Relevant and even prescient commentary on news, politics and the economy.

Eleven richest Americans have all received government subsidies

A new report by Good Jobs First shows how the very wealthy in America have benefited from government subsidies as one element in building their fortunes. According to the study, the 11 richest Americans, and 23 of the 25 richest, all have significant ownership in companies that have received at least $1 million in investment […]

30 minutes to Fed Statement

The markets wait for the Fed’s statement in 30 minutes. Some thoughts beyond low inflation and an active labor market… Fed must give forward guidance to normalizing the Fed rate. Yet, any sense of disciplining the markets will be met with lower stock values. The markets need discipline which is part of the normal process […]

Monetary Reflections… more to come in 2015

I reflected in a post last week that we should have had less accommodative monetary policy and more fiscal policy since the crisis… Thoughts on Investment, IS-LM & Effective Demand. Today Paul Krugman also had what appears to be a moment of reflection upon monetary perspectives… The Limits of Purely Monetary Policies. He recognizes the […]

Peso Problems, Ruble Problems, Euro Problems and all Bhat

The Ruble is collapsing. This will do dramatic damage to the Russian economy, because many Russian firms have dollar denominated debts. This is a familiar story. Something similar happened in East Asian countries in 1997 and Russia in 1998. There is no good policy response, because defense of the Ruble based on extremely high interest […]

Waiting & Watching… What response to Russia?

These are tense moments… At 1 am in the morning, Russia made a dramatic announcement to raise its base interest rate from 10.5% to 17%. Their ruble was falling fast yesterday. There is capital flight out of Russia. So the rate rise was meant to attract money back into their country. They even raised their […]

House exempt from ethics education, lets change that.

So, I just got an email from my congressman letting me know that he has submitted a bill that would no longer exempt the House membership from annual ethics training.  Their staff is required to have such education, the Senate is required, but not the house.   He is also trying to get it into the rules […]

US investment, discounted profits and irrational exuberance

As promised below, I have written something about investment (warning google document) In the note, I calculate some variables related to discounted future profits. Here is a snip from the paper in which I define them. Standard micro founded models of investment are based on shareholder value maximization and assume that there are adjustment costs, […]