Sovereign Debt Wonkery, by Arnold Kling

Sovereign Debt Wonkery, by Arnold Kling: "

I wrote Guessing the Trigger Point for a U.S. Debt Crisis for Mercatus. Don't assume that you understand it the first time you read it. This is a really difficult, subtle issue.

Think of the following as an analogy. A guy is paddling down a river without realizing that he is headed toward a waterfall. When is the last point that you can warn him in time so that he can paddle to safety? It depends on how fast the river is moving, how fast he can change direction, how strongly he can paddle, and so on.

The sovereign debt crisis trigger point is like this problem, only one level deeper. You don't win by guessing the last point at which the guy can make it to safety. Instead, imagine that you have a bunch of people standing next to the river placing bets on whether or not the guy makes it to safety. Your job is to pick the point at which the folks doing the betting will believe he can no longer make it to safety. That is what the trigger point for the sovereign debt crisis looks like. (For those of you familiar with Keynes' beauty contest analogy, there is something similar going on here.)

In any case, this an issue where academics generally fear to tread. Rogoff and Reinhart have taken a lot of grief for their magic number of 90 percent ratio of debt to GDP. And that is for a less striking prediction. They just want to predict the point at which you will see economic growth slow down, not the point at which you get a sovereign debt crisis. I'm trying to tackle the harder issue.

"

Candid photo captures the haunting beauty of the federal postal service, which is only losing $1 billion a month

Candid photo captures the haunting beauty of the federal postal service, which is only losing $1 billion a month: "The United States Postal Service recently announced that it lost more than $3.5 billion in one quarter. Competition from email, UPS and FedEx -- along with outrageous costs associated with union benefits -- were the major culprits.

A recent photo captured the efficiency of the federal bureaucracy as it relates to its 'management' of the postal service:

Is that a Corona someone squirreled away in the mailbox?

But don't worry, rubes: even though the feds can't seem to manage mail delivery, rest assured they can orchestrate the entire health care system. After all, it's only one-sixth of the whole frickin' economy.

True, Democrats may be incompetent... but you've got to give them this: they're exciting!


Via: FailBlog and Instapundit.

"

GLOBAL WARMING ALERT:

GLOBAL WARMING ALERT:: "

COMMON CENTS proudly brings you today's Global Warming alert. Ever since Al Gore has released his movie "An Inconvenient Truth" the Earth's temperatures have continued to cool. In fact, since the release of his movie the average temperature on Earth has cooled 0.74 degrees F (0.39 C).

The latest global averaged satellite temperature data for June 2009 reveals yet another drop in the Earth's temperature. This latest drop in global temperatures means despite his dire warnings, the Earth has cooled .74°F since former Vice President Al Gore released "An Inconvenient Truth" in 2006. According to the latest global satellite data courtesy of the University of Alabama in Huntsville and made into an easy to read graph by algorelied.com: 'For the record, this month's Al Gore / 'An Inconvenient Truth' Index indicates that global temperatures have plunged approximately .74°F (.39°C) since Gore's film was released,' noted algorelied.com. (See satellite temperature chart here with key dates noted, courtesy of www.Algorelied.com - Also see: 8 Year Downtrend Continues in Global Temps) Gore -- who is fond of saying the Earth has a "fever" -- has not yet addressed the simple fact that global temperatures have dropped since the release of his global warming film. (Gore has also not addressed this: Another Moonwalker Defies Gore: NASA Astronaut Dr. Buzz Aldrin rejects global warming fears: 'Climate has been changing for billions of years' - Moonwalkers Defy Gore's Claim That Climate Skeptics Are Akin To Those Who Believe Moon Landing was 'Staged') A record cool summer has descended upon many parts of the U.S. after predictions of the "year without a summer.' There has been no significant global warming since 1995, no warming since 1998 and global cooling for the past few years. (Also see: Scientists Write Open Letter to Congress: 'Earth has been cooling for ten years' - 'Present cooling was NOT predicted by the alarmists' computer models, and has come as an embarrassment to them' - July 1, 2009) In addition, New peer-reviewed scientific studies now predict a continued lack of global warming for up to three decades as natural climate factors dominate. (See: Climate Fears RIP...for 30 years!? - Global Warming could stop 'for up to 30 years! Warming 'On Hold?...'Could go into hiding for decades' study finds – Discovery.com – March 2, 2009 )

http://commoncts.blogspot.com/feeds/posts/default

"

Or a Program That Was Actually Going to Work

Or a Program That Was Actually Going to Work: "

John Judis writes in the New Republic that Obama hasn’t been as successful at selling his economic program as Reagan was:

On the eve of the [1982] election, with the unemployment rate at a postwar high, a New York Times/CBS News poll found that 60 percent of likely voters thought Reagan’s economic program would eventually help the country. That’s a sign of a successful political operation.

