 |
| Fran Lebowitz |
I moved to New York when I was 18, and today I’m still looking for a good apartment.-RW
As Larry’s uncle Paul Samuelson taught me in graduate school at MIT, if the real interest rate were expected to be negative indefinitely, almost any investment is profitable. For example, at a negative (or even zero) interest rate, it would pay to level the Rocky Mountains to save even the small amount of fuel expended by trains and cars that currently must climb steep grades. It’s therefore questionable that the economy’s equilibrium real rate can really be negative for an extended period.But, of course, you can never have a negative "natural interest rate" even in the short-term.
Sawant says she’s tackling housing costs next, with a proposal to exempt cities like Seattle from the statewide ban on rent control and use a billion dollars in bonds to build affordable housing.
“Look at the city, the rent is out of control.”
Sawant has scheduled a big public hearing on affordable housing for Thursday, April 23, at Seattle City Hall.
[H]is marriage to a Russian [Lydia Lopokova] in whom bigotry of the Tsarist regime had been ingrained since girlhood, perpetuated this blight on his character. Their banter together included automatic jibes about the Jews: he considered Judaism as a subject for harsh superior humor. 'I smelt it', he told Lopovoka in 1924 after hearing that the Gluckstein family, which owned Lyons Corner House, had bought the Cafe Royal where his Tuesday Club held its monthly dinners...NYT would rather distort the views of Walter Block, a non-Keynesian economist, then give us truth about their quite evil guiding light Keynes.
He still remained enough of an Edwardian to regard immigrants from eastern Europe as schemers, who outwitted less nimble-minded natives and polluted their environment: "It is not agreeable to see a civilisation so under the ugly thumbs of its impure Jews who have all the money and the power and the brains' he said of Weimar Germany.
Re the recent post about employment since the bust, how can we discern what jobs are "real" and which ones are boom induced? Is it only after the bubble bursts do we know the answer or is there any tool in the Austrian tool kit to know this a priori?
 |
| Stella-resume required. |
Oakland Athletics pitcher Sean Doolittle and girlfriend Eireann Dolan knew it wouldn’t be easy apartment-hunting in the Bay Area for a home they’d need only through the baseball season — maybe even the post season. The added challenge was that it had to be dog-friendly.
In mid-February, they found a spot… sort of. The catch was that the couple was required to write a resume for Stella, their loveable, friendly 5-year-old Rhodesian ridgeback. Nothing too complicated, the landlord assured them. He provided them with a three-page sample resume for dogs and a word of advice. “Think about it a little more in-depth than what you would do for yourself,” Dolan recalled.
Apparently, Stella’s resume did little to impress management. The couple was denied an apartment. The official reason: their vehicle was five inches taller than the garage stall provided for it.
The deterioration of Ukraine’s situation is accelerating. The financial collapse of which I had been warning for months occurred in February, when the hryvnia’s value plummeted 50% in a few days, and the National Bank of Ukraine had to inject large amounts of money to rescue the banking system. The climax was reached on February 25, when the central bank introduced import controls and raised interest rates to 30%.
Since then, President Petro Poroshenko’s jawboning has brought the exchange rate back close to the level on which Ukraine’s 2015 budget was based. But the improvement is extremely precarious.
This temporary collapse has shaken public confidence and endangered the balance sheets of Ukrainian banks and companies that have hard-currency debts. It has also undermined the calculations on which Ukraine’s programs with the International Monetary Fund are based. The IMF’s Extended Fund Facility became insufficient even before it was approved.
But EU member states, facing their own fiscal constraints, have shown no willingness to consider additional bilateral aid. So Ukraine continues to teeter on the edge of the abyssThis is all, of course, because of U.S. meddling in the country, especially the U.S. instigated overthrow of the democratically elected government of Ukraine. Soros ignores this and absurdly blames Russia, but he is correct about the likely developments from here:
A more likely scenario is that Europe muddles through by drip-feeding Ukraine. Ukraine does not collapse, but the oligarchs reassert themselves and the new Ukraine begins to resemble the old Ukraine.-RW
On January 31, 2014, I left the chairmanship of the Fed in the capable hands of Janet Yellen. Now that I’m a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers. I look forward to doing that—periodically, when the spirit moves me—in this blog. I hope to educate, and I hope to learn something as well. Needless to say, my opinions are my own and do not necessarily reflect the views of my former colleagues at the Fed.
