Category: economics

Inflation Derp Abides

Inflation Derp Abides

Jim Rogers declared that “we are all going to pay a terrible price for all this money-printing and debt.” And I asked the obvious question: How long has Rogers been predicting a printing-press-and-deficits disaster?
The answer is, a very, very long time. Here he is in October 2008 — six full years ago — declaring that we were setting the stage for a “massive inflation holocaust.”

What I expect is that inflation will be slightly higher than normal and the people claiming inflation holocaust for the past six years will act as if they were right all along.

A $20 an hour minimum wage really would cost a lot of people their jobs

A $20 an hour minimum wage really would cost a lot of people their jobs

The good news about Denmark is that their unemployment rate is only very slightly higher than the USA’s and was lower in the recent past. The Danish economy as a whole does a good job of keeping people employed, and it also does a much better job than the American economy of delivering high living standards for the poor. But mandating high wages for fast food workers has more or less the impact you would expect — low levels of fast food employment.

The standard response to raising the minimum wage is always why not a million dollars and hour as if that’s under consideration. $20 is too hight. Much to high. That doesn’t mean that $0 is the correct answer.

Pro Big Corporate IRS: Agency Guts Whistleblower Program, Leaves Billions on the Table

Pro Big Corporate IRS: Agency Guts Whistleblower Program, Leaves Billions on the Table

It’s widely known among tax professionals that the US does little in the way of tax enforcement, and the little that it does do is directed against individuals and small businesses. What is not so widely known is how deep the institutional bias is in the IRS in favor of letting big corporate tax cheats get away with it. Conventional wisdom is similar to the rationalization of weak enforcement at the SEC: that the agency is afraid that if they go after big companies, they’ll have the penalties and fines challenged in court, and they’ll often lose by virtue of being outgunned by better lawyer…It turns out that the picture is vastly worse than that. In 2006, recognizing that the IRS was losing over $450 billion a year in revenue to tax evasion, Congress mandated that the agency establish a whistleblower office and pay whistleblowers 15% to 30% of amounts recovered from their filings. Unfortunately, as a whistleblower from the IRS’ Office of the General Counsel in New York has revealed, the IRS at its highest levels is opposed to implementing the policy.

The best proof yet that nobody has actually read Piketty’s book

The best proof yet that nobody has actually read Piketty’s book

In other words, very few economists believe that Thomas Piketty’s equation r > g explains the rise in US inequality over the past 40 years. The punchline here, however, is that Piketty’s book does not say that r > g explains the rise in US inequality over the past 40 years.

The best criticisms of Piketty have not come from the media or right wing hacks. They’ve come from policy wonks in the center.

Secret Deficit Lovers

Secret Deficit Lovers

Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs. A few years ago they almost managed to bully the nation into cutting Social Security and/or raising the Medicare eligibility age; they even had hopes of turning Medicare into an underfinanced voucher program. Now that window of opportunity is closing fast.

How to Reduce Global Warming for Fun and Profit

How to Reduce Global Warming for Fun and Profit

We’re not actually so far off from turning emissions into commodities, it turns out. In the United States alone, a number of companies aim to convert waste carbon dioxide into chemicals that can be used to make products we buy every day

The only people who think regulating CO2 will end capitalism are Libertarians and Marxists. Anyone who has an understanding of economics that doesn’t begin and end in the 19th century understands that markets react to regulations in the exact same way they react to everything else. Incentives change, prices adjust, people come up with new ideas that make money.

New study shows that the savings from ‘tort reform’ are mythical

New study shows that the savings from ‘tort reform’ are mythical

“Tort reform,” which is usually billed as the answer to “frivolous malpractice lawsuits,” has been a central plank in the Republican program for healthcare reform for decades. The notion has lived on despite copious evidence that that the so-called defensive medicine practiced by doctors merely to stave off lawsuits accounts for, at best, 2% to 3% of U.S. healthcare costs. As for “frivolous lawsuits,” they’re a problem that exists mostly in the minds of conservatives and the medical establishment. A new study led by Michael B. Rothberg of the Cleveland Clinic and published in the Journal of the American Medical Association aimed to measure how much defensive medicine there is, really, and how much it costs. The researchers’ conclusion is that defensive medicine accounts for about 2.9% of healthcare spending. In other words, out of the estimated $2.7-trillion U.S. healthcare bill, defensive medicine accounts for $78 billion.

Denying Climate Change ‘Will Cost Us Billions Of Dollars,’ U.S. Budget Director Warns

Denying Climate Change ‘Will Cost Us Billions Of Dollars,’ U.S. Budget Director Warns

“From where I sit, climate action is a must do; climate inaction is a can’t do; and climate denial scores – and I don’t mean scoring points on the board,” Donovan said. “I mean that it scores in the budget. Climate denial will cost us billions of dollars.”