SYDNEY - on the street, central + surry hills, 10/31/08

Happy Halloween

A Federalist Fiscal Stimulus

Many economists are calling for another fiscal stimulus package. For example, Martin Feldstein, who once wrote an article called "The Retreat from Keynesian Economics," recently pulled a full Keynesian in an article in the Washington Post:

The only way to prevent a deepening recession will be a temporary program of increased government spending.

Marty thinks the tax rebates earlier this year did not do much to stimulate consumer spending. I think Marty is too quick in reaching this conclusion: Other scholars who have seriously analyzed the data disagree.

If there is going to be another fiscal stimulus, there will likely be a division between those who want tax rebates to households and those who want to help states pay for extra infrastructure spending. I have a compromise, based on the grand U.S. tradition of federalism: Let each state decide.

Congress could pass a fiscal stimulus of a certain amount per person but offer two ways to have it paid out. Each state governor could be allowed to determine whether to take the money as state aid or have it paid directly to his or her state's citizens. Those governors who think they have valuable infrastructure projects ready to go would take the money. Those who do not would let their citizens take the extra cash. When designing a fiscal stimulus, there is no compelling reason for one size fits all. Let each governor make a choice and answer to his or her state voters.

Happy Halloween!

andrea: four *plus* things for my poppy wedding

readers, please say a friendly hello to andrea of smartbrideboutique.ca!

Hi,
Great idea! Forgive me, I really couldn�t stick to 4.

[no worries!]


{ pretty poppies wedding invitations by lilribbers }

1) Poppies! I�m currently obsessed with Poppies � possibly due to the amazing tea set I inherited from my Grandmother. So I�d definitely go with poppy themed invitations, these were my favourite of many.

* Tip - Make sure you get matching thank you cards at the same time so you can start sending them out as soon as the early bird gifts arrive.

I would complement the poppy theme with a few more �poppy� items in addition to the centerpieces and flowers.

Guest book:

{ custom-made guest book/album by enjibeck }

OR I love the idea of creating a poster sized invitation to have your guests sign.

Place cards:

{ red poppies place cards by michellebrusegaard }
[see my feature on michellebrusegaard here]

A matching tie for the groom:

{ poppy necktie by toybreaker }

2) One signature item of clothing to really make the bridal ensemble pop and accent your theme.

Fascinator:

{ ivory feathers, pearls and beading fascinator by sweetsnlo }

[here i substituted the custom listing, as the one andrea picked was reserved for a bride]

Fascinator 2:
{ Carrie Ivory Silk Flower and Feather Fascinator by chameleondesignsaus }

[sadly this listing has been removed, but check out the other fascinators at chameleondesignsaus]

Necklace:

{ Pearly Girly Necklace by VirginiaGeiger Jewels }

Wrap:

{ French Vanilla Bridal Wrap by bonzie }

3) And now for some fun! I did homemade cupcakes for my own wedding instead of cake. Perhaps for a DIY favour, you could combine the recipe for your wedding cupcakes on a snazzy recipe card, with a small canning jar full of the pre-mixed dry ingredients. i.e. Just add milk, eggs etc for your own �eat at home� cupcakes!

{ Cupcake Pop Recipe Cards by DingbatPress }

4) Lastly, we can't forget about bridesmaid gifts. I like the fact that you can get wristlets by babycakesboutique in several different Amy Butler fabrics so your bridesmaids never have to show up to a party with the same purse after the wedding.

Bridesmaid Gift:

{ Handmade Kashmir Eastern Inspired Bangle Wristlet by babycakesboutique }

thank you *so* much for your extensive picks, andrea! all best to you and your new blog, smartbrideboutique.ca/blog/

#413: yes. you. can.

via ever fab daisy chain.

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The Pigou Club: Canadian Division

Check out this open letter from 255 Canadian economics professors in support of a carbon tax.