When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings.
I was concerned about those seniors as well. But if the goal was for retirees to enjoy sustainably higher real returns, then the Fed’s raising interest rates prematurely would have been exactly the wrong thing to do. In the weak (but recovering) economy of the past few years, all indications are that the equilibrium real interest rate has been exceptionally low, probably negative. A premature increase in interest rates engineered by the Fed would therefore have likely led after a short time to an economic slowdown and, consequently, lower returns on capital investments. The slowing economy in turn would have forced the Fed to capitulate and reduce market interest rates again. This is hardly a hypothetical scenario: In recent years, several major central banks have prematurely raised interest rates, only to be forced by a worsening economy to backpedal and retract the increases. Ultimately, the best way to improve the returns attainable by savers was to do what the Fed actually did: keep rates low (closer to the low equilibrium rate), so that the economy could recover and more quickly reach the point of producing healthier investment returns.
A....confused criticism often heard is that the Fed is somehow distorting financial markets and investment decisions by keeping interest rates “artificially low.” Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by “the markets.” The Fed’s actions determine the money supply and thus short-term interest rates; it has no choice but to set the short-term interest rate somewhere. So where should that be? The best strategy for the Fed I can think of is to set rates at a level consistent with the healthy operation of the economy over the medium term, that is, at the (today, low) equilibrium rate. There is absolutely nothing artificial about that!
This week controversy ignited when Patrick Moore, a prominent advocate for Golden Rice, was interviewed on the French TV channel Canal+. He correctly claimed that glyphosate was safe enough to drink and not likely causing alleged cancer outbreaks in Argentina. When the host offered him a glass of Roundup herbicide he did not drink it and walked off the set.
Of course, twitter and other opinion outlets of the world's pseudoexperts exploded with the fact that Moore was forced to eat his words rather than drink weed killer.And then the Big M felt compelled to remind everyone that weed killer is not a beverage and that Moore is not representing the company.
Over the years I've done the demo, not hammering a glass of the stuff, but mixing a tablespoon of the working solution into diet Mountain Dew. No big deal.Of course when you do a stunt like this everyone goes completely unhinged, screaming that a scientist endorses drinking weed killer. As usual, it is not about thinking-- it is about harming a scientist's credibility. My demo is not about drinking weed killer-- it is about demonstrating empirically-derived biological thresholds, physiological fates of well-characterized chemicals, and understanding a herbicide's mechanisms of action.But that's nuance and science, so don't expect them to understand that.So for the record, don't drink weed killer. There is absolutely no evidence that glyphosate is going to kill you or even make you sick in working concentrations. However, the formulation used on plants contains surfactants, detergent-like compounds that help the chemical penetrate a leaf.Anyone who has ever consumed soap (long story) knows that it gives you a royal case of crazy colon, and that would likely be the effect of drinking a full glass of the commercial herbicide preparation.Moore might have been planning a long flight or a marathon run, places where a case of the urgent flaming schmootzies would be most unwelcome.My official words- don't drink weed killers or any ag chemicals. Instead, take the time to learn how to use them safely, and always do so within the labeling guidance.
.png)
[A]n unexpected recent rebound by the ruble has partially reversed months of pain for the nosediving national currency and fired hope among harried officials in Moscow that there might be a light at the end of the tunnel.
Few analysts were betting on a bounce after the ruble lost over 40 percent of its value in 2014 and carried on the slump into this year.
But a drop in fighting in east Ukraine and the steadying of oil prices seems to have combined with the tax payment season and a Kremlin drive to get money repatriated to fire an unlikely recovery.Guys, it was mostly Elvira.
Willie Nelson, the country singer-songwriter (and well-known consumer of cannabis), has revealed plans to launch a branded chain of marijuana dispensaries and related products, including signature strains of pot. Dubbed “Willie’s Reserve,” the brand is expected to start formulating plans in the next year. Nelson spokesman Michael Bowman told The Daily Beast that the operation is going to “be something that’s reflective of (Nelson’s) passion” for cannabis.
