Sunday, June 30, 2013

No, destroying efficient capital will not generate growth

Paul Krugman has forgotten more economics than you will ever know:
With the Environment, Paul Krugman Forgets the Poor

Update: From James Taranto and Best of the Web

Two Former Enron Advisers in One!
  • "Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of 'Eurosclerosis,' the persistent high unemployment that affects a number of European countries."--former Enron adviser Paul Krugman and Robin Wells (Mrs. Krugman), "Introduction to Macroeconomics," second edition, 2009
  • "In general, modern conservatives believe that our national character is being sapped by social programs that, in the memorable words of Paul Ryan, the chairman of the House Budget Committee, 'turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency.' More specifically, they believe that unemployment insurance encourages jobless workers to stay unemployed, rather than taking available jobs. . . . The move to slash unemployment benefits . . . is counterproductive as well as cruel; it will swell the ranks of the unemployed even as it makes their lives ever more miserable."--Krugman, New York Times, July 1, 2013

Friday, June 21, 2013

Credit where credit is due

It's not very often I can say this, but the St. Louis Post-Dipatch had an editorial the other day that hits the nail on the head:  Missouri is drunk on tax credits. Who will take the bottle away?

Their focus is on the politics and corruption behind the growing burden of development tax credits: 
Part of the problem is an old one in Missouri: Despite a strong push from Gov. Jay Nixon, a Democrat, and many conservative Republicans in the Senate, lawmakers have been unable to overcome the power exerted by key developers (and contributors) who profit from the tax credit programs.
Another problem was outlined by Post-Dispatch reporter Jeremy Kohler in his report Sunday on the $7.8 million in brownfield redevelopment tax credits used to help pay for the demolition and eventual reconstruction of Northwest Plaza shopping center in St. Ann’s.
They fail to mention, however, that tax credits simply do not work, as has been shown over and over again.  Then again, I'm probably being naive in thinking that any big-government boondoggle is going to end just because it's ineffective. 

Maybe because there is no link

EPA fails to link fracking to water contamination for the third time

Wednesday, June 12, 2013

Economics research in Missouri

If you've seen my previous two posts (here, where I provide the ranks Fed economists, and here, where I create a ranking of Feds), then you already know that I am devoting today's blogging to various rankings of economics research.  Truth be told, the BLS website that I need has been down for maintenance, so I've been fiddling around with these rankings instead.  This particular post is my annual look at economics research rankings for Missouri based on data from RePEc (see previous years' posts: 2011, 2012).

Ranking Fed research

My previous post discussed and documented the large number of Fed economists among the top tier of economists doing academic research.  As a fun follow up, I've used information from the ranking of Fed economists' research to rank the various Feds.  Specifically, I simply aggregated the Wu-index across economists at each Fed to obtain a measure of "Total Wu-ness".

Here it is. Make of it what you wish:

Academic economics at the Fed

This story from Reuters describing Federal Reserve Governor Janet Yellen as "by far the most likely candidate to replace Ben Bernanke when his second term" made me wonder if there has been a permanent change in the job requirements for the Fed Chairmanship.  Specifically, if Yellen does succeed Bernanke, the Fed will have its second leader in a row whose prior career was as a highly successful academic economist: Bernanke's Fed tenure was preceded by many years at Princeton, where he was one of the most prominent research economists in the world, and Yellen spent many years as a world-renowned professor at UC-Berkeley.  Prior to Bernanke, Fed chairmen were (almost?) exclusively from Wall Street or Washington rather than the ivory tower.