It was their idea, so it’s no surprise they like paying interest on reserves, even excess reserves: For quite a while, the Fed was quite happy to have that money on its books. Indeed, the power to pay interest on reserves was considered a key tool to keep control over all the liquidity the Fed […]

The WSJ Economics Blog, discussing June 2010 unemployment rates by state, uses the headline “Most Regions Show Improvement“* I suppose we should be encouraged by the headline and not look at the text: Washington, DC and 16 states recorded jobless rates in excess of 10%. North and South Dakota continued to have the lowest rates […]

Went to Massacghusetts for the weekend, where I learned that Martha Coakley supports child rapists* and Scott Brown (R-MA Sen.) is a decent legislator who stands by his convictions, including his opposition to the Financial Services Reform Act, which principled action he takes because the act institutionalizes Too Big to Fail. (This is also Russ […]

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 […]

Sometimes, I hate being right. Most of those times are when I take a pessimistic view of data; this has happened a lot recently. It gets worse when the people who agree with you are none other than The Giant Vampire Squid. As the Wall Street Journal notes: Zero — First quarter GDP growth, minus […]

One of the things that goes without saying these days is that a recovery doesn’t lift all boats. It doesn’t lift all banks, either. For your consideration, the number and documented costs (in $MM) of bank closings in the U.S. since 2000.

“Liquidity” is another magic word. I like it rather less than “friction.” In the debate on financial regulatory reform opponents of tight regulations use the word liquidity as a magic spell which, they hope, will make all inconvenient evidence and arguments go away (no links my claim is like saying the Sun emits light). The […]

As I should have noted yesterday, and as Arnold Kling discusses today, sometimes the questions are as revealing as the responses. And sometimes, the answers are suspiciously inconsistent. Below is the graphic from my question for the Q2 Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers. Link to the survey press release here, […]

The great thing about Accounting Identities is that they must be true. The bad thing about Accounting Identities is that their truth is often trivial. Tim Duy notes the reality: We can’t all be net exporters The Greek crisis…is a reminder that global imbalances are still with us – and, if not corrected, will eventually […]

by Bruce Webb It is I think a truism that in any economic enterprise all costs ultimately have to come out of price, that in the end ‘the customer pays’. But what is not true is that price is infinitely elastic, at some point price in and of itself will restrain demand, and while you […]