Category: economics

The Real Poverty Trap

The Real Poverty Trap

the evidence suggests that welfare-state programs enhance social mobility, thanks to little things like children of the poor having adequate nutrition and medical care. And conversely,of course, when such programs are absent or inadequate, the poor find themselves in a trap they often can’t escape, not because they lack the incentive, but because they lack the resources.

The stats make the article worth a read. Basically, if you make it easier for people to be less poor, people will be less likely to be poor. No surprise there.

Krugman: Envy Versus Anger

Krugman: Envy Versus Anger

But the polling data don’t say anything about envy: when people say that they have lost their belief that hard work will be rewarded, they aren’t saying that they are envious of the rich; they’re saying that they have lost their belief that hard work will be rewarded. To the extent that people have negative feelings about the one percent, the emotion involved isn’t envy — it’s anger, which isn’t at all the same thing. Envy is when you have negative feelings about rich because of what they have; anger is when you have negative feelings about the rich because of what they do.

The standard defense is to dismiss criticism of 1% by the 99% as envy and criticism of the 1% by the 1% as hypocrisy. How convenient that literally no one is able to criticize the 1% without that being proof that there is something wrong with them.

Federal Budget Deficit Falls to Smallest Level Since 2008

Federal Budget Deficit Falls to Smallest Level Since 2008

In nominal terms, that is the smallest deficit since 2008, and signals the end of a five-year stretch beginning with the onset of the recession when the country’s fiscal gap came in at more than $1 trillion each year. As a share of the nation’s economy, the budget deficit fell to about 4.1 percent, from a high of more than 10 percent during the depths of the Great Recession.

So can we talk about issues other than cutting social programs now? At what point can we start talking about policy that does’t involve cutting taxes for the wealthy and gutting programs for the poor?

The nation’s budget wars have reduced the deficit by $3.3 trillion

The nation’s budget wars have reduced the deficit by $3.3 trillion

The endless rounds of deficit reduction in Washington in recent years have significantly improved the nation’s budget outlook, reducing projected borrowing by $3.3 trillion through 2024, according to new estimates by Senate Budget Committee chairman Patty Murray (D-Wash.)…As this chart from Murray shows, the discretionary budget, which funds the Pentagon and other agencies, will absorb nearly half of the cuts, or $1.6 trillion…A quarter of the impact comes from the higher taxes on the wealthy that were adopted during the fiscal cliff fight. And another 20 percent comes from not borrowing as much and not having to pay more than $700 billion in interest that otherwise would have accrued. Mandatory programs, which include Social Security and Medicare, were barely nicked, meanwhile, accounting for just 7 percent of overall savings.

Was that 7% worth it? Were cuts to programs that help the people who need help the most really worth it? Considering how much more we can cut defense programs the pentagon doesn’t even want.

Bitcoin Schadenfreude

Bitcoin Schadenfreude

Just think about it: billions in value in bitcoins just waiting to be stolen by anybody. Russia and China (and other nations) have huge digital warfare operations that could target those bitcoins, either officially or extracurricularly. No matter how cryptographically safe, systems can be penetrated through hardware or personnel. And no government guarantees! I wonder who will write them insurance knowing this?

Dunning-Krugerrands. Bitcoin looks like a good idea if you know literally nothing about the history of financial regulations. Why those regulations exist and what problems they solved.

I Crashed a Wall Street Secret Society

I Crashed a Wall Street Secret Society

Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.

I have heard of KBP in passing before so I already knew it existed. I had no idea their annual event was so crazy.

Rand Paul, You Failed Econ 101. Supply, Demand and the Minimum Wage

Rand Paul, You Failed Econ 101. Supply, Demand and the Minimum Wage

Two decades ago, both coffee and water were virtually free. Starbucks raised the price of coffee dramatically, leading to every main street and corner in America offering Starbucks coffee at $2 or more per cup. Now you need to go to a government-subsidized McDonald’s or Walmart to get a cup of coffee for a buck. Over the same time period, pricey water in little bottles became ubiquitous.

I see no reason to believe that Senator Paul is actually concerned about unemployment when he opposes increases in the minimum wage. It’s just the best counter argument he has laying around.