Microsoft has been trying to join powers with Yahoo for some time to try to beat market juggernaut Google--Microsoft apparently didn't offer Yahoo a good enough deal, which opened the door for Google to spread its influence even farther, and to partner with Yahoo. Interesting how joining with Google could possibly benefit both Yahoo and Google (at least, they can find an agreeable partnership for now).
More news about the economy doing better (rather than weakening, maybe stabilization); also economists seem to back up the Fed. Inflation is supposed to dip to 2.4% rather than 3.9%, which is a mixed sign. Before people start worrying too much (these numbers have been going up and down, mind you), keep in mind that the historical average is 3.42%--we're relatively close to that.
Lehman Bros reported their first negative quarter in its history, I believe, and people act like the world is ending. It likely doesn't warrant firings, but if that's what keeps the investors happy...
I always find strikes interesting, because of the economic situation that drives people to strike, and the economic consequences following the strike. Recently, in Spain, the shellfish industry is affected by striking lorry drivers.
Looks like the Fed is right to target inflation. Note Houston isn't too bad, according to the graphic. Beware Dallas.
Friday, June 13, 2008
Wednesday, June 11, 2008
HISD policy
According to this recent article, five years ago HISD started charging out-of-district students a tuition for enrolling in HISD schools. Did the decline in enrollment really surprise them? Due to the decline in enrollment, HISD started losing money, and they're now considering getting rid of the tuition to HISD's schools.
First of all, thank goodness they're lowering barriers to education. I highly suspect that when this policy was passed five years ago, long term economics benefits were not considered--that is, making education more affordable for children now will allow them to contribute more to the economy in the future. There are high pay-offs to lowering barriers to education, but they take a pretty long time to come. Still, as a general policy, charging such tuitions at the primary and secondary education levels is probably a bad idea.
The first issue that comes to mind, however, is that there may be free riders from other districts. That is, other districts may severely lessen funding to their educational programs, and lessen their taxes, if they know their students are going to HISD for their schooling. The possible effect? Cost of living in surrounding areas goes further down, those surrounding areas reap the benefits of higher population growth (and the longer term benefits of an education populace), and depending on the elasticity they may still come out ahead financially.
Then again, transportation is a big issue, unless the surrounding areas use their educational funding to transport their children across district lines.
Side notes: The article refers to HISD schools as "elite." Pardon my skepticism. And, when evaluating the unknowns of what will happen with the policy (the article mentions a board member worried that neighboring districts will send their problem children to HISD), why not just look at the numbers from recent history (five years prior)? Look at the number or percentage of problem children (however the board member my define that term; whatever she's worried about) before and after the previous policy change. There may be none, but if there is, find out how much those extra problem children cost the district, and do a basic cost-benefit analysis. I just hope they consider longer term factors as well.
First of all, thank goodness they're lowering barriers to education. I highly suspect that when this policy was passed five years ago, long term economics benefits were not considered--that is, making education more affordable for children now will allow them to contribute more to the economy in the future. There are high pay-offs to lowering barriers to education, but they take a pretty long time to come. Still, as a general policy, charging such tuitions at the primary and secondary education levels is probably a bad idea.
The first issue that comes to mind, however, is that there may be free riders from other districts. That is, other districts may severely lessen funding to their educational programs, and lessen their taxes, if they know their students are going to HISD for their schooling. The possible effect? Cost of living in surrounding areas goes further down, those surrounding areas reap the benefits of higher population growth (and the longer term benefits of an education populace), and depending on the elasticity they may still come out ahead financially.
Then again, transportation is a big issue, unless the surrounding areas use their educational funding to transport their children across district lines.
Side notes: The article refers to HISD schools as "elite." Pardon my skepticism. And, when evaluating the unknowns of what will happen with the policy (the article mentions a board member worried that neighboring districts will send their problem children to HISD), why not just look at the numbers from recent history (five years prior)? Look at the number or percentage of problem children (however the board member my define that term; whatever she's worried about) before and after the previous policy change. There may be none, but if there is, find out how much those extra problem children cost the district, and do a basic cost-benefit analysis. I just hope they consider longer term factors as well.
