Marshall Gramm hits 30-1 shot and does the Riddler Dance!

My degenerate horse race gambling buddies and I hit a 30-1 shot recently at Gulfstream Park in Florida. You can watch it below. The Horse's name is Warrior's Reward.

When the horse hit the wire, Marshall Gramm broke out and did the Riddler dance. The crazy goof had a fist full of winning tickets and he laughed himself silly like Frank Gorshin. Watch him...

Charles Krauthammer tells it like it is.

You should not be afraid or have any fear of what is to come. I know the future and will remove all uncertainty. Do the words European Union have any meaning to you? http://www.washingtonpost.com/wp-dyn/content/article/2009/02/26/AR2009022602908.html?wpisrc=newsletter I remember 60 Minutes did a piece on Denmark a bit back. Morley Safer asked the youth there "if there is one thing you would tell your American counterparts what would it be?" They said "give up on the American dream and let government take care of you." Just listen to the Sex Pistols and "God Save the Queen." Watch especially beginning at 2:37...this is what the nanny state will do to us...Look at Johnny Rotten and his vacant eyes... No future...no future...no future for you. Government has determined your destiny. http://www.youtube.com/watch?v=MeP220xx7Bs Did you see that? Maybe we will all now become hash smoking, alcoholic wards of the state like Johnny...and the Brits and the Dutch. So surrender, dry your eyes, fire up your hash pipe and pay up sucker.

One quick look and you will know.

http://www.usatoday.com/money/economy/housing/2009-02-24-bigloans_N.htm

Click on this link and then go to the bottom of the map of the US. Then drag the scrapper from left to right. You better sit down.

"V" or "L"????

Senator Schumer asked Chairman Bernanke the other day whether when the economy does recover will the recovery be a "V" or an "L"? In other words will recovery be a swift and quick return to trend growth or a protracted tepid growth path. Chairman Bernanke of course equivocated. I won't...it will be an "L" Senator...a real long long "L".

Weeping tears of sadness. R.I.P. Victor Zarnowitz

http://www.nytimes.com/2009/02/26/business/economy/26zarnowitz.html?_r=1

The world has lost a great economist and one of its most wonderful human inhabitants. It is with deep regret that I must report Victor Zarnowitz has died. He was one of the kindest men I have ever known and he did many wonderful things for me over the years. He is in my first book and wrote the Foreword for my second book. He always took my calls when I wanted to discuss the business cycle with him. His whole family was destroyed by the Nazis in World War II. He grew up in Auschwitz as a child. He fled when the war broke out but stayed in a Russian labor camp for 19 months. He uplifted me spiritually whenever I remembered what he lived through and triumphed over. Victor Zarnowitz made this world a much better place. I gave him the nick name "Mr. Business Cycle." He will be deeply missed.

Here is my interview with him from 1997. This interview still moves me.
www.funnyeconomist.com/zarnowitz.pdf

The "New New Deal"

Whether you are Roosevelt with the National Recovery Act and the National Industrial Recovery Administration or you are Obama and talk about cap and trade, card check, health care and comparable worth ... the result is the same ... even if we bottom out soon, the recovery will be long and protracted as these policies throttle efforts at resuscitation. These things can only be viable with a vibrantly growing economy. That is not today.





http://online.wsj.com/article/SB123553912675568201.html

You gotta watch this. I'm the Funny Economist Right? Trust me.

Bernanke was talking earlier in his testimony about the Fed-Treasury marriage in the bank bailout and how the details are still being worked out. Click on this video and then zoom up the time to 4:45 and watch it. Barney Frank really tells a knee slapper. This is funny.



http://www.cnbc.com/id/15840232?video=1045486333

When he talks...we need to listen. Here are the high points.

http://www.reuters.com/article/ousiv/idUKTRE51N3Q520090224?virtualBrandChannel=10480&pageNumber=1

Guess Who? Him again. This is an absolute MUST READ!

My colleague Phil Rothman and I are increasingly of the opinion that Ricardo Cabellero has an intellectual handle on what needs to be done.

http://www.voxeu.org/index.php?q=node/3098

We are now on the "Road to Serfdom" ... all aboard comrades.

Ignore Hayek and bash Milton Friedman...to such an extent that folks don't even want to create the Institute in his honor at the University of Chicago. Pathetic. Maybe everyone would be happier if the Institute were named after Fidel Castro or some other great liberator that has set people free.

Venceremos! (Marxist mantra meaning "We will Triumph!")