#412: tip this.

our venue reminds me of 'semi homemade with sandra lee'. because it includes 95% of all-things-needed-for-a-wedding-reception, i (very brilliantly) will not have to hire outside what the venue already provides. instead, i can focus on tweaking small things here and there along the way to make the venue and the event reflective of "us".

and the best part? i won't have to carry around a big wad of cash on the day-of to tip multiple vendors. awe. some.

i will not be tipping (because i will not be using...):
a caterer
a makeup artist
a hairstylist
a florist
lighting specialists
linen people
chaircover people
valet

am i missing anyone? the venue estimate is inclusive of 19% gratuity (servers, bartenders) so i don't think i need to tip anyone there, right?

wait, so does this mean i really have no one to tip on the day-of?

freaking awesome.

oh wait, i might hire a dj. who i'd then have to tip. but then again, i might just use an ipod.

SYDNEY - on the street, paddington, 10/30/08

Get Ready for Deflation

Says NYU economist Nouriel Roubini.

How to Rework Bad Mortgages

Yale economist John Geanakoplos and lawyer Susan Koniak propose a way to deal with troubled mortgages:

we propose legislation that moves the reworking function from the paralyzed master servicers and transfers it to community-based, government-appointed trustees. These trustees would be given no information about which securities are derived from which mortgages, or how those securities would be affected by the reworking and foreclosure decisions they make. Instead of worrying about which securities might be harmed, the blind trustees would consider, loan by loan, whether a reworking would bring in more money than a foreclosure.

The government expense would be limited to paying for the trustees � no small amount of money, but much cheaper than first paying off the security holders by buying out the loans, which would then have to be reworked anyway. Our plan would also be far more efficient than having judges attempt this role. The trustees would be hired from the ranks of community bankers, and thus have the expertise the judiciary lacks.

#411: badassness.

my first 'featured guest'? um, more like 'SUPERSTAR'.

post #407 had a lot of you drooling. i rule! nah, i'm joking, it was all kimi. and like you, i was dying to know how she did what she did. so i reached out to her and she graciously agreed to give us the deets. i'm sure her words will inspire you as much as they did me. enjoy.

*********************************************

I am not a wedding person. Before I met my now-husband I had never even entertained the thought of getting married, let alone having a big wedding. If I'd had my way we would have run off to the woods and gotten married by ourselves, and then had a big party afterwards. But other people had other (strong) opinions. So a slightly more traditional shindig it was. But I decided to make as many things as possible, so it would feel more 'me', from invitations to favors to The Dress.

Not being a wedding person, I am also definitively not a wedding-dress person. I went into a couple of bridal stores but promptly ran out hyperventilating before even looking at anything. After a couple of J.Crew dresses that had to be returned due to total cleavage obscenity, I ordered a cheapo sheath dress from Target. It was so cheapo ($68 on sale) that I really held out no hopes for it. But when it arrived, it fit perfectly and was made of quite decent material. I thought to myself, If you don't want to be typical, here's your chance to get creative. I quickly ordered a 2nd one as a backup, just in case my attempts backfired. I mean, they were $68 for pete's sake.

After many experiments with cutting into the dress, fabric flowers, paint, beads etc., I decided on cutout silhouettes. I went to fabric stores and in the dusty basement of one found a kind of flocked velvet backed with acrylic. If it was regular velvet, or any other normal fabric, the edges would have shredded with the thin delicate shapes I was planning. There aren't really any d.i.y. instructions because they would have to say "Be an Artist and Graphic Designer Like Me", which isn't very helpful. I just took a pair of scissors and went at it�but there are tons of patterns on the web that people could trace. I cut out hundreds of leaves and vines and animals until I had shapes that looked good. Then I took the clean dress and laid it out on the floor and began arranging all the pieces until I got a pattern I liked. Then the hot glue gun came out (superglue also works I discovered later, and I was too lazy to even try fabric glue). I attached a piece of netting to extend the train and glued more trailing leaves down that. Several weeks-worth of evenings later, I had my dress. It has birds, deer, mice, our initials, a big fox, and the words we have inscribed in our rings�"It's all true". Meaning every dream, every fairytale, every story about dragons or empires or even true love, it's simply all true.

And then came the wedding. And even though it poured and we couldn't get married outside, it was lovely. A friend gave us the gift of an original composition for harp and string quartet, his father did an audience-participation jug band, and all these new yorkers got drunk and played washtub bass. The location was an Audubon center in beautiful prospect park in Brooklyn, so bird mobiles were everywhere and we got married next to a giant fiberglass chipmunk. The dress was a smashing success. Everyone wrote and drew such lovely things in the little books. Everyone took the paper flowers and adorned themselves with them, and everything and everyone looked gorgeous.

