Curt Doolittle

Category: Economics, Finance, and Political Economy

  • KRUGMAN Straw Man Of The Day : iPhone 5 Shows We Are All Keynesians?

    Krugman’s straw man of the day uses discussions about the impact of the iPhone 5 release on the economy to suggest we are all Keynesians, and that government should spend more money.

    [callout] [/callout]

    But all actions have costs. And Americans have decided that the cost of funding expansion of government influence, power, and corruption is so high, that government stimulus is even worse then continuing recession. So, while Americans may understand, within reason, the value of stimulus. Unlike Keynesian economists, American’s also understand the cost of the expansionist state. And they have had quite enough of it. Unlike certain Nobel laureates.

  • THE DEMAND CURVE FOR COCAINE Thanks to the irrepressible Robert Murphy. A humoro

    THE DEMAND CURVE FOR COCAINE

    Thanks to the irrepressible Robert Murphy.

    A humorous way to teach a basic idea: prohibition increases price and demand, and by means of artificial scarcity, distributes vast amounts of money to producers of banned substances. One of the best ways to make money is to provide something that people want, and are willing to pay for, but it subject to extraordinary tariffs.

    Oh, to be a pirate on the seas. 🙂

    Source date (UTC): 2012-09-08 21:58:00 UTC

  • PAPER ON HOUSING’S RELATIONSHIP TO THE ECONOMY “What made housing vulnerable to

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2139670&http%3A%2F%2Fpapers.ssrn.com%2Fsol3%2Fpapers.cfm%3Fabstract_id=2114620EXCEPTIONAL PAPER ON HOUSING’S RELATIONSHIP TO THE ECONOMY

    “What made housing vulnerable to a bubble? And why has the housing market been so impervious to attempts at resuscitation?

    This Article critically reviews the theories of the housing bubble. It argues that housing is unusually susceptible to booms and busts because credit conditions affect demand and because the market is incomplete and difficult to short. Housing market distress transmits to the macroeconomy through a balance sheet channel, a construction channel, and a collateral channel.

    Housing is unique as an asset class in that it is both a consumption and investment good. It is also the largest single consumer asset and debt class. Because housing is credit-backed and such a large asset class, failure will impact the financial system itself and pull down the economy as a whole. The dual-use of housing, its ubiquity on consumer balance sheets, its highly correlated pricing, and its linkage to the macroeconomy make it a particularly painful type of asset bubble to deflate.

    The credit-backed nature of housing is also the key to understanding why there was a bubble. We argue that the bubble must be understood as stemming from the change in the mortgage financing channel from Agency securitization to private-label securitization (PLS). This shift enabled financial intermediaries — economic, but not legal agents of borrowers and investors — to exploit the information problems inherent in PLS for their own short-term gain. In other words, a set of agency problems in financial intermediation was the critical factor in fomenting the housing bubble.”

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2139670&http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2139670&http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2114620

    Thanks to Adam Levitin at http://www.creditslips.org/

    Source date (UTC): 2012-08-31 21:32:00 UTC

  • WHAT PERCENT OF YOUR PORTFOLIO IS IN GOLD? So, I have this little hobby forecast

    WHAT PERCENT OF YOUR PORTFOLIO IS IN GOLD?

    So, I have this little hobby forecasting currency changes. And, really, I do pretty well with it. That’s because governments are predictable and slow moving. And economic instability has created plenty of opportunity since 2008.

    Now, I’m not a gold bug. Like most analysts, I just view it as another form of manipulatable currency. And I’m not a trader. I invest in my businesses. And my cash reserves are defensive. So, gold is just a currency to move to when others are going to fall. The ticker symbol GLD is a fairly safe way to buy.

    And since gold is fairly volatile, you can buy it gradually over time in the valleys.

    I’m going to increase my GLD holdings by 5%, even though my intuition says to increase them by 10%.

    This election is going to have an enormous impact on world affairs. And like I wrote in 2006, the only way they’re going to fix the problem is to all but destroy the currency both here and in Europe. I just don’t see a way around it at this point without pervasive civil unrest.

