Category Archives: Econ & Money

I was actually modestly cheerful this morning, reading about the Bush administration coming out against some of the most atrocious farm subsidies.

It would be nice to have a government initiative I could actually agree with.

Comes now Brad DeLong, assisted by Mark Schmitt, to bring me back down to earth…where in fact this is just another example of the Washington Monument ploy, or perhaps even just an other episode of Dingbat Kabuki.

Sigh.

Robert's Stochastic thoughts, formerly Robert's Random Thoughts, summarizes (sends up?) the good ideas in economics as falling in one of 14 categories.

I think he's on to something here, at least if you accept, as I do, that whatever virtues may have lurked in his sociology, Marx was a very poor economist.

The Washington Post's Jonathan Weisman notices something important, then fails to call it by its name.

Changing for the Better — or Worse?. Throughout a two-day conference on the economy, President Bush and his allies extolled the virtues of his tax cuts and “pro-growth” policies, which they said have lifted the nation from recession and propelled it well above its international economic competitors. If Washington adheres to the path of fiscal restraint while following the president's tax prescriptions, it was suggested, policymakers could secure powerful economic growth far into the future.

Yet when the subject turned to the nation's legal or Social Security systems, the picture grew suddenly dark. Frivolous lawsuits have hobbled America's businesses and have put them at the mercy of their enlightened overseas competition, administration officials said. As for federal entitlements, a rising tide of retiring baby boomers will inevitably slow economic growth and bankrupt Social Security.

“The crisis is now,” Bush warned in his closing speech.

Such contradictions emerged repeatedly, pointing up the delicate balancing act that Bush faces as he tries to sell his economic proposals.

Sorry, Jonathan, but there's a name for political posturing that involves saying both 'A' and 'not-A' at the same time while trying to whip people up into supporting your political program..

Demagoguery.

My brother notes:

Michael Forsythe writes for Bloomberg News: “One of the best indicators of superior returns on U.S. stocks during President George W. Bush's first term was contributions to Republican candidates.

“The 50 companies that most favored Republicans with their political donations delivered an average 44 percent return on investment over the last four years, while the Standard & Poor's 500 Index fell 4.1 percent, assuming dividends were reinvested.”

In Macro 101 they teach you that when your currency drops, exports become cheaper, so they increase — this is one of the major factors that works to stop currency free fall. But here's an I hope unusual account of a circumstance in which one sort of export, albeit one based largely on imported parts, shrinks as a result of a currency decline:

Boing Boing: Danger, high voltage: It's common for people living in Europe to buy computer hardware in the US where prices are lower and the Euro is strong. Just don't try it with the new iMacs. An article in today's International Herald Tribune points out that the G5 iMacs sold in the US are strictly 100-110 volt, unlike every other Apple machine on the market with the exception of the eMac. Plug a new iMac into a standard 220-240 European outlet without a transformer and your motherboard will fry. From the IHT article:

It was a sudden, unexpected and little publicized change for Apple…

I asked Apple why and have not received an answer. Postings on Internet discussion boards are thick with speculation. The most likely reason is that limiting the reach of U.S. and Japanese computers is meant to help preserve European sales, where PC sales are relatively strong but the economy is weak. A company also gains if its revenue is in a more valuable currency than the one its costs are in.

Link.