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Tom Lindmark's  Instablog

About a year ago, a company asked me to write a daily blog for them. I told them that I’d never read a blog and had absolutely no idea how to write one but sure, if you want to pay me for it, I’ll give it a shot. It was either my good or bad fortune to start at the beginning of the credit... More
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But Then What
  • Arnold Kling: Recovery Will Be Fast

     How about a little sunshine for a change. Keep in mind that this is opinion and flies in the face of a lot ofcurrent data but Arnold Kling is a pretty level-headed economist.

    Writing in The Atlantic he makes the following observations:

    Sudeep Reddy takes note of an important fact about the current recession:
    1.  Cutbacks in employment (and, I would add, hours worked) are sharp relative to the cutbacks in output.

     

    In addition, I would point out that:

    2.  The stock of automobiles is aging, because hardly any new cars have been bought for the past year.

    3.  Household formation is falling, because people cannot afford to form new households.

    4.  The rate of homebuilding is way below the long-term trend.

    All of these factors will turn around once economic growth picks up.  Firms will find themselves needing to add workers in order to meet demand.  People will have pent-up demand to form households and get new cars.  Homebuilding will actually start to contribute positively to growth.

    He also thinks that once Washington gets done with all of their deliberations about health care, cap-and-trade etc. there will be a lot less uncertainty in general which would be another positive. He thinks that commercial real estate and retail are still pretty ugly but overall thinks that once things stop going down the recovery will be brisk and steady. He says no double dip recession.

     

    It seems that his predictions depend on a fairly robust increase in consumption. I think that it might play out that way initially as we bounce off extremely low levels but I'm not sure how much staying power the consumer is going to display. There will be a restocking recovery as firms have to replace depleted inventories so the early numbers when some growth does come may look deceptively positive. I think it will peter our and we'll either find ourselves in the double dip or flat lining at a low level of GDP growth.

     

    Nevertheless, Kling is a very, very smart guy so I wouldn't discount his thoughts entirely.
    Jul 18 05:36 pm | Link | Comment!
  • Congress Doesn't Really Hate Golf

     Remember the outrage about golf and banks sponsoring golf tournaments while they were recipients of

    TARP money. One would have thought that the game of golf (which I happen to love) was one of the roots of our economic demise.

    Well it turns out that the political class loves golf too, particularly when it can be used to generate some lucre for their favorite charity -- themselves.

    From Politico.com:

    From Jonas Brothers concerts to Boston Red Sox games, politicians can always find a timely way to host a fundraiser. And, in the summertime, why not hit the greens to raise the greenbacks?

    This year, there's no shortage of political fundraisers dressed up as golf outings. A quick sampling, as gleaned from data on the Sunlight Foundation's website:

    In June

    Rep. Tom Petri (R-Wis.) at the American Club and Kohler Waters Spa: $2,500 per individual

    Rep. Mike Conaway (R-Texas) at the Robert Trent JonesGolfClub: $1,000 per individual

    Sen. John Thune (R-S.D.) at the Caves Valley Golf Club: $2,500 per individual

    Rep. Tom Rooney (R-Fla.) at the Robert Trent Jones Golf Club: $1,000 per individual

    Rep. Todd Tiahrt (R-Kan.) at the Old Hickory Golf Club: $1,000 per individual

    Rep. Glenn Nye (D-Va.) at the Heron Ridge Golf Club with NFL Hall of Famer Bruce Smith: $500 per individual

    Rep. Steve Israel (D-N.Y.) at the Bethpage Black: $5,000 per player

    Rep. Ed Royce (R-Calif.) at the Stonewall Golf Club: $2,300 per individual

    Sen. Max Baucus (D-Mont.) at the 10th Annual Fly Fishing & Golf event: $2,500 per individual

    Rep. Michael Castle (R-Del.) at the Biderman Golf Club: $1,000 per individual

    Sen. Blanche Lincoln (D-Ark.) at Westfields Golf Club: $1,500 per individual

    In July

    Rep. Loretta Sanchez (D-Calif.) at the Westfields Golf Club: ($500 per player)

    Sens. Richard Burr (R-N.C.) and Saxby Chambliss (R-Ga.) at the Greenbrier Hotel: $2,500 per individual

    In August

    Rep. Tom Price (R-Ga.) at the King and Prince Golf and BeachResort: $2,400 per person

    Sen. Bob Bennett (R-Utah) on a "Fishing and Golfing" trip (named "Flies and Drives")

    Rep. Jim Langevin (D-R.I.) at the Third Annual Langevin Open GolfTournament, held at the Shelter Harbor Golf Club: ($1,000 per player)

    Sen. John Barrasso (R-Wyo.) at the Jackson Hole Golf & Tennis Club: ($1,000 per individual)

    Rep. Tim Murphy (R-Pa.) being hosted by Arnold Palmer at the Latrobe Golf Outing

    And this weekend provides an occasion for fundraising: Saturday night's concert at Nationals Park with Billy Joel and Elton John. At least three fundraisers are planned to support Reps. John Shadegg (R-Ariz.), Jean Schmidt (R-Ohio) and John Shimkus (R-Ill.). All of those ask for more than $1,500 per ticket.

    I guess if you raise money for yourself it's OK but if you're tossing a few coins to St. Judes Hospital or some other charity it's a taxpayer ripoff. These guys are shameless.

    Jul 18 05:35 pm | Link | Comment!
  • More Taxing Health Care Ideas

     Following up on yesterday's post about taxes to pay for health care reform, here is where Charlie Rangel

    wants to go:

    From The Hill:

    The House will propose raising taxes on people earning more than $350,000 a year to pay $540 billion for healthcare reform, Ways and Means Committee Chairman Charlie Rangel (D-N.Y.) said Friday.

    House Democrats had been weighing a plethora of other tax increases, such as levies on sugary soft drinks and alcohol, that raised hackles within their caucus.

    Instead, Rangel said Democrats will seek to enact one large tax increase targeting wealthier workers to generate the revenue they need to finance their $1 trillion-plus healthcare reform bill.

    “We have decided that instead of putting pieces of different revenue raisers together, that the best that we can do [is] we would have graduated surtaxes starting at [$]350],000],” Rangel said. The tax hikes would begin in 2011 and raise $540 billion over 10 years, he said after a meeting with Democratic committee members.

    The price tag of the bill is expected to be around $1 trillion. Democrats have already tentatively assembled a package of spending cuts worth around $500 billion, mostly from Medicare and Medicaid.

    According to the article there would be surcharges of 1%, 2% and 3% at income levels of $350,000, $500,000 and $1,000,000 respectively.

    Of course, this is the going in price. We all know that over the long run this program is going to actually save money by controlling costs -- don't we? So surely these surcharges are temporary.

    Jul 11 05:16 pm | Link | Comment!
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