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

How the Internet Can Make You Smarter, Today’s FT Version

Today’s Page 1, above-the-fold, biggest type headlines for the FT:

  1. US PDF edition: “Obama proposes corporate tax rate cut: System ‘outdated, unfair, and inefficient’

  2. US Print edition: “Obama and Romney unveil rival tax plans: Proposals show strong support for reforms”

The latter piece waits until the 7th graf to Tell the Truth and Shame the Romney (as Rick Santorum might say):

Mr. Romney’s advisers said that their plan would not widen the deficit, but they relied on so-called “dynamic effects”, which assume that the lower rates mean greater economic growth and therefore more revenue. They did not say which tax breaks—such as the popular deduction for mortgage interest relief—they might scrap to pay for the lower rates.

The English translation of “dynamic effects” is “we’re going to reduce the velocity of money so that it is held by people whose Marginal Propensity to Consume is lower, and count that as a good thing, instead of it being used by people who will not hide it in the TOPIX, and who therefore don’t count in economic modeling. Because that worked well when we did it in 2001 and especially 2003.” (See Noah Smith for discussion.)

The print edition treats this mumbo-jumbo as if it were a real “tax plan.” Readers of the online PDF are saved such bollocks, and therefore better informed at the end of the article.

UPDATE: Ezra Klein (whom Google Plus seems to believe works for Bloomberg, not the web-inept Vast Wasteland that is Kaplan Prep Daily) delves into the Romney/Hubbard plan and finds pretty much what you would expect from the man who led the clusterfuck of 2003 and an at best ambiguous relationship with Medicare Part D* (“all of the expenses without any of the savings, unfunded”):

But for now, the narrative is clear: A Romney presidency will be tough on those who depend on government programs, and good for those who pay high taxes. That suggests a Romney presidency would, at least in its first few years, reduce the deficit by asking much more from the poor than from the rich. Is that really the narrative they want?

*Shorter Glenn Hubbard: “It happened on my watch, and I knew it was in the works, but the “gross mismanagement” of the Bush Administration in enacting Medicare Part D astounds me and I had nothing to do with it.”

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Bleg – Yesterday’s FT (US PDF)

One advantage the electronic subscribers have over us print people when dealing with The World’s Worst Newspaper Website(TM) is that if they forget to download a holiday (read:not printed in the US) issue, they can access the phosphors without having to deal with The World’s Worst Newspaper Website.

Anyone have a PDF of yesterday’s FT they can email to me??

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Kash is En Fuego Today

Go. Read.

  1. US Bank Exposure to Greece, part 3. The FT lets someone from Nomura argue that Kash’s declaration of U.S. bank exposure to Greek default in Part 2 (referenced here, but just go to Kash’s link for the gist) was overstated.

    Nomura and The FT lose the argument, badly.

  2. Disasters for an economy — either real or financial — are not always disasters for the economy’s currency.”* Good to think of in combination with this piece from Barry Ritholtz.

*I may write up more using this when I can do some charts and graphs. It is starting to appear as if no one other than Dr. Black understands The Whole of The Euro Story.

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Crooked Timber notes from the FT

First, go read Henry on the lambasting of, especially, Turkey by U.S. idiots. Apparently, any U.N. vote is wholly the responsibility of everyone except the people who presented the resolution.

Note also that the editorial page has a much more interesting piece on economics than all those Zogby myths. Maybe more about that later, but for now, let’s pull the appropriate (in more ways than one) quote:

In reality, conflicts of interest abound – between buyers and sellers, short and long terms, equity and debt, taxpayers and shareholders. Context is all-important – the idiosyncrasies of age, financial circumstances and geography. How do we provide a “neutral” framework for such crooked timber?

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A Sentence Worthy of the WSJ Editorial Page

We can only hope that the special Infrastructure supplement in today’s edition of The Pink One was written and/or edited by a PwC, not an FT, employee.  Otherwise, how are we to explain Michael Peel’s curious declaration in “Unweaving a Tangled Web” that:

…[there is a] continued prevalence of corruption around the complex, lucrative, and transnational global infrastructure industry, despite limited efforts in the past few years to root it out. [emphasis mine]

Let’s see: complex (difficult to understand and therefore regulate), lucrative, transnational (easier to create transactions and translational exposures), and facing “limited efforts” at control.  Would anyone—even William Easterly—even consider the possibility that this is not an area more subject than most to regulatory capture at best, and corruption as the norm?

Other sentences we should expect from Mr. Peel:

SEC enforcement officials remain overburdened and behind despite Christopher (“Uh, two plus two?  Pass me a calculator.”) Cox having been replaced as its Chair.

BP leadership still want their lives back despite their recent ability to capture almost 10% of the oil escaping from their Deep Horizon drilling site.

Chernobyl-area lumber sales continue to be made primarily in the grey market to unsuspecting customers despite the leak that irradiated those trees being almost twenty years old.

Feel free to add your own in  the comments section.

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