At a time when legalized marijuana is already a $2.2 billion business, Nelson is far from the first celebrity to eye the branded cannabis model. Last year, the family of reggae legend Bob Marley announced plans to create a line of pot products, including “heirloom Jamaican cannabis.”
Plus, with more than 20 states now having legalized marijuana for recreational or medical use, cannabis chains are starting to emerge. In Colorado, for example, a chain called Native Roots has locations in more than a half-dozen cities, with additional ones coming soon.
.jpg)
.jpg)
We’re about to do the meanest thing this newspaper could do to Tim Robbins: Agree with him.
The famously liberal actor has come out against the attempt by the actors union, the Actors’ Equity Association, to impose the minimum wage on small theaters, and we’re with him all the way.
At issue is the 99 Seat Theater Plan, which allows union members to work for modest stipends in small theater productions. Mr. Robbins, who calls himself a “proud member of Actors’ Equity,” says he opposes the minimum wage because these small theaters are not about making money. Actors volunteer for many reasons—an opportunity to do live theater, to take a part they might not otherwise get, maybe even to be discovered.
In a piece for the Los Angeles Times, Mr. Robbins portrayed his position as a fight for the little guy—the unknowns going up against the union bigs in Actors’ Equity’s “new $7 million offices.” Between the lines he’s saying the mandated wages may be a death knell for some of these small theaters.
Perhaps Mr. Robbins will now give the same consideration to the little guys who lose their jobs in the rest of the economy when wages are set too high for the market. He might also learn to appreciate that even at profit-making companies people take low-wage jobs for many reasons: the retiree who works at McDonald’s to keep active, the college grad who takes an unpaid internship to gain experience, or the teenager who works at a bodega to get some spare cash.
For most people, buying a home is no cheap venture. That's especially the case when the growth in U.S. home prices is beating wage increases 13 to 1.
Wages climbed by 1.3 percent from the second quarter of 2012 to the second quarter of 2014, compared to a 17 percent increase in home prices around that time, according to a new report from RealtyTrac. The real-estate data provider used the Labor Department's weekly earnings data to measure wage growth, while home prices were derived from sales-deed data in December 2014 and compared to December 2012 on the hypothesis that a change in average wages would take at least six months to affect home prices.
Using localized earnings data, RealtyTrac also found that 76 percent of housing markets posted increases in home prices that exceeded the wage growth there during that time frame, led by the regions of Merced, California; Memphis, Tennessee; Santa Cruz, California; and Augusta, Georgia. Others include the Detroit, Houston and Miami regions.
 |
| William Vickrey |
I started [at Columbia] in August 1981 and finished in May 1985, but I had a job with a bank in Secaucus, so I stuck around until August '85.Walter Block, in a reply to Davidson, continued the Vickrey tales:
We didn't overlap, but William Vickrey was a professor when I was there. I didn't know he was going to win a Nobel prize in 1996...His class oozed his Keynesian views, which I put up with because I wanted to minor in economics (and major in astrophysics) and his class was supposed to be better than the other professor (whose name I forget) according to the course guide.
One day, he came to class with a box diagram all strung with colored yarn. He then attempted to recapitulate the graph on the chalk board in two dimensions. He arefully explained all the equations, wrote them up on the board, drew the graphs, then said, "No, that isn't it."
Took up his eraser, started over. A room of 200 students flipped their notebooks to a fresh page and started again.
This happened at least six times as I recall. I remember drawing that
graph over and over and over. A whole lot of muttering in the room.
Every time it was "No, that isn't it" two hundred pages would be
flipped.
Finally, he finished the sixth version and looked at it, blinked a
bit, and said, "Yes. That's it. That's exactly right. Now, what you
see here is exactly what I was trying to say about the yarn box. Not
very important though, and it won't be on your test."
There was a pause. Twenty notebooks slammed shut. I was third out
the door, and all the students who left that day went straight to the
registrar's office to drop his class. Memorable.
I think Vickrey won the Nobel Prize in econ, and then, two weeks later, passed away. Murray Rothbard used to say of Vickrey, "He could draw 8 curves, all in different colors, with one sweep of his arm." When I was a columbia grad school, we all had to take a placement exam for micro. Becker taught the highest scoring students, Vickrey the middle group, and Alcaly the lowest. I was lucky; I got Becker.(Thanks to Dr. Block for sending along the exchange.)
