be very clear, with hyperlinks to rigorous mathematical proofs, or somesuch. Paradigms change slowly, though.

Bianaoh points me to the Dataverse Network, which seeks to make data and its analysis more accessible, while preserving credit. It strikes me as a great idea, and I hope to be able to use such tools in the future.

Cartoonist Scott Adams tells people what economists are good for. Convincing the public of anything unpopular is an uphill battle, Scott.

Lastly, something more related to the current economy. Current numbers with an historical perspective. The message: things have been worse, and we're still around. Cheer up, people.

Cities, broadband, and globalization

This should surprise no one. As cities grow more dense and traffic gets worse, people turn to closer-to-home solutions for shopping. Sprawling cities get shopping centers, close to home, that support the majority of local shoppers' needs. It, of course, makes perfect sense. Some places even have everything self-contained in single, massive buildings--living space, work, and shopping all in one.

Have you ever been worried that municipal politicians are wasting your money? It happens at every level of government. How's that for dead weight loss?

Google talks about municipal broadband. As I said in my other blog, Houston's working on it! Apparently, other cities aren't having success, though.

PBS has a neat web page on globalization, though the economist in me always wants more data.