Channelling Anger

A more open political era
Is suddenly beckoning nearer
In a Mideast redoubt
We know little about,
Which happens to help Al-Jazeera.  

Internet viewership of the Al-Jazeera English service, with its live coverage from Tunis, Cairo and other hot spots, has risen 2500% since the recent wave of Arab popular rebellion began, as reported by the Huffington Post. Up to now, almost no US cable TV providers have carried the channel due to lack of demand (and fear of backlash), although the Arabic-language AJ channel is carried in quite a few US markets.

Economic Limericks Live!

Here, from the 2011 American Economic Association annual meeting in Denver, is David Lefkovits presenting "Limericks Économiques by Dr. Goose" during the Economic Humor Session in Honor of Caroline Postelle Clotfelter, Professor Greg Mankiw of Harvard University presiding.

January Fed Statement

"With jobs disappointingly slow,
Home prices depressingly low,
And inflation subdued -
We, the members, conclude:
On the good QE2 we shall row."  

The Fed's Open Market Committee ended their January meeting yesterday and determined that, with only modest improvement in economic conditions and continuing weakness in the housing and labor markets, they would continue along the path of quantitative easing.  QE2, as it is known, is the program of buying Treasury bonds to lower interest rates and increase the money supply, thereby providing a monetary stimulus to the economy.

State of the Union 2011

Yesterday's Brian Lehrer Show on WNYC FM featured our "State of the Union" limerick from 2010, which seems even more appropriate this year:


Said the President, wagging a finger:  
"Unemployment no longer may linger;  
So, to send a jobs bill  
To my desk from the Hill  
Is the task of each left- and right-winger."    


Here is the audio podcast, with the limerick at 1:15.

A tip of the hat to the most prolific limericist on the interwebs, Mad Kane.

Too Small to Prevail

The diminutive banks in the land  
May be showing less profit than planned,  
If for growth they're depending  
On small-business lending,  
For which there is flagging demand.    


Kelly Evans writes in the Journal's Ahead of the Tape that smaller banks do not appear set to report the earnings improvements that the largest banks generally have of late.  The chief reason for this disparity is the smaller banks' greater dependence on lending, which has been slow to recover from the financial crisis.

Consumer of Last Resort

A recovery study, right clever,
Showed consumers need time to delever;
So, for growth to begin,
Uncle Sam must step in  
And stimulate, right now, or never.   

The Economist's Free Exchange blog cited a recent study by the Federal Reserve Bank of San Francisco: researchers Atif Mian and Amir Sufi showed that residential investment was quicker to recover in counties with low average household debt than in more highly indebted counties. From this, the authors conclude that, with the US consumer generally highly indebted, lower taxes or interest rates would not suffice to stimulate economic growth; government must step in as the consumer of last resort. This space would add that the nation's infrastructure is in sad shape, and its renewal would bring double benefits.

Too Big to Save?

Those banks that were too big to founder
Have grown bigger without growing sounder;
So, what to do then,
If they founder again,
As sooner or later they're bound ter?  

The top five US banks now comprise 13.3% of the nation's financial firms' assets, as Real Time Economics points out in its Number of the Week. This is up from 11.8% in 2007, when Bank of America, JP Morgan Chase, Citi, Wells Fargo and Goldman Sachs were all considered too big to fail. In a comment echoed by MIT economist Simon Johnson, RTE's Mark Whitehouse wonders if these banks, in comparison with the federal government's strapped resources, are now too big to save.

Hu Wants a Strong Dollar?

Declared China's President Hu:
"With the Fed buying bonds as they do,
It touches raw nerves,
As our dollar reserves
May devalue a trillion or two."  

President Hu Jintao of China, in preparation for his state visit to Washington this week, expressed his unease with the course of the US dollar.  Responding to questions from the Wall Street Journal and Washington Post, President Hu said that the dollar as the international reserve currency is "a product of the past."  He also worried about the impact on China's $2.85 trillion of US currency reserves of the Fed's "quantitative easing" policy of buying treasury bonds to lower interest rates.  China fears that such stimulation will export inflation and cheapen its US dollar investments.  

Of course the Fed, as steward of the world's largest free-floating currency, does not have the luxury of the more direct forms of manipulation practiced in Beijing.  These are a source of irritation to many in the US, as they tend to cheapen Chinese exports and exacerbate the trade imbalance.  Should make for some interesting state dinner conversation with President Obama.

Martin Luther King

A precocious Montgomery pastor
Urged removal of racism faster;
For injustice to pierce
While the urgency's fierce,
In oration, of which he was master.    

Happy Birthday from Dr. Goose to Dr. King!

Economic Humorists Group Photo

Pictured at the 2011 American Economic Association's Economic Humor session (from left to right): David Lefkovits (Dr. Goose); Yoram Bauman (The Stand-Up Economist); Prof. Greg Mankiw; Jodi Beggs (EconGirl of Economists Do It With Models);Nick Tilipman and Mark Butler (Ecocomics Blog).


Here is a pithy review of the proceedings from the Tall Thin Guy (his nom de blogue).

Financial Crisis Post-Mortem

Economists noted the fact
That the big banks continue intact
By taking on debt,
Which, lest we forget,
Is implicitly government-backed.

At the 2011 American Economic Association annual meeting, leading economists - including MIT's Simon Johnson, co-author of "13 Bankers" - opined that financial reform had not done much to reduce the dangers posed by "too big to fail" banks.  Such banks maximize the amount of their debt financing because, due to the market's inference of a government guarantee, it is unnaturally cheap.  Similarly threatening are Fannie Mae and Freddie Mac which, Johnson said, "should be euthanized as soon as possible."

