Friday, June 29, 2012

George Will on Subprime College Education

George Will writes in his column today about the higher education bubble, subprime college education and "administrative sprawl": "In his book “The Higher Education Bubble,” Reynolds writes that this bubble exists for the same reasons the housing bubble did. The government decided that too few people owned homes/went to college, so government money was poured into subsidized and sometimes subprime mortgages/student loans, with the predictable result that housing prices/college tuitions soared and many borrowers went bust. Tuitions and fees have risen more than 440 percent in 30 years as schools happily raised prices (see chart above) — and lowered standards — to siphon up federal money.

Wednesday, June 27, 2012

Clash of Economic Ideas

Lawrence H. White of George Mason University and author of The Clash of Economic Ideas talks to EconTalk host Russ Roberts about the economists and their ideas of the past one hundred years. They discuss Keynes and Hayek, monetary policy and the Great Depression, Germany after the Second World War, the economy of India, and the future of monetary policy.

Tuesday, June 26, 2012


The United States ranks 24th out of 188 on the Transparency Index survey of corruption. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email to buy additional rights. With its fragmenting monetary union, tottering banks and politically discontented citizens, the last thing the European Union needs to hear is that it has an embarrassing public and private sector corruption problem on its hands. Yet this is the conclusion of a new report from Transparency International, the global anti-corruption watchdog. “Political parties, public administrations and the private sector are assessed as the weakest forces in the promotion of integrity across Europe,” says the report. Political party funding is inadequately regulated, lobbying remains veiled in secrecy, parliaments don’t live up to their own ethical standards, public procurement practices breed corruption and there isn’t enough legal protection for whistleblowers. Whew. No wonder the rest of the world isn’t inclined to take lessons from the Europeans any more. Except, of course, that corruption can and does flourish everywhere. “We have the best government that money can buy,” Mark Twain, the 19th-century American humorist, once remarked of his own country.

Saturday, June 23, 2012

CBO channel on SlideShare

This is the official CBO channel on SlideShare. CBO’s mandate is to provide the Congress with objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget and the information and estimates required for the Congressional budget process.

Thursday, June 21, 2012

Profits, Competition, and Social Welfare-Gary Becker

The main reason to be concerned about the attacks on competitive capitalism is that it has delivered during the past 150 years so much to all strata’s of society, including the poor.

Tuesday, June 19, 2012

Contrary to Popular Belief, the Recovery is not Stalling

Contrary to Popular Belief, the Recovery is not Stalling Nonfarm employment came in well below expectations in May, adding only 69K jobs with the unemployment rate drifting a notch higher to 8.2 percent. The details of the nonfarm payroll report suggest that weather could have been a driver for the weaker-than-expected outturn. Click below for Wells Fargo's latest view of the US and international economy. In spite of the challenges facing the US, a turn to Europe shows our comparatively positive position, although we may well find ourselves in the southern Mediterrean position sooner than later.

Sunday, June 17, 2012

Taxes and incentives

A ballot initiative this November would give California a whopping 13.3 percent top marginal rate for state income taxes, stealing the confiscatory taxation crown from New York, which currently charges a bit under 13 percent.

That’s more than double the average 6 percent top rate for state taxes. T

Saturday, June 16, 2012

The following links were provided to my Principles students.

Economic Growth - GDP - BEA

JOTS report - a much more nuanced analysis of unemployment in the US - note:  The BLS is a must site for business majors or those of you who are interested in markets - click here for the JOLTS site.

Current CPI data.  This may be of interest as you prepare your second discussion post this week.

Business Cycles - as you know, the Great Recession began in Dec. 2007 and ended in June 2009 (although it may not feel like it).  The NBER is the organization that tallies data on the business cycle.

Excellent overview of the challenge of debt

Emerging econonomic conditions in China - World Bank Analysis

Book recommendation - The Company of Strangers.  A short recommendation from 5 Books (a great site for readers to bookmark.

The Facebook Effect (an important book on the social media company) - nice interview with the author.

Inside the Plex (one of many excellent books on Google)

The Amazon Effect (article in The Nation)

The Bureau of Labor Statistics has an excellent site containing data on occupations.  You can use this to review wage data about your intended career - it might give you pause and perhaps motivation to consider other career options.

Thursday, June 14, 2012

France’s Broken Dream

Wednesday, June 13, 2012

Maybe a Walmart near your home isn’t so bad after all

From Devin G. Pope and Jaren C. Pope: Walmart often faces strong local opposition when trying to build a new store. Opponents often claim that Walmart lowers nearby housing prices. In this study we use over one million housing transactions located near 159 Walmarts that opened between 2000 and 2006 to test if the opening of a Walmart does indeed lower housing prices. Using a difference-in-differences specification, our estimates suggest that a new Walmart store actually increases housing prices by between 2 and 3 percent for houses located within 0.5 miles of the store and by 1 to 2 percent for houses located between 0.5 and 1 mile.

Tuesday, June 12, 2012

Bad regulation

"Bad regulation is much worse than no regulation because you create conditional expectations of safety." From All the Devils Are Here: The Hidden History of the Financial Crisis (245) Mclean and Nocera go on: "It [bad regulation] helped feed the fiction that these risks [subprime] could be quantified or even understood."(245) So, in thinking about expansive regulatory regimes such as those proposed by Dodd Frank, the EU in Europe, or Health Care in this country I have to wonder about the risk of "bad" v "good or effetive" regulation. This is a significant challenge. The role of institutions is at the heart of welfare enhancing societies and it seems as if policy makers today are failing to consider the consequences of past "bad" regulation in their haste to construct new and expansive regulatory regimes. McLean and Nocera's books is outstanding and I recommend it highly.

Saturday, June 9, 2012

Why do conservatives hate freedom?

Why do conservatives hate freedom? The question may be startling. After all, don’t conservatives claim they are protecting liberty in America against liberal statism, which they compare to communism or fascism? But the conservative idea of “freedom” is a very peculiar one, which excludes virtually every kind of liberty that ordinary Americans take for granted. I distinguish conservatives from libertarians, who, on issues of personal liberty, tend to side with liberals. Since World War II, mainstream conservatives have opposed every expansion of personal liberty in the United States.

Friday, June 8, 2012

Is Krugman the new Arthur Schlesinger?

"Herbert Hoover was as much of a laissez faire president as Barack Obama has been or the leaders in Europe have been. From a free market perspective, the steps taken since 2007 have turned a market correction into an economy wide crisis and then a global crisis. Those steps were anything but "do nothing", and they were taken first by a Republican President and then pursued further by a Democratic President. We have never given "nothing" a chance. But mythologies need to be created in order to tell neat historical tales. Laissez faire Hoover is replaced by activist FDR and the nation is saved." Read the full post -

Saturday, June 2, 2012

America Revealed - Manufacturing

Watch Made In The USA on PBS. See more from America Revealed.

American manufacturing has undergone a massive revolution over the past 20 years. Despite all the gloom and doom, America is actually the number one manufacturing nation on earth. Yul Kwon crosses the nation looking at traditional and not-so traditional types of manufacturing.

Along the way, he meets the men and women who create the world’s best and most iconic products, engineers who are reinventing the American auto industry, steelworkers who brave intense heat to accommodate radical new ideas about recycling, and engineers who are re-imagining the microchip. He visits one of the most innovative manufacturers on earth: a small start-up company that is building personalized robots – machines that may one day reshape our homes and offices, driving our revolution further forward.

Yul further explores the emerging notion that manufacturing itself is changing from a system based on the movement and assembly of raw materials like steel and plastic to a system in which ideas and information are the raw materials of a new economy based around communications and social connections via companies like Facebook and Google.