Wednesday, May 30, 2012
A Bond Market Meme, Revisited
About a year ago, I pointed out a fashionable trend: Some pundits were saying that long-term interest rates couldn't go much lower. Since then, the yield on a 10-year Treasury bond has fallen from 3.18 to 1.65 percent.
The lesson: Don't try to time the market. My own asset allocation remains 60 percent stocks, 40 percent bonds, with wide diversification in each category.
The lesson: Don't try to time the market. My own asset allocation remains 60 percent stocks, 40 percent bonds, with wide diversification in each category.
Tuesday, May 29, 2012
More Competition
University of Michigan economist Miles Kimball is now blogging. Incidentally, many years ago, Miles was my very first PhD dissertation advisee.
Sunday, May 27, 2012
What the Market Will Bear
Saturday, May 26, 2012
From Harvard Commencement
Friday, May 25, 2012
Government as Venture Capitalist
Larry Summers once said that goverment is a "crappy venture capitalist." He was right.
Harvard students on Occupy Harvard
The Crimson reports:
For a Statistics 104 final project, a group of students asked 1,035 undergraduates to gauge their impression of Occupy on a scale of one to ten, with ten being most positive. They found that the average ranking of Occupy Harvard was 2.84 out of 10.
Thursday, May 24, 2012
You are using the wrong textbook when...
The NY Times reports:
An economics book used in some high schools holds that the Antichrist — a world ruler predicted in the New Testament — will one day control what is bought and sold.
Wednesday, May 23, 2012
Economics Educators Conference
In November, I will be speaking at the annual conference of the Gulf Coast Economics Association, which this year is being held in Orlando, Florida. If you are interested in attending, registration is now open.
Tuesday, May 22, 2012
Monday, May 21, 2012
Faulty Memories
In watching various news talk shows over the past few weeks, I have seen Democratic partisans make the following argument:
There are two things wrong with this.
First, the premise is incorrect. President Obama wants to raise income tax rates to where they were during the Clinton years. But because he has already raised the payroll tax as part of his healthcare reform (and also expanded the base of this tax to unearned income), the total tax rate under President Obama's proposal would exceed that during the Clinton years. All economists agree that it is the total tax rate that matters.
Second, it is worth remembering that the Clinton boom was in large measure driven by the dot-com bubble, which was coming to an unhappy conclusion during President Clinton's last year in office. (By the way, as I recall, President Bush did not spend as much time blaming his predecessor for bequeathing him a sick economy as President Obama has.) It seems unlikely that President Obama's tax increase will happen to coincide with another technological bubble that will drive the economy forward.
Reasonable people can disagree about the virtues of raising the top tax rate. But it is important to separate valid arguments from political spin based on a faulty recollection of history.
President Obama just wants to return top tax rates to where they where in the 1990s under President Clinton. And that was a great time for the U.S. economy. So one shouldn't be concerned about the impact of higher tax rates.
There are two things wrong with this.
First, the premise is incorrect. President Obama wants to raise income tax rates to where they were during the Clinton years. But because he has already raised the payroll tax as part of his healthcare reform (and also expanded the base of this tax to unearned income), the total tax rate under President Obama's proposal would exceed that during the Clinton years. All economists agree that it is the total tax rate that matters.
Second, it is worth remembering that the Clinton boom was in large measure driven by the dot-com bubble, which was coming to an unhappy conclusion during President Clinton's last year in office. (By the way, as I recall, President Bush did not spend as much time blaming his predecessor for bequeathing him a sick economy as President Obama has.) It seems unlikely that President Obama's tax increase will happen to coincide with another technological bubble that will drive the economy forward.
Reasonable people can disagree about the virtues of raising the top tax rate. But it is important to separate valid arguments from political spin based on a faulty recollection of history.
Thursday, May 17, 2012
Good News
Tuesday, May 15, 2012
California Fact of the Day
"A ballot initiative this November would give California a whopping 13.3 percent top marginal rate for state income taxes."
Source.
Source.
Saturday, May 12, 2012
Geanakoplos on the Leverage Cycle
Yale economist John Geanakoplos discusses his view of the financial crisis. It takes about an hour.
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Thursday, May 10, 2012
Wednesday, May 09, 2012
Tuesday, May 08, 2012
Fact of the Day: CEO Pay
Sunday, May 06, 2012
Laura Tyson on the Corporate Tax
She says we should reduce it, financed by a tax increase on dividends and capital gains at the personal level.
