#626: the dance.

we will be having a father/daughter + mother/son dance. together. at the same time. because that's how we do.

i can't decide on a song. actually, it's not that i can't decide on a song. it's more like...i haven't found the song. i've pored through lists and lists, looked through you tube, googled and googled, asked my friends and family. and nothing.

what's your song?

LONDON - soho, 04/30/09

#625: aNOTHER contest.

but this one's a good one.

read more about it here.

hint:

photo by feather love photography.

mmhm.

#624: the makeup.

so these are the products that made the cut:
1) diorshow waterproof mascara.
2) urban decay eyeshadows.
3) make up forever eyelashes.
4) smashbox primer in light.






what i've learned.
1) makeup is damn expensive.
2) makeup is way fun to play with. but it takes time to apply. me = lazy.
3) but still. i should wear makeup more often. because it's fun.
4) there's a lot of stuff out there. it's like, crazy.
5) i toads need to practice before the wedding.

Veronique de Rugy on France

The Rule of Law -- Not!

Via the WSJ, here is the view from a "secured (sic) creditor" of Chrysler:

"Like many others I made the mistake of buying what I believed was 'value,'" Mr. Gwin says, adding that investors who bought at the time believed the loans were worth more than their market price. "We did not contemplate having our first liens invalidated by a sitting president," he adds.

As the President intervenes in more and more industries, a key question is how he does it and what he is trying to achieve. Is he trying to reorganize insolvent firms while, as much as possible, preserving the rights of stakeholders as established under existing contracts? Or is he trying to achieve a "fair" outcome as he judges it, regardless of preexisting rules and agreements? I fear it may be the latter, in which case politics may start to trump the rule of law.

Chairman John

John Campbell is the new chairman of the Harvard economics department. Congratulations, John, and my condolences as well.

I have long thought that my biggest contribution to Harvard was being part of the team that recruited John to the university. As a coauthor of John early in his career, I knew a few years before the rest of the profession that he is both a great economist and a great human being. I am delighted that the leadership of our department will be in such capable hands over the next few years.

LONDON - soho & mayfair, 04/29/09

#623: the timeline.

10:45am - ceremony begins.
11:30am - ceremony ends.
11:35am - cocktails + hors d'oeuvres hour.
12:15pm - slide show / our entrance / first dance.
12:30pm - lunch is served.
1:30pm - the toasts.
1:45pm - father daughter / mother son dance.
2:00pm - cake cutting / dessert is served.

this is the meat of it. no pun intended. heh.

#622: hi!

i know i've been toads MIA lately. it's a number of things. first, i don't know what to talk about. second, i was REALLY really sick for over a week and i'm still recovering (mom is convinced i have swine flu). third, the wedding is in less than a month so maybe i'm a little stressed out and don't want to blog about wedding stuff because i'm inundated with wedding stuff every single minute of the day? idk.

we're going to another wedding this weekend. hopefully we find time to write our vows at some point. heh.

oh. and there's another project i want to take on.

the polaroid guest book. except it won't be a free-for-all-take-as-many-pictures-as-you'd-like kind of thing. polaroid film = expensive. so i think i'm going to station 3 of my cousins at the front and have them take pictures of the guests as they arrive.

then again, i may not want to have another project on my plate.

then again, it'd be really cool to have a polaroid guest book.

"I DON'T HAVE ANY FRENCH ACCENT"

Miron on the Financial Crisis

A talk from Harvard's Jeff Miron.

Reis on Macro

Russ Roberts interviews Ricardo Reis.

LOS ANGELES - hollywood & farmers market, 04/26/09

Goolsbee versus Obama

The President:

Invoking the Sputnik Era, Obama Vows Record Outlays for Research

The President's adviser:

Does Government R&D Policy Mainly Benefit Scientists and Engineers?

by Austan Goolsbee

Conventional wisdom holds that the social rate of return to R&D significantly exceeds the private rate of return and, therefore, R&D should be subsidized. In the U.S., the government has directly funded a large fraction of total R&D spending. This paper shows that there is a serious problem with such government efforts to increase inventive activity. The majority of R&D spending is actually just salary payments for R&D workers. Their labor supply, however, is quite inelastic so when the government funds R&D, a significant fraction of the increased spending goes directly into higher wages. Using CPS data on wages of scientific personnel, this paper shows that government R&D spending raises wages significantly, particularly for scientists related to defense such as physicists and aeronautical engineers. Because of the higher wages, conventional estimates of the effectiveness of R&D policy may be 30 to 50% too high. The results also imply that by altering the wages of scientists and engineers even for firms not receiving federal support, government funding directly crowds out private inventive activity.