DeLong-Awaited Confession

Said a chastened Professor DeLong,
"This admission I cannot prolong:
When I held that the banks
Knew the risks in their ranks,
I was ruefully, woefully wrong."

From the American Economic Association 2011 annual meeting: UC Berkeley economics professor (and former Treasury official) Brad DeLong, leading off a panel on "What's Wrong (and Right) With Economics," offered a list of "The Things I Believed Before the Financial Crisis That Turned Out Not to be True." First among them: "That the Highly-Leveraged Banks Had Control Over Their Risks."

State of Despair

Said an expert in public finances,
When asked for his view of the chances
If, for federal largesse,
California would press:
"Uncle Sam's no more likely than France is."  

Here we take poetic license with the words of Dr. Alan Auerbach, professor of economics and law at UC Berkeley, who spoke at a panel discussion on the US federal deficit at the American Economic Association annual meeting.  Dr. Auerbach actually said that "Germany is more likely to bail out Greece than the US is to bail out any of the states."  He went on to note that the federal government could help the states by reducing unfunded healthcare mandates.

Econ Humor Video Fail

This space would like to apologize
If your Saturday night was monopolized;
We clearly did think
That there'd be a live link,
But reality proved to be otherwise.

Dr. Goose regrets that the promised live video stream from the Economics Humor session at this year's American Economic Association meeting did not materialize.  There were unforeseen technical limitations to our equipment, which proved incapable of capturing both the performers and their slides, and ended up with neither.  I thank everyone who set aside part of your Saturday night to watch a bunch of nerdy comics on the internet, and will endeavor not to let you down in the future.

Golden Ticket?

Said Mankiw: "Incomes's deficient
For those who are not quite proficient."
But a higher degree,
For the rich wannabe,
While useful, is hardly sufficient.    


Harvard economics professor Greg Mankiw, who served as Chairman of the Council of Economic Advisors to President George W. Bush, has an answer to the persistent question of US income inequality.  In his New York Times piece advising President Barack Obama on dealing with the new Republican majority in the House, Professor Mankiw cites Claudia Goldin and Lawrence Katz' book, “The Race Between Education and Technology.”  "The authors conclude that widening inequality is largely a symptom of the educational system’s failure to provide enough skilled workers to keep up with the ever increasing demand."


He might better have cited "Winner Take All Politics," by Jacob Hacker and Paul Pierson.  Their book identifies our Washington politics, dominated by corporate lobbyists, as the active culprit in the growing inequality between the richest of the rich and everyone else.  In this, the educated are as disadvantaged as any.

Marginal Argument

While discussing adverse tax incentives,  
Said Mankiw, waxing inventive,  
"In defending the wealthy,  
The common touch's healthy,  
Thus, the low-wage example I went with."    

Harvard economics professor Greg Mankiw, in his own words "a sometime advisor to Republicans" (including President George W. Bush as the chairman of his Council of Economic Advisors), wrote a New York Times piece advising President Barack Obama "how to break bread" with the new House majority.  Professor Mankiw advised the President to mind the adverse incentives created by marginal tax rates, a pressing concern in the family office and corporate tax-planning community.  As an example, he cited the phasing-out of the Making Work Pay tax credit for individuals making $75,000 a year.

After spending the rest of the week attempting to rebut Professor Mankiw's advice with limericks, Dr. Goose will be pleased to share the stage with him as the good professor moderates a panel of economic humorists, this Saturday night at 8:00 PM MST at the American Economic Association annual meeting.  Those of you on the East Coast should click on the Live Webcast link at 10:00 PM EST.

Mankiw's Advice

A Harvard professor of econ  
Told the President: "Fix what you're weak on;
Since you took a shellacking,
You've got to start tracking
The mind of the av'rage House Neocon."    

Harvard economics professor Greg Mankiw, in his own words "a sometime advisor to Republicans" (including President George W. Bush as the chairman of his Council of Economic Advisors), wrote a New York Times piece advising President Barack Obama "how to break bread" with the new House majority.  Professor Mankiw advised the President to mind the incentives created by marginal tax rates; to spread opportunity rather than "spreading the wealth;" and to avoid making the opposition his enemy.

This space finds much of the professor's reasoning and assumptions flawed, and will spend the rest of the week attempting to rebut them in five-line verses of anapestic meter.  Following that, we are pleased to share the stage with Professor Mankiw as he moderates a panel of economic humorists, this Saturday night at 8:00 PM MST at the American Economic Association annual meeting.

Economic Comics

Ev'ry year, in the opening week,
At the conférence économique,
Next to earnest debates
At off-season rates,
There's some divertissment très comique.

The imaginary Dr. Goose will share the stage with some real - and really funny - PhD's during this weekend's annual meeting of the American Economic Association in Denver.  The AEA's humor session is 8:00 PM MST on Saturday, January 8 and includes the lineup below.  It's free and open to the public, so please come see us if you are in Denver.  If you are not, you can see the live webcast, courtesy of Harvard's Jodi Beggs, a.k.a. "Econgirl."

Jan 08, 2011 8:00 pm, Sheraton Downtown Denver, South Convention Lobby
American Economic Association

The Economics Humor Session in Honor of Caroline Postelle Clotfelter

Presiding: N. GREGORY MANKIW (Harvard University)

"Limericks Economiques" by Dr. Goose

DAVID LEFKOVITS (limericksecon.com)

Supplying Justice, Demanding Vengeance: The Economics of Comic Books

MARK BUTLER (St. Johns University and Ecocomics Blog)

NICHOLAS TILIPMAN (Cornell University and Ecocomics Blog)

The Economics of the Simpsons

JODI N. BEGGS (Harvard University and economistsdoitwithmodels.com)

CBO versus OMB...OMG!

YORAM BAUMAN (University of Washington and standupeconomist.com)