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Tuesday, March 30, 2010

News Flash! Ricky Martin is GAY! So what?

This posting ran last October 2008. Let's look at it again shall we? And these projections were without health care for all!

This is old news. Apparently it needs to be repeated over and over. This is the "tomato that is going to eat Philadelphia". Of course I speak of Medicare, Medicaid and Social Security. And still we go on, year after year, one year indistinguishable from the next, and nothing happens. Kinda like claiming staring into a bug zapper every evening all night long is your major accomplishment in life.

Read the following, if you can, from the May 2008 Congressional Budget Office report "The Long-Term Economic Effects of Some Alternative Budget Policies" :
"How would the economy be affected if the projected rise in primary spending under CBO’s alternative fiscal scenario (from about 18 percent of GDP in 2007 to about35 percent in 2082) was financed entirely by a proportional across-the-board increase in individual and corporate income tax rates? Answering that question is difficult because the economic models that economists have developed so far would have to be pushed well outside the range for which they were initially developed. Any numerical estimate would be very speculative and heavily dependent on the model producing it.
Nonetheless, tax rates would have to be raised by substantial amounts to finance the
level of spending projected for 2082 under CBO’s alternative fiscal scenario. With no
economic feedbacks taken into account and under an assumption that raising marginal
tax rates was the only mechanism used to balance the budget, tax rates would
have to more than double. The tax rate for the lowest tax bracket would have to be
increased from 10 percent to 25 percent; the tax rate on incomes in the current
25 percent bracket would have to be increased to 63 percent; and the tax rate of the
highest bracket would have to be raised from 35 percent to 88 percent. The top corporate
income tax rate would also increase from 35 percent to 88 percent. Such tax
rates would significantly reduce economic activity and would create serious problems
with tax avoidance and tax evasion."
Now go back to work and pay up sucker!

Thursday, March 25, 2010

Barro knows fiscal policy. This is not so good.

I was at a Conference on the Great Depression last March at the Council on Foreign Relations (for all you right-wing nut jobs out there, no, we did not discuss the Kennedy assassination). Jonathan Alter (top left)from Newsweek gave a speech and indicated that anything the government spends money on, anything at all, was economically stimulating. Really, he said it. Ed Prescott got up and proclaimed "all this financial business is much ado about nothing". Glad he did not win the Nobel Prize for that statement.

Anyway, one of the highlights of the Conference was Ellen McGrattan (top right)from the Minneapolis Fed. She said she used a fiscal multiplier of zero in the empirical analysis she conducted. An outraged old Keynesian in the audience shouted out "where did you get that number from?" She gave a one word answer ... "Science". It was a truly beautiful moment. After reading Barro's piece above it seems zero is a little low.

Wednesday, March 24, 2010

ECU Class of 2002 Econ Grad Captain Rob Murphy

One of the greatest rewards of being a college professor is to be associated with young people and then to see what they become in life. Many remember you and maintain contact over the years. I don't know that I am prouder of any of my former students than Rob Murphy. He is now on his second tour of Afghanistan. His father was drafted and served in the 173rd Airborne Brigade in Vietnam. Now Rob has followed in his father's footsteps as a Captain in the same Brigade.

Here is an except from his most recent email:
"Funny how tactics change, last time was a search and destroy. This deployment is more about rebuilding, structure, and the COIN(Counter Insurgency) effort. We definitely have to get in the weeds and show the people we're here to help them."

God speed.

This is what drives me bonkers. Good enough for you but not me SUCKER.

Saturday, March 20, 2010

Friday, March 19, 2010

An alternative and well thought out perspective.

The problem is as I have said before, no one seems to want to tell me how these things will be kept in actuarial the young folks say today, LIKE, how we gonna deal with the pie charts presented here?

Wednesday, March 17, 2010


Never in the history of our country has such sweeping legislation been enacted without a consensus, or at least one vote from the opposition. God help us.

Tuesday, March 16, 2010

ECU majors, Alumni, Faculty and Friends of ECU ECONOMICS...Come and Get 'EM!

Here are the ECU ECONOMICS NATION shirts ready for you! They come in Childrens' medium, Adult M, L, XL and XXL and in the colors of Navy and Black.

They are $20 and available to the above named groups. Sorry, but they are not for sale to the general public as we are using the Pirate Symbol royalty free.

Come and get 'em. Or contact Cindy Mills our venerable Department Secretary at
add $5.00 for shipping and they will be on the way! AAAARRRRRGGGHHH!

50th Birthday Bash @ Gulfstream Park

I celebrated my 50th Birthday with two days of live racing down in Hallandale Florida with the whole Parker tribe. Saturday, the 5th race was named in my honor, "Professor Parker's 50th Birthday Dash" a 5 1/2 furlong turf sprint that got pulled on to the dirt because of the rain. I got to present the winning trophies to the winning trainer (the venerable Nick Zito) and the winning jockey (Jesus Castanon). It was a memorable event. From the left: Rick Parker my nephew, his mother Ginger, my sister Paula, Daughter-in-law Ashley behind her, Victoria friend and girlfriend of Francis Vaughn, me, Nick Zito, Jesus Castanon, Francis Vaughn (who pulled off the naming of the race), my brother Rick and Jesus Castanon's wife and kids. What a party we had.

