Results for “age of em” 17234 found
Would Idaho have more people if it were a separate country?
Call me silly but I think about questions like this. It's a big state with only about 1.5 million people, even though it is the only place with six pointed star garnets (refined here). Much of the state is beautiful.
Imagine the counterfactual that, in 1846, when the U.S. and Great Britain resolved the border, one part of the area went its own way. Today an independent Idaho would probably a) be more "right wing" than the U.S. as a whole, and b) free ride upon U.S.-provided public goods, such as national defense. A federal Idaho government might be more concerned with boosting tax revenues (it would be full residual claimant) than is the current state-level government. All those factors would militate in favor of population increase. Most of all, I have the odd (Bayesian?) notion that since it would look and feel like an underpopulated country, more people would flow in.
On the other hand Idaho would face the risk of trade barriers and its legal order might be less secure than for the U.S. as a whole. The prospect of mobility barriers could either keep people in the area or out of it.
Would the place still be called "Idaho"? I doubt it. Might the town of Nampa — #2 in the state — be much better known to the world at large? I think so.
Does EU accession add or drain people from its smaller units, such as Slovakia and Estonia? There's much at stake here, yet governments sign on to many agreements without thinking about the long-term consequences for their populations, whether pro or con.
Note: The comments section on this post is not for rehashing standard debates over immigration.
Managing the Fed’s new balance sheet
James Hamilton writes:
I recommend instead that the Fed should be buying Treasury Inflation-Protected Securities in the current situation. Tim Iacono
says that’s like the Mafia buying “protection” from itself. But my
point is that TIPS represent an asset that would gain in value at a
time the Fed needs to sell them, meaning that the logistical ability of
the Fed to drain reserves quickly in such circumstances is without
question.
Read his whole post, which ranges more broadly than this quotation would indicate. It’s one of the best blog posts written this year. Don’t forget this crystal clear passage:
A second concern I have with the new Fed balance sheet is that it has
seriously compromised the independence of the central bank. To my
knowledge, every hyperinflation in history has had two key ingredients:
(1) budget deficits that could not be resolved politically, and (2) a
central bank that assumed the obligations that the fiscal authority
could not.
I certainly would not predict hyperinflation, but we could be in for some serious contractionary monetary policy in the next five years.
Is there a big gain to keeping banks small?
I agree with Kevin Drum:
But to me it still has the flavor of a solution that's clear,
simple, and wrong. After all, Bear Stearns was a quarter the size of
Citigroup, and it was considered too big to fail. So just what would
the limit be on bank size? $500 billion in assets? $200 billion? Can
a country the size of the United States even have nationwide banks with
limits like that? And what happens the next time around, when all
these smallish banks overleverage themselves and collapse en masse?
Are we any better off than we are with a few big banks failing?
The whole post is worth reading, but I have a feeling that nostalgia
for the 70s just isn't going to work. Big companies are here to stay,
and I suspect that any regulation stringent enough to keep banks small
enough to fail won't be sustainable. And unless we reign in
overleverage and massive waves of credit expansion, it won't do any
good anyway. The same thing will happen again, just in a slightly
different way.
Here is my earlier post on itty bitty banks.
Oh Ye of little faith
Mark Davenport reports to me (the link I added):
I noticed your recent blog entry about Rejecta Mathematica. A couple of us on the editorial staff are semi-regular readers of your blog, so we were happy and excited to see your posting. I wanted to let you know that we are actually in the later stages of releasing our first issue – just finalizing a few things with the small crop of brave authors who have responded to our invitations. If you would like, I will let you know when our inaugural issue is available.
The Taiwanese war against tax evasion
This passage reminded me of the Greg Mankiw student who wanted to boost spending through destruct-lotteries on dollar bills. But this is a way to encourage tax reporting:
It seems tax evasion was a problem for the government in a country
where credit cards are not widely accepted and small business transacts
most business. The government hit upon the idea of a sales lottery
rather than a sales tax. Every sales receipt has a lottery number
printed on its back. Once a month, the government publishes several
newspaper pages of winning numbers. You can win anywhere between $5
and about $200 if you have a lucky sales receipt.
The government’s theory was everybody would demand a sales receipt
if they had a chance of winning a lottery. You play anytime you make a
purchase; no matter how small a purchase. The result is, as the island
has become more prosperous, most people don’t want to bother with
combing through thousands of lucky numbers in a newspaper once a month
to maybe win $5. Charities stepped in. Along many streets you see
clear plastic canisters promoting various charitable causes soliciting
your sales receipts. Retired volunteers go over the numbers on
receipts collected. It gives non profits a source of funding and gives
old people a steady way to contribute without hard physical labor. The
Yngge Ceramics Museum I visited last Saturday collected sales receipts
instead of charging admission. If you were without a sales receipt
(unlikely in this country) you could run across the street to 7-11 and
buy a piece of candy for pennies and come back with a sales receipt.