[T]here are tantalizing signs that the cycle has turned. In February, U.S. consumer prices rose 0.2% from January, which pulled the annual inflation rate out of negative territory; it’s now zero. More important, core prices rose 0.16%, which nudged the annual rate up to 1.7% from 1.6%. It was the second upside surprise to core inflation in a row. The driver in January was firmer service prices, this month it was goods.
There have been scattered signs that inflation has bottomed out elsewhere, as well. In the eurozone, the 12-month inflation rate rose from minus 0.6% in January to minus 0.3% in February, while core inflation ticked up ever so slightly to 0.7% from 0.6%. (Britain is an exception: both headline and core inflation came in lower than expected in February.) Anecdotal evidence is also piling up. As my colleague Josh Zumbrun has noted, the Billion Prices Project at the Massachusetts Institute of Technology, which skims the Internet every day for up to date pricing information, is signaling a turn....
Branko Milanovic notes Lee Kwan Yew’s explanation of the success of Singapore and other Asian economies; partly Confucian culture, partly air conditioning. If you’ve ever tried to walk around Singapore, you know whereof he speaks.
The same factor plays a major role in explaining differential US regional growth, and thereby hangs a tale.
The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out response, because location decisions have a lot of inertia; few people would choose de novo to live in the old industrial towns of upstate New York, but the existing housing stock and the fact that people have family and social networks prevent quick abandonment. So to this day temperature is a good predictor of state population growth. I’ve taken the NOAA data and divided states into three groups by average temperature: Group I is colder than Rhode Island, Group III warmer than California:
Who’s in Group III? The full list:
Oklahoma
Arizona
Arkansas
South Carolina
Alabama
Mississippi
Georgia
Texas
Louisiana
Florida
These are places where summer would be really oppressive without air conditioning.
The current federal minimum wage is $7.25, half of what San Francisco’s wage floor will be set at by 2018 after a series of increases that begin in May. Nationally, Congress phased in the last 40% increase to $7.25 over a three-year period; in Oakland, an almost-identical 36% increase happened overnight on March 1...-RW
In Oakland, local restaurants are raising prices by as much as 20%, with the San Francisco Chronicle reporting that “some of the city’s top restaurateurs fear they will lose customers to higher prices.” Thanks to a quirk in California law that prohibits full-service restaurants from counting tips as income, other operators—who were forced to give their best-paid employees a raise—are rethinking their business model by eliminating tips as they raise prices.
Ironically, this change in compensation practices has reduced the take-home pay for some of the employees it was supposed to help: At the Oakland restaurant Homestead, the East Bay Express reported that servers are taking “a substantial pay cut,” earning a flat wage of $18 to $24 an hour and no tips instead of the $35 to $55 an hour they were accustomed to earning when tips were included.
.jpg)
Under the agreement with BlueMountain, Mr. Stein will be paid by the hedge fund but not employed by it. In this way, he will be placing one foot through the revolving door between Washington and Wall Street, a move others like Alan S. Greenspan and Ben S. Bernanke have also made.-RW
The list of Washington movers and shakers who have taken lucrative positions in the private sector after leaving public office is long.
Mr. Greenspan was hired to consult for Deutsche Bank, the bond investment firm Pacific Investment Management Company and the hedge fund Paulson & Company after stepping down as Fed chairman. Last year, Timothy F. Geithner, the former Treasury secretary, joined the private equity firm Warburg Pincus. William M. Daley, a former White House chief of staff, joined the Swiss hedge fund Argentière Capital as a managing partner.
The Great Inflation was the defining macroeconomic event of the second half of the twentieth century. Over the nearly two decades it lasted, the global monetary system established during World War II was abandoned, there were four economic recessions, two severe energy shortages, and the unprecedented peacetime implementation of wage and price controls. It was, according to one prominent economist, “the greatest failure of American macroeconomic policy in the postwar period”... In 1964, inflation measured a little more than 1 percent per year. It had been in this vicinity over the preceding six years. Inflation began ratcheting upward in the mid-1960s and reached more than 14 percent in 1980
.jpg)
