Tuesday, May 31, 2011

Mazi's Link O' the Day

When comparing wages, you must also look at WHERE those wages are earned. For example, living in NY costs much more than living in some town in Kansas. If someone in NY only makes 2 cents more than a Kansas resident, do they really have a higher standard of living or more purchasing power?:

http://blogs.wsj.com/economics/2011/05/31/adjusting-wage-disparities-for-cost-of-living/?mod=WSJBlog

Monday, May 30, 2011

Mazi's Link O' the Day

TED philosophizing again. It is Memorial Day, after all. So take a look at life, outside of your job and priorities, and just think of what you need:

http://epicureandealmaker.blogspot.com/2011/05/pebbles-in-stream.html

Sunday, May 29, 2011

It's Getting Old

Click on the title of the post for a graph from Age Works. What does it say? There are more old people. Much of this increase can be chalked up to the baby-boomers coming of age, and while I'm no demographer, it seems possible that there will be a dip in that percentage, or at least a slow-down in the rate of growth. Of course, this begs the question, what's wrong with an older population?

Naturally, the first point to bring up is the effect on the labor force. 65 year olds aren't quite suited to build bridges, and even non-physical jobs require youth. A 70 year old probably can't put in an effective 20-hour week as an investment banker, while somebody younger can. While these points are somewhat obvious, there is a more subtle aspect to all this. New ideas come from young people, and new ideas lead to innovation. Anyway, I won't belabor the oft explained benefits of a large youth population. Most of the reasons should be obvious.

The next point somewhat stems from the first. Older people, especially if they have retired, "take out" more than they "put in." Ok, when they were young, old people did their share of "putting in," but I'm speaking contemporaneously here. If there is a large old person population relative to youth population, our "taking out" to "putting in" ratio will unfavorable. "Taking out," by the way, means using services like Social Security and Medicare, etc... They cost money, but they are necessary (a debate in itself, but I stand by my point).

Let's say we want to make our population younger, now that we've got a decent grasp on why that would be good. The standard remedy is to usher in more immigrants. The average immigrant's age tends to be lower than that of the overall population. Ok, makes sense, right? Immerse a group with a low average with one with a high average and you should get a new group with an average in between. Well, as before, I'm going to take issue with averages... AGAIN. The U.S. population in 2009, according to the census bureau, was around 307 million. According to the Migration Policy Institute, between 2005-2010 there was a net inflow 950 thousand migrants to the U.S. That is .309% of the U.S. population in 2009. A little hard to make dent in the AVERAGE age with those kinda numbers, yeah?

Mazi's Link O' the Day

A victory for economic liberty in El Paso:

http://mjperry.blogspot.com/2011/05/ij-wins-victory-for-food-trucks-in-el.html

Saturday, May 28, 2011

Mazi's Link O' the Day

This has nothing to do with economics. I just thought it was cool that the Wall Street Journal is called Valor Economico in Brazil:

http://economistmind.blogspot.com/2011/05/valor-economico.html

Thursday, May 26, 2011

Mazi's Link O' the Day

Ohio's got a beetles problem. How to solve it? Well, they're ruining the Ash trees, so the question becomes, "How important ARE those Ash trees?":

http://www.env-econ.net/2011/05/i-guess-thats-one-way-to-get-rid-of-all-the-ash-holes-in-ohio.html

Wednesday, May 25, 2011

Sunday, May 22, 2011

Hollywood and Washington

Oi Oi Oi... I never thought I'd reach the day where I'd say, "James Buchanan (the economist, not the president)... I agree with something he said." A brief primer for those of you unfamiliar with the words and ideas of Mr. Buchanan. He was (and is) one of the leading thinkers in the field of political economy, and, as I garnered in my brief time reading his thoughts, decided to turn the lens of economics analysis on politics. Essentially, all those tried and true "principles of economics" (self-interest, incentives, etc...) are all aptly applicable to politics and its practitioners as well. That should be obvious to most people who take a moment to think about it. Unless you staunchly believe that those who commit themselves to public service are truly above the petty (or natural, as some might call it) wants and drives of the common man, you shouldn't be surprised when your senator accepts a fat paycheck from some lobbyist and votes for some misbegotten bill.

Hollywood, at times, does not seem to buy into Mr. Buchanan's philosophy. Actually, let me clarify, Hollywood observes Mr. Buchanan's philosophy in practice and reacts with outrage and shock. And while I hate to be the person who comments on the "unbelievability" of Hollywood movies, I'm going to do just that. Hollywood takes the slightly corrupt nature of Washington and spins it off into some completely overblown scenario. Essentially all movies regarding political drama involve one politician lying, cheating, murdering, etc... to win power. Already the case falls apart. A quick look at recent political scandals reveals that corruption (perhaps surprisingly) has nothing to do with political "power." Nobody accepts a paycheck from their lobbyist so they can become president. Nobody has sex with their aide so they can become chair of some committee. So, to sound like a true economist, I'll say it, "Money comes first, sex comes second, and power doesn't even matter." But we should actually take solace in this fact. The U.S. government, as we've told time and time again, has a cleverly devised system of checks and balances. There is no all-powerful member in our government, and, in an extreme case, a very popular and charismatic senator can have almost as much political sway as the president. The risk inherent in undertaking some heinous Hollywood-esque scheme to snatch power, is equivalent to robbing a bank to get 200 extra dollars. You don't see political corruption for power because it's illegal (obviously) and it's just not worth it. Many senators have a much higher net worth than the president. When a lobbyist comes forward offering cash for favors, it's not some dastardly scheme to snatch control of the U.S. government. It's one person responding to one incentive. I'm not saying we should rejoice at pork-barrel spending, or corruption of any kind, but it could be worse. In the trade-off between my politicians sleuthing around trying to make a few extra bucks or sleuthing around trying hijack the balance of power, I'll let them keep the cash every time.

