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"Pre-Privatization": You Have to Be Kidding Me

Have you heard the new term for bank nationalization? All the cool kids are calling it “pre-privatization.” Oooh, you’re so scared of bank nationalization, what a chicken. Is it because your mommy and daddy warned you about it? I bet they told you to stay away from dope and rock ‘n roll, too.

How the Government Dealt With Previous Recessions

This is a really neat idea by the New York Times. They got a few big guns to discuss the government’s moves during previous recessions. Unfortunately, the three economists all cling to the Keynesian/monetarist view that government spending and money printing boost the economy, with the only downside being rising prices. (Somebody else, who claims […]

Fleshing Out the Broken Window Fallacy

A colleague recently forwarded me an email he had received asking about the broken window fallacy. (If you have never heard this spelled out before, you absolutely must read Hazlitt’s discussion–it’s very short.) Anyway, the correspondent was puzzled, because if the “flaw” in the broken window fallacy is that the baker would have spent money […]

DeLong and Krugman Surrounded by Friggin Idiots, #283

Ah, poor Brad DeLong. In a post entitled, “Against Stupidity the Gods Themselves Contend in Vain,” he echoes Paul Krugman’s exasperation with moronic Republicans. Here’s Krugman full post: The most valuable lesson I learned from the year I spent in Washington (1982-1983, on the staff of the Council of Economic advisers — I was the […]

The Stock Market in 1929 Was Undervalued??

So argue McGrattan and Prescott in this 2003 Fed paper (pdf). Here’s the abstract: Many stock market analysts think that in 1929, at the time of the crash, stocks were overvalued. Irving Fisher argued just before the crash that fundamentals were strong and the stock market was undervalued. In this paper, we use growth theory […]

Potpourri

* Here is Nouriel Roubini explaining that laissez-faire capitalism has failed. I’m not sure how the Federal Reserve (which caused the boom) or the trillions in bailouts and other rescue moves (which caused/exacerbated the financial panic) qualifies as laissez-faire. But beyond that quibble, I love how Roubini lists all of the things that can go […]

Consumer Price Inflation at 4.9% Annualized Rate

Longtime readers know that I care little for the Bureau of Labor Statistics’ “seasonal adjustments” to their data. If you know where to look in their latest report, you’ll see that the unadjusted index of consumer prices rose 0.4% from Dec 08 to Jan 09, which is an annualized increase of 4.9%. As I said […]

Stocks Down, Gold Breaks $1,000

I’m starting to notice a pattern… Anyway, gold broke $1,000, though as of this post it’s down to $990. And the S&P 500 right now is down about 1% for the day. It’s down 43 percent from a year ago. I think the investors of the world are finally starting to read this blog.