Notes from the Under...stimulated

Only In Economics

only in economics can something being unchanged = excitement
only in economics can the word "patience" make thousands of people across the country bite their finger nails
only in economics can the sentence "At this juncture, with inflation low and resource use slack, the committee believes that policy accommodation can be removed at a pace that is likely to be measured" cause a collective "OH!" and not a collective "so what?"

so yeah. Fed leaves interest rates unchanged at 1.0% for now. i'm sure your interest on this topic rates about 1.0% as well.

Good. The market's DisaPpointed (slightly).

let's hope people take 1Q04 GDP at face value and don't realise that it's still pretty good at 4.2%. weakest part of the report (kind of) was inventories. this points to bigger growth next quarter too (when people start to restock).

i can see why inventories are weak. who's good at taking inventory? it's depressing. for example:

OCCUPATIONAL INVENTORY:
1 chewed up pen that only works when shaken
1 really bruised elbow
1 phone that needs a big paper binder to hold down the mute key (see exhibit below)
1 job that i don't particularly enjoy
3 unused napkins
4 advil liquid gels (time to reorder!)
1/2 protein bar
3 reports of other banks' research
10 people who think my name is "Lorraine"

THE PHONE

It's Not Easy Being Green...span
Tell me he's not a muppet:

I half expect the next question for Greeny to be posed by Statler (next heckle, more likely, Congressman Frank was all "SO. have you discussed deficits with VP Cheney? You can't say? Fine. We'll just ask Paul O'Neill.") from up in the balcony:

For No Apparent Reason*
The Day in Anglos: News
1. Blair's trying to survive journalist proclaimed "week of hell."
2. today is Australia's self-proclaimed Australia Day. strewth, matie. bob's your uncle.
3. old news, but still funny: Pres. Bush "like likes" the Canadian aide.
4. New Zealand has a "hot air egg balloon" that apparently can fly over mountains. (it was that or talk about how peter jackson who filmed in NZ doesn't look like a hobbit, but like a dwarf, and maybe is elijah wood really an elf? he's a small something wearing a green velvet suit, that's for sure.)

*other than that i am bored.

Ex-Secretary of the Treasury Paul O'Neill w/r/t to President Bush and what it's like working for him: "The only way I can describe it is that, well, the president is like a blind man in a roomful of deaf people. There is no discernible connection." more on O'Neill and his new book.

UPDATE:
breaking news headline on Bloomberg Treasury rejects IMF Deficit Study as 'Breathless Hyperbole'

two things:
- is "breathless hyperbole" itself an hyperbole?
- Bush "Heh. That's great. I was hyperbole when I was a kid too, but I've calmed down since then!"

Ah. Here's Something Interesting:

On Wednesday January 8, the IMF Said Rise in US Debt is a Threat to the World's Economy

The US acts as the global growth engine, and US consumers are the engine behind US growth (i couldn't resist at least a small allusion to the spending habits of some 18-year old manhattanites...). But the US government is running up a debt that would put even the most devoted no-limit barney's shopper to shame. and the IMF (notoriously thought of as a US mouthpiece) has come out saying, "uhm, yeah. this could be bad." the real problem here is that the Bush administration is borrowing and spending today with no thought about tomorrow. i read something that compared Bush to "the guy who buys you a present. on YOUR credit card. and then a month later when you get the bill, you realise that not only did he buy you something, he bought himself the ENTIRE STORE and stuck you with the bill!" simplified? yes. scary? definitely.

my favorite line of the entire article is when they point out that "White House officials dismissed the [IMF] report as alarmist, saying that President Bush has already vowed to reduce the budget by half over the next five years." uh huh. riiiiiiiiight. don't you wish it were that easy? (cue dream sequence)

Someone: what're you DOING borrowing my car and fucking it all up???
You: pish POSH. don't be so alarmist. I vow to buy you a new one.

Another: dude. your drinking's getting out of control!
Not Me: don't freak out man, i told you already: i vow to cut back over the next five years.

Roomate I: hi, uhm, where's the rent check?
Roomate II: you didn't get it? i vow to send it to you, cool?

anyway. i'd love to hear how with tax cuts and spiraling defense spending we're going to be cutting back the debt. don't be surprised if the next crop of public school educated kids no write-y english so good.

but at least we have our MTV.

well, for those of you out there that haven't seen Ferris Bueller's Day Off in a while, here's the curve:

do you believe it? the assumption is if you raise taxes too high, people will work less, thus the revenue raised from taxation falls. i'm no supply sider, so, it's pretty obvious where i stand.

"Operation Wooden Nickel" that's the name. for real!

I just met (and talked to, well, got talked at by, for an hour) Art Laffer. If you don't know him from your economics classes, you may know him from this (if not, look him up on Google yourself...):

"In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone? ...the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered? ...raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics."

there were many quotable pearls from this conversation. including talk about Ghandi drinking his own urine, how arnold schwartzeneggar reeks of charisma, how he (Laffer, not the Governor) owns five dogs and a 130yr old turtle (named Mahatma, hence the urine talk) among some other more economic-y (READ: conservative) discussions. and his fly was open THE ENTIRE TIME.

the hawley-smoot tariff shout out in the above quote is, however, applicable to Bush's TOTAL AND COMPLETE STUPIDITY (republicans and democrats are in agreement in on that one. i think it was referred to as Rope-a-dope) w/r/t proposing tarriffs on Chinese imports. what he's doing is DOWN RIGHT scary. i have a lot of opinions on this, but i really should be doing work right now as i lost an hour talking to Reagan's economic advisor.