And that's the story of my wedding and my dress. I'm thinking re-commitment ceremony with yet another dress, in the woods, with a decorated umbrella. Just in case of rain.

The End.

(And there's a brief story of another dress. We had always planned on doing a mountaintop ceremony, just the two of us, sharing personal vows. So I made a 2nd dress for it, using an old silk nightgown of mine with leaves of matching silk that I hot-glued onto it, with a train of leaves in back. It's a pretty risqu� dress when worn, not appropriate for the web, so I'm only attaching a picture of it hanging up. The dress brought tears to the boy's eyes, and it was all beautiful, even though it was raining again and we once again had to stay indoors.)

For anyone who wants to see more pics, click here to view our flickr set. I feel incredibly honored that people love my dress and want to know more about it.









*********************************************

{thank you kimi.}

Cutler & Mankiw

A Panel Discussion of the Presidential Candidates' Economic Policies.

** Today **

Wednesday, Oct 29, 4 to 5:30 pm.
Science Center Hall A.

All are welcome.

Addendum: This event is free, which is a bargain compared to other venues:

A reception, policy discussion and lunch was offered in Newark, N.J., with David Cutler, Obama for America�s senior health-care adviser, for $500 for a guest or $2,300 for a V.I.P.

And you don't even have to travel to Newark!

Update: The Crimson reports on the event.

SYDNEY - on the street, paddington + surry hills + darlinghurst, 10/29/08

Two Questions for SAM

Andrew Caplin et al. propose a way to stop home foreclosures:

The way to do so is through the shared appreciation mortgage, or SAM. The concept is simple: Homeowners are offered the chance to write down a portion of their mortgage debt, but at the same time, they are required to share future appreciation gains with those who helped them out....

For example, a homeowner unable to support payments on a house purchased for $200,000 that today is worth only $150,000 might be offered a write-down of up to $50,000. But this would not be a free lunch.

With the SAM, once the value began appreciating above $150,000, the mortgage holders would be due their share. The details of the write down and the appreciation sharing could be tailored to different circumstances. But one way to give lenders a share of the upside would be to pay back some of the write down if the house is later sold.

This is like Zingales's Plan B.

I can see the attraction of these ideas, but I have two questions:

1. Would a law giving homeowners the right to write down their mortgages in exchange for equity attract so many homeowners that financial institutions would suffer even bigger hits than they already have? As these authors note, foreclosure is unpleasant for everyone. But because it is so unpleasant, some homeowners who are underwater on their mortgages keep paying them anyway. If we give them a better alternative, why would they?
2. If Congress were to pass a law allowing homeowners to rewrite their mortgage contracts, and lenders suffered losses as a result, what would the constitutional implications be? The fifth amendment says "nor shall private property be taken for public use, without just compensation." Could lenders get "just compensation" for losses that resulted because Congress crammed down an equity-for-debt swap? If so, would this be the best use of taxpayer funds?

Update: Andrew brings to my attention his longer, earlier treatment of the issue. He also responds to my questions. In response to the first question, he writes:

The offer would come from the lender (not borrower) in cases in which there is a stop in payment on the mortgage. Offering this on top of a standard write-down is an option that is currently not in their arsenal, a fact that many of them are not aware of (essentially ruled out by the tax code). One offers incentives for the writedown e.g. by exempting the shared appreciation strip from capital gains taxes. This is then part of the workout routine that would be far more attractive than a pure write-down, and often superior to enforcing default.

Suppose someone stops payment on their mortgage without needing to just because this offer is potentially open. They can be offered some powerful discouragement: (a) Increasing share of appreciation with increasing write down; (b) Give lenders ability to check income. There would then be a high % dedicated to the loan (you won't want this if you are doing fine or expect to recover income); potentially, have payments on the mortgage rise with income if one needs to work this angle harder.

The complete incentive system could be designed in a dynamic manner, adjusting as evidence of excessive use came to light.