Mazi's Link O' the Day

So, there's been some outrage over the doubling of LinkedIn's share price on the first day of its IPO. Claims abound that the underwriting banks purposefully priced the stocks at a lower-than-expected, so to speak, price, so that when the stock surged, they would see green. TED disputes this:

http://epicureandealmaker.blogspot.com/2011/05/dan-you-pompous-ass.html

Thursday, May 19, 2011

Mazi's Link O' the Day

It's time for a shake-up at the IMF. Note: Chasing maids down the hall without any clothes is generally frowned upon:

http://blogs.wsj.com/economics/2011/05/19/imf-begins-succession-process/?mod=WSJBlog

Tuesday, May 17, 2011

Mazi's Link O' the Day

Something thoughtful and intelligent from TED about what (instead of making angry documentaries) we should be doing to fix our flawed financial system:

http://epicureandealmaker.blogspot.com/2011/05/put-down-your-pitchforks.html

Sunday, May 15, 2011

Korean Trade and Financial Linkages with the U.S. and Japan

Well, as promised, here's the paper that kept me up at nights...

Korean Trade and Financial Linkages With the U.S. and Japan

Thursday, May 12, 2011

Mazi's Link O' the Day

I'd put a link... but I seemed to have saved-over my bibliography of a rather long research paper and thus must sift through pages and pages of exchange rates, financial integration, and other maddening things... To make up for it, I will share this paper... When it's done.

Wednesday, May 11, 2011

Monday, May 9, 2011

Aggregate Demand Post-Recession

Keynes, if he were alive today, would claim our recession was likely a case of weak aggregate demand. Government stimulus, such as TARP, could help boost C+I+G+NX and shift the aggregate demand curve outward, increasing prices, decreasing unemployment, and getting the economy back to 2007 levels. Well, in many respects, we have reached those levels. See this post. But looking at levels without context is misleading.

As the post shows, despite being at an absolute higher level than in 2007, we are well below trend. So, why do people, particularly suppliers, feel like the economy is picking up? To be able to note our sub-trend expansion, one would need to have a rather long-run macro view. I would venture to say people's memories are not so long. And in fact, I would also venture to say that people do not truly react to changes in levels. Growth rates are the place to look.

If this quarter, a supplier experiences an increase in his growth rate of widgets sold, compared to the same time last year, he will, in my opinion, likely envision this as an increase in demand for his goods and a "better economy." It is an increase in demand, relatively speaking. In a long-run view, had there been no recession, his growth rate would/should have been much higher. But if (and this is probably the truth), our supplier is only looking at his year-over-year, or quarter-over-quarter growth, then he will only "feel" the initial dip at the start of the recession and then subsequent rejuvenation of demand for his goods later. Not to say suppliers are narrow-minded and don't have long-run views, it's just that reinvigorated demand is much more easily viewed, empirically, than a trend line on a graph. But, then again, we are all dead in the long-run anyway.

Mazi's Link O' the Day

Get those mommys some jobs!:

http://economix.blogs.nytimes.com/2011/05/09/unemployed-mothers-day/

Sunday, May 8, 2011

Mazi's Link O' the Day

Everybody loves precious metals. Expensive, shiny, gold bars... But that's soooo last year. The new thing... Platinum? Silver?....Copper (What!?!):

http://www.businessinsider.com/copper-ingots-for-sale-2010-5

Friday, May 6, 2011

Mazi's Link O' the Day

Prof. Laura Tyson discusses her thoughts on the future of the renminbi and specifically why she, like so many others, supports continued appreciation versus the dollar:

http://economix.blogs.nytimes.com/2011/05/06/the-outlook-for-chinas-currency/

Thursday, May 5, 2011

Mazi's Link O' the Day

Jeff Cornwall says bad news bears for the economy (stagflation!!! Booooo!):

http://www.drjeffcornwall.com/2011/05/more-on-preparing-for-inflatio.html

Tuesday, May 3, 2011

Mazi's Link O' the Day

TED in response to the DealBook's article, "Is reputation dead on Wall Street?"

http://epicureandealmaker.blogspot.com/2011/04/twilight-of.html

Monday, May 2, 2011

Pissing in the Wind




Originally published at http://dominicfrisby.net/blog


QE... Nice work

Mazi's Link O' the Day

I mean, everybody already knows, but it wouldn't be right to put up anything else today:

http://www.nytimes.com/2011/05/02/world/asia/osama-bin-laden-is-killed.html?hp

Sunday, May 1, 2011

Mazi's Link O' the Day

An interesting post on how rising productivity (faster in fact than the rest of the economy), has actually led to manufacturing declining as a share of nominal GDP:

http://mjperry.blogspot.com/2011/05/how-increasing-worker-productivity-has.html