Wednesday, January 31, 2007

Worth a Thousand Words

I had recently made a new friend who reminded me of my college days when I enjoyed a few of the art exhibits at the University of Delaware (Paul R. Jones is a major contributor there).

picture of the day at Wikipedia is a famous photograph taken by Gordon Parks of a government cleaning woman. I’m still always amazed at how a picture can speak a thousand words.

(picture via Wikipedia from Library of Congress Prints and Photographs Division, Farm Security Administration - Office of War Information Photograph Collection.

Farm Subsidies

When President Bush in his State of the Union speech declared that, “We must continue investing in new methods of producing ethanol,” I wondered how much he was thinking about investing because earlier in the month President Bush declared on reducing the budget deficit in the next five years.

Well, ironically enough, according to Reuters (via The Washington Post) the U.S. will be cutting back on farm subsidies – except for ones that could produce ethanol. Personally I've always disliked any and all farm subsidies. With this news though of the President’s subsidy cuts not really cutting, but probably shifting funds more towards the production of ethanol, I think it’s time I started investing in my friend’s corn fields…now.

The Trade Deficit

This article from The Washington Post states what many lawmakers in Washington, as well as Henry Paulson (U.S. Treasury Secretary), have been saying for quite some time: that the U.S. trade deficit with China is too large.

I think it is important to provide some context by showing you what one of my favorite economists thinks of this.

Firstly here, Greg states the possibility that some people could be overreacting.

Although this textbook problem is useful as a theoretical exercise, one should not overstate its practical relevance (as I believe Paul mistakenly did in his paper). In the example, the United States is made worse off by growth in China because our trade with China dries up, so we lose the gains from trade. This theoretical result has minimal application to the world as we see it today. World trade is booming, not shrinking.

And via Greg Mankiw, Michael Spence writes in this Wall Street Journal article:

…if China does allow its currency to revalue over time, then we will simply run a deficit with another collection of countries, and from a domestic point of view, nothing much will have changed.

I’m tempted to let China “hold our debt” as the lawmakers say. Why, because the trade deficit signifies continued U.S. economic expansion. This expansion is what continues to let people buy goods that may not come from the US. The real counter to the argument is on if China is purposefully manipulating its currency (keeping it cheap) to sell more goods, which lawmakers argue is an economic no-no.

Monday, January 29, 2007

Dating Market Specialization

Just in case you were thinking that the dating market didn't have enough characteristics with other more formal markets, here is (from The Washington Post) something for you in case you didn't already know.

The quote that got me was:

Other dating sites, he says, are just not for him: They're geared to "people who are more normal."
Specialized markets...they exist everywhere.

By the way, to readers who are keeping tabs with me: No, I have yet to succumb to joining an online dating service. Although, don't let me make you think that it's easy out in the "dating market." It can still be very rewarding (new people to meet) and disappointing (sometimes things have to end or never end up going anywhere).

Friday, January 26, 2007

The Onion's Dating Levity

With all the dating talk that I’ve done in the past on my blog, I think this Onion article brings some wonderful levity to it all.

My favorite part:

Although Klein said he was "never a big believer in love at first sight" before, he claimed to be "instantly drawn" to the way Ridenour sat within 10 feet of him and looked in his general direction. A short conversation revealed the two were single, lived in the same town, and had both considered short-term kidnapping schemes in order to avoid spending another Christmas alone.

For her part, Ridenour says it didn't take long to realize Klein was the most caring, funny, and sensitive man who had ever spoken to her for more than 30 minutes without trying to get her to switch long-distance carriers.

And someday, I know I’ll be just as lucky.

Tuesday, January 23, 2007

Bush's Health Insurance Proposal

John Irons over at the Budget Blog at the Center for American Progress lays out some views on President Bush’s latest proposal to provide tax deductions on those who purchase healthcare outside of work.

Greg Mankiw weighs in here and provides an upbeat look on the proposal:

Economists have long suggested that tax subsidies lead to excessive use of employer-provided health insurance. This proposal would help fix that problem, while giving a helping hand to the uninsured.