It would be a terribly boring existence to know everything. I don't see how Senator Sanders stands it. Read this and weep.


http://inthesetimes.com/article/4193/the_failed_prophet

Jim Calhoun is worth $1.6 million.

So now here we go...someone like Jim Calhoun, who is worth $1.6 million and does not get paid with state funds is now being questioned about his salary. Stay tuned, it is only the beginning.

What a great idea!

Guess who? Ricardo Cabellero again.



http://www.washingtonpost.com/wp-dyn/content/article/2009/02/20/AR2009022003230.html

Jackass talk...

Any talk about raising any taxes on anyone right now is just as dumb as it comes. It's all just a little bit of history repeating.

Fun with words. These are really clever...

John Lennon once said about his song writing, "I'm just having fun with words man, that's all."

So let's have some fun with words....

HERE ARE THE WINNERS OF THE WASHINGTON POST'S MENSA INVITATIONAL, WHICH, ONCE AGAIN, ASKED READERS TO TAKE ANY WORD FROM THE DICTIONARY, ALTER IT BY ADDING, SUBTRACTING, OR CHANGING ONE LETTER, AND SUPPLY A NEW DEFINITION.1. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.2. Ignoranus : A person who's both stupid and an a***ole.3. Intaxication : Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.4. Reintarnation : Coming back to life as a hillbilly.5. Bozone ( n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.6. Foreploy : Any misrepresentation about yourself for the purpose of having sex.7. Giraffiti : Vandalism spray-painted very, very high.8. Sarchasm : The gulf between the author of sarcastic wit and the person who doesn't get it.9. Inoculatte : To take coffee intravenously when you are running late.10. Osteopornosis : A degenerate disease. (This one got extra credit.)11. Karmageddon : It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer. 12. Decafalon (n.): The grueling event of getting through the day consuming only things that are good for you.13. Glibido : All talk and no action.14. Dopeler effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.15. Arachnoleptic fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.THE WASHINGTON POST HAS ALSO PUBLISHED THE WINNING SUBMISSIONS TO ITS YEARLY CONTEST, IN WHICH READERS ARE ASKED TO SUPPLY ALTERNATE MEANINGS FOR COMMON WORDS AND THE WINNERS ARE: 1. coffee, n. the person upon whom one coughs. 2. flabbergasted, adj. appalled by discovering how much weight one has gained. 3. abdicate , v. to give up all hope of ever having a flat stomach. 4. esplanade , v. to attempt an explanation while drunk. 5. willy-nilly, adj. impotent. 6. negligent, adj. absentmindedly answering the door when wearing only a nightgown. 7. lymph, v. to walk with a lisp. 8. gargoyle, n. olive-flavored mouthwash. 9. flatulence, n. emergency vehicle that picks up someone who has been run over by a steamroller.10. balderdash , n. a rapidly receding hairline.11. testicle , n. a humorous question on an exam. 12. rectitude , n. the formal, dignified bearing adopted by proctologists.13. pokemon, n. a Rastafarian proctologist.14. oyster, n. a person who sprinkles his conversation with Yiddishisms.15. Frisbeetarianism, n. the belief that, after death, the soul flies Up onto the roof and gets stuck there.

Like I have said all along...Pakistan is the problem

Maybe next the Pakistanis will negotiate a certain percentage control for the Taliban over their nuclear arsenal. Remember Pakistan means "land of the pure." If you are not Pakistani then guess what? You are unpure. How's that make you feel?


http://www.nytimes.com/2009/02/17/world/asia/17pstan.html?_r=1&th&emc=th

Three mortars + ten seconds = 144 virgins. Joe Jihadi has a Bad Day Part VIII

Don't look if you don't wanna see two stoops do themselves in.

By the way, why is it 72 virgins? Why not 39 or something a bit more manageable? I'd be happy with one dirty girl from Paris.

I have never been prouder to be an American. Watch this whole video. You will feel the same.

http://www.militarytimes.com/multimedia/video/rpg_surgery

From Martin Wolf of Financial Times...

Like I have said all along, start lopping off heads. Either recapitalize and clean up the banks balance sheets or shut them. We don't want no stink'in zombies!

So says Martin Wolf thus:
"The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. It is an important, but secondary, question whether the right answer is to create new “good banks”, leaving old bad banks to perish, as my colleague, Willem Buiter, recommends, or new “bad banks”, leaving cleansed old banks to survive. I also am inclined to the former, because the culture of the old banks seems so toxic."