    Source date (UTC): 2012-08-28 16:20:00 UTC

  • CONSERVATIVES WANT AN END TO TRANSFERS? Conservatives want to engage in exchange

    CONSERVATIVES WANT AN END TO TRANSFERS?

    Conservatives want to engage in exchange rather than transfer.

    But what is it that they desire in exchange?

    They desire aderence to virtues. Adherence to virtues is a cost for impulsive.

    The virtues compensate for the unfairness of biological differences.

    They drive down the cost of such subsidy and charity.

    But no. Instead the less able are due redistribution, obtained by force, due to the nature of their existence, rather than due to their actions.

    Societies will not bind on theft. All societies bind on exchange.

    Source date (UTC): 2012-08-17 13:58:00 UTC

  • Untitled

    http://www.reuters.com/article/2012/08/17/markets-bonds-idUSL6E8JH5W820120817

    Source date (UTC): 2012-08-17 09:29:00 UTC

  • ARE THERE OPPORTUNITIES FOR ORDINARY PEOPLE TO FORCE INVOLUNTARY TRANSFERS? QUES

    ARE THERE OPPORTUNITIES FOR ORDINARY PEOPLE TO FORCE INVOLUNTARY TRANSFERS?

    QUESTION: “True or false: there are cases in modern society – not referring to CEOs or the like – where some peoples’ voluntary decision(s) to pursue their own (non-violent) interests inadvertently harm other people in tangible ways. If yes, examples?” – Ashtad Bin Sayyif

    ANSWER: “There are many such opportunities. They fall into informal (moral and ethical) and formal ( property and opportunity) categories whereby one causes an involuntary transfer from others to one’s self. Society is constructed of these formal and informal rules. All of which prevent us from using asymmetry of information to cause involuntary transfers. From the most common retail clerk, to the most sophisticated legal document, from the most common of marital abuses, to the most formal partnership and citizenship agreements. Almost no human action is devoid of opportunity to cause involuntary transfers. It’s pervasive. We have the vast edifice of laws, morals, ethics and manners to attempt to prohibit them.” – Curt Doolittle

    Source date (UTC): 2012-08-17 02:07:00 UTC

  • What percent of US hardwood production is devoted to making pallets? “And yet pa

    What percent of US hardwood production is devoted to making pallets?

    “And yet pallets are arguably as integral to globalization as containers. For an invisible object, they are everywhere: There are said to be billions circulating through global supply chain (2 billion in the United States alone). Some 80 percent of all U.S. commerce is carried on pallets. So widespread is their use that they account for, according to one estimate, more than 46 percent of total U.S. hardwood lumber production.” – Cowen

    Source date (UTC): 2012-08-16 18:18:00 UTC

  • CREATES JOBS? My friend Sam Hughes +Gmailed me about this unpublished TED talk.

    http://www.upworthy.com/breaking-you-know-that-nick-hanauer-ted-talk-you-werent-supposed-to-see-here-itWHO CREATES JOBS?

    My friend Sam Hughes +Gmailed me about this unpublished TED talk. And it’s actually true. But misleading. Yes, the super-rich do not create jobs, the middle class creates jobs. However

    a) The middle class ‘hires’ the super rich to protect them from the government. And it works.

    b) The ‘Rich” are almost universally (above 90%) members of the middle class who made their money in small and medium business.

    I don’t support the super rich. I support active constraint, and even dissolution, of the government.

    Source date (UTC): 2012-08-16 15:57:00 UTC

  • ECONOMIST OR LIBERTARIAN QUESTION: Does anyone know if there has been any resear

    ECONOMIST OR LIBERTARIAN QUESTION: Does anyone know if there has been any research done on student loan defaults by political preference?

    I know the most defaults came from the most left wing university. (Wesleyan.) But I haven’t seen anything on conservatives.

    It’d be an interesting statistic.

    Source date (UTC): 2012-08-04 13:00:00 UTC