"

@GregWHoward, 8/25/10 8:07 PM

Greg Howard (@GregWHoward) 8/25/10 8:07 PM Intel CEO Blasts Obama Administration, Says Anti-Business Policies Are Killing The Country http://bit.ly/bZTRNv #tcot #ocra #sgp #p2 #tlot

@AndrewCMcCarthy, 8/25/10 7:11 PM

Andrew C. McCarthy (@AndrewCMcCarthy) 8/25/10 7:11 PM On Fox last night with another moderate imam who can't bring himself to say Hamas is a terrorist organization...http://tinyurl.com/29sh5kl

@devildawg99, 8/24/10 7:57 PM

devildawg99 (@devildawg99) 8/24/10 7:57 PM Obama campaigned against Bush saying he knew what to do. Now all he does is blame Bush b/c he doesn't know what to do. #p2 #tcot #sgp

@Ricochet, 8/24/10 2:28 PM

Ricochet (@Ricochet) 8/24/10 2:28 PM Attn Rich Liberals: Pat Sajak reminds you that tax deductions are suggested minimums only. Pay as much as you want: http://ow.ly/2ubtv

@WilliamJBennett, 8/24/10 6:43 AM

Dr. Bill Bennett (@WilliamJBennett) 8/24/10 6:43 AM With popularity dropping, will a narcissistic #Obama even run in 2012? #tcot #GOP

@jimgeraghty, 8/24/10 6:16 AM

jimgeraghty (@jimgeraghty) 8/24/10 6:16 AM Barack Obama Elementary School, in Upper Marlboro, Md., opened Monday. School Team Nickname: The Fightin' Equivocators. http://bit.ly/cS2kMR

@instapundit, 8/24/10 6:14 AM

instapundit.com (@instapundit) 8/24/10 6:14 AM CHICKEN: James Cameron backs out of debate with climate-change skeptics….: CHICKEN: James Cameron backs out of d... http://bit.ly/cdYpO1

@laborunionrpt, 8/23/10 8:23 PM

LaborUnionReport (@laborunionrpt) 8/23/10 8:23 PM Pick out Russ Feingold's Union Bosses! | RedState: http://bit.ly/dohNHM #tlot #tcot #teaparty #aflcio #astroturf #LUR

@michellemalkin, 8/23/10 9:14 AM

Michelle Malkin (@michellemalkin) 8/23/10 9:14 AM Just posted - The White House War on Jobs http://is.gd/eyMLI

Response to an Angry Critic

Response to an Angry Critic: "

Dear Ms. ___________:

Thanks very much for writing. I appreciate your thoughts.

I assure you, though, that you’re mistaken in your conclusion that I am “a disgusting typical conservative corporate mouth piece.” First, I truly am not conservative. Second, I very often speak out against policies that benefit corporations. (Whether or not I am disgusting is not for me to say.)

Contrary to your accusation, to recognize (as I do in my offending blog-post) that statistical differences in the pay of men and women might well be the result of perfectly reasonable differences in the patterns of career choices typically made by men from the patterns of career choices typically made by women is not at all, as you describe it, “to tow [sic]… [an] ignorant conservative line.” For example, here’s philosopher Peter Singer, who is no one’s idea of a conservative or of an economic libertarian!:

While Darwinian thought has no impact on the priority we give to equality as a moral or political ideal, it gives us grounds for believing that since men and women play different roles in reproduction, they may also differ in their inclinations or temperaments, in ways that best promote the reproductive prospects of each sex. Since women are limited in the number of children they can have, they are likely to be selective in their choice of mate. Men, on the other hand, are limited in the number of children they can have only by the number of women they can have sex with. If achieving high status increases access to women, then we can expect men to have a stronger drive for status than women. This means that we cannot use the fact that there is a disproportionately large number of men in high status positions in business and politics as a reason for concluding that there has been discrimination against women. For example, the fact that there are fewer women chief executives of major corporations than men may be due to men being more willing to subordinate their personal lives and other interests to their career goals, and biological differences between men and women may be a factor in that greater readiness to sacrifice everything for the sake of getting to the top.*

Correct or not, people can – and do – without being mouthpieces of corporate America, or even favorably disposed toward free markets, believe that statistical differences in men’s and women’s pay are explained by factors having nothing to do with ill-intent, discrimination, or, as you say, “men/male power/domination over women/female subservience/exploitation.”

Thanks again for writing.

Sincerely,

Donald J. Boudreaux

* Peter Singer, A Darwinian Left: Politics, Evolution, and Cooperation (New Haven: Yale University Press, 2000), pp. 17-18.

Ms. __________ should read some of the economics literature on this topic. She can begin with J.R. Shackleton’s Should We Mind the Gap?: Gender Pay Differentials and Public Policy (2008).

"

A Case For Capitalism (Some Great Quotes).

A Case For Capitalism (Some Great Quotes).: "

For those of you who believe in a Market Economy, check out The American Thinker web site.

Here’s a great sample:

The Case For Capitalism By Sally Julian

Wherever people are dependent and unable to work for themselves, the human spark that desires private property is killed, and life is “solitary, poor, nasty, brutish and short.” Enough time as a dependent, and the human becomes degraded and abased. After the fall of the Soviet Union, CNN filmed what had happened in one of the Soviet collective farms. Anyone there was offered a farm of his own. Only one family, who must have had some distant memory of what private property meant, took them up on the offer. They worked from dawn to dusk. The rest of the collective farm members were often drunk and slept until noon while the tractors rusted in the field. The motivation to work collectively vanished. The expectation in these communities to share everything went against human nature.

A market economy based on private property, buttressed by the rule of law, is truly the best environment for mankind. People will work harder and with ingenuity if they know they have earned rewards from that labor. When the rewards are given to them for nothing, there is frustration and despair. Capitalism benefits more people than any other economic system. To work for oneself and reap the rewards is a basic human aspiration.

Winston Churchill:

The inherent vice of capitalism is the unequal sharing of its blessings. The inherent blessing of socialism is the equal sharing of its miseries.

Margaret Thatcher:

“We have been ruled by men who live by illusions … the illusion that there is some other way of creating wealth than hard work and satisfying your customers.”

Abraham Lincoln:

You cannot help the poor by destroying the rich. … You cannot lift the wage earner up by pulling the wage payer down … you cannot build character and courage by taking away people’s initiative and independence. You cannot help people permanently by doing for them, what they could and should do for themselves.

"