A very informative but technical explanation of the market for bank liquidity.

From the Fed of San Franciso. If you ever have the chance to go to San Francisco, take it. It is a wonderful city...and the gateway to California's wine country.

http://www.frbsf.org/publications/economics/letter/2009/el2009-04.html

The clock keeps ticking...we sit there and suck our thumb.

http://www.economist.com/printedition/displayStory.cfm?Story_ID=13108724

http://www.nytimes.com/2009/02/13/business/economy/13insolvent.html?pagewanted=1&hp

We must act decisively and boldly right now. Unless the financial market is cleared up, nothing else will happen but more crap.

Thomas Friedman gets it 1000% right. Open up the gates. Let the best and the brightest in. NOW!

"Give me your smartest, your brightest, your huddled, skilled workers and Ph.D. s yearning to create and produce."

http://www.nytimes.com/2009/02/11/opinion/11friedman.html?_r=1

ECU Economics goes global.

ECU Econ Class of 2002

First Lt. Robert Murphy

Deployed in Afghanistan

We are very proud of you.

Look to Japan for lessons? Not a chance.

Japan had their own bout with fiscal policy to stop a depression as little as 15 years ago. They built bridges to nowhere and even built highways that were parallel and right next to existing national highways. Imagine if we had another Interstate right next to Interstate 40 that runs from Wilmington, NC to Redlands CA. Now wouldn't that be something? Choice, that's the key.

Why not look at what worked for them and toss out what did not?

http://www.nytimes.com/2009/02/06/world/asia/06japan.html?pagewanted=1&hp

Stimulus and the end of welfare reform.

From Greg Mankiw:

The stimulus bill shows its slime....

http://gregmankiw.blogspot.com/2009/02/end-of-welfare-reform-as-we-know-it.html

This is why we love dogs.

Trade War...the opening shots.

What do you expect the Canadians to do, EH? I don't blame them, I blame us.

http://www.theglobeandmail.com/servlet/story/RTGAM.20090210.wPOLunions0210/BNStory/

First it was Nancy in her own words. Now how about Robert in his own words? Time to choose your side.

Here is an excerpt from my second book in an interview with Robert Lucas. Here I ask about the distribution of income and poverty. Nancy said she wanted all incomes equalized. Here is what Lucas says. He even mentions immigration and trade. You choose.

Randall Parker: I asked all the economists of the interwar generation this because it is a question I am deeply interested in and now I want to ask you. Can poverty and the distribution of income be correctly viewed as separate?

Robert Lucas: Well if you mean by poverty an absolute, the living standard has just grown enormously in the United States. Certainly in the post-war period it has been a rather smooth 2 percent per year growth in average living standards. So when people say that poverty isn’t changing, to say that you have got to keep raising the standard of what you mean to be out of poverty over time. Certainly if you define poverty as anyone would have, say, in 1948, there are damn few people left in that situation now in 2005. We care about it but I think the focus on distribution tends to distort the analysis of economic policy. It leads us to think the only way you make me better is by making you worse off, that there’s some kind of a zero-sum aspect to it. All (Lucas raises his voice and stretches out the word all) the lessons of economics since the industrial revolution have run against this idea of a zero-sum game. People are worried about China and India growing now. We’ve gained enormously during the periods where we have been most open, with immigrants coming from abroad and we are buying from abroad. We have always tried somehow to get low-income people around the world, let them get rich selling to us. Whether they come over here and work in plants like the Poles, the Italians and the Jews did 100 years ago or we go abroad and buy from people. It doesn’t make a hell of a lot of difference. The thing is Americans gained too, we all gained enormously during those periods. The fastest periods of growth for the United States have been periods of rapid immigration and openness to trade.

History repeats...Smoot-Hawley returns! Protectionism and Unions are our economic salvation!

Now Federal contracts require union labor:

http://sev.prnewswire.com/construction-building/20090206/DC6802106022009-1.html

Here are the names of those who voted for and against taking the "Buy American" wording out of the Stimulus Bill. I expected it from Kay Hagan, but not Richard Burr. So, protectionism and unions are going to be our economic salvation. It's all just a little bit of history repeating. If this keeps up I am going to revise my recovery timing to beyond its current 2010 timeline.

With thanks to Greg Mankiw and Phil Rothman for the ideas...

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=1&vote=00044

And one for the road....

http://www.nytimes.com/2009/02/02/business/worldbusiness/02global.html?_r=1&ref=business

Nancy in her own words.