Here is the full story and thanks to Joel Cretan for the pointer. Read the whole post, it makes many other interesting points about Taiwan.
Advertising markets in everything
Don't be surprised if you see Col. Sanders out filling potholes. In an
unusual cause-marketing push, KFC is tackling the pothole problem in
Louisville, Ky. in exchange for stamping the fresh pavement with
"Re-freshed by KFC," a chalky stencil likely to fade away in the next
downpour.
Here is the story and I thank The Browser for the pointer. Elsewhere from The Browser, here are recent job placements at Treasury.
Markets in everything, gypsy threat point edition
I do not read Italian, but Stefano offers me the following summary:
Gypsies exploit their bad reputation to make money. That's what happened in the provinces of Macerata, Ascoli Piceno and Ancona. A group of Gypsies coming from Veneto figured out an original way to swindle real estate agencies. Three of the Gypsies would show up at construction sites driving an expensive car and wearing nice clothes; they would get in touch with the sales office and and put down a down payment in cash for an apartment, sight unseen. After a couple of days they would then show up with their entire families, obstreperous and in tatters. This would trigger an immediate buy-back of the sale contract: the real estate agency would promptly pay back three times the amount of the down payment to get the apartment back (an apartment that the Gypsies did not in fact really want). Real estate agencies reporting this scheme to the police set in motion an investigation that resulted in three of the Gypsies being indicted for fraud. Their loot has been estimated around 300k Euros.
Here is the article.
Assorted links
1. Are vasectomies countercyclical? Some people wish to get theirs before their health insurance is yanked away.
2. Local specialty dishes served by McDonald's around the world.
3. Daniel Akst reviews Parentonomics.
Toward a theory of Raivo Pommer-Eesti
Every day, usually promptly, he (it?) leaves comments on MR posts. His comments read like this:
Bayern LB Bank
Die krisengebeutelte BayernLB traut sich nach einem Verlust von rund
fünf Milliarden Euro im vergangenen Jahr auch für 2009 keine konkrete
Prognose zu. Die Unwägbarkeiten an den internationalen Finanzmärkten
seien zu groß, sagte BayernLB-Chef Michael Kemmer in München.
Die Bank sei aber zufriedenstellend ins neue Geschäftsjahr
gestartet. 2008 haben die Milliarden-Belastungen aus der Finanzkrise
tiefe Löcher in die Bilanz der BayernLB gerissen, sie musste alleine
vom Freistaat Bayern mit zehn Milliarden Euro gestützt werden. «Es ist
zu bedauern, dass vor allem die bayerischen Steuerzahler in Anspruch
genommen werden mussten, um die existenzbedrohende Lage bei der
BayernLB zu beseitigen», sagte Kemmer.
No link is offered (he's not trying to boost a Google ranking), but the posts do list an email. If you don't know German, I can assure you that is not an ad for Viagra. It is simply dull (or is it?) chat about German banks. He (it?) leaves these posts all over the internet, often on economics blogs. Each comment to MR comes from a new IP address, so reporting him (it?) as spam does not stop the flow.
What motivates Raivo Pommer? Do you have a theory of Raivo Pommer? Is this proof of a multiverse? (Apparently a world with Raivo Pommer is a possible world.) And will he offer a report about German banks on this post too?
Here is one man's frustration with Raivo Pommer, worth a read. Here is a Twitter about Raivo Pommer.
If I were ever to write fiction (or a song), my first effort would be about Raivo Pommer.
Tax information for Parents of Kidnapped Children
You may claim a kidnapped child as your dependent if the following requirements
are met:
- The child must be presumed by law enforcement to have been kidnapped by
someone who is not a member of your family or a member of the child's family,
and - The child had, for the taxable year in which the kidnapping occurred,
the same principal place of abode as the taxpayer for more than one-half of
the portion of such year before the date of kidnapping.
for purposes of determining:
- The dependency exemption
- The child tax credit, and
- Head of household or qualifying widow(er) with dependent child filing
status.
This tax treatment will cease to apply as of your first tax year beginning
after the calendar year in which either there is a determination that the
child is dead or the child would have reached age 18, whichever occurs first.
For more information, refer to Publication 501, Exemptions, Standard
Deduction, and Filing Information.
