Wednesday, December 12, 2018

Hoover Institutitution: Why California Home Prices Will Soon Fall

By  Lee Ohanian

The median price of a single-family home in California has increased to about $546,000. This is a record high, and is more than 80 percent above the 2012 median of $300,000. California home prices are likely peaking now, and I expect that they will decline soon. The simple analytics of the California housing market is that not nearly enough California households have sufficient income to support the cost of home ownership at current price levels and with current lending standards.

The first signs of a weakening housing market are already occurring.

Trump vs. The Federal Reserve Board: Will Interest Rates Be Raised Next Week?

President Donald Trump
President Donald Trump is in the face of the Federal Reserve Board, again.

During an interview with Reuters on Tuesday, Trump said it would be a mistake if the Fed raises interest rates when it meets next week.

Will Trump be able to intimidate the Fed into not hiking rates next week?

Tuesday, December 11, 2018

22 Days in Paul Krugman's Masterclass (Day 21) (How to Write About Economics for the Intelligent Masses)

Lesson 21 in Paul Krugman's Masterclass is 9 minutes and 53 seconds long.

In this lesson, Krugman provides thoughts on how someone should write economics for the layman---but there is a Krugmanite diabolical twist even in this teaching of basic writing of economics.

Trump Signals Progress On Trade Talks With China

President Donald Trump
For whatever it is worth, President Trump has sent out a tweet signaling progress in trade talks with China and that important announcements are coming.

What Kind of Power Will Alexandria Ocasio-Cortez Have in Congress?

Alexandria Ocasio-Cortez
Will  House Speaker-designate Nancy Pelosi, who will ultimately decide committee assignments for the coming session, give socialist Alexandria Ocasio-Cortez a seat on the powerful House Ways and Means committee?

That's what AOC wants but the committee is usually made up of seasoned House members.

Macron Increases the Minimum Wage: The Dumbest French Leadership Move Since Waterloo

Emmanuel Macron
French president Emmanuel Macron addressed the nation from the presidential Elysee Palace on Monday in a recorded TV speech and announced new economic measures in a desperate attempt to quell four weeks of violent protests across the country.

He announced that he would increase the minimum wage by 100 euros per month to take effect at the start of 2019. He also said that a tax hike for the poorest pensioners will be canceled at the start of the next year.

Monday, December 10, 2018

Introducing the Walter E. Block Scholarship

Introducing the Walter E. Block Scholarship:
Accepting Applications now!



My name is Walter E. Block, Ph.D., and I am the Chair of the Economics department here in the College of Business at Loyola University New Orleans. I’m eager to share some exciting news with you.

22 Days in Paul Krugman's Masterclass (Day 20) (A Very, Very Bad, Inconsistent, Methodological Perspective)

Lesson 20 in Paul Krugman's Masterclass is 11 minutes and 27 seconds long.

In this class, Krugman begins by discussing methodology and correctly points out that the world is too complex to run experiments the way you can in the physical sciences. Though he continues to express things in an unclear manner and doesn't put things as succinctly as I have in the above sentence.

But then he goes haywire.

Climate Fear Monger Michael Bloomberg to Deliver Commencement Speech at MIT

Michael Bloomberg
So much for scientific rigor at the Massachusetts Institute of Technology.

The university has announced it will have as its 2019 commencement speaker the climate fearmonger Michael Bloomberg. He is the 10th richest man in the United States, according to Forbes.

He is considering a run for president on the Democratic ticket and remains active in the area of climate change. He currently serves as the U.N. Secretary General’s Special Envoy for Climate Action, which, according to a U.N. press release, means Bloomberg “support[s] the Secretary-General’s climate strategy and efforts towards the planned 2019 Climate Summit at United Nations Headquarters.”

