I think I have to disagree with Brad DeLong’s assessment of Glenn Hubbard’s WSJ op-ed from the other day. Brad suggests that Hubbard may indeed have identified an important piece of the puzzle – the puzzle being why poor Asian economies are lending so much money to the United States. Hubbard’s point boils down to […]

Michael Hoffman forwarded to us an interesting short paper showing the lack of an empirical relationship between the exchange rate and the current account. He summarizes the underlying theoretical construct as two conventional claims: (1) A cheap (depreciated) dollar causes the current account deficit to shrink.(2) A current account deficit causes the dollar to depreciate. […]

I wish to amend for two errors of omission in this post. The first was not mentioning the same day op-ed from Eric Pfeiffer. While I disagree with much of what Mr. Pfeiffer wrote, I appreciate the fact that his definition of the Social Security surplus included interest income. The second was my failure to […]

On occasion, Lawrence Kudlow produces an interesting tidbit of information. Take the chart at the bottom of his “Stop the Raids, Start the Accounts”, which shows the total nominal return one would have earned on ten-year Treasury bonds had one invested $1000 in 1977. While the amount of nominal wealth as of 2002 looks very […]

Is it “Dishonest Dick” or “Deferment Dick”? I’ll spare you my sermon on how Cheney smeared Senator Hagel as Kos covers this perfectly. Kos is rightfully frustrated with this write-up from CNN but note this sentence about the detainees at Guantanamo Bay: “They’re living in the tropics. They’re well fed. They’ve got everything they could […]

Some have suggested that the recent surge in home prices could be explained by the drop in interest rates. Recently Dr. Rosen, Senior Economist at the Chicago Federal Reserve Bank, made this argument in a Fed Letter “Explaining recent changes in home prices“. UCSD Economics Professor Dr. Hamilton, of Econobrowser, suggested another possible interest rate […]

John Tamny claims that 10-year Federal bonds are overvalued in what may be the oddest NRO oped on record. It is true that the recent decline in long-term interest rates is a conundrum, but the market price for bonds is readily explained by its payout structure over its term compared to market yields on similar […]

Dr. Hubbard dismisses the Keynesian paradox of thrift argument and focuses on Asian financial disintermediation (hat tip to Tyler Cowen). Dr. Hubbard also seems to have freed himself from having to defend the long-term fiscal stimulus of the Bush Administration: The rise in the global saving rate is more than accounted for by a higher […]

Dan Bartlett went on the morning talks shows to explain that Rove’s speech included this sentence: Conservatives saw the savagery of 9/11 and the attacks and prepared for war; a few liberals extremists saw the savagery of the 9/11 attacks and wanted to prepare indictments and offer therapy and understanding for our attackers. I put […]

This week’s bid by a Chinese oil company (CNOOC) to buy an American oil company (Unocal) has provoked some interesting reactions in Washington. Despite the fact that 70% of Unocal’s oil reserves are in Asia, that it supplies just 1% of US oil needs, and that oil is highly fungible (meaning that oil from one […]