Friday, December 26, 2014

Related to that Christmas Eve post...

There's a piece in today's Wall Street Journal called "The Fed's Needless Flirtation With Danger" in which Martin Feldstein writes that in order to stimulate demand, "Well-designed tax rules are a safe and effective alternative to quantitative easing".  

Dr. Feldstein argues that we'd have been better served by tax policies that induce businesses to make new investments and help consumers consume, as opposed to so much QE.   

Unrelated to that X-mas Eve post but relating to other economists in the media...

I once saw an Economist on Squawk Box who insisted that economists collectively agree on nearly all major policy prescriptions.  I
Nassim Taleb, Wikipedia
wish I could recall his name. 
His remarks still strike me as wishful.  

He wanted viewers to believe that the discipline of economics breeds the kind of metaphysical certainty found in the natural sciences.  

To help settle the issue or at least test it, a Krugman-Feldstein debate or a Taleb-Krugman debate would be an interesting spectacle, like the sort I watched years ago.

Paul Krugman, Wikipedia
I'm referring to the old TV debates on public television that featured thought leaders from opposite ends of a policy spectrum who respectfully but forcefully hashed out their differences on politics and economics.  All that without commercial breaks.  

My favorite debater remains the late William F. Buckley.*  

*Amazon Prime members can access some of WFB's old Firing Line debates -- free.
WFB, Wikipedia

Wednesday, December 24, 2014

Holiday gifts for the American consumer

Have you read about the recent boost in U.S. consumer spending?  Of course you have and you know it is attributed -- at least in part -- to a steep drop in energy prices, particularly a drop in gasoline prices. clip art
This development is described by some in the financial press as a tax cut because the benefit accrues to the consumer in much the same way a tax cut does.  That is, by paying less at the pump, we automatically keep more of what we earn.  I wonder how Keynesians who routinely advocate for enormous government spending to stimulate demand are reacting.  Putting money directly in the hands of taxpayers can also spur consumption.