Fri, 31 Oct 2008

A Nature-al Choice

Here's a funny endorsement:

As anyone in academia will know, a thoughtful and professorial air is not in itself a recommendation for executive power. But a commitment to seeking good advice and taking seriously the findings of disinterested enquiry seems an attractive attribute for a chief executive. It certainly matters more than any specific pledge to fund some particular agency or initiative at a certain level — pledges of a sort now largely rendered moot by the unpredictable flux of the economy.

This journal does not have a vote, and does not claim any particular standing from which to instruct those who do. But if it did, it would cast its vote for Barack Obama.

Well, not that funny an endorsement, but a funny source: Nature, one of the two most prestigious journals of science in the world.

10:20 - 31 Oct 2008 [/y8/oc] link

Tue, 28 Oct 2008

Heartwarming examples of civic engagement...

... or rancid acts by democracy-hating extremists. You decide.

07:23 - 28 Oct 2008 [/y8/oc] link

Fri, 24 Oct 2008

Issue 33

Is out after an inexcusable delay, my apologies.

• What is the real source of the financial crisis? It's not mortgages, and it's not derivatives either, really. Too much capital?
• Graph of the month! Profits v. wages, Republicans v. Democrats.
• Word games with Medicaid, by David Rochefort and Kevin Donnelly. Does how it's said affect what you hear?

22:42 - 24 Oct 2008 [/y8/oc] link

Wed, 22 Oct 2008

RIPR Award for absurd campaign literature

These are the candidates (with working web sites) mentioned in this week's column:

• Christine Spaziano, Republican candidate for Senate District 4 (Providence)
• Larry Signore, Democratic candidate for Senate District 32 (Barrington/Bristol)
• Tim Lee, Republican candidate for House district 21 (Warwick)
• Steven Hart, Republican candidate for House district 28 (Coventry)
• Chris Ottiano, Republican candidate for Senate district 11 (Portsmouth)
• Robert Paquin, Republican candidate for House district 19 (Warwick and Cranston)
• Dan Reilly, Republican candidate for House district 72 (Portsmouth and Middletown)
• John Pagliarini, Republican candidate for Senate district 35
• Bill Connelly, Republican candidate for Senate district 36 (North Kingstown/Narragansett)

10:57 - 22 Oct 2008 [/y8/oc] link

Tue, 21 Oct 2008

Heard on NPR

Maya McGuineas, of the Committee for a Responsible Federal Budget, on the possible stimulus bill the next Congress might pass: "I just hope they don't pork it all up... just so it's not spend spend spend"

I used to aspire to do satire, but why bother?

20:59 - 21 Oct 2008 [/y8/oc] link

Sat, 18 Oct 2008

Hitting home

So there are exciting times on Wall Street. But what does the financial crisis mean for those of us who aren't borrowing or lending? Well, the credit markets serve not just businesses but governments, too.

Our state and local governments issue bonds not just for building things, but also for cash management. That is, sometimes the tax revenue doesn't come in synch with the bills to be paid. In those cases, cities and towns can issue "tax anticipation notes", short term loans to help cover the bills until the tax collections pick up. It's a pretty typical cash management technique. Borrowing for a few months at 3% isn't a huge cost, and if it means not having to build up a big cash reserve, so much the better.

But this only works so long as the credit market works and the rates are low. East Providence has used anticipation notes fairly routinely in the past, and was intending to do so this fall. Last year they borrowed about $25 million at 3% interest sometime in December, and paid it back when property tax collections started arriving in the summer. They anticipate about the same need this year, but at the moment, interest rates are running at more than triple what they've paid in the past, not to mention some uncertainty their bonds would sell at all. Right now, their policy is to hope this all clears up by December since they only have around $4 million in reserve. If it doesn't, there's big trouble.

See more ...

00:47 - 18 Oct 2008 [/y8/cols] link

Fri, 10 Oct 2008

That Fantastic Napkin

Sometime during the Ford administration, legend has it that Wall Street Journal editor Jude Wanniski and two White House officials named Donald Rumsfeld and Dick Cheney sat down for lunch with the economist Arthur Laffer. During the meal, Wanniski said Laffer drew the famous "Laffer Curve" on his napkin, and our government has never been the same since.

The Laffer Curve? That's a graph that shows that if you raise taxes too high, tax revenue drops. Conversely, if you're above some magic point on the graph, lowering the tax rate will increase revenue.

But the whole thing is essentially a fairy tale, beginning with the napkin. As Laffer himself told it, the restaurant had cloth napkins and "my mother had raised me not to desecrate nice things."

But what about the economics? In a certain sense, of course, the Laffer Curve is valid, even obvious. In an abstract world, it is indeed possible to imagine a tax high enough that raising it further would lower revenue. However, stepping back into the real world, few real governments could actually impose such a tax. Ours never has, and despite legions of economists looking for examples, no one has ever demonstrated that this effect is observed in the world in which you and I live.

See more ...

23:03 - 10 Oct 2008 [/y8/cols] link

Mon, 06 Oct 2008

The big picture?

Well, not so big, but the big picture when you consider that each of us has choices to make in our lives, and are forced to live with the consequences. In dealing with the personal (and mental) consequences of staring into the uncertain future, Judith Warner nails it, for some of us.

09:23 - 06 Oct 2008 [/y8/oc] link

Sat, 04 Oct 2008

A Failure to Plan for Failures

As the nation continues to reel from the ongoing financial crisis, the boom and bust that we're suffering, it's worth stopping to ask how it is that we got to this place.

Everyone knows that foreclosures are driving the economic crisis, but does everyone know that people falling behind in their payments isn't the big story? According to HUD statistics, in 1986, about 5.5% of all mortgages were in arrears, and about one in 21 of those went into foreclosure. In the first quarter of this year, 6.35% of all mortgages were behind in their payments, but foreclosure proceedings had begun on one in six of those. In the subprime markets, the delinquency rates are much higher (22% for variable rate mortgages), but the foreclosure rates are higher still (almost one in three). As late as 2002, the delinquency rates for this kind of mortgage were almost 15%, but only about one-sixth of the delinquent loans began foreclosures.

In other words, these are tough economic times, but at the ground level, we're not so far from other economic slowdowns. What's different now is that foreclosure is a far more likely outcome of falling behind in your mortgage payments than it has been at any time since HUD started tracking these numbers in 1986.

See more ...

15:06 - 04 Oct 2008 [/y8/cols] link

Wed, 01 Oct 2008

This seems about right

Why did the bailout plan fail? Was it principled opposition or failed gamesmanship? from here:

The House conservatives who sank the bailout didn't do so because they were listening to loud and angry voices. They sank the plan by accident. They were trying to double-cross the Democrats. First, they wrung lots of concessions out of Democrats at the negotiating table as the price for delivering 80 votes. Then, by not delivering 80 votes and forcing Pelosi to pass the bill as a partisan Democratic bill, they were going to wage a demagogic anti-bailout campaign. But Pelosi refused to be played for a sucker and so the conservative inadvertently sank a bill that, all evidence suggests, they actually wanted to pass. They just wanted to vote "no" on it for short-term political gain.

As evidence for this view, it appears that the RNC prepared — in advance of Monday's vote — attack ads to be run against Democrats who voted for the plan.

As a philosophical point, there are two competing views of what politics is. Or at least there are two with which I am familiar. One view has it that politics is the process by which we rule our polity. This conception of politics is all about finding solutions to the problems we face. Another conception of politics is that it is war. In this conception, all the entities involved in politics are engaged in an all-out struggle for primacy and power. Which do you think serves our nation better?

10:50 - 01 Oct 2008 [/y8/oc] link

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