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

Modeling the Wealth, Income, and "Saving" Effects of Redistribution: More is Better?

Update: More expansive discussion of this model with more graphics, here. Update 2: There is a revised and corrected version of the model and spreadsheet here, with discussion. It has long seemed to me that redistribution is, for some reason, necessary for the emergence, continuance, and growth of large, prosperous, modern, high-productivity monetary economies. No such economy […]

The Miasma School of Economics

I’ve been reading Steven Johnson’s The Ghost Map, about the London cholera epidemic of 1854, and one passage reminded me exactly of today’s economics discipline. The sense of similarity was heightened because I also (instigated by Nick Rowe) happened to be reading Mankiw’s micro textbook section on the rising marginal cost of production — a […]

Marginal Rates and Economic Growth: They Go Up Together

With Republicans frantically clinging to discredited ideology and digging in their heels on raising top marginal tax rates, I thought it would be worth revisiting a post from a couple of years ago, showing some excellent long-term evidence that higher marginal tax rates are not associated with slower growth. Quite the contrary, in fact. Here […]

It’s No Wonder People Don’t Understand the "Public" Debt

A friend of mine posted this on Facebook: I started to explain it, but realized that the standard usage is wildly screwy and confusing for any normal human, and decided to explain it here instead. The problem is that even in standard economists’ usage, “public” is used in two different ways: 1. “Public” debt: debt […]

Medium of Account vs Unit of Account: Brazil Anyone?

I’d like to interject a very concrete example into the large swirl of quite theoretical, thought-experiment discussion about whether “demand for money” means “demand for the medium of exchange” or “demand for the medium of account.” Scott Sumner and Nick Rowe are, as so often, at the center of this discussion. But before I do, […]

Engineering a Permanent Democratic Majority

Matthew Yglesias points the direction in his post: the Geographically smallest Electoral College map, which starts with the densest states and works down: If Democrats can bring Indiana, Virginia, North Carolina, and Florida (or even two or three of them) firmly into the Democratic camp, the game is over for the foreseeable future. Those states […]

Fixing Disaster Relief is Simple! Let Markets Work.

I’ve often commented on how childish, really adolescent, the views of libertarians are. But it’s rare that I see such a stunning example. In a recent NYT “Room for Debate,” Russell Sobel of The Citadel gives us this: Fixing disaster relief is simple: greater use of decentralized markets, and focusing government on its proper role. […]