In response to the second question:

This would be voluntary negotiation. The idea would be to set up the incentives for it in the tax code. It simply dominates current options in most circumstances.

Thanks, Andrew.

#410: hunting.

i plan to go hunting this weekend.

for stuff, that is.

because as you know, or maybe you don't know yet, i'm trying my best to stay away from doing the typical floral centerpiece arrangement thing.

1) i don't think i can afford a florist.
2) flowers die. (not to sound cynical. but it does make me feel better to say it over and over in my head.)
3) if i go the diy route, i'd rather do it over the next 7 months as opposed to hurting myself and those within arm's reach the day before the wedding.
4) and even if i'm capable of DOING IT ALL (far from it!) and SOMEhow magically arrange flower centerpieces the day before the wedding, there are no guarantees they'll come out any good. and i still may have to hurt someone afterward.

so for inspiration, i'm going to a flea market this weekend. a good trip will be if i actually buy something. but mostly, i'll be there to scope the scope and take some notes.

i'm hoping to find something kind of like this:

via aid to artisans.

or of course, this. hubba.

A View from India

In The Times of India, Swaminathan S Anklesaria Aiyar writes about the U.S. presidential candidates:

McCain is one of the few American politicians in either party with the courage and conviction to stand up to protectionist populism. By contrast, Obama embodies protectionism....

McCain has voted 88% of the time against bills creating trade barriers, and 90% of the time against export subsidies for US producers. Few other senators have such a splendid record.

Obama has served a much shorter time in the Senate, and avoided voting on many key issues. He has voted against trade barriers only 36% of the time. He supported export subsidies on the two occasions on which he voted, a 100% protectionist record in this regard.

In 2007, he voted to reduce visas issued to foreign workers (such as Indian software engineers), and to ban Mexican trucks on US roads. He sometimes voted for free trade - he supported the Oman Free Trade Act and a bill on miscellaneous tariff reductions and trade preference extensions. More often he voted for protectionist measures including 100% scanning of imported containers (which would make imports slower and costlier), and emergency farm spending.

In 2005 he voted to impose sanctions on China for currency manipulation, and against the Central American Free Trade Agreement (CAFTA). He voted for the Byrd amendment, a disgraceful bill (later struck down by the WTO) that gifted anti-dumping duties to US producers who complained, thus making complaining more profitable than competitive production.

Obama says the North American Free Trade agreement is a bad one, and must be renegotiated. He has opposed the US-Colombia Free Trade Agreement on the bogus ground that Colombia is not protecting its trade union leaders from the drug mafia. In fact, such assassinations have fallen steadily from 205 in 2001 to just 25 last year. Obama is cynically twisting facts to woo the most protectionist US trade unions. This cannot but worry India, which may also be subjected to bogus slander and trade disadvantages.

By contrast, McCain has consistently voted for open trade. He has opposed federal curbs as well as private curbs on outsourcing to countries like India. He opposed the disgraceful Byrd amendment on anti-dumping duties. He voted against farm subsidies and labour standards for imports (which are not necessarily bad but could become a disguised form of protectionism).

Unlike Obama, McCain voted against imposing trade sanctions on China for supposedly undervaluing its currency to keep exports booming and accumulate large forex reserves. India has followed a similar policy, though with less export success than China. But if indeed India achieves big success in the future, it could be similarly targeted by US legislators and, will need people like McCain to resist.

Obama favours extensive subsidies for US farmers, hitting Third World exporters like India. This has been one of the issues on which the Doha Round of WTO is gridlocked. McCain could open the gridlock, Obama will strengthen it.

Obama also favours subsidies for converting maize to ethanol. The massive diversion of maize from food to ethanol has sent global food and fertiliser prices skyrocketing, hitting countries like India. But McCain has always opposed subsidies for both US agriculture and ethanol. While campaigning, he had the courage to oppose such subsidies even in Iowa, an agricultural state he badly needs to win if he is to become president.

If any of my economist friends who are working for Obama wants to defend his positions on ethanol subsidies, tariffs on Chinese goods, the Byrd amendment, etc., shoot me an email, and I will gladly post it for my blog readers. But I am not holding my breath.

autumn wedding sampler II: invitations

{each photo links to its shop}