Category Archives: Econ & Money

Angry Bear has an interesting post on the further decline in the US savings rate (go read it) which contains this arresting statistic:

The personal saving rate fell to just 0.2% of after-tax income in October. That means that an average family that earns $75,000 per year, with take-home pay of about $5,000 per month, is saving about $10 per month. That's it.

I think our high-deficit cheap dollar party is a strategic blunder of the first order. And I also think currency markets are chaotic, and we are at risk of falling off a cliff. Brad thinks I'm silly, but I think this is doubly true now that the Euro is a credible alternate reserve currency (and commodity pricing index…what happens when oil is priced in Euros and the dollar falls?).

Of course, a sudden collapse in the value of the dollar could never happen…

You would think the WSJ, a very fine paper, would get something this basic right. But apparently not. See TaxProf Blog: Schmalbeck Criticizes Wall Street Journal's Reporting on Teresa Heinz Kerry's Tax Return for the numerators and denominators. See also TaxProf's summary of Michael Kinsley's defense of her investment strategy.

Brad DeLong's Semi-Daily Journal: A Weblog: Preview: The Economists' Voice: A Manifesto

Economists are losing the battle for mindshare in public debates and discussions about the economy. Too much of what we economists write meets the technical canons of modern economics, but reaches a very small audience (if it reaches any audience at all). Too much of the rest of what we write is murdered by being forced into the Procrustean bed of the 700-word op-ed: a space too small to make any but the most pathetic and oversimplified excuse for an argument. The result is that public understanding of the economy is abysmal, and the intellectual level of the public debate is far too low. We economists all can, no doubt, think of a dozen examples in the past month of hideous errors in the public perception of the economy and hideous mistakes made in good faith (i.e., not by lobbyists) about the effects of public policies. (And, because we are all economists, we economists at least would all largely agree on at least 80% of what are hideous mistakes.)

We—that is, Joe Stiglitz, Aaron Edlin, and I—aim to start an online publication, The Economists' Voice, to be “published” by Berkeley Economic Press, to try to remedy this situation. The two youngest of us are confident that we have a very good chance of succeeding. Our confidence is based on one fact: Joe Stiglitz thinks that this will work, and his judgment in this area is very good, as is shown by the remarkable success of the Journal of Economic Perspectives which has greatly increased the flow of information across the subfields of economics, and done a remarkable job of welding the American Economic Association into a stronger intellectual community.

The Economists' Voice will aim for pieces longer than an op-ed and shorter than (and much more readable than) a piece for a standard journal. We thus avoid the op-ed problem—the problem that op-ed space is too short for an argument, and only provides space to be shrill. But we also hope to stay short enough to be readable, and understandable. And we will aim for quick turnaround—days rather than the years of journals.

The level will be non-technical but sophisticated: perhaps what one expects to read in the Financial Times and the news pages of the Wall Street or National Journal, or perhaps a notch above. The aim will be to provide an economist's argument and point of view on some salient and interesting issue: a survey of something interesting happening in the economy, or a call for some change in policy or institutions—which would consist of a review of what the principal important factors are, what the objective function is, what the constraints are, why the objective function is maximized at the particular set of policies or institutional arrangements that the author prefers.

We will launch the The Economists' Voice later this year. We will succeed if we become the place on the internet where economists, journalists, interested observers, staffers, and others turn in search of high-quality comprehensible economic analysis.

The best title for this item would be

A) Dismal Science Tries to Jazz It Up

B) Economists Launch Highbrow Popular Online Journal

C) 'Economists' Voice' Seeks to be 'Masters' Voice' for Chattering Class

D) Man, I'd Like To Work With Stiglitz

E) Oh no, One More Thing I Won't Want to Miss

F) Where Does Brad Find the Time?

G) All of the Above

Kudos to Maggie McConnell of Optimization Prime for unearthing this reference to Models of Optimal Vapirization. (Fun reading, yes, but I think Laurell Hamilton is even more fun, although I do not like the design of her web page.)

Memo to self: soon as you get done worrying about oil prices, start worrying about food prices. Memo to John Kerry: it's all the fault of the Chinese. Memo to Brad: yes, yes, that's a joke, really, I know trade is good for everyone in the long run (which I believe to be some time after November). No manholes in Coral Gables, so I don't have to worry about falling down one.