by Tyler Cowen
on February 6, 2009 at 7:22 am
1. Paul Romer on creating good banks.
2. Another application of Modigliani-Miller?
3. How fiscal stimulus fared in Japan.
4. More economic advisers for Obama, including Tyson and Feldstein on a council.
5. What is conservatism?
6. Abandoned cars in Dubai: a bad sign.
Re: Obama’s new economic advisors… The stimulus package (or at least half of it) should just set aside up to $1 trillion to be used at the discretion of the Obama and his advisory council. Does anyone, left or right, doubt that if Obama’s economic think tank were left unfettered by congress they would be able to come up with the best plan possible? Would it not also be infinitely politically easier than actually getting congress to pass the best plan possible?
Dr. Cowen: do you perhaps consider yourself a “conservative of doubt” in Andrew Sullivan’s terminology?
About the abandoned cars in Dubai bit. there is a salient fact that is not mentioned. In 2008 the UAE government instituted a new law designed to get old cars off the road, whereby any car older than ten years cannot be re-registered by a new owner. That is, if you own an old car, you can continue to drive and register it, but a new owner cannot. Thus, cars over 10 years old suddently have a resale value of near zero – the only people you can sell them to are dealers who specialize in exporting them to places like Iraq or Uzbekistan.
So, if your stint in Dubai is up, and you have an older car (and a lot of the Indian and Pakistani expats did have cars this old), leaving it at the airport is the sensible thing to do, because going through the process of selling it for next to nothing and then renting a car for your last few days is a bigger PITA.
RE: Japan fiscal stimulus
I really liked thesweline in the NYT article:
Economists tend to divide into two camps on the question of Japan’s infrastructure spending: those, many of them Americans like Mr. Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste.
Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. ”
So liberal economists in the US think it was great. Everyone in Japan, economist or average joe, thinks it was a huge waste and detrimental.
This sounds like a classic example of Soviet glorifiers in the US during the Cold War. Everyone in Soviet Russia knew how horrible it was, but liberal American thinkers rained praises on Soviet government and its public works projects.
I’m glad Americans have decided that Japan succeeded when even Japan doesn’t believe it did.
The “stimulus” question comes down to cost versus benefit. The benefits (and it remains to be seen how much there will be) are short-term, the costs (due to debt funding) are long-term.
Even if a stimulus bill could shave 1% off of unemployment rates for the next three years (and that is what Mr. Obama’s people Romer and Bernstein are saying), is it worth a trillion in additional debt?
Germany and France spent years at 10% unemployment, and Romer and Bernstein only think without the stimulus that US unemployment will be at 9%.
Here is the study:
You people, yes, YOU PEOPLE have been brainwahsed for so long that you no longer know what reality is. You forgot what independance is. you apparently dont mind when the local police have a hitler style CHECKpoint held on the Fourth of july to throw it in your face.
Have you also not noticed the plethora of hitler television shows on the history channel like he is someone to laud?
BIG GOVERNMENT IS NEVER THE ANSWER. Unless the question is how to keep the poeple opressed.
Why should fred the car lover, (once and still an american past time) not be allowed to own what HE considers a classic vehicle simply because 99% of the rest of the world does not?
we are NOT a democracy. we are a REPUBLIC.
we DID NOT build a country where 51% can control 49% or 99% control 1%.
THATS NOT FREEDOM!
and if you havent noticed, we are not only NOT even a democracy, we have become a dictatorship.
when everything is illegal, nothing is illegal.
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