Tuesday, June 10, 2008
Texas-related news
The Trans-Texas Corridor looks like it may get rerouted to go through Houston. As traffic is a big issue in Houston--and, a key part of our mayor's platform--I don't know if the benefit to the local market will outweigh the cost of traffic, but I'm hoping that it'd go through Grand Parkway rather than down 59 or 610.
I like the focus on commuter rails in Houston--surely a result of gas prices. It'd be nice to have a low energy-consumption society, as Paul Krugman depicts in a previously mentioned article, but I previously worried that Houston was going about this the wrong way. Dallas has a great system, with rails that parallel major highways, and according to this news report, Houston is looking to do the same. If this gets off the ground, I may not complain as much about a Trans-Texas Corridor through the city.
The IRF predicted that Houston, so far lightly hit by the credit crunch, will be hit much harder later in the year. The IRF is an essential resource in Houston, and it'd be nice if it was expanded.
Also, I would like to see statistics showing the efficacy of teacher bonus incentives that prompt such news articles regarding HISD as this.
Still, the Texas economy as a whole seems to be doing fairly decently. Fifth in the country? Not too bad. Besides that, Kiplinger says that Houston is the best city to live in the United States, with Austin also making the top 10.
In personal news, I recently got my BS in Economics, and am hoping to soon start graduate work. That's my excuse for not updating this blog very often. Maybe I'll ask Dr. Barton Smith of the IRF if I can work with him in his regional work.
I like the focus on commuter rails in Houston--surely a result of gas prices. It'd be nice to have a low energy-consumption society, as Paul Krugman depicts in a previously mentioned article, but I previously worried that Houston was going about this the wrong way. Dallas has a great system, with rails that parallel major highways, and according to this news report, Houston is looking to do the same. If this gets off the ground, I may not complain as much about a Trans-Texas Corridor through the city.
The IRF predicted that Houston, so far lightly hit by the credit crunch, will be hit much harder later in the year. The IRF is an essential resource in Houston, and it'd be nice if it was expanded.
Also, I would like to see statistics showing the efficacy of teacher bonus incentives that prompt such news articles regarding HISD as this.
Still, the Texas economy as a whole seems to be doing fairly decently. Fifth in the country? Not too bad. Besides that, Kiplinger says that Houston is the best city to live in the United States, with Austin also making the top 10.
In personal news, I recently got my BS in Economics, and am hoping to soon start graduate work. That's my excuse for not updating this blog very often. Maybe I'll ask Dr. Barton Smith of the IRF if I can work with him in his regional work.
Interesting news.
I think this is an interesting news bit that won't get enough air time, but the EU antitrust chief is apparently a fan of open standards. While he may push for open standards, the statement probably is not going to have much of an effect on actual business practices. Still, the more people who are aware of open options, the better.
I predicted before that the recession, if there was one, ended at least a month ago (not that we're recovering already, but we're probably in a trough). It's worth noting, though, that while businesses may be bouncing back or adjusting, the adjustment period is the part of the cycle that is most painful on the population. We'll feel the effects of the recession for maybe six to nine months after the recession is over (again, the numbers are my prediction). Some evidence is recently provided by Paul Krugman in his blog. And, some evidence for why I think we're in a trough rather than a recession (this is not nearly exhaustive): positive growth (more recently it's been adjusted up, too) and strong or seemingly unaffected production. And, according to recent news, the Fed and gold/commodity prices might agree with me. Note that I'm not saying the economy is doing well, just that the term 'recession' is not an accurate description of the current economy.
And, some interesting oil-related articles. Krugman, NYT, Mankiw, Forbes. I find that Forbes article particularly interesting because it mentions that Bernanke's implication that rates will rise in the future has strengthened the dollar, which in turn has lowered the cost of oil.
I thought this was interesting: Economists and their investments. They're apparently not bad.
Lastly, can I talk about economics and not politics? Yes, but it's more difficult when we're so close to elections. I'll just mention that I like Obama's economic advising staff, and it just got a boost. Obama should consider himself lucky, I think, and if this sort of thing was more publicized, Obama would have the edge on economic policy issues. Not that presidents have much control over that sort of thing, but it's one of those things people talk about.
Edit: Looks a little more definitive that Bernanke agrees with me.
