Academic Weasel Words, Translated

This is hilarious (click to enlarge):

Academic Weasel Words, Translated (source unknown).

Hat tip: macroexposure

A Common Sense Argument for Taxing the Super Rich

From a successful investor-entrepreneur, this rings very true:

It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.

That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.

Source: Raise Taxes on Rich to Reward True Job Creators: Nick Hanauer.

Unfortunately for Politicians, the Laws of Arithmetic Are Not Flexible

Economist Martin Wolf in today’s Financial Times:

If the private sector is seeking to run down its debts, it is hard for the government to do so, too, because everybody cannot spend less than their income. That is the “paradox of thrift”. No, it is not a novel idea. (Link)

Household Debt is Holding Back the U.S. Economy

After reading this article and this presentation, and reviewing these two papers by Amir Sufi and Atif Mian, I no longer harbor any doubts that the root cause of the U.S. economic malaise is too much household debt, which is holding back consumer spending across the country.

Two sets of charts neatly summarize Sufi and Mian’s findings.

The Future is Not Here Yet

Last week my wife and I decided to migrate our personal email accounts from a longtime business-oriented service to the paid edition of Google Apps, because we wanted to take advantage of the latter’s seamless integration between applications, outstanding mobile functionality, cross-platform compatibility, and large storage capacity. (We chose the paid edition of Google Apps instead of the free one because it offers better privacy.  According to Google, “there is no ad-related scanning or processing” of user data if one disables ads in the paid edition.)

On the U.S. Economic Situation

Imagine an island inhabited by two tribes who have divided the island’s territory as shown below. For lack of originality, let’s call these two fictitious tribes the “Giants” and the “Patriots,” or “G” and “P” for short:

A Brief Note on Krugman on Bitcoin

Finally, I just had a chance to read Paul Krugman’s column on Bitcoin.

For the record, I fully agree with Mr. Krugman that it would make no sense for any government to adopt Bitcoin as its economic unit of account, because that would make its economy susceptible to the very same problems the world’s economies experienced during the Gold Standard.

On the Potential Adoption and Price Appreciation of Bitcoin in the Long Run

(If you don’t know much about Bitcoin, please read the excellent introduction posted at the MIT Technology Review by Tom Simonite. You may also want to read the recent paper by Reuben Grinberg, a J.D. candidate at the Yale Law School.)  [Update: The Economist has published a fantastic article.]

In less than a year, the price of Bitcoin has increased from close to zero to nearly $9 as I write this (see below), prompting the digerati to question, only half-jokingly, if Bitcoin prices are in a “bubble” – see this post by economist Tyler Cowen for a typical example.