Join Bill Fleckenstein this week on a trip to the government department responsible for fun with numbers. Maybe you are already familiar with the use of hedonic indexing of information technology and how it affects GDP. Well, now they are thinking about taking it further:
It is sometimes said that long lines at theaters, sports events, and amusement parks are signs of a market that is not clearing and that prices should be raised. In fact, people pay in a combination of money and time costs, that’s all. With a moderate-income clientele it makes sense for some people to ration by waiting rather than by cash. These are the low opportunity cost customers. At rock concerts, some performers insist on keeping ticket prices below what they can get for public relations purposes and, in the long run, it’s probably a good strategy.
Did you ever notice that Louisiana is the only state of the Union where you can get a decent floral arrangement? No? Then it may surprise you to learn that Louisiana is the only state to license would-be florists.
The IRS is closing a “loophole” that’s allowed individuals to avoid government-theft. Also see this article.
Fascinating piece in the NYT exploring how it is that sometimes the federal deficit is a huge concern and other times it is not. Today, says the piece, the zeitgeist suggests that the deficit is no problem. Unmentioned anywhere in the article is the role of the Fed as the lender of last resort. As Roger Garrison suggests, taking away this power and allowing federal debt to come with a default premium would change political incentives dramatically.
From The Economist: “Two economists, Deirdre McCloskey of the University of Illinois, and Stephen Ziliak of Roosevelt University, think their colleagues do a lousy job of making sense of figures, often falling prey to elementary errors. But their biggest gripe is that, blinded by statistical wizardry, many economists fail to think about the way in which the world really works.” [...]
From Edward Cox: I don’t know if it’s been previously mentioned, but Mises, in his book Liberalism, directly addresses the issues of free trade and international capital mobility that have been debated by Paul Craig Roberts and several Austrian economists during the past weeks.
The relevant passage can be found here.
The GSE Report, a watchdog of the housing agencies, keeps a close eye on these government-subsidized agencies that are fueling the housing bubble by packaging mortgages into “riskless” assets with the implicity promise of a government guarantee. Fannie purchases mortgage-backed securities that are packaged by banks, then underwrites them and resells or holds them.
