Sunday, December 23, 2012

A serious view on American gun control.

There are sound reasons why the U.S. should not crack down on law abiding gun owners, but these are overshadowed by the poor defense provided by pretty much every idiot who has managed to get  themselves on television. For all the right wing bluster about perceived liberal media elites, they sure seem to run like lemmings to just about any smirking prick with a news show.

What's changed in the last week is that I think blue state opinion makers have taken time to reflect and understand what the zeal of gun owners and the gun lobby is really about. Piers Morgan's repetition of 30,000 gun deaths a year vs. about 30 in the UK seems to make an inarguable, if patronizing, case for the solution to gun violence. The numbers are apparently clear. He has the data and it frames the issue in a way that shows quantitatively that there can be no rational response other than to reduce the number of guns available to civilians in the U.S. From this view, the facts have data, the government has the power to respond, and this should be a done deal. But these numbers don't tell the whole story.

Saturday, December 15, 2012

Bernanke's QE n + 1

Federal Reserve Chairman Ben Bernanke's commitment to provide liquidity (buy U.S. treasuries and other assets) until the unemployment rate drops from 7.7% to 6.5 is an open ended commitment to "print" money - inflation be damned - until it is politically viable to cease propping up the treasury.

Policy makers in Washington must be seriously weighing the consequences of high inflation brought about by "printing," against the likelihood of widespread unrest when the prices of staple goods multiply. Whether governments choose austerity or inflation, someone is going to lose. It's really a question of who will be in more of a position to do anything about it.

Otherwise-serious people appear to be making preparations to protect themselves from the breakdown of civil society. Ask anyone interested in "zombie apocalypse" anything, and you will find it's just a polite euphemism for protecting themselves from their neighbours when the ATMs turn off, the shelves are bare, and the lights, heat or taps turn off in cities.

End-of-days anxiety aside, the real point is that it is unlikely that U.S. unemployment will drop to 6.5% anytime soon. High inflation and its consequences are certainly implied, and so the question becomes, what civil effects might QE n+1 have?

Wednesday, December 5, 2012

Probable tax policies.

Fiscal conservatives may not be aware of a factor driving centre-left parties in the debates over the spending in the US, and over tax rates rates in the UK and France.

Arguments against increases in corporate rates and capital gains are based in sound economic reasoning, but at this stage of the economic crisis most politicians in power recognize that "recovery" is abstract and distant compared to more exigent concerns.

The logic of political survival asks a question which economists have not. Politicians are asking themselves, "would we rather govern in a poorer economy, or be the opposition in a better one?"