I just came across a fellow internet econocrank’s tax proposal, and find it quite interesting — especially its proposed progressive tax on net worth, which echoes the flat tax on financial assets that I’ve bruited. It also reflects many of the notions I suggested I’d implement if I was the Dictator of America.The basic problem […]

Bruce Wilder had an excellent comment recently in the Crooked Timber thread on markets, economic rents, and the constraints on economic actors, excerpted by Dan here, and more with comments by Jazzbumpah here. (If you like the thinking there, run don’t walk to read this windyanabasis post and comments.) The emphasis on constraints prompts me […]

Any knowledgeable economist will tell you that GDP (or GDP/capita) is a profoundly imperfect and non-inclusive measure of national well-being.In particular, GDP doesn’t count any work isn’t paid for with money — painting your mom’s house, volunteering for the Rotary Club or your church (David Brooks, are you listening?), caring for your kids and your […]

Or: It’s The Velocity, Stupid.I got quite a bit of blowback on my recent post suggesting that economists don’t understand accounting. In response I give you Exhibit A: the almost-ubiquitous notion that more saving increases the supply of “loanable funds” — hence that more saving causes or at least allows more investment. (The absolute classic […]

David Frum was excommunicated from the Righties Club a few years back because he insisted on occasionally saying sane and accurate things. He continues that aberrational behavior today in his review of AEI uber-zealot Charles Murray’s new book, Coming Apart: The State of White America, 1960-2010 (which I will not link to here — no […]

Don’t tell me that the Dems favor fiscal stimulus because they like big government. The payroll tax cut will make it a bit more difficult to expand the size of government in future years. (As Clinton found in 1993, when he was told the “bond markets” (i.e. the Reagan tax cuts) wouldn’t allow him to […]

David Beckworth: global economic growth over the past few decades has outpaced the capacity of the world economy to produce truly safe assets Really? The U.S. could have just deficit-spent more, crediting people’s/businesses’ checking accounts and thereby increasing the global stock of the world’s safest asset: U.S. dollars. It could (by U.S. law is required […]

Matt Yglesias has a great post over at Moneybox (paragraph breaks added): The need for regime change. … The Depression discredited the gold standard and a whole set of related notions. The Great Inflation discredited ideas about the Phillips Curve … We had, until recently, the Great Moderation Consensus that … the Federal Reserve has […]

I just searched Harvard, U Chicago, and a few other top econ departments’ course offerings and major requirements. The string “account” barely appears. Chicago says quite explicitly: Courses such as accounting, investments, and entrepreneurship will not be considered for economics elective credit. Much less requirements! No wonder so many economists: • Have such profound misunderstandings […]

There’s been a running discussion of this on various blogs (sorry if I missed linking some!), inflated simultaneously by Krugman and by magisterial and mysterious commenter JKH’s “paradigm riff,” here. That discussion has brought me to the following conclusions. Assuming you have a coherent and accurately representative System of National Accounts*: • Accounting, and accounting […]