Sunday, March 14, 2010

Duck Season is over...time to think about golf.


#10 Golfer: "I think I am going to drown myself in the lake."
Caddy: "Think you can keep your head down that long?"

#9 Golfer: "I'd move heaven and earth to break 100 on this course.
Caddy: "Try heaven, you've already moved most of the earth."

#8 Golfer: "Do you think that my game is improving?"
Caddy: "Yes sir, you miss the ball much closer now."

#7 Golfer: "Do you think I can get there with a 5 iron?"
Caddy: "Eventually!"

#6 Golfer: "You got to be the worst caddy in the world."
Caddy: "I don't think so sir. That would be too much of a coincidence."

#5 Golfer: "Please stop checking your watch all the time."
Caddy: "It's not a watch, it is a compass."

#4 Golfer: "How do you like my game?"
Caddy: "Very good sir, but personally I prefer golf."

#3 Golfer: "Do you think it is a sin to play on Sunday?"
Caddy: "The way you play, sir, it is a sin on any day."

#2 Golfer: "This is the worst course I've ever played on."
Caddy: "This isn't the golf course. We left that an hour ago."


Golfer: "That can't be my ball, it is too old."
Caddy: "It's been a long time since we teed off, sir."

Saturday, March 13, 2010

For an old guy like me...the Rat Pack says it all!

This is the only known film of Johnny Carson singing and that is Quincy Jones conducting the Count Basie orchestra in the background.

Thursday, March 11, 2010

The recession is definitely over.

This is a graph of an econometric forecasting model that predicts the probability that we are currently in a recession (a so-called Markov model). Not, not much chance here today. For a complete listing of the probabilities of being in Recession for every month from 1967:02-2010:12 here is the excel spread sheet:

Tip o' the hat to Dr. Rothman and Dr. Jeremy Piger at University of Oregon.

Recent U.S. Recession Probabilities
Probability of Recession
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009

Wednesday, March 10, 2010

Dr. Rothman's most excellent new adventure!

Dr. Rothman has just been accepted as a panelist in the Philadelphia Fed’s ‘Survey of Professional Forecasters’! What an honor! Congratulations to our friend and esteemed colleague! Hey Alumni, why not send him warm wishes and Congrats at

Hot air.

Tell me why the mean temperature 55 million years ago at both the north and the south pole was 72 degrees F and then we'll have a discussion about global warming.

Saturday, March 6, 2010

Remember this guy? ECU Basketball Hall of Fame member Erroyl Bing

He is still playing ball in France...and I still miss him. He is one of the finest young men you could ever hope to meet. I hope he keeps cashing pay checks from basketball for years to come.

Friday, March 5, 2010

This is an absolute MUST READ!

Both Dr. Rothman and Greg Mankiw alerted me to this piece from Gary Gorton of Yale University. Do yourself a favor and print these 17 highly readable pages and leave much smarter than you came!

Thursday, March 4, 2010

Guest Post: Phil McPherson "The Oil Guru"

I have had some loyal followers ask me about "The Bakken Oil Deposit" and how this could be our answer to eliminating foreign dependency for our petroleum. Click here: I admitted that I was unaware of this but would ask someone who did know. (BTW, that is really great advice for all in every situation...if you don't know find someone who does.)

Ladies and Gentlemen please welcome Phil McPherson. He is a 1997 ECU Economics Graduate who has remained my close friend and is also an expert in gas and oil exploration. He has agreed to a guest posting to explain the Bakken strike. Is this our ticket out? on:

This really is what it all boils down to....Henninger again of course.

Wednesday, March 3, 2010

It is going to happen again!

Got this email from Peter Wallison at the Amercian Enterprise Institute along with this file:

Not so great.


The news from the Hill suggests that things are approaching some kind of turning point in the Senate Banking Committee. Most of the media coverage has followed the controversy over the Consumer Financial Protection Agency, but far more important in the long run are what the Senate Committee does on resolution and the regulation of large nonbank financial firms.

Government entry into these areas could have a profoundly adverse effect on our economy in the future and deserves more attention than it is getting.

In the last week, I’ve published two op-eds on different aspects of the resolution issue, especially the fact that a government resolution system for large nonbank financial firms will enhance too-big-to-fail rather than eliminate it.

I thought you’d be interested.

Best, Peter

Monday, March 1, 2010

Know the is right before you.

The federal government has 50 natural experiments sitting right before it. Learning from the States and their experiences should be a key goal of federal policy makers. Not a chance. The future is before care in Massachusetts and fiscal policy in Detroit.

Eugene White is RIGHT ON TARGET!