Third Quarter Growth Revised Downwards

The BEA has revised its estimates for the third quarter’s growth down to 2.8% from 3.5%. This is also a bit below the expected growth of 2.9% for the quarter. The main factors behind the downgrade: consumers didn't spend as much, commercial construction was weaker and the nation's trade deficit was more of a drag on growth. Businesses also ...

Krugman on the Debt and Deficits

Paul Krugman has taken some rather interesting stances on the fiscal situation here in the U.S. First up is a piece entitled Fiscal Train Wreck from March 2003, With war looming, it's time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates ...

Kelo Follow Up

Well looks like the entire town of New London, Conn. is going to get screwed by Pfizer. “Look what they did,” Mr. Cristofaro said on Thursday. “They stole our home for economic development. It was all for Pfizer, and now they get up and walk away.” That sentiment has been echoing around New London since Monday, when Pfizer, the giant drug company, ...

Health Reform & Standards for Equal Justice

The Urban Institute's Eugene Stuerle is not very happy with the health care expansion legislation that is likely to be passed into law. Stuerle argues that the legislation violates the standards of equal justice. Of course, families in this income bracket pay far more than $14,700 for health care. They get hit by uninsured expenses or covered expenses they have ...

OTB Radio – Tonight at 5:30 Eastern

The next episode of OTB Radio, our BlogTalkRadio program, will record and air live from 5:30-6:30 Eastern. Dave Schuler and I will talk about the Fort Hood massacre and be joined by Steve Verdon to talk about the House passing its version of healthcare reform. Other topics will likely come up as well. We'll also be taking calls at (646) 716-7030. ...

Making Jobs More Expensive

The recently passed health care “reform” noted by James below is going to have another impact some have noted, but many have not given much thought too. It will, in effect, make labor more expensive. When something becomes more expensive for firms then tend to use less of it. They will substitute away from it if possible, ...

Jobs Created or Saved…Again

It looks like the Obama Administration’s brilliant political jujutsu move of using “jobs saved or created” is making its way around some of the economics blogs again. First up is Brad DeLong’s attack on Allan Meltzer. Meltzer wrote the following, There is no greater recognition of the failure of the stimulus program to create jobs than the efforts to ...

Political Control of Government Motors

Back when talks about bailing out General Motors started one potential issue was that GM would “encouraged” to make decisions based on political considerations vs. a sound business plan. Looks like there is evidence for such concerns with this story of how Montana’s Congressional Representative and two Senators are pushing to get a contract reinstated with a Montana palladium ...

Recession Over?

While it is good news that the economy grew last quarter I think claims that the recession is over are premature. Why? Because I think the last quarter’s numbers are due to gimmicks by the Obama Administration as was discussed last night on OTB Blog Radio and also when looking at this post by Dave Shuler at the ...

Efficient Market Hypothesis

Jeremy Siegel of the Wharton School looks at the claims that the Efficient Market Hypothesis (EMH) is the cause of the current crisis and rejects these claims. The main part of his argument is, But is the Efficient Market Hypothesis (EMH) really responsible for the current crisis? The answer is no. The EMH, originally put forth by Eugene Fama of ...

Multiple Choice: Economics

The New York Times has an interesting multiple choice question regarding how to spend money to help stimulate the economy, If you wanted to help the economy and you had $14 billion to bestow on any group of people, which group would you choose: a) Teenagers and young adults, who have an 18 percent unemployment rate. b) All the middle-age long-term jobless who, ...

The Great Green Jobs Claim

I periodically hear this during presidential campaigns and when various elected officials are trying to push a green policy, often in response to global warming. Because of [insert environmental problem here] we need to pursue a policies that will promote [insert one or more alternative fuel/energy sources here]. And not only will it address [the environmental problem noted above], but ...

Health Care Reform Tax on Low Income Earners

James Capretta does a back of the envelope calculation on the Baucus health care reform bill and concludes that it would be like having a 70% marginal tax rate on the low income. According to CBO, family coverage in 2016 is likely to cost about $14,400 under the so-called “silver option” in the health-care reform plan sponsored by Senate Finance Committee ...

Professional Failure

Or this post could be titled how doctors routinely fail to predict illnesses, diseases and injuries. It strikes me that this is one of the main problems with health care in this country. If only doctors could get better at practicing their art then we might not have such a problem with run away health care costs. ...

Fire Chief Shot in Court Over Tickets

Yes, that headline is not an exaggeration. The Chief of the Jericho Fire Department went to court and was shot by the police for disputing two tickets requiring two trips to the court house. JERICHO, Ark. – It was just too much, having to return to court twice on the same day to contest yet another traffic ticket, and Fire ...