Economics

The Unappreciated Virtues of Low Prices

Former Joe Biden chief economist Jared Bernstein has a piece up at PostEverything extolling the virtues of the $20/hour wage rate paid to McDonald’s employees — and other fast food workers — in Denmark. The base pay for a fast-food worker in Denmark is $20, and the pay package includes considerable non-wage benefits, including five […]

What Could Be Worse Than Raising the Minimum Wage?

I see that our mayor has proposed a city ordinance to raise Chicago’s minimum wage to $13 an hour. The current minimum wage in Illinois is $8.25/hour, a buck over the federal minimum, so that amounts to a 58% hike. This follows Seattle’s decision to increase their minimum wage to $15 a few months ago, […]

5 Years of the Business Cycle

I’ve been seeing this chart meme in a few places lately: The URL at the bottom indicates it’s from the folks at “I love it when I wake up in the morning and Barack Obama is President.” I’m assuming the numbers are accurate. There’s no date on it, but with that Dow number it has […]

Gary Becker on Crime

One of the giant minds of economics, Gary Becker, passed away on Saturday. Among other things, he and Kevin Murphy were pioneers in the idea of rational addiction, which I wrote about last year. That was just one example of his approach to applying the tools of economic thinking to a wide variety of other […]

An Argument From Envy

Over at In These Times, United Steelworkers president Leo Gerard has an opinion piece in which he purports to explain “Why the GOP Really Fears Minimum-Wage Hikes.” Republicans in America suffer a crippling anxiety. It’s the terrible fear of corporations paying poor workers too much. I don’t have any special claim to understanding why Republicans […]

Plenty of Blame to Go Around for the National Debt

I spotted this awful meme image on Facebook, from the Being Liberal page: Aside from the poor grammar and gratuitous attention-getting reference to 9/11, its implications about the history of our national debt are just plain wrong. On 9/11 we were attacked. Immediately after military expenditures doubled. Do you recall the Bush administration seeking added […]

Poor Ain’t Stupid

Poor people get a bad rap. I’m not talking about accusations of welfare fraud, and I don’t just mean politicians who call them “moochers” and “takers.” I’m talking about the people who think that if they were born poor, they could do better. They believe most poor people could move into the middle class if […]

Sequestration — Bring It On

I’ve been reading President Obama’s helpful guide to the things that sequestration will force the goverment to cut (the link is to the Illinois version) and I’ve realized that most of the cuts from sequestration fall into two categories: The first category consists of cuts that would be pretty damned awesome: …Illinois will lose about […]

Obama Wins, Markets Do Something

It’s easy to make fun of “up-down” financial market reporting, which is why I do it. Every day, some poor fool pretends to understand why thousands of investors made millions of of decisions about billions of dollars and boil it down to a single cause, such as “profit taking,” “hunting for bargains,” or “declining investor confidence […]

“Obama Loves American Car Workers”

…and hates American car owners. Over at In These Times, the President of the United Steelworkers International union, Leo Gerard, is praising President Obama for propping up politically connected businesses, although that’s not quite how he puts it: President Barack Obama…has given some love to American car companies and American car workers. He also gave […]

Romney’s Disturbing Ignorance About the American Economy

The left has been going wild over Mitt Romney’s “47%” comment, and for good reason. What they may not realize is that a fair number of people on the free-market right aren’t too happy with it either, because it shows shocking ignorance of how the American economy works. Steve Chapman has a takedown of Mitt […]

Mega Millions Breakeven?

For those interested in the numbers, the Mega Millions jackpot stands at $540 million. That’s the estimated nominal value of the annuity payout over 25 years (26 payments, the first one is immediate and the rest are at the end of the year). That annunity is calculated based on the current cash prize pool of $389 […]

The More I Learn About the Mortgage Crisis, the Less I Know

I’m reading Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon by Gretchen Morgenson and Joshua Rosner. It’s an account of the collapse of the subprime mortgage market at the beginning of our current economic mess. The book tells the story at an odd level of detail: It doesn’t give a lot […]

Death to Pennies

Here’s something I never thought about before: It’s time to stop using pennies. Aside from its actual subject — the uselessness of pennies — this video is also worth watching because it’s a terrific example of how to make an argument. It’s clear, it’s concise, and in four minutes and 31 seconds I went from […]

R.I.P. Paul Krugman’s Brain

[Update: I am relieved to note that the Google+ page referenced below below does not actually belong to Paul Krugman. It is a fake. The author offers an explanation, “hope it will enlighten many…” blah, blah, blah, but it was kind of an annoying stunt. It’s true that Krugman has said similar things in the […]

No Way to Run a Country

I’m really tired of hearing about the debt ceiling, and I’ve avoided contributing to the cacophony so far, but I just have to get this off my chest. It’s not so much that I think one side is right and the other side is wrong. Rather, I think everyone who created this mess deserves a […]

Trump Craziness Is Deeper Than Birtherism

You’ve all heard about Donald Trump’s weird obsession with Obama’s birth certificate, right? Pretty crazy, huh? You ain’t seen nothing yet. The real crazy shit will come when Trump starts explaining his policy proposals. That’s not a prediction. It’s a memory: CNN November 9, 1999 Billionaire businessman Donald Trump has a plan to pay off the national […]

A Long Post About Flat-Fee Lawyering

I don’t know what Houston criminal defense lawyer Mark Bennett’s politics are, but over the past couple of months he’s been experiencing a classic example of the sort of thing that turns people into libertarians: Out of the blue, the government–in the form of the State Bar of Texas–wants to outlaw his business model. He usually […]

Windy Investments

Mark’s review of Michael Lewis’s The Big Short: Inside the Doomsday Machine sounds interesting. I generally find finance and economics difficult to read about, but I may give the book a go. From the sound of it, the author and I seem to have a couple of similar arguments about what is wrong with the efficient […]

The Big Short, and a Modest Proposal

To my co-blogger Ken: I haven’t seen you in a while, so we haven’t had time to talk about any of the usual stuff, therefore I’m taking this opportunity to submit a modest proposal for your consideration. As you know, one of the areas where we disagree about economics issues is the subject of the […]

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