The Fact of My Ignorance

Just wanted to give everyone a heads up that there will be plenty more posts coming up over the next several weeks so keep your eyes open. I’m finally through my mid-block round of finals and I’ve got 6 weeks or so until the next one. And we’re now getting into some semblance of a schedule with Jonah so I’ll finally be able to write some of the articles I’ve been building up here. And to start things off here’s a quick one.  You may have heard something about the G20 summit coming up this week and like many people you may have wondered, “What in the world is the G20?”.  Well that bastion of trivia, MentalFloss, put up an article about it today so just click “continue reading” for a quick definition. Continue reading

Well I’ve had several questions lately about a statement I made in my post CA Obstructionism and Political Games in which I was pretty dismissive of tax cuts in the stimulus bill.  All the questions came via email of course (this is what the commenting system is for guys!  You can comment anonymously if you want!).  Anyway, while I’m planning on writing a much larger treatise on tax policy at some later date, I thought I’d address why I think tax cuts provide for relatively little stimulus.  I’m going to try to keep it as non-technical and conversational as possible.  And I should note before I begin that the principles I’ll present in this post are not universally agreed upon in the field of economics, but they are reflective of the economic philosophies that seem most reasonable to me given my educational experiences, and the views that are most widely held among economists today.  So with that, lets just jump right in, this is the trouble with tax cuts as far as I can tell… Continue reading

I think this video does a fantastic job of explaining the credit crisis in simple terms.  It doesn’t really discuss some of the newer developments, and it certainly over-simplifies some of the issues at points along the line.  But it explains the events that initially got us into this mess about as clearly and succinctly as they can be explained.  If you’re new to the economics of the credit crisis, you may still be a little shaky after a single viewing, but you’ll certainly understand things much better.  And even if you consider yourself a financial pro, you’ll likely have a clearer understanding of how the various problems facing banks, lenders, investors, and homeowners are connected after watching this.  It’s 11 minutes long but its definitely worth it.  And don’t forget to share your thoughts about it in the comments!

From Vimeo via MentalFloss

One last stimulus post and then I promise I’ll take a break.  I have been utterly amazed at the creative reading skills of stimulus opponents over the last few weeks.  As they say a lie can travel halfway around the world before the truth has finished putting its shoes on.  And the four outrageous claims discussed here have been passed around virtually unchallenged for a while now.

ACORN Nuttiness

The idea that there was money for ACORN in the stimulus was first invented by Fox news in the run up to the stimulus debate and its since been parroted by republican legislators including John Boehner and David Vitter.  In reality, of course, ACORN is not mentioned at all in the bill but what worries republicans is that 4.2 billion is set aside for local governments and (gasp) non-profit organizations to help them buy up foreclosed homes, fix them up, and sell them or rent them out.  So the logic goes 1.There is money in the bill for non-profits to buy up homes,   2. ACORN is a non-profit organization that does things vaguely housing related   3. The democrats are trying to sneak money to their buddies at ACORN!!!!!

Lest you think I’m exaggerating here is a quote from Louisiana Republican David Vitter on the subject: ”$4.2 billion dollars would be available to organizations like ACRON for so-called neighborhood revitalization. That’s just political payoff, quite frankly, not in spite of their voter registration fraud activity, really because of it, in my opinion, in terms of support from some of the liberals in Congress.”  … Wow.   That’s quite a conspiracy theory he’s put together there.  Never mind the fact that “ACORN Housing” is an entirely different organization than the ACORN that committed voter fraud, never mind that ACORN housing has never purchased a foreclosed home in its history and has no plans to do so, and never mind that… Continue reading

To continue the themes of my post earlier today, if you want to read the stimulus bill for yourself, the Senate compromise version can be found here: Senate Stimulus Bill.  If you right click on the link you can choose to download it to your computer for easier reading.  Its 778 pages.  But its 778 pages of double spaced, 16 point text that only takes up the middle third of the page.  So it reads much more quickly than one would expect.  Its brought to you via Readthestimulus.org.  And you can go there to find previous versions of the bill.  The new house and senate compromise version should be available soon.

Once again, if you can find some kind of pet project hidden in it then by all means notify news agencies because you’ll have some pretty exclusive information.  For all the talk of the “bloated, pork-filled stimulus”  I haven’t been able to find anything yet.

UPDATE:  See the way that the spending in the final bill breaks down through this intuitive little tool: CNN Stimulus Spending Chart

Well I might as well get started.  On this blog I’m planning on spending a fair amount of time covering principles rather than current events, but with all that’s happening now with the stimulus, and with us being at the beginning of one of the greatest economic crisis in American history, I thought it would be appropriate to talk about it a bit.  Just in case you missed it, these are the prepared remarks from President Obama’s news conference a few days ago.  Its via Hulu so you may have to watch a commercial before it starts.  If you haven’t watched it yet I suggest you do so.  In fact its probably a good idea to watch the rest of his remarks as well.  Which can also be found on Hulu.

I thought he did a good job explaining some of the rationale behind the plan and driving home some of the most important points.  Overall I just thought it was great to have a president who was willing to admit that the plan wasn’t perfect and that things may not turn out the way they hope.  His candor was really refreshing.  And he took the time to explain things to the American people.  He didn’t just say “trust me”, he didn’t just spew slogans and talking points, he tried to explain the plan the way a friend would try to explain it to you.  Once again, very refreshing.

Still the stimulus plan is complex, and he was only able to address a few of the issues surrounding the bill.  Hopefully I’ll be able to delve into some of them a little more deeply tomorrow.