Yo, PBS raps

Oh, dear...

Keynes vs. Hayek, with hip-hop:


What Bruce Bartlett said.

Update (1/25/10): Now there's a video, too.

Yo NAMA

The Times reports from Copenhagen:

The focus on reducing emissions from land use change is an important shift from the Kyoto Protocol, the first attempt by the nations of the world to develop a global plan to limit climate change. Current drafts circulating here would allow land-use activities that reduce emissions to be included in the United Nations Nationally Appropriate Mitigation Activities program, or NAMA, so countries could use that to achieve emissions reduction goals or targets.

But at the WTO in Geneva, NAMA is Non-Agricultural Market Access. Not only is the Doha round sputtering, it appears they are also losing control of their acronyms...

Our Ballooning Government

Is the Value-Added Tax (VAT) an idea whose time has come to the United States? In the midst of an article about this interesting question in the Times, I come upon this:

Introducing such a tax would probably require an overhaul of the entire federal tax code, no small order, and something the government last did in 1986. At the time the goal was to simplify the tax system, to raise money more efficiently and with fewer headaches for taxpayers.

Since then, federal spending has ballooned, while the government’s ability to raise taxes has become increasingly inefficient.

Ballooned? I don't see any ballooning here: Yes, there is a bit of a jump at the end due to automatic stabilizers and appropriate (though not big enough) countercyclical fiscal policy, but there's clearly no upward trend in federal spending since the mid-1980s. Moreover, federal government purchases - i.e., the stuff that's in the G component of GDP - accounted for 7.5% of GDP in 2008, down from 9.8% in 1986.

Update: Actually, since the graph goes through 2008, the main countercyclical fiscal policy (i.e., the stimulus bill) isn't in there.

The Liberty of Insignificance

China no longer enjoys it, Martin Wolf writes:

A country’s exchange rate cannot be a concern for it alone, since it must also affect its trading partners. But this is particularly true for big economies. So, whether China likes it or not, its heavily managed exchange rate regime is a legitimate concern of its trading partners. Its exports are now larger than those of any other country. The liberty of insignificance has vanished.

Anti-Dumping in My Backyard

Southwest Ohio's friendly neighborhood steelmaker, AK Steel, is among those being hit with antidumping tariffs by China, the Oxford Press reports:

The head of locally-based AK Steel said the company will “vigorously appeal” a decision by China, the world’s biggest steel consumer, to impose anti-dumping import taxes of up to 25 percent on specialized steel imports from Russia and the United States.China’s Ministry of Commerce said today, Dec. 10, that U.S. and Russian companies are selling flat-rolled electrical steel, a product used in the power industry for items such as transformers, at unfairly low prices in China. Starting Friday, Dec. 11, importers will need to pay anti-dumping deposits ranging from 10.7 percent to 25 percent to import the product from U.S. companies such as AK Steel.

Historically, the US steel industry has been a leading user of antidumping actions, so one naturally wonders if this is another example of the retaliation dynamic studied by Feinberg and Reynolds.

The College Tour

In the Times, high school senior Lauren Edelson writes of a new cliche on the campus tour:

I was surprised when many top colleges delivered the same pitch. It turns out, they’re all a little bit like Hogwarts — the school for witches and wizards in the “Harry Potter” books and movies. Or at least, that’s what the tour guides kept telling me.

During a Harvard information session, the admissions officer compared the intramural sports competitions there to the Hogwarts House Cup. The tour guide told me that I wouldn’t be able to see the university’s huge freshman dining hall as it was closed for the day, but to just imagine Hogwarts’s Great Hall in its place.

At Dartmouth, a tour guide ushered my group past a large, wood-paneled room filled with comfortable chairs and mentioned the Hogwarts feel it was known for. At another liberal arts college, I heard that students had voted to name four buildings on campus after the four houses in Hogwarts: Gryffindor, Ravenclaw, Hufflepuff and Slytherin. Several colleges let it be known that Emma Watson, the actress who plays Hermione Granger in the movies, had looked into them. I read, in Cornell’s fall 2009 quarterly magazine, that a college admissions counseling Web site had counted Cornell among the five American colleges that have the most in common with Hogwarts.

Hmm... for something different, she should visit Carleton College in Northfield Minnesota, where the tour guide would no doubt highlight the fact that a scene from "Mighty Ducks 3" was filmed in Carleton's Great Hall.

