Russ Roberts on the debate about the impact of the stimulus act: My take is summed up the by the quotations marks I’ve put around “measuring.” Blinder and Zandi don’t really measure the impact of government intervention. They measure what the model says is the impact. The model is based on past relationships that were .. read more
Will Wilkinson on countercyclical economic policy: They’re talking about financial crises in particular, but I suspect the same holds for recessions generally. As long as the government doesn’t do anything spectacularly stupid or crazy, we’ll return to trend. Policy so far has been only mildly stupid and not crazy. The heated arguments between competing camps .. read more
I suppose it is at least refreshingly honest to tell the public that if we want to keep spending at this rate, taxes will have to rise on everyone to pay for it. Greg Easterbrook says taxing the rich isn’t enough: Here’s the uncomfortable point few want to face: even if the rich do get .. read more
There has been a lot of press recently about the amount of cash sitting on corporate balance sheets. Since GDP growth is very dependent on investment spending, what companies do with their $1 trillion cash horde is most important. This Bloomberg article makes the case that companies are about to start spending: The $1.24 trillion .. read more
Wedge formations such as this one seen in the Canadian dollar ETF are often resolved with a large move. The problem is that the move could be in either direction. Wait for the break before taking a position. You’ll miss the initial part of the move but that is better than taking a position ahead .. read more
The policies of demand management through monetary manipulation and government spending produced a period that has been called the Great Moderation by economists. This moniker refers to the alleged moderation of the business cycle. The policy of demand management is based on the idea that there is a simple positive correlation between total spending or .. read more
Articles are popping up all over about the disappearing oil in the Gulf of Mexico: Mighty Oil Eating Microbes help clean up the Gulf : Perhaps the most important cause of the oil’s disappearance, some researchers suspect, is that the oil has been devoured by microbes. The lesson from past spills is that the lion’s .. read more
Gold and stocks are trading in patterns that are nearly perfectly inverse. Gold may be peaking and stocks may be making a bottom. If that turns out to be true, I would take it as a very positive sign for the economy and the stock market.