Deficit or Unemployment? That Is Not the Question

In the face of sovereign debt worries making waves in global financial markets and an extraordinarily imbalanced budget (recognized even by the folks at Moody's, who have a bit of a tendency to underestimate risk) from President Obama, Paul Krugman suggests that the current fear-mongering over the US budget is reminiscent of "the groupthink that took hold during the run-up to the Iraq war." His carefully-considered opinion is that the government should focus on tackling the what, based on recent writings, he regards to be the greatest dilemma of the current recession--unemployment.

Despite Krugman's dismissal of budget concerns, given the insanely high projected debt-to-GDP ratio, the government should ABSOLUTELY be focusing on the matter. Nonetheless Krugman is right that unemployment has significant short- and long-term consequences as well. So perhaps our policymakers can act like economists, make a bit of a trade-off, and try to deal with both problems at the same time. There's no reason to focus entirely on problem X, unemployment, while ignoring problem Y, the deficit. Of course, the remedies for one could hinder progress toward solving the other. Then again, that's a challenge macroeconomists and policymakers must always face. There is no reason for them to shirk now, when it is critical that we deal with both issues.

Porker of the Year

It's official--Barney Frank has won the dubious distinction of being "Porker of the Year" in the US Congress. This annual award, chosen by Citizens Against Government Waste could not have gone to a better politician.

In related but sadder news, former "King of Pork," John Murtha died earlier this week. A decorated Vietnam veteran, he became most famous for passing out the pork and being amongst the first senior Democrats to turn against the Iraq war. His now-open seat could continue to shift political momentum should a Republican take it, although it will not dramatically tip the balance of power in the House.

Putting the "Pork" back in "Pork Spending"

Here's a new reason for a not-so-new play on agricultural commodities.

Argentina's president, Cristina Fernandez, has emerged as a leading spokesperson for the global pork industry. In a piece of truly in-depth journalism, the Associated Press reports that she "thinks eating pig meat is really sexy." Who knew pork could be better than Viagra? According to her, though, she and her husband both sing its praises.

Although "there is no study showing that pork meat significantly improves sexual activity," she approved subsidies for the pork industry, explicitly putting the "pork" in "pork spending.

So how can the average person benefit from this? Perhaps by having homemade "romantic apple pork chops" and an evening with someone special. And perhaps you can pay for dinner with the killer profits you'll reap from going long lean hog futures (which after all, are much sexier than pork bellies).

A Couple of Things

I realize that quite a lot has happened since the last real post on this blog. The past few months of living in the real world have allowed me significantly less time than I'd have liked to peruse my favorite blogs, to find and collect interesting stories, and most notably, to post them here. Not making this online project of mine much of a priority probably didn't help either.

Nonetheless, in my few free moments at the office, I've forwarded certain stories to myself to post to this site when the opportunity arose. Today, that opportunity has finally come.

The stories and sites that have most caught my eye ranged from politics to climate change to dollar inflation and, last but not least, to the unending fight between Keynes and Hayek. Obviously, one could also not miss the Brown victory in Massachussetts or the earthquake in Haiti, but too much has already been said on those matters for now. Here are a few bits to start, with more regular (and timely) postings to follow.

While I missed out on Climate-gate and don't feel the need to weigh in on one side or the other, this story in the UK's Daily Mail caught my eye as providing an intriguing alternative hypothesis to global warming. Despite a long-lasting commitment to the environment (sparked when I read The Berenstain Bears "Don't Pollute (Anymore)" in 1st or 2nd grade), I don't know whether to accept global warming as gospel or to be more of a skeptic. Expect more on the topic of climate change in the future.

In addition, two good pieces highlighted recently on Greg Mankiw's blog. The first, his piece for the New York Times on the potential inflationary picture facing the United States. Ordinarily, I'd offer my two cents on his analysis, but suffice it to say that I agree. Concise though it is, this piece sums things up quite neatly. The main inflationary risk right now appears to be the inevitably slow response from the Fed when the inflation mechanism (as Wall Street research calls it) gets back into place. The second piece, written for the Wall Street Journal by Martin Feldstein, discusses the recession, the response/stimulus, and the ongoing budget problems facing the United States.

Paul Krugman also offered a short note on the current state of the economy, which is worth taking a look at (being sure to follow the links).

AND OF COURSE, THERE'S THE BEST NEW ECON VIDEO OUT THERE, pitting archrivals John Maynard Keynes and Friedrich von Hayek against each other in what could be THEIR GREATEST BATTLE OF ALL TIME:

Back Online

After nearly six months of inactivity on this blog and three months without internet access at home, I am happy to announce (to nobody at this point, I would expect) that Brigham's Almanack will finally be back up and running this week.

Sophomore slump? Or comeback of the year?

Is Obama Toeing the Bush Line on Terrorism?

Clive Crook of the Financial Times points out many of the ways in which Barack Obama's national security policy has disappointed and infuriated those both to his left and to his right. Recognizing the seemingly obvious--that there must be a tradeoff between security and liberty and that one cannot completely trump the other--we must accept both that the Bush administration was not completely evil and that civil liberties must be protected. The answer is, like the golden mean, somewhere in between.

Wordle: The Effect of Stress and Relaxation on Financial Decision Making

My senior thesis in graphic form:



(Thanks to Wordle.com)