Posts Tagged: Economics
6

A Unified Theory of Why Money Makes No Sense Right Now

A theory as to why the rent is too damn high and a potato salad is ten thousand dollars and Uber is ten billion dollars and you'll have to buy reservations for restaurants like concert tickets and tickets for Transformers 4 in IMAX are like twenty-five dollars so that it made three hundred million dollars its opening weekend: Welcome to the Everything Boom — and, quite possibly, the Everything Bubble. Around the world, nearly every asset class is expensive by historical standards. Stocks and bonds; emerging markets and advanced economies; urban office towers and Iowa farmland; you name it, and it is trading at prices that are high by [...]

2

The Great Leap Backward: China's New Ad Campaign About Parents And Piety

A spot about a father suffering from Alzheimer's is the most popular of a new series of ads that has young people on China's social networks talking—or better put, it has them talking about crying. "Every time I see it I cry," writes one Weibo user. Hers is a typical reaction. Filial piety might seem a laughable topic for a public-service campaign in the west, but in China, it's the basis for a campaign aimed to guilt kids into thinking about the elderly. Making China's youth cry is not enough, though; China needs the new generation to act on that guilt, to buy into the Confucian ideal [...]

45

The Evil Economics Of Judging Teachers

The Times and a host of other publications heralded last week's new study extolling the lifelong money-earning benefits of having a good primary/middle-school teacher. Oh, yay! Let's do what these economists from the National Bureau of Economic Research suggest, right?

Actually, ugh, no. What economists Raj Chetty and John N. Friedman of Harvard and Jonah Rockoff of Columbia want to do, apparently, is to identify and fire "weaker" teachers, for the sake of a barely perceptible increase in students' "lifetime income." Nobody has actually tried this yet; the report doesn't describe an experiment. It's just the conclusion they draw from their analysis of massive amounts [...]

26

Endless Boom and Bust: Two Proposals Towards a Way Out

The 1970s began in late 1973 and ended in early 1982. A decade-long hangover. The childish joie de vivre of flower power had faded by 1973, five or six years after the Summer of Love, three years after the breakup of The Beatles. The bloom was off the rose and a kind of cynical sense of entitlement had set in. To be cool in 1973 you needed to live in a squat (preferably in The Smoke, as we called London in those days), go on the dole and wear an Afghan coat. Brightly colored underwear was still OK, but the important thing was to be weary and [...]

33

David Brooks and the Myth of the New Fair Society

Rest easy, America! After our long march through the spiritless battle to prop up our inflammable paper economy, David Brooks has identified the true cause of our distemper: we have been lulled into a terminal state of civic distrust by an overly porous power elite.

Yes. The recruitment of our upper-class leaders has become more demographically open, Brooks notes, with the old WASP establishment giving way to a "meritocratic" scrum of other-than white male power brokers. And as a result, "we've changed the criteria for success. It is less important to be clubbable. It is more important to be smart and hard-working." But there's a twist! "As [...]

17

Hot Excess Supply of Labor Action! Wages, Productivity and the Market

In this glorious 3rd quarter of the year, something rather amazing has happened. Overall, companies reported that "worker productivity" was up by 9.5% while actual hours worked was down 5%. This means exactly what you think it means. Mostly it means that there is no reason for companies to do any hiring. Why? Because they are doing just fine without you.

5

You Know Who Else Hated Tipping?

Rich people, mostly, actually. Heh.

Here is the latest series of arguments—yeah, here we go again!—against tipping. It's discriminatory (when white and black servers are compared, diners tip blacks far less well) (PDF), it's unfair to restaurant staff, it's unfair to diners, and apparently it's unfair to Ayn Rand. Oh sure, everyone loves Kickstarter and "tip your blogger" payments, but someone brings you food and to hell with them.

1

Andrew Leonard's Fire Story

"In Berkeley, we are addicted to high taxes—in the 25 years I’ve lived here, I can’t even count how many times I and my fellow citizens have said a resounding yes to yet another tax hike or bond measure. Two weeks ago, I got my money’s worth."

