Category Archives: Economics


Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

[from sources unknown, via John Tantalo]

the myth of the fiscal conservative

John pointed out an article in the New York Times magazine that looks in-depth at Obama’s economic plan and why it’s so difficult to classify as liberal or conservative.† The whole article is a great read, but this one passage caught my attention:

The second criticism is that Obamaís tax increases would send an already-weak economy into a tailspin. The problem with this argument is that itís been made before, fairly recently, and it proved to be spectacularly wrong. When Bill Clinton raised taxes on upper-income families in 1993, his supply-side critics insisted that he would ruin the economy. As we now know, Clinton presided over the longest economic expansion on record, the fastest income growth most workers had experienced in a generation and the disappearance of the federal-budget deficit. His successor, Bush, then did exactly what the supply-siders wanted, cutting upper-income tax rates, and the results were much worse. Economic growth wasnít quite as strong or nearly as widespread, and the deficit returned. At the very least, Clintonís increases did no discernible economic damage. Rubin, citing academic work on tax rates, made the case to me that rates under an Obama administration would not be nearly high enough to stifle innovation.

It probably isn’t the first time that admission was made, but it’s the clearest summary I’ve seen to date. In short, Clinton’s policies benefitted the entire economy, while Bush’s policies helped the wealthy at the expense of the economy as a whole.

sunny isn’t nearly so interesting anymore

You know the myth: “Housing prices in San Diego are so high because everyone wants to live here.”† It’s depressing if you want to buy a home, but it turns out it just isn’t true.† We’ve been losing more people than we’ve gained over the last four years, and it started just about the time housing prices started going up.

Catherine MacRae Hockmuth of Voice of San Diego has an interesting take on it:

…a society in which only 9.4 percent of the population can afford a median-priced home is not a healthy society. The situation is bad for businesses who struggle to attract workers whose money will stretch much further in places like Dallas or Atlanta. And before you offer up San Diego’s mantra — But then you have to live in Dallas or Atlanta — consider that people who live there like it well enough and they don’t have to do financial gymnastics to own homes there.

So here’s the question: since there isn’t an influx of people driving housing prices up (at least here), and if it’s not due to rising wages or inflation, then what’s the real cause?

like a flan in a cupboard

Nick sent along this depressing article entitled “Thirty-Six Sure-Fire Signs That Your Empire Is Crumbling.”† In other words:

You know your empire’s crumbling when it’s considered an achievement to pretend that you’ve halved the rate at which you’re adding to the massive mountain of debt you’ve already accumulated.

You know your empire’s crumbling when you’re spending tens of billions of dollars you don’t own on new nuclear warheads and space weapons that don’t work, to be used against an enemy you don’t have.

You know your empire’s crumbling when gays and immigrants are used as diversionary issues to keep people from thinking about the pillaging of their country and their wallets actually taking place. And it works.

I’d go on, but it’s all so distressingly familiar.