It’s Bill Gross’s rambling pleas for action from Washington that get most of the attention. But I think PIMCO strategist and portfolio manager Paul McCulley is actually much better than his boss at laying out the case for government intervention. This is from his July commentary, which I just stumbled across:
[T]he paradox of thrift
…
But that’s not gonna stop me from posting it. From Brad DeLong:
Here’s what NetNewsWire throws up as tops in attention in the “economics” category:
* Mark Thoma’s Economist’s View http://economistsview.typepad.com/economistsview/
* Alex Tabarrok and Tyler Cowen’s Marginal Revolution
…
From the abstract of “An Economic Model of the Planning Fallacy,” (pdf!) by Markus Brunnermeier, Filippos Papakonstantinou, and Jonathan Parker:
People tend to underestimate the work involved in completing tasks and consequently finish tasks later than expected or do an inordinate amount of work right before projects are due. We
…
Yesterday I made an argument for ignoring the debate around the minimum wage. I said the number we should really care about is the median wage of workers paid by the hour. That figure, for the 75.9 million Americans paid hourly rates, is $11.95. (The mean is higher—$14.25—but the Bureau of Labor Statistics thinks the median is a …
In response to my post over on the Creative Capitalism blog about
the vexing dilemma that:
1) Having multiple organizational goals can be a recipe for underperformance and waste,
but
2) Focusing exclusively on a single, simple goal like profit maximization or shareholder value can lead an organization terribly astray.
Two telling news reports today about retailers from metropolitan Seattle. First:
NEW YORK (Reuters) – Costco Wholesale Corp warned on Wednesday that its quarterly profit would miss current Wall Street targets because of soaring energy costs and other inflationary pressures, sending shares of the No. 1 U.S. warehouse club operator down as
…
Tomorrow the federal minimum wage goes up 70 cents to $6.55 an hour. Rather than join in either side of the outrage—the people who think $6.55 is still way low (including, ostensibly, the 23 states with higher floors) or the people who think the minimum wage is an unforgivable distortion of supply and demand that leads to greater …
John Paulson, the hedge fund guy who made the spectacularly dead-on bet that the market for mortgage securities would go haywire last year (and took home a paycheck in the vicinity of $3.7 billion in the process), is planning a new fund that would invest in financial companies.
The fund would “provide capital to financial firms hurt by …
Wall Street got drunk, it got drunk (it’s one of the reasons I asked you to turn off your tv cameras.) It got drunk and now it’s got a hangover. The question is how long will it sober up, and not try to do all these fancy financial instruments.
And now we got a housing issue, not in Houston, and evidently, not in Dallas, because
…
I wrote this for the Creative Capitalism project that Conor Clarke and Michael Kinsley are organizing. And I’m reposting it here because recycling is a really important aspect of creative capitalism:
There’s already been ample discussion here of Milton Friedman’s famous argument that “The Social Responsibility of Business is to Increase …
Hank Paulson’s Build-Confidence-Without-Saying-Anything-That-Will-Sound-Dimwittedly-Pollyannaish-a-Year-From-Now Tour continued with a speech in New York this morning. It’s actually pretty good, as these things go. But this paragraph struck me as problematic:
Looking beyond today’s market challenges, we need to get to the point where
…
The Congressional Budget Office has just issued its estimate of the likely cost of Hank Paulson’s plan to let troubled mortgage giants Fannie Mae and Freddie Mac draw on a Treasury credit line (that is, borrow money from taxpayers). The verdict: $25 billion.
This is what the CBO calls “probability-weighted average” of the different …
