It boils down to two main reasons: The problem is extremely difficult.The field of macroeconomics has been corrupted by politics. Regarding the first problem, it’s an issue of complexity. Just like molecules do not act like sums of atoms (and thus chemistry bears little resemblance to physics), humans do not act like sums of organs,… Continue reading Why Can’t Economics Accurately Predict the Timings of Recessions?
Why Did the Fed Lower Interest Rates If the U.S. Economy Is Doing Well?
There are three prevailing theories: 1) insurance 2) political pressure 3) market pressure. Regarding the first theory, Fed chair Jerome Powell may be trying to pull off what Greenspan did in 1995 and 1998. Powell has characterized both the rate cut in July and the most recent one in September as “insurance.” What he means… Continue reading Why Did the Fed Lower Interest Rates If the U.S. Economy Is Doing Well?
What Does It Mean When “The Monetary Authority Is Financing the Fiscal Authority”?
The fiscal authority is Congress (along with the president), which passes budgets regarding federal taxation and expenditures. In economics, these types of actions are called fiscal policy, which means Congress is the fiscal authority. Tax cuts and increased spending can stimulate an economy to fight unemployment, and the opposite actions can cool it down to… Continue reading What Does It Mean When “The Monetary Authority Is Financing the Fiscal Authority”?
The Economics Behind the Individual Mandate
In regards to the big Supreme Court decision on Romneycare Obamacare, there's been much hand-wringing on how this is a tax on doing nothing. This does seem odd, until you realize that a penalty or tax on one group but not on a second group is economically identical to having no penalty or tax on the first group but a tax credit… Continue reading The Economics Behind the Individual Mandate
Electoral Reform, Part II: IRV, an Improvement
Updated on 9/28/21 to add image via Yes! Media and mention of ranked-choice voting. I had originally intended this to be part of a four-part series that also covered Approval Voting and the Condorcet Method, which was my favorite method at the time, but political science professor Matthew Shugart convinced me that ranked-choice was better.… Continue reading Electoral Reform, Part II: IRV, an Improvement
Electoral Reform, Part I: The Problem with Plurality
Image via FairVote. Originally posted at "fling93 loves fishies," my old blog. Migrated, updated links, and added featured image on 9/21/21. I’ve been carping about our two-party plurality electoral system for so long now that many of you are probably wondering what I would replace it with. This will take quite a bit of explaining… Continue reading Electoral Reform, Part I: The Problem with Plurality
Whom to Blame for the Recession?
Now that the economy appears to be on the right track again, I'd like to revisit what I think was the cause of the 2001 recession. I run across too many people who take a partisan stance and blame it on Dubya or blame it on Clinton. Really, the President doesn't have as much power… Continue reading Whom to Blame for the Recession?