Economics PhDs

From the NSF report on the Survey of Earned Doctorates, which covers PhDs awarded in the US, for the 2007-08 academic year:

• Number of econ PhD recipients: 1091
• Percent female: 34.3%
• Percent US citizen/permanent resident: 34.9%
• Percent with bachelor's degree in econ: 56.1%
• Median age at doctorate: 31
• Median time to doctorate (from grad school start): 6.9 years

Of the 954 who responded to the question on their postgraduation status, 81 had definite plans for postgraduate study, 680 had definite employment and 168 were seeking employment or study (and 25 were 'other').

Of those reporting definite employment, 59.3% were headed to academe, 12.5% to government, 18.1% to business, 5.7% to nonprofits and 4.4% to other. Most (74.3%) of the jobs were in the US.

That's all in table 38, "Statistical profile of doctorate recipients in science fields, by sex and field of study: 2008." Nice to know the NSF considers us scientists!

The report came to my attention via Bruce Bartlett, who has some of the overall numbers.

Meanwhile, the next crop of soon-to-be Econ PhDs are in the midst of job market season, staring at their phones, waiting for calls for interviews at the meetings in Atlanta in January. They should read Brad DeLong's summary of what those interviews will be like.

BLS Brings Some Holiday Cheer

Relatively good news from the BLS this morning: in November, the unemployment rate fell from 10.2% to 10%.The unemployment rate is calculated from the household survey, which reports 227,000 more people were employed and 325,000 fewer were unemployed - the difference is largely attributable to people leaving the labor force, possibly because they have given up on finding a new job (to be counted in the labor force, you must either be working or looking for work). Accordingly, the labor force participation rate ticked down again, to 65%.If the labor market is truly turning around (and it does seem to be) we may soon see people re-entering the labor force, which would actually cause the measured unemployment rate to rise in the short term.

The establishment survey - which has a larger sample - reported a decline of 11,000 jobs (red line in the first graph). Less dramatic than the household survey, but a much smaller decline than recent months, and much better than expected. Moreover, a revision to the October and November figures reduced the jobs lost in those months by 159,000.

Floyd Norris is optimistic about the speed of the recovery:

One reason is the sheer abruptness of the decline in employment during the recent recession. (Yes, I think it is over.) After Lehman Brothers failed, the unemployment rate rose at a faster clip than at any time since 1975. There was something approaching panic among employers. They feared sales would collapse and that credit would be unavailable. In that spirit, they cut every cost they could. Imports plunged because no one wanted to add inventory. Ad spending collapsed. And people were fired.

That has left many companies in a position where they may need to add workers quickly for even a small increase in business.

Not surprisingly, Paul Krugman plays the grinch:

Today’s unemployment report was good news. But in a real sense good news is bad news, because this month’s not-too-bad number deflates the sense of urgency.

The fact remains that realistic projections show unemployment staying disastrously high for many years.

More on the employment report from David Leonhardt, Justin Fox.

Note: The charts were created using the St. Louis Fed's wonderful FRED tool. They have provisionally removed the shading for the recession at July, 2009, but the NBER business cycle dating committee has not yet officially a declared a date for the trough of the recession that began after the Dec. 2007 peak.

Pigou!

In the Journal, John Cassidy profiles A.C. Pigou, the Cambridge (UK) economist who pioneered the concept of externalities.

Keynes' Bad Grandchildren

At project syndicate, Keynes' biographer Robert Skidelsky revisits "Economic Possibilities for Our Grandchildren." While we have achieved economic growth even slightly better what Keynes hoped for, our attitudes towards work and wealth have not changed in the ways he predicted. In particular, the fact that we can now afford what would be a very high material standard of living in Keynes' day with much less work should have freed us to "live wisely, agreeably and well."

Skidelsky offers a very gloomy interpretation:

Moreover, Keynes did not really confront the problem of what most people would do when they no longer needed to work. He writes: “It is a fearful problem for the ordinary person, with no special talents, to occupy himself, especially if he no longer has roots in the soil or in custom or in the beloved conventions of a traditional economy.” But, since most of the rich – “those who have an independent income but no associations or duties or ties” have “failed disastrously” to live the “good life,” why should those who are currently poor do any better?

Here I think Keynes comes closest to answering the question of why his “enough” will not, in fact, be enough. The accumulation of wealth, which should be a means to the “good life,” becomes an end in itself because it destroys many of the things that make life worth living. Beyond a certain point – which most of the world is still far from having reached – the accumulation of wealth offers only substitute pleasures for the real losses to human relations that it exacts.

Hmmm... My favorite hypothesis on this remains Robert Frank's.