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

Oil Prices and the Windfall Arrogance Tax

Arnold Kling writes: If the oil company executives want to put money on their “working assumption of $15-$30 per barrel,” then they should go short in the futures market. But if their goal is to maximize shareholder wealth, then they should make long-term investment planning decisions based on the futures price of about $60 a […]

Inflation Report

Yesterday’s CPI release showed that inflation continues to gallop ahead at a rather high rate, though once again, most of the rise was attributable to higher energy prices. Marketwatch offers this assessment: WASHINGTON (MarketWatch) — U.S. consumer prices increased a larger-than-expected 0.7% in January, led by higher energy, food and housing costs, the Labor Department […]

Fuzzchart Flip-flops on the Gold Bug Issue

Jerry Bowyer has finally written something that makes a little sense: This debate has been going on for more than a year between supply-siders — the gold-first crowd on one side, the bond-market/interest-rate/gold-also crowd on the other. Meanwhile, each month the consumer price index comes out with a relatively low reading. If the accuracy of […]

Low R&D in the UK: Calling Michael Mandel

Michael Mandel and I agree on at least one thing – R&D is an investment: The factory is a long-lived investment which provides returns not just this year, but years into the future. That’s why Intel’s investment gets added into GDP, separate from the value of today’s production of microprocessors. Similarly, R&D is a long-lived […]

No Wonder the National Review Thinks Spending is Too High

Jonah Goldberg over at The Corner opens with: Warrantless searches, Katrina fingerpointing, $7.8 trillion budget, Abramoff spin: these were the stories buffetting the White House last week. Table 3.2 from the Bureau of Economic Analysis reports the Federal spending for 2005 was less than $2.55 trillion. Does Jonah expect this Republican government to triple Federal […]

Even the President’s Budget Suggests We Are Below Full Employment

AB reader Fred C. Dobbs directs us to the Economic Assumptions chapter for the President’s budget. Starting on page 171, we see: When the economy is operating below potential, the unemployment rate exceeds the long-run sustainable average consistent with price stability. As a result, receipts are lower than they would be if resources were more […]

What would Lord Keynes Say about this Division of Dynamic Scoring?

Kash noted the endorsement of the Division of Dynamic Analysis from Bruce Bartlett which had me dusting off my copy of the General Theory as I read this from Bruce: The great recession of 1973-75 was a severe blow to Keynesian economics because inflation was high while at the same time there was significant unused […]

Bernanke’s Debut

Ben Bernanke has testified before Congress numerous times in the past, but today was the first time that he spoke as the Chairman of the Board of Governors of the Federal Reserve. Overall, Bernanke’s testimony struck me as quite optimistic. He mentioned the potential hazards for the economy in 2006 of growing inflation and a […]

Division on Dynamic Analysis

Bruce Bartlett jumps on the dynamic analysis bandwagon, applauding the creation of the “Division on Dynamic Analysis” at the Treasury Department. Menzie Chinn and PGL have covered the prinicpal problems with this political exercise disguised as economic analysis, so let me just add two small points to what they’ve said. First, Bartlett is quite wrong […]

Dead-Eye Dick Does Dynamic Scoring

Expert marksman and Nobel laureate Dick Cheney delighted the Conservative Political Action Conference with the suggestion that free lunch supply-side spin is solid economics: Cheney touted President Bush’s recently announced proposal to create a tax analysis division as a move toward providing more evidence for the administration’s side of the argument. “The president’s tax policies […]