I predicted before that the recession, if there was one, ended at least a month ago (not that we're recovering already, but we're probably in a trough). It's worth noting, though, that while businesses may be bouncing back or adjusting, the adjustment period is the part of the cycle that is most painful on the population. We'll feel the effects of the recession for maybe six to nine months after the recession is over (again, the numbers are my prediction). Some evidence is recently provided by Paul Krugman in his blog. And, some evidence for why I think we're in a trough rather than a recession (this is not nearly exhaustive): positive growth (more recently it's been adjusted up, too) and strong or seemingly unaffected production. And, according to recent news, the Fed and gold/commodity prices might agree with me. Note that I'm not saying the economy is doing well, just that the term 'recession' is not an accurate description of the current economy.
And, some interesting oil-related articles. Krugman, NYT, Mankiw, Forbes. I find that Forbes article particularly interesting because it mentions that Bernanke's implication that rates will rise in the future has strengthened the dollar, which in turn has lowered the cost of oil.
I thought this was interesting: Economists and their investments. They're apparently not bad.
Lastly, can I talk about economics and not politics? Yes, but it's more difficult when we're so close to elections. I'll just mention that I like Obama's economic advising staff, and it just got a boost. Obama should consider himself lucky, I think, and if this sort of thing was more publicized, Obama would have the edge on economic policy issues. Not that presidents have much control over that sort of thing, but it's one of those things people talk about.
Edit: Looks a little more definitive that Bernanke agrees with me.
Wednesday, June 20, 2007
Venezuelan inefficiencies
Some people are excited Venezuela is starting to make their own computers and supply their own food.
Did anyone ever stop to wonder why Venezuela didn't do this before? I can tell you there's a very good reason. It wasn't economically efficient. If making Venezuelan computers and food costs more than importing them, then entering those markets is bad for the Venezuelan economy.
Moreover, if the prices for such goods are being kept artificially low via government subsidies, then it's doubly bad because consumers are paying to have lower prices, whether they buy the goods or not. That means everyone's real income is dropping even more than it normally would with just the inflation due to the increase of currency into the market because of the government making the Venezuelan central bank print more money.
Small wonder there's yet another strike.
Regardless, the price ceilings installed by Chavez are making shortages of many staple goods in Venezuela.
Did anyone ever stop to wonder why Venezuela didn't do this before? I can tell you there's a very good reason. It wasn't economically efficient. If making Venezuelan computers and food costs more than importing them, then entering those markets is bad for the Venezuelan economy.
Moreover, if the prices for such goods are being kept artificially low via government subsidies, then it's doubly bad because consumers are paying to have lower prices, whether they buy the goods or not. That means everyone's real income is dropping even more than it normally would with just the inflation due to the increase of currency into the market because of the government making the Venezuelan central bank print more money.
Small wonder there's yet another strike.
Regardless, the price ceilings installed by Chavez are making shortages of many staple goods in Venezuela.
Saturday, May 5, 2007
Our next president
No, I'm not going to make any predictions, nor am I going to laud my favorite candidate.
I met two economists today, and we got into an interesting discussion. Eventually, they asked me the question, "Should our next president be a monetarist or a fiscalist?"
Caught off guard, I offered a throw-away answer, a joke. They chuckled. But the question isn't so easily answered. The terminology was easy enough to see through--should our next president try to use monetary policy or fiscal policy to keep the economy on its feet?
The question, of course, is inherently flawed. The president does not have direct control over either set of policies. Monetary policy is controlled by the Federal Reserve, and fiscal policy is the domain of congress. That is, of course, academic, and avoid the issue. Regardless, the president has sway--potentially strong sway--over both organizations, and thusly the policy it produces. Still: should our government try to use fiscal policy or monetary policy to keep our economy strong?
The answer I ended up going with was a monetarist. It's a good answer, and I think I want to stick with it. In the long run, there is evidence to show that fiscal policy has a minimal effect on the economy. That, in the long run, it's all a wash. So, monetary policy is the way to go, and thus was the support for my answer. Solid support, and the couple I met showed their approval with smiles and nods. I think we all made a fatal assumption, though: that our next president would know how to properly use said policy wisely. Maybe a fiscalist president is a safer bet for the country.
I haven't taken the time to do the research, but I wouldn't be surprised if we've never had a president with a degree with Economics.