I thank The Browser for the pointer.
Fiscal stimulus and German unification
For all the talk about the Great Depression, we are missing one historical analogy for a program of large fiscal stimulus, namely Germany after the Berlin Wall came down. The two countries united, lots of money was spent and lots of money was borrowed. West Germany had a modern economy with both manufacturing and services. At the time Germany had unemployed resources, especially if you count the labor moving from East Germany to West Germany as grossly underemployed and available for higher-return projects.
The results were less than wonderful. The higher demand boosted measured gdp growth in the short run (bananas and porn, plus reconstruction) but Germany fell into economic stagnation. The new demands took the West German economy only so far. The higher taxes and debt then kept the German economy down for many years. Few Germans were happy with the economic fallout from this "stimulus." And that was with a relatively well-functioning financial system and a reasonable amount of initial optimism.
You can list many dissimilarities between German unification and the current U.S. situation (and in the comments I am sure you will). Still, as historical examples go, I believe this one has some relevance. When European leaders are skeptical about fiscal stimulus, they have some reasons, some of them quite recent.
If you'd like a lengthy account of the economics of that period, along with lots of numbers, try this study. Just read through the first few pages, you'll see statements like:
Economic theory suggests that a fiscal expansion financed by distortionary taxation could potentially generate substantial adverse growth effects after the initial positive demand stimulus dies down.
It is then estimated that the negative economic impact from the German stimulus may explain up to one third of the subsequent growth gap between Germany and comparable European nations.
Addendum: Don't be fooled by the topic-shifting comments on why East Germany didn't do better; this post is about how West Germany fared from so much stimulus. Not so great.
What is the rosy scenario?
Econbrowser assembles some bits of good economic news and the NYT offers a related report. Is there any chance the worst is over?
The rosy scenario is that in a highly connected, internet-intensive world, the bad news travels far more quickly and far more convincingly than before. The early stages of the downturn are like falling off a cliff. We bottomed out maybe two weeks ago. That said, the rebound also comes much more quickly. Wages are more flexible than before. Bad inventory policies are avoided through information technology. The Fed responds to changing conditions ever more quickly. Overall, economic time accelerates on both the downswing and the upswing.
I do not believe the rosy scenario, as I think there are still other "shoes to drop," most of all internationally. I also think we will see a double-dip or triple-dip recession, as the Fed must eventually withdraw some of new money from the system. Good news is then, in fact, simply a sign that some bad news is on the way, sooner or later.
Still, if you are looking for something to believe in, I offer you the rosy scenario.
Fortunately, the appetite for U.S. government debt can be taken for granted
Mike Perry, a loyal MR reader, sends me this:
The U.K. failed to find enough
buyers for 1.75 billion pounds ($2.55 billion) of bonds for the
first time in almost seven years as debt investors repudiated
Prime Minister Gordon Brown‘s plan to stem the worst economic
crisis in three decades.
Gilts slumped after the London-based Debt Management
Office, which manages bond auctions on behalf of the Treasury,
said investors bid for 1.63 billion pounds of the 40-year
securities. The last time the U.K. government was unable to
attract enough investors was in 2002 when it tried to sell 30-
year inflation-protected bonds. The yield on the 4.25 percent
gilt due 2049 rose 10 basis points to 4.55 percent.
Lotus Eater macro
The question was what happens in macroeconomies as consumption approaches satiation. Here's Bryan Caplan's answer:
…as consumption approaches satiation, workers reduce their hours of work to prevent themselves from actually reaching
satiation. More technically, as workers approach satiation, their
labor supply curves start to "bend backwards." The result is that
rising labor demand stemming from rising productivity raises wages yet
reduces employment.
A longer statement of the question is here and I believe it is fair to assume people still are not satiated in leisure and thus they will work less. Does productivity have to be rising (rather than just high) in this scenario? And isn't MU-weighted labor productivity probably falling?
My other query is whether the real interest rate approaches infinity. Can the resulting incentives for capital consumption keep the economy away from virtual satiation altogether? A trickier question is what is optimal monetary policy in such a setting. Can you figure it out?
Assorted links
1. Download Free Banking in Britain, for free.
3. Felix Salmon and William Cohan, the guy who wrote the new Bear Stearns book, doing Bloggingheads.TV.
4. An Icelander, on Michael Lewis.
5. "Federal Reserve Chairman Ben Bernanke tells lawmakers he wanted to sue
AIG to stop its bonus payments, but was told a lawsuit could end up
awarding the bonus recipients more in punitive damages." –story is here.