Fed staff goes negative

The FT reports:

Fed study puts ideal interest rate at -5%

The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve's last policy meeting.

The analysis was based on a so-called Taylor-rule approach that estimates an appropriate interest rate based on unemployment and inflation.

A central bank cannot cut interest rates below zero. However, the staff research suggests the Fed should maintain unconventional policies that provide stimulus roughly equivalent to an interest rate of minus 5 per cent.

Instantaneous Deflation as a Macro Solution

In the process of making the case that I am a nut, Robert P. Murphy of the Ludwig von Mises Institute examines my column on negative interest rates and offers up a useful observation:

Let's stipulate for the sake of argument that the "equilibrium real interest rate" is negative, and that the nominal interest rate goes all the way down to zero. But oh no! Given the current array of prices and the expected array of prices next year, the implied real interest rate is too high for the market to clear. What to do?

Mankiw's suggestion is that the Fed should credibly promise to dump gobs of new dollars into the economy in twelve months, thus raising the future price "level" and giving people an incentive to unload their dollars today, while they have some purchasing power.

But there is another alternative, and that is for market prices today to fall very steeply until the market clears. The short-term collapse in prices during the present month, say, will then allow for a rapid price inflation back up to "normal" prices a year from now. [Emphasis in the original.]

I think this analysis is correct, under the maintained assumption that prices (including wages) are completely and instantaneously flexible. But if prices are sticky, then the immediate deflation and concurrent increase in expected inflation won't occur painlessly. Instead, it would take a while for the price level to fall, and as we wait, the economy would suffer through a period of depressed economic activity.

According to conventional new Keynesian analysis, sticky prices are the ultimate market imperfection that makes aggregate demand matter. If you deny that prices are sticky and assume they can instantaneously jump downward to new equilibrium levels, many macroeconomic problems become much easier to solve. Indeed, you don't need to solve them at all, as the market would do it.

I wish we lived in the world that Mr Murphy describes, but my reading of the evidence is that we don't.

AGYNESS NEW HAIRCUT

The Facehunter Show is back on Monday the 4th of May!
We'll start with Paris, part 1 of 3.
Watch it here and on facehuntershow.com (the website will be active then).

#621: done.

centerpieces: check.
placecards: check.
boutennieres: check.
flowergirls' headpieces: check.

Symposium Announcement

Alvin Hansen Symposium on Public Policy

Re-Regulating the U.S. Financial Markets:
What Should We Do Once the Recession is Over?

Debate with Randall S. Kroszner, University of Chicago, and Robert J. Shiller, Yale University.

Debate will be followed by comments by Benjamin M. Friedman, Harvard University; Robert C. Pozen, MFS Investment Management; Hal S. Scott, Harvard Law School; and George C. Kaufman, Loyola University Chicago.

Thursday, April 30, 2009, 2:00 PM
Room 105, Emerson Hall
Open to the public

LOS ANGELES - boys, fairfax flee market + standard hotel + koreatown + silverlake, 04/25-26/09

Voting with Your Feet

The Time of London reports:

TWO OF Britain�s best known entrepreneurs are considering leaving Britain in protest against Alistair Darling�s new 50% tax rate, as leading figures from business and the City line up to warn of a talent exodus.

Hugh Osmond, the pubs to insurance entrepreneur, is thinking about a move to Switzerland. Peter Hargreaves, the �10m-a-year co-founder of Hargreaves Lansdown, the financial adviser, is looking at the Isle of Man or Monaco. More are likely to be follow.

Osmond, whose net worth is estimated at �230m, said: �A lot of people will be off. It�s highly unlikely that I will continue to have the UK as my country of residence. It�s just as easy to work from any close location � Switzerland or wherever.�

Hargreaves, facing an extra �500,000 on his tax bill, warned: �I won�t pay, I�ll leave.�

Robert Pfeiffer, a partner at Compass Advisers, a mergers and acquisitions firm, said that businesses such as his did not need to be based in Britain. �We all love living in London but in the end it becomes an economic decision. The clients don�t care.�

He and his partners were discussing a move to Geneva. �Do we want the hassle of moving? Probably not. But there comes a point economically when it�s hard to justify being here.�

I wonder: Do economists tend to migrate toward low-tax states? I have not noticed much evidence of it, but perhaps they should.

For example, Massachusetts has a top income tax rate of 5.3 percent, while New Jersey has a top rate of 8.97 percent. That difference of 3.67 percent shrinks to about 2.4 percent after taking into account that state taxes are deductible at the federal level, but it is still not trivial. If Paul Krugman and Eric Maskin had stayed at MIT and Harvard, rather than moving to Princeton, they each would have enjoyed about $29,000 more after taxes from winning the Nobel prize.