John Irons dislikes the proposal because…

What ails the nation’s health care system cannot be cured by a simple tax change. For a variety of proposals on how to reduce costs and cover the uninsured, see CAP’s health care work.

Obviously John and Greg are two very intelligent economists, and I agree with the both of them, and it’s these kinds of informed men who should be engaging in the political debate. As for myself, while I may not agree with Arnold Kling on everything, I agree with this statement from him:

The number two policy problem is that American's extravagant use of medical procedures with high costs and low benefits is paid for in part by government subsidies. Remove the subsidies, and I don't care how Americans handle their health care, just as I don't care how they buy cars.

My stance: I also don’t like the subsidies because those too provide inefficiency in the healthcare system. Unfortunately, I also agree that a real problem in health insurance is for people who can’t afford health insurance at all. Yet, maybe there’s a way we could provide a “floor” for coverage that does not exclude larger ailments, but rather, helping protect against those large ailments (e.g. cancer) is the main reason why the insurance would exist. The “floor” would act almost like liability insurance for vehicles, which may not be the best coverage, but still provides insurance in accidents and large catastrophes. Arnold Kling is a proponent of this idea, and while I’m still not sold completely on it, I believe it is part of the best way forward.

If I could, I would vote for the proposal if President Bush changed it in the way this Washington Post Op-ed suggests:

Rather than embracing tax deductions, which are most valuable to people in high tax brackets, Mr. Bush could have made his proposal even more progressive by recommending a refundable tax credit that would be worth the same to everyone.

Maybe President Bush will change it. I certainly hope he does.

Sunday, January 21, 2007

Arnold Kling Discusses Tax Breaks

Arnold Kling discusses his case against tax breaks. It’s this kind of thought that shows how an economist(s) usually thinks beyond any partisan line. Robert Samuelsson did so earlier in the week.

Now, Kling:

We really should get rid of tax deductions. Any social policy that you want to do can be done with subsidies. Even the charitable deduction could be re-cast as a matching grant from the government.

It’s important to remember that economists don’t think equality is a bad thing. What’s most concerning for an economist is the priority for everyone to participate in a market and that most importantly, the government doesn’t favor anyone. In fact, it’s pretty obvious that’s why Republicans usually have (or had) an economist's vote. But, as we’ve seen in recent years, Republicans can be just as bad at government spending (and prone to spend) as Democrats.

Wednesday, January 17, 2007

Dating Tactics

According to this latest tidbit of news, the opposite sex will find you more attractive if the people around you are smiling. If only I were a comedian.

The Minimum Wage

Robert Samuelsson opines on the minimum wage and the futile effort that it is to provide true socio-economic change.

I agree completely, and his further suggestion of a gas tax qualifies him for the Pigou Club.

Quoting Samuelsson:

Among social scientists, it's no secret that the minimum wage is a weak weapon against poverty. Modest numbers of workers are affected; many are teenagers, often from middle-class homes; and many of the poor don't work. And a higher minimum wage may destroy some jobs. No matter. Democrats plunged ahead because raising the minimum wage is symbolically powerful. It says that you care about "economic justice."

More on the Cape Gazette

Well, it seems as if my previous post wasn’t enough in order to discuss how media bias operates and how it manufactures consent. This is a perfect linguistics exercise that Noam Chomsky has gone over and over again.

Concerning a small local body of water, The Cape Gazette is undoubtedly the only media outlet with the narrative on what is occurring. Also, their paper seems to be developing an omniscient tone. When I’ve asked my friends in a nearby town, they exclaim, “Tell me a time when that river wasn’t polluted.”

Tuesday, January 16, 2007

Lucky CEOs

In this latest paper from Lucian Bebchuk, Yaniv Grinstein, and Urs Peyer, “Lucky CEOs” who do well with their stock grants apparently don’t have luck to thank for much of their monetary.