Not even Marx himself said he wanted to "equalize" incomes.

" We need to work toward the goal of equalizing income in our country and at the same time limiting the amount the rich can invest." "We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans'."

I'm all for helping out, but incomes should be equal? Why not a 100% tax rate Nancy? Think of the revenue it will generate. Be afraid...be very afraid.

Just one bird can down a jet. Watch this and then think of what Sully accomplished!

Two Mortars + Four Seconds = 72 Virgins. Joe Jihadi has a bad day part VII.

Once again, if you don't want to see Joe Jihadi have a bad day, then log off and we will see you tomorrow. By the way, do dum-dums still get 72 virgins?

Alan Blinder and his two cents. It's worth a lot more...

http://www.nytimes.com/2009/01/25/business/economy/25view.html?_r=2&ref=business

Randy Parker Hall of Fame: Barry Eichengreen

This boys and girls is Barry Eichengreen. He is an economist at The University of California at Berkeley. He is also one of the greatest scholars on the Great Depression and is in my second book. Anytime he speaks about international economics we need to listen. Break up the Euro? Absolutely unthinkable.

http://www.voxeu.org/index.php?q=node/2815

Welcome Home Leona Helmsley.

I lived in Lexington, Ky about the time that Leona Helmsley was sent to federal prison there. A liquor store put up a sign that read "Welcome Home Leona Helmsley". Remember her? She is the one who said "taxes are for little people". And it seems also for all those except the ones who make the tax laws. Now, go back to work so we can redistribute more income and make this society more fair. Dry your eyes and pay up sucker.

Ricardo Caballero makes sense of it all: Part II.

http://voxeu.org/index.php?q=node/2828

Ricardo Caballero makes sense of it all: Part I.

http://www.voxeu.org/index.php?q=node/2827

Take this economics 101 test from 1909!

Thanks to ECU Alumni Hall of Fame member Scott Shook for providing this copy.

Lessons from Japan...what are we waiting for?

From the December 8, 2008 NY Times:


Economists and former Bank of Japan officials say the biggest lesson they learned was that cutting rates alone has almost no effect when the financial system has fallen into a crisis as deep as the one Japan faced in the 1990s.
Japanese banks simply refused to lend in an environment where borrowers could suddenly go bankrupt, saddling lenders with huge, unforeseen losses. The Bank of Japan tried even more extreme measures, like using its powers to create money to essentially stuff cash into the nation’s commercial banks in hopes they would start lending again.
Exasperated central bankers found that commercial banks just let the money pile up instead of lending it out.
Economists say the United States faces a similar situation, after the sudden collapse in September of Lehman Brothers created fears of additional failures. Economists also fault Washington for its inconsistency in dealing with the financial crisis, leaving the impression that it does not have a clear strategy for dealing with ailing lenders.
In Japan’s case, economists and former bankers say, credit began to flow freely again only after 2003, when regulators adopted a tough new policy of auditing banks and forcing weaker ones to raise new capital or accept a government takeover. Economists said the audits finally removed paralysis in credit markets by convincing bankers and investors that sudden failures were no longer a risk, and that the true extent of problems at banks and other companies was finally being revealed.
Economists say Washington needs to do something similar to make banks and financial companies more transparent, and reassure investors that there were no more collapses like that of Lehman Brothers on the horizon.
“The United States needs to do it like Takenaka did,” said Anil Kashyap, a professor of business at the University of Chicago, referring to Heizo Takenaka, the former banking minister who started the 2003 audits. “We need someone to come in and give a good housekeeping seal to banks.”
Economists and former central bankers said another lesson from Japan’s experience was the importance of consistency. This became apparent in 2000, they said, during one of the bank’s more embarrassing episodes, when it raised interest rates, and lowered them back to zero a year later when the economy faltered.
Former Bank of Japan officials said they learned that bankers and investors would lend in difficult times only if they believed that rates would stay low for a long period, ensuring them adequate profits. By raising the possibility of future interest rate increases, the Bank of Japan dampened enthusiasm for lending, say bankers and economists.
“We learned that zero rates work by building expectations,” said Rei Masunaga, an economist and former director general at the Bank of Japan. “Zero interest rates take time to be effective.”

Joe Jihadi has a bad day: Part VI

This is a video of our brave service men and women bringing Al Qaeda and the Taliban to Allah. If you don't want to watch this, then simply log out and we'll see you tomorrow.