Econ: half baked, so far. Stay tuned.

Economics heats up in an election year. Here are MY thoughts.

(1) I believe the Fed is mostly a good thing, the gold standard is silly. Gold's a commodity like anything else, and pegging money to it creates volatility: a bad thing. It's just playing craps.  What's the ideal money? One where prices are fixed: $1 for a hamburger, now and forever.  That's oversimplistic of course, we should use some average (eg Consumer Price Index) but you get the picture. The way to do that is to adjust the money supply.  For instance, money supply has to grow if the economy does, lest all the new people making all the additional hamburgers cause deflation!

The Fed goes beyond "pure" constancy, seeking a moderate (2%) inflation. It's important to note inflation is under control.  I don't mean that in the sense of "it's low" but in the sense of literally responsive to stimulus in ways we understand and can affect. That's what a control "system" is and arguably the US inflation control system operates pretty well.  We could argue all day about what the inflation rate Ought to be, and we should, but that's another topic.

Note the Fed can control inflation without impact on US Government debt.  No one has to issue  a T-bill for the Fed to buy one.  Heck right now (QE3) they're buying ordinary assets: home loans. No debt is being created, just adjustment of the money supply.

One thing I'm ignorant of and interested in is the Fed motivations. What creates and ensures their altruism? Under what pressures are they to do the right thing and can those pressures become overweening? For instance, a lot of those mortgages they're buying under QE2 are going to turn out to be bad debts and the Fed will lose money on this deal. What are the consequences of losing money when you can just print more?  None is my simpleton's answer. If somebody can offer a more nuanced explanation I'd like to hear it.

One thing that will surely happen is that the banks, like Katrina victims with a fat insurance check in their pockets, will go right back and build more houses with potentially unchanged risk aversion. That safety net aspect of selecting (possibly distressed) mortgage assets seems a questionable choice to me. If we're stepping away from t-bills, how about buying up windmill farms, or public schools or something else we really want to encourage?

(2) Gini  The Gini coefficient is a measure of income concentration and the US trend is pretty bad and getting worse: look at our cohort: we're in a dead heat with China, aiming to overtake Mexico any minute.

Mitigating this grim fact somewhat is our ageing population, which demographic skews the answers as they retire but (unlike worse off countries) live on. I'd like to see a Gini coefficient calculated based on wealth instead of income. Of course, it's a big internet, and so here it is!  You can sort the list with a click and find the US is the WORST except for Namibia, Zimbabwe and Switzerland, though we have the highest per capita wealth except for city-states Hong Kong, Luxemburg. (It's $143k, if you care, but those are jiggered currency trying to normalize across all currencies.) In the US, you can see below that the wealth gini exhibits much larger disparity than the income gini.

I'm opposed to this oligarchy and thus in favor of high inheritance tax. I agree you should get to benefit from the fruits of your labor, but maybe not your parents'! You should get what you deserve not what They did eh? This explodes the hypocrisy of many.  A similar argument leads me to capital gains taxes. (A sense of fairness says, you don't labor for your capital gains.) Perhaps most importantly, I feel tax policy is the lever to control Gini Coefficient, just as Fed monetary policy is the lever to control inflation. We should argue about Gini, just like inflation, and then act positively to affect it. Right now the concentration is high and increasing, so the tax code should be more progressive. This seems pretty cut and dried to me.


This is about 2/3 of the hops.  It's the second year and they grew great. No aphid problem this year (I used a fertilizer treatment Jack recommended) but I did have a bunch of tiny caterpillars, that ate perhaps 15% of the leaves.   This'll be enough for a batch though, so now all I need is a barley farm...


Airplane from last spring. Idea is to have roll and yaw coupled correctly with the same command. It's like a ventral rudder, but doesn't get scraped off when you land.