February 26, 2008 by Tom Armstrong.

Steve Forbes has a good rant in the most recent Forbes issue. Notable:

Astonishingly, a growing body of research has found that changes in sunspot activity directly correlate with temperature changes on Earth. Solar cycles usually fluctuate every 11 years. Alas, sunspot activity has been rather quiet recently. If it doesn’t pick up in a couple of years we could be in for a long-term cooling the likes of which has not been experienced since the so-called Little Ice Age more than 300 years ago. That period was marked by frigid bouts of weather that devastated crops and led to periodic famines. Back then, for instance, London’s Thames River often froze, whereas today that body of water gets ice only when it’s spilled overboard by revelers on boating excursions. And guess what? The last big freeze came after the kind of sunspot abnormality that may be unfolding now.

That meanie Paul Johnson does not believe the U.S. taxpayer should bail debtors and creditors out of the mortgage mess. Heartless. How dare any one espouse the virtues of free market capitalism.

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February 26, 2008 by Tom Armstrong.

Although I took several econ classes in my undergrad program, I loathed them all (that’s why I majored instead in finance). It was not until the end of the undergrad program that I began to appreciate economics. My first teachers were Friedman, Sowell, Ayn Rand, and Mankiw. Later I began to read some more complicated textbooks and research. But my study of economics suffered from the Law of Diminishing Marginal Utility. Each additional book or paper I’d read became a little less enjoyable. I felt I was maybe just losing my interest in the subject. Not so.

I found this link on Mankiw’s site discussing the same issue. And it’s true, as others say: reading the Mankiw textbooks is all any one really needs to understand basic economics. Although I can’t imagine not studying statistics or reading Varian, Paul Samuelson or Olivier Blanchard. And, of course, every Milton Friedman book should be read.

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February 26, 2008 by Tom Armstrong.

Watch the second part of the Laffer Curve video at YouTube. (I must link indirectly to it, via Cafe Hayek.)

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February 26, 2008 by Tom Armstrong.

AAA Oligopoly 

What happens when the feds license only a few companies to provide a service, and then require investors to buy that service?

For the answer, take a look at the mess in today’s bond market, where investors have been hanging on whether the main government-appointed credit rating agencies — Standard and Poor’s and Moody’s — would downgrade bond insurers MBIA and Ambac. Equities rallied yesterday when the agencies maintained their AAA ratings.

Bankruptcy Act 

Has Harry Reid realized that the just-enacted $168 billion stimulus plan will do nothing to encourage economic growth? On the same day that President Bush signed the bill, February 13, the Senate Majority Leader introduced Son of Stimulus, with plans for a floor vote today.

For this bill Mr. Reid decided to ignore the normal vetting of committee hearings and markups, and it shows. Democrats laud the $200 million in the bill for credit counseling, but the actual language of the bill directs $200 billion to something called the Neighborhood Reinvestment Corporation. We trust this error will be eliminated before Mr. Reid achieves Guinness fame for creating the world’s most expensive typo.

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