19

Economists Just Can't Figure Out This Unemployment Thing

Would you like to play get the economist? Reading Chicago economics prof Casey Mulligan trying to make sense of job losses in the recession is fun for everyone.

It's this kind of fun: "Payroll spending now exceeds what it was when the recession began, yet employment remains millions lower. Apparently, payroll spending is not enough to bring those jobs back." Hmm, if only I could find a model that accounts for that! Is there any conceivable reason that there would be fewer people making, all told, more money in America today?

This is what happens when people start working with pure numbers: real-world motivations stop making [...]

17

MN Gov Candidate: Reducing the $2.13 Waiter Pay Creates Jobs!

"[Minnesota] Republican gubernatorial candidate Rep. Tom Emmer said the state could gain jobs if employers could a pay a lower hourly wage to employees who earn a lot of money from tips." -Sure. It's a plan?

27

Here Is What Needs To Happen For Gay Marriage To Pass

Yesterday's defeat of a gay marriage bill in the New Jersey Senate is just one more disappointment in a string of bitter losses for those who seek equal justice under the law. Sure, other countries don't seem to have a problem making fairness legal, but here at home, at the state level, we have apparently decided that we're not going to play along. Many of the objections you hear center around religion, but the sorry undercurrent behind the unwillingness to grant the same rights to homosexuals that their fellow citizens already enjoy and frequently abuse is actually one concerning politics and economics, i.e., in These Troubled Times legislators [...]

4

Small Bank Falls Down, Goes Boom

"New Frontier Bank was chartered in a double-wide trailer in 1998. Founder Larry Seastrom raised capital by selling shares – at $10 apiece – to 181 friends and neighbors. As the bank grew, the shares soared in value, reaching $110 at their peak in 2006. Now, the bank has been shut down and the shares are worthless."

14

Elements Of Economics In Order Of Relative Gayness

24. Nash Equilibrium/Stackelberg Competition

23. The Production Function

22. Pareto Optimality

21. The Phillips Curve

20. The Gauss–Markov theorem

19. Hysteresis

18. Say's Law

17. The Lucas critique

16. Theory of the Firm

15. Quantity theory of money

14. Keynesian Stabilization

14

Reagan Proven Much More Awesome at Fixing America Than Obama

"How do conditions compare locally to when the Reagan administration was asking for a second term. Statistically, have we seen the same kind of recovery from the 2007-to-2009 recession as we did from the 1980-to-1982 recession? Not to ruin the suspense, but the charts below suggest the answer is 'no.' The Miami area enjoyed a much more robust recovery at the end of the Reagan first term than it has under the Obama first term." —Well, there you have it then.

21

Why Tall People Earn More

Taller people are smarter than you, so they deserve more money. They are also probably more attractive.

32

How To Not Spend Any Money In New York City

Sure, it was basically a glorified ad for the author's overly precious personal-finance site, but that doesn't mean that Alexa von Tobel's recent Huffington Post piece on living in New York City on $0 a day wasn't offensive and dumb. Von Tobel's giggly guide to keeping it real could have been retitled "The Well-Off Person's Guide To Playing Pauper For A Day" — the hold-on-to-your-wallets flip side of all the "aspirational" dreck that clogs too much media even to this day. She walked to work, which just happens to be a mere 20-minute hike from her apartment, instead of taking a cab! She gave up Le Pain lattes [...]

6

Just Like Wall Street, Hollywood Is Raking It In With Fewer Workers

Even Nikki Finke is a neo-Marxist Keynesian hybrid up in her economic thinkings! "According to BoxOffice.com, 2009's domestic cume has already topped 2008's record haul of $9.626 million from January 1 to December 31, 2008," she writes today, asking: "So Why Is Most Of Hollywood Out Of Work?" You know why, girlfriend! All over America, it's easy to figure out this year that you can pay one person to do the work of two or three. Even best boys.