Welcome to Trump Budget Management : A Week After Decrying a $716 Billion Defense Budget, Trump Agrees to $750 Billion Defense Budget

The Commander-in-Chief
President Donald Trump has agreed to a request from Defense Secretary James Mattis to propose a defense budget of $750 billion for the coming year, reports CNN.

Last week, Trump appeared to call the Defense Department budget of $716 billion "crazy" in a tweet.

Sunday, December 9, 2018

22 Days in Paul Krugman's Masterclass (Day 19) (A Vicious Attack on Larry Kudlow)

Paul Krugman, viciously attacks Larry Kudlow
Lesson 19 in Paul Krugman's Masterclass is 12 minutes and 58 seconds long.

Krugman starts off this lecture by telling us what he reads every morning:
The New York Times
The Washington Post
Twitter (He adds that he never reads responses to his own tweets)

Who is Paying the Steel Tariff?

Some are claiming that the Chinese are absorbing the price of the steel tariff imposed by President Trump.

But the data show otherwise.

The Phony US-China Trade Truce

By Barry Eichengreen

On December 1 in Buenos Aires, US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed on a 90-day moratorium on increases in import tariffs to provide a window for negotiations. Unfortunately, this approach to mediation does not always succeed, and investors were not impressed – as was evident in the 800-point fall in the Dow Jones Industrial Average on December 4. And if markets were skeptical then, they will be even more skeptical now, with the arrest of Huawei Chief Financial Officer Meng Wanzhou for violating US sanctions on Iran.

The two presidents’ approach to relieving trade tensions does have ample precedent, but such episodes provide little grounds for hope. In February 1930, the League of Nations convened an international conference in Geneva to address the problem of proliferating protectionism that “obstructed the development of large-scale production and impeded European recovery” and was deployed more generally as a “weapon of economic warfare.” Thirty countries sent delegations. The United States, though not a member of the League, sent Edward C. Wilson, the first secretary at the US Embassy in Paris.

DEEP DIVE: Behind The Arrest of Huawei CFO Meng Wanzhou

Meng Wanzhou
China has summoned the Canadian ambassador to China to protest the detention of a top executive of leading Chinese tech giant Huawei, calling it “unreasonable, unconscionable, and vile in nature” and warning of “grave consequences” if she is not released, reports CP24.

A report by the official Xinhua News Agency carried on the Foreign Ministry's website said that Vice Foreign Minister Le Yucheng called in Ambassador John McCallum on Saturday over the holding of Huawei Chief Financial Officer Meng Wanzhou, the daughter of the founder of the company.

Saturday, December 8, 2018

22 Days in Paul Krugman's Masterclass (Day 18) ("San Francisco Has to Become More Free Market")

Lesson 18 in Paul Krugman's Masterclass is 7 minutes and 31 seconds long.

Ok, from the start, I want to make it clear, I am giving Krugman an A for this lesson. He probably deserves only a B+ but it is so much better than his other lessons I am giving him a semi-deserved break.

In this lesson, Krugman discusses "economic geography." His points are correct but I just don't think he is a great clear presenter of ideas.

He starts off by noting that before Silicon Valley became such a powerful tech sector, it was known as being a major apricot growing sector.

Fed Chairman Says U.S. Economy Performing Very Well (Hint: He has no clue.)

Jay "Everything is fine." Powell
I am saving this for future reference.

This past Thursday, before the Housing Assistance Council's 2018 Rural Housing Conference in Washington, D.C., Federal Reserve Board Chairman Jay Powell told the audience that, "the economy is strong overall."

Mark the date: December 06, 2018.

Just Exactly What Sort of "Dominance" Does the US Enjoy By Being the World's Largest Economy?

Don Boudreaux 
A Don Boudreaux letter to The Financial Times:
Lawrence Summers makes many good points in “Washington may bluster but cannot stifle the Chinese economy” (Dec. 3). But Mr Summers regrettably promotes a popular myth when he speculates that “for the US to lose its position as the world’s largest economy, after a century of dominance, would be a seismic event.”