I know, your faces are filled with shock.
This leads to a question I've been pondering: why is fiscal policy so weak? Shouldn't it make a difference where billions of our dollars are going every year?
The answer is, of course, yes.
So what am I getting at? Over the long run, our politicians go back and forth between policies. Sometimes it's a Democrat running things, other times it's a Republican, and it's certainly never the same. Back and forth, over time, it's a wash. A post-1900s president with nothing but good economic policy is hard to find, and he'd also be pretty unpopular. Go figure. More than that, most politicians (and congressmen) don't know anything about economics at all. Monetary policy is a different story. They, at least, have some training in their field. More than that, governors of the Fed tend to last for a pretty long time. Fed governors have a pretty decent track record past the Great Depression. Congress, on the other hand, is notorious for horrendous fiscal policy on all sides of the political sphere.
If the controllers of fiscal policy were not only educated, but rigorously tested in their fields and tenured (that is, they don't have to worry about politics as much), then fiscal policy would probably be much stronger. Moreover, the strength would probably lead to it making a difference and helping the economy out.
A novel idea, to be sure.
So, as it stands, I'm for a monetarist president, based on the overly optimistic assumption that the president will know what he's doing. Would a fiscalist president help? It would to some extent, though congress has too much power to let a fiscalist president have too good a time.
My initial response, though, was probably the best.
"We just need any economist."
I met two economists today, and we got into an interesting discussion. Eventually, they asked me the question, "Should our next president be a monetarist or a fiscalist?"
Caught off guard, I offered a throw-away answer, a joke. They chuckled. But the question isn't so easily answered. The terminology was easy enough to see through--should our next president try to use monetary policy or fiscal policy to keep the economy on its feet?
The question, of course, is inherently flawed. The president does not have direct control over either set of policies. Monetary policy is controlled by the Federal Reserve, and fiscal policy is the domain of congress. That is, of course, academic, and avoid the issue. Regardless, the president has sway--potentially strong sway--over both organizations, and thusly the policy it produces. Still: should our government try to use fiscal policy or monetary policy to keep our economy strong?
The answer I ended up going with was a monetarist. It's a good answer, and I think I want to stick with it. In the long run, there is evidence to show that fiscal policy has a minimal effect on the economy. That, in the long run, it's all a wash. So, monetary policy is the way to go, and thus was the support for my answer. Solid support, and the couple I met showed their approval with smiles and nods. I think we all made a fatal assumption, though: that our next president would know how to properly use said policy wisely. Maybe a fiscalist president is a safer bet for the country.
I haven't taken the time to do the research, but I wouldn't be surprised if we've never had a president with a degree with Economics.
I know, your faces are filled with shock.
This leads to a question I've been pondering: why is fiscal policy so weak? Shouldn't it make a difference where billions of our dollars are going every year?
The answer is, of course, yes.
So what am I getting at? Over the long run, our politicians go back and forth between policies. Sometimes it's a Democrat running things, other times it's a Republican, and it's certainly never the same. Back and forth, over time, it's a wash. A post-1900s president with nothing but good economic policy is hard to find, and he'd also be pretty unpopular. Go figure. More than that, most politicians (and congressmen) don't know anything about economics at all. Monetary policy is a different story. They, at least, have some training in their field. More than that, governors of the Fed tend to last for a pretty long time. Fed governors have a pretty decent track record past the Great Depression. Congress, on the other hand, is notorious for horrendous fiscal policy on all sides of the political sphere.
If the controllers of fiscal policy were not only educated, but rigorously tested in their fields and tenured (that is, they don't have to worry about politics as much), then fiscal policy would probably be much stronger. Moreover, the strength would probably lead to it making a difference and helping the economy out.
A novel idea, to be sure.
So, as it stands, I'm for a monetarist president, based on the overly optimistic assumption that the president will know what he's doing. Would a fiscalist president help? It would to some extent, though congress has too much power to let a fiscalist president have too good a time.
My initial response, though, was probably the best.
"We just need any economist."
Tuesday, April 24, 2007
First post
My tastes are pretty diverse--this blog could end up being a collection of thoughts of Economics, politics, games, or a variety of other things. We'll see where it leans.
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