Rather, Bebchuk, Grinstein, and Peyer find that…

about 1150 lucky grants (roughly half of all lucky grants in our sample) owe their status to opportunistic timing rather than mere luck. This opportunistic timing was spread over a significant number of CEOs and firms. We estimate that about 850 CEOs (about 10% of all CEOs) and about 720 firms (about 12% of all firms) received or provided manipulated lucky grants. In addition, about 550 additional grants at the second lowest or third-lowest price of the month owe their status to manipulation.

At its core, this is a corporate governance issue. For example, tenure of the CEO matters as a characteristic correlated with lucky grants. As well, the level of independence on the board mattered as well.

Also, while Sarbanes-Oxley did not eliminate the occurrences of stock manipulation, the act did curtail its frequency.

Monday, January 08, 2007

More on Bill Kristol

In case you thought it was just Glenn Greenwald. Here's Andrew Sullivan on Bill Kristol.

Friday, January 05, 2007

On Bill Kristol

A close conservative friend of mine felt bad for Bill Kristol when he recently appeared on the Daily Show with Jon Stewart. I, on the other hand, did not feel bad at all.

Anonymous Liberal states why.

For those who don’t feel like reading the entire post over on Glenn Greenwald’s blog, essentially Anonymous Liberal cites time after time when Bill Kristol has come up with bad prediction after bad prediction in Iraq.

The Laffer Curve

This article is for my friend Will. Will and I were discussing the Laffer curve, and what it means to have such a high tax rate imposed upon you that it becomes very tempting and worthwhile to do what you can to evade taxes.

The article concerns Bjorn Ulvaeus from the Swedish pop group ABBA:

It's the second incident of alleged unpaid taxes for Ulvaeus, who last year was pursued for $13 million dollars to the STA to pay tax on contracts signed in Sweden prior to his move to the UK in 1984.

Thursday, January 04, 2007

Anti Global Warming Research Funded by Oil Companies

This article (brought to my attention by Kevin) has to be one of, if not, the most unsurprising items I have read in some time. The headline, “Report: Oil firm funded discrediting of science” is really almost just too sensational. We’re inching our way closer to the Wal-Mart is the death of society plot to almost nauseating level.

But I’m only making the Wal-Mart comparison to show you how sensationalist the headline is. As I said, it should be no surprise that oil companies fund researchers or research groups who favor their views. Remember that tobacco companies actually ended up creating their own research group at one point.

Remember also that there’s money on both sides of the aisle. I can only imagine that corn production has been having a good time with the production of more ethanol in the past few years. Even movies like The Distinguished Gentleman have pointed out that lobbyists contribute from both sides of any issue.

So, for there to be research monetarily supported by oil companies that supports their side of the argument, I am not surprised, and neither should you be.

Wednesday, January 03, 2007

Setting a Sheep Straight

How ironic would it be if the Christianist Right decided to use the genetic tampering that they’ve opposed to weed out homosexuality?

This article explains the possibility of the process:

By studying the brains of the homosexual rams, scientists pinpointed the mechanisms influencing their sexual orientation.

They gave the sheep injections to adjust the levels of hormones in their brains and some of the previously gay rams became attracted to ewes.

If I were to guess a possible argument from the Right, it might come out as something like:

“If treating depression with drugs is possible because it’s from a chemical balance, then why can’t we say that homosexuality is also a form of a chemical imbalance?”

I really hope I didn’t give them any ideas.

Open Season

Since I love the topic of blogging and many outlets of online media, I thought this article was pertinent to the discussion. Like George Will had written earlier (and I discussed), the content that people can put out there is not restricted by quality at all. And many times, those who create the content don’t realize what they’re actually writing.

This quote explains the public’s possible realization of what’s going on:

"I do think it's an invasion of privacy," says Melissa Bush, a business major at the University of Dayton. "But when you think about it, anything you post online is open season."

When she interviewed for an internship last summer, her interviewer told her upfront that they'd be checking her Facebook profile. She didn't worry because she's careful about what she posts -- but lately, she's been deleting messages from friends that she deems inappropriate.

"If you don't want people to read it, don't post it," Bush says. "If you don't want people to see a video, don't post it.

Obviously, when you post in the public domain it’s open season for anyone to reply or critique. Unfortunately, only now are many people realizing this.