Ranking Departments

U.S. News and World Report has a new ranking of graduate programs in economics.

LOS ANGELES - rachel, hollywood, 04/24/09

Congratulations, Emmanuel

Emmanueal Saez has won the John Bates Clark Award.

On Stock Markets and Roller Coasters

The Economix blog offers up a simulation that alleges to show a ride on a roller coaster "whose track charts the Dow Jones industrial average from October 2007 to March 2009."

But that can't be right. Stock prices are approximately brownian motion, which means they are everywhere continuous but nowhere differentiable. In plainer English, "continuous" means that stock prices an instant from now, or an instant ago, are close to where they are now. But "not differentiable" means that the direction they move over the next instant is not necessarily close to the the direction they were heading over the last instant. A roller coaster with that property would be quite a ride.

The Ideal Financial System

As seen by economists Larry Kotlikoff and Ed Leamer. Their suggestions remind me of narrow banking proposals.

LOS ANGELES - venice beach, downtown & hollywood, 04/22/09

Which economic system is better?

Rasmussen Reports:

Only 53% of American adults believe capitalism is better than socialism.

The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are not sure which is better....

Republicans - by an 11-to-1 margin - favor capitalism. Democrats are much more closely divided: Just 39% say capitalism is better while 30% prefer socialism.

Buyer Beware

The Wall Street Journal:

Federal Reserve Chairman Ben Bernanke and then-Treasury Department chief Henry Paulson pressured Bank of America Corp. to not discuss its increasingly troubled plan to buy Merrill Lynch & Co. -- a deal that later triggered a government bailout of BofA -- according to testimony by Kenneth Lewis, the bank's chief executive. Mr. Lewis, testifying under oath before New York's attorney general in February, told prosecutors that he believed Messrs. Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, the struggling brokerage giant...."Isn't that something that any shareholder at Bank of America...would want to know?" Mr. Lewis was asked by a representative of New York's attorney general, Andrew Cuomo, according to the transcript. "It wasn't up to me," Mr. Lewis said.

USA Today:

Americans need to sharpen their financial know-how to help them best use their money, especially during the current economic crisis, Federal Reserve Chairman Ben Bernanke said Monday. "As the global economy continues to experience extraordinary turbulence ... the need has never been greater for initiatives that help consumers learn to manage their money wisely," Bernanke said....Improving financial knowledge also can help protect people from scam artists, he said.

Indexing wins again

Yesterday's Wall Street Journal reports:

Investors in actively managed mutual funds for the past five years have reason to wonder what they have been paying for: A new study from Standard & Poor's finds that 70% of large-cap fund managers who use the S&P 500-stock index as a benchmark for comparison have failed to match the performance of the index over that time....The failure of active management is replicated across almost all categories, not only U.S. stock funds but also bond funds and even emerging-markets funds. What's more, those numbers are similar to the previous five-year cycle.

This phenomenon is a perennial favorite of economics professors. It is discussed in my favorite textbook in the chapter on "The Basic Tools of Finance."

#620: twenty dollars.

that's how much alllll the materials cost. i'm making 5 real bouts plus several other bouts-y type things.

twenty dollars.

holler.

Great Theater

I am in New York with my wife and two sons, and we just saw the new revival of West Side Story. It's great. (My 10 year old, who has probably never seen a tragedy before, said, "That's a terrible ending." Yet he loved the show and is still singing the songs.)

#619: i've been sick.

so sad. it's 90 degrees here in la and i've had a fever for the past 4 days. boo hoo.

but i'm feeling much better now. so you can expect more bloggage from me. first up, here's the dress that had me feeling the dress envy.



so. gorge.

oh, and if you're wondering why the quality of my pictures is always so terrible, it's because i take pictures with his blackberry. for the convenience of being able to email them to myself right away. so i can post them on this blog. so i have something to do. when i'm not doing wedding stuff. for my wedding.

LOS ANGELES - miracle mile & silverlake, 04/21/09

Bravo, Mr President!

Phil Levy points out:

For the second time in a week, the Obama administration has discarded a major campaign pledge on international economic policy. In its decision last week not to name China a currency manipulator, and now to forswear renegotiation of NAFTA, the administration avoided two potentially costly mistakes.

I am delighted. My biggest fear about international economic policy was that the President might actually follow through on his campaign rhetoric. So this news is a great relief.

wedding decor: vintage vases

{each photo links to its shop}

for eco-friendly reception centerpieces -- what other creative things could you repurpose or reuse as vases?