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

Credit Default Swaps Again

by Robert Waldmann My post on “what the hell are credit default swaps for” got lots of comments and I learned a lot from the comment thread. I continue my effort at remedial education via blogging. First a very simple article by Martin HutchisonDoes this guy know what he is writing about ? Key quote […]

Soc Sec XXXVII: Backwards Transfers: Biggs Responds

Soc Sec XXXVI: $17 Trillion Backward Transfer was a response to a comment by Jim Glass ( to a post by Andrew Biggs. Andrew responded with a new post attempting to rebut my argument. You can see the whole thing at Responding to Angry Bear: Where does $17 trillion come from including my response to […]

Infrastructure 2

Infrastructure – The Next Big Deal? #1 Reuters carries a report on an infrastrucutre concern: The worst Midwest flooding since 1993 has generated images of swamped towns, cracked roads, washed-out bridges, overwhelmed dams, failed levees, broken sewage systems, stunted crops and water-logged refugees. The losses are in the billions of dollars and still mounting, as […]

Recession Indicators

The NBER committee that officially determines the dates for recessions has a few favorite, or key indicators that it gives much more weight. One of the indicators is real manufacturing and trade sales. Not many people pay much attention to it because it does not have its own press release and wall street traders do […]

Tax “Cuts”: Kash’s Rebuttal to Mankiw

Kash suggests that Greg Mankiw was not careful in his beer drinking example: The first and second men (the poorest) used to pay $0.20. Now they pay only $0.15 (a savings of $0.05, or 23%). They must then pay an additional $0.16 somewhere down the road. The third and fourth men (the next poorest) used […]

Feeling Bearish

David Wessel of the Wall Street Journal is feeling bearish this morning: Every so often, economic forces and financial markets collide in ways that make for a tumultuous year — the stock market crash in 1987, the Asian financial crisis and bond-market paralysis in 1998, the bursting stock bubble in 2000. Suddenly, this year has […]

Everything’s Relative

GDP growth in the first quarter of this year was just revised upward to a very robust 5.3%. Yet a lot of analysts are disappointed: WASHINGTON (MarketWatch) — The U.S. economy grew at a 5.3% annual rate in the first quarter, the Commerce Department said Thursday in its first revision of gross domestic product estimates. […]

Confusing Financial Assets with Goods Production

Why does the National Review allow John Tamny to publish such utterly stupid comments: If a homeowner secures a loan that enables him or her to purchase more goods, by definition there is a lender who has foregone that same consumption. There’s no direct stimulus here, just a shift of money from one person to […]

Real Compensation in 2005: Helping Sec. Snow with the Data

Bruce Bartlett and Brad DeLong note that even the Washington Times is challenging the credibility of our Treasury Secretary: According to Mr. Snow’s own numbers, which Mr. Frank had to drag out of him, over the past 12 months average nominal wages, for production and nonsupervisory employees, who account for 80 percent of private-sector employment, […]