Tuesday, July 29, 2008

Everyone wants to help the poor

Or, at least most of us would like to think that. Here are two interesting (and relatively short) readings on how maybe we can help better than we have been. (1, 2)

Monday, July 28, 2008

What else should we expect?

"These projected deficits are both manageable and temporary if spending is kept in check, the tax burden remains low and the economy continues to grow," OMB said in its Mid-Session Review of the federal budget.

How can that be any good way to think? (And, how can that be even slightly reasonable?) I don't know, but can we really blame consumers for low credit, high debt-to-asset ratio, and the outrageous idea that it’s ok to walk away from a pledge to debt when it hurts to deliver the goods? Maybe not, if all that has been exampled before them is counter to the principles of credibility, patience, and fidelity.

“Pay yourself first” is advice often given by financial counselors and often practiced when consumers spend large sums on depreciable goods instead of paying down outstanding debts, mortgage owners walk away to preserve their remaining wealth, business leaders ousted by their failing companies seem to bleed green when everyone else bleeds red, investment banks rake in profits for seemingly countless quarters before finding out all their assets are really debts for which they’ve previously spent any commodity, and when the government fails not at paying its own interests while failing considerably in fulfilling prior promises.

What else really should we expect if the OMB itself acts this way?

[It looks now like the Wall Street Journal removed the quote at top]

Saturday, July 26, 2008

Incentives... are everywhere?

Economists believe that every action is a transaction and therefore multiple opportunities and mechanisms to change behavior exist. Sometimes there is more than one means to the same end and I guess that is not a bad thing.

Friday, July 25, 2008

Two great articles worth reading

The first is very funny and mostly true.

The second, What if the candidates pandered to economists? is even better. I probably agree with six of his eight arguments, all of which feel very liberal (maybe even Anti-American?), which is surprising given the the writer is an extremely conservative Harvard professor who has served as adviser to one Republican President and one Republican candidate.