Memo to Senate: Just Say No

A couple of weeks ago, I gave a talk at the Federal Reserve Bank of Dallas. I said that, although I am not a fan of President Trump, I have to give him credit for making good appointments to the Fed. I was thinking about people like Jay Powell, Rich Clarida, and Randy Quarles.

Then today the president nominates Stephen Moore to be a Fed governor. Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job. If you doubt it, read his latest book Trumponomics (or my review of it).

It is time for Senators to do their job. Mr. Moore should not be confirmed.

Reflections of a Textbook Author

Click here to read my most recent essay.

Updates: David Henderson and Tim Taylor comment on the piece. And someone starts a reddit discussion of it.

Passing the Baton

Former ec 10 students might be interested in hearing this news.

If you are in North Carolina...

...you can hear me speak on Wednesday of this week. Click here for information.

Econ Theory Summer Camp

Graduate students with an interest in economic theory and/or finance will be interested in this opportunity, run by my colleague Eric Maskin.

A Clue in Today's Jeopardy!

Campbell McConnell

With sadness, I note the passing of economist Campbell McConnell. I never met him, but it is hard not to be impressed. He wrote the first edition his introductory textbook around 1960, and it has been one of the best-sellers ever since. Even today, about 60 years later in its 21st edition, it is the main competitor of my favorite textbook. Here is an old NY Times article about his book, when its main competition was Paul Samuelson's text.

Ec 10 Guest Lecturers

Here are the guest lecturers for ec 10 this semester. How many do you recognize? (Click on image to enlarge.)

Who is the prototypical rich person?

I recommend this op-ed by Emmanuel Saez and Gabriel Zucman. Not because I agree with its recommendation of super high tax rates on the rich, but because it makes clear the perspectives and motives of the Left.

In the standard economic approach to optimal redistribution (such as Okun and Mirrlees), the case for progressive taxation is based on diminishing marginal utility. But that is not the essence of the matter, according to Saez and Zucman. They view rich people as fundamentally undermining democracy. It is more a political argument than an economic one.

Saez and Zucman seem to think that rich people are like Henry Potter, the conniving banker in It's a Wonderful Life. Mr Potter makes his money dishonestly and uses it to control the instruments of the government to further enrich himself and impoverish the lives of those around him.

Another kind of rich person is someone like Taylor Swift. She is fabulously wealthy (net worth > $300 million) but earned that wealth by enhancing the lives of others through great music. As far as I know, she does not have significant political clout.

So are most rich people more like Henry Potter or Taylor Swift? Obviously, they come in both kinds. Unfortunately, we now have a Henry Potter living in the White House. 

But most rich people I know seem more like Taylor Swift. They make their money honestly by providing value to others. And they have less political influence than is often supposed.

Indeed, most rich people I know would have been happy to spend vast sums of money to keep Mr Trump out of the White House. And many tried. The Trump phenomenon is not an argument that the moneyed elites have too much influence on politics. If anything, it is an argument that they have too little.

The Radical Alternative

Users of my principles textbook might enjoy reading this critique of the ten principles in my first chapter.The authors are members of the steering committee of the Union for Radical Political Economics (URPE). 

I don't find their arguments persuasive. In many cases, they are responding to things I did not say but they think I am suggesting. (How else can someone complain about the statement "People face tradeoffs"?) In other cases, their message is, "Things are more complicated." (Of course! But you can't include everything in Chapter 1.) 

But I am surely not the most objective person regarding this. Decide for yourself.

You Can Support Putting a Price on Carbon

If you are an economist and want to support a carbon tax and dividend plan, click here.

Update: Here is a somewhat over-the-top video by a student group backing the plan:

History of Econ Summer Camp

Those with an interest in the history of economic thought might want to consider this summer program. I have been told that the program is designed primarily for students in graduate programs in economics, though students in graduate school in other fields as well as newly minted PhDs will also be considered.

Humor from ASSA 2019

ASSA 2019

I just arrived at the ASSA meetings in Atlanta. Readers of this blog might be interested in the following public events that I am involved with.

First, I will have a book signing to celebrate the publication of the 10th edition of my intermediate macro text. It is Saturday at 2:10 pm at the Worth Publishers booth. (I understand that copies are already going fast, so if you want one, you might stop by the booth earlier to pick it up.)

Second, I will be speaking at this session:

Saturday, January 5
What Should Students Learn From Intermediate Theory Classes?
Saturday, Jan. 5, 2019 10:15 AM - 12:15 PM
Atlanta Marriott Marquis, A706

Four Questions for the Year Ahead

Click here to read my column in Sunday's NY Times.

Merry Christmas

A Christmas message (be sure to check out the mouse-over text).

How the Govt Shutdown Affects GDP

In this interview, CEA chair Kevin Hassett (around minute 4:00) dismisses the adverse impact of the government shutdown on real GDP. It seems to me that he is more wrong than right. Kevin appears to be assuming that government workers don't produce anything of value when they are at work, or that they will make up all the undone work when they return, so making them stay at home has no significant economic impact. If that were really the case, we should give them all shorter work weeks, so they can enjoy more leisure.

To me, that does not seem tenable. Take, for example, the national parks that are now closed because of the shutdown. Those families that would otherwise be enjoying them are suffering a true reduction in economic well-being that is forever lost.

My very rough calculation is that economic cost of the government shutdown is in the ballpark of about $100 million per day.

Trumponomics

Click here to read my review of  Trumponomics by Stephen Moore and Arthur Laffer.

A Recent Interview

I am interviewed in N Magazine, starting on page 63.

Macro 10e

The 10th edition of my intermediate macro text is now available. Click here for more information.