Are economists better than others?

http://freakonomics.blogs.nytimes.com/2008/01/31/repugnance-revisited-or-are-economists-really-evil/

Stephen Dubner over at Freakonomics seems to imply so - that Economists may be one of the few individuals able to analyze things objectively and free of bias. Now, perhaps I'm no expert, but I know enough economists and read enough news to know that that is ridiculous. I've said before that the arrogance of the economic profession is a big concern of mine, and here it again shows its head. Economists have their biases - they call them "assumptions."

It's time for the economic profession to stop pretending they are somehow immune to being human or somehow loftier than other fields of inquiry just because they know how to differentiate an equation.

Tangible vs. Intangible property rights

Hat tip to mises.org, here is a great article on the debate about intellectual property rights.

Definition of Crazy: Doing it again and expecting a different result

Bernanke and friends did it again today and dropped the funds rate by another 50 basis point (on top of the 75 they did last week). As I mentioned last week, nothing happened - in fact the stock market fell last week in the days after the announcement for the most part both here and globally.

So what happened this time? Well, the Dow is, according to my stock checker on my phone, down 37 points on the day. The S&P is down 7 points. Yet again, this is a big slap in the face to the Fed bankers and to me it is quite scary actually because it shows me that this market really has no confidence that the Fed or fiscal policy can reverse the downward trend. To me, the market sees negative underlying conditions and inflation as much more problematic than the Fed does. In fact, the Fed thinks inflation will moderate in 2008. And I agree with my friend Mike Moffatt - I don't know why they think that.

Not a Good Sign

It's never a good sign that, even with an unorthodox surprise 75 basis point drop in interest rate by the Fed, the Stock market continues to fall (Dow Jones - over 200 points since beginning of yesterday's trading). Investor confidence in Bernanke (or the Fed's ability to help) must be really low.

If oil prices are skyrocketting, why are non-energy prices stable?

I think the answer to the title questions lies in the fact that we are experiencing a simultaneous decrease on both the supply and demand side. Hence, other than certain necessity items (like food), soaring gas prices have not had a trickle effect on other prices in the economy because while the gas prices can have an effect on our economy's output of goods, we are simultaneously experiencing a demand-side malaise led largely by negative perceptions due to: the Iraq war, media pundits proclaiming a huge economic crisis, a declining dollar, middle class real-wage stagnancy, and the bubble burst in the housing market, etc.... The demand side shift is tending to keep prices down just as high gas prices and falling supply is pushing prices up.

The result is that core inflation is not rising as one might expect from higher oil prices. All of that matters little. The point is that national output/expenditure is likely to grow at a snails pace (if you are an optimistic economist) or may even dip into negative growth (if you are, like me, less than optimistic). High prices or low prices, that's bad news. But there is one saving grace - and that is the stagnant prices give a little more breathing room to Bernanke and friends.

Oh Snap!

Hat tip to Mankiw,
Reagonomic supply-sider and political hack Bruce Bartlett gets his ass handed to him.

A post completely about politics

As the political season heats up, I will likely start putting in more political type posts as opposed to sticking to just 100% econ issues.

I read this this morning and it made me chuckle. It is a response by John McCain when asked about a mailer he sent out in Michigan that many perceived to be very negative:

"We had to respond to negative campaigning [of Romney]. Now, we won’t go tit-for-tat, but ...we will respond in a very forceful fashion."

Isnt' that a little bit like saying, "I don't discriminate, I just don't let certain people into my restaraunt." ....

Gotta love political mumbo jumbo talk.