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Varrack
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6/19/2015 12:29:55 AM
Posted: 1 year ago
Since I know so little about econ and have been pretty much oblivious to econ-related discussions on this site, I thought I'd start a thread to ask some basic questions to learn a bit more about this area of knowledge. So here they are.

1. What exactly is the Federal Reserve. Does it serve a good purpose, or should it just be rid of?

2. Are there any circumstances in which you think the rich should have to pay more than the poor?

3. Should the minimum wage be kept in place. If so, should it be altered at all?

That's all for now. If there's anything else you think I ought to know you can add it.
ResponsiblyIrresponsible
Posts: 12,398
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6/19/2015 1:14:50 AM
Posted: 1 year ago
At 6/19/2015 12:29:55 AM, Varrack wrote:
Since I know so little about econ and have been pretty much oblivious to econ-related discussions on this site, I thought I'd start a thread to ask some basic questions to learn a bit more about this area of knowledge. So here they are.

1. What exactly is the Federal Reserve. Does it serve a good purpose, or should it just be rid of?

It's the central bank of the United States that deals with the supply of - and to some extent value of, though that's largely the purview of the Treasury - of money. It is statutorily required by Congress to address two core objectives: maximum sustainable employment (unemployment around the NAIRU) and price stability, which it defines as 2 percent inflation. To that end, it will generally adjust interest rates, or more specifically set a target for its benchmark overnight rate, the federal funds rate (the rate at which banks lend to each other), by adjusting the supply of reserves in the system: more reserves means lower interest rates, ad thus more economic activity, and vice versa for less reserves. It's a tad complex at the moment with a deluge of reserves being held on bank balance sheets, which is why the Fed has resorted to a number of unconventional measures (I'd recommend my stickied post on this if you're interested).

I really don't know of a single serious person who would want to do away with the Fed. The notion that monetary policy would set itself - or, worse yet, that Congress could do it - is positively asinine, and we know from decades of research that the best way to reign in inflation and produce the best outcomes is with an independent central bank free of short-term political pressures.

2. Are there any circumstances in which you think the rich should have to pay more than the poor?

As a dollar amount or as a percentage of their income?

I would say yes to both, and my reasoning for that is that inequality is higher than it's been since the late 1920s and it has tangible harms that have to be addressed in some ways. I don't think *soaking* the rich would be effective, and clearly policy would need to be tailored such that it comports with the bounds of the reason, but I don't have a problem with the rich paying a slightly higher marginal rate than poor people. In fact, I wouldn't mind a negative income tax in the form of, say, an expansion of the EITC (which I'll get to in a minute) for poor people.

3. Should the minimum wage be kept in place. If so, should it be altered at all?

This is something that I'm split on. A lot of the empirical literature suggests zero effect, but there's still other research suggesting sharper or even modest disemployment effects. I went on a rant earlier today about dumb arguments against the MW, such as "Well, why shouldn't it just be $100 or some other such absurd value?" That's a silly argument, but weighing the harms - that there likely are negative employment effects, but it likely reduces inequality, produces greater efficiences, and reduces poverty - is really the only sensible way to approach a debate as complex as the MW. In my view, it does reduce employment, and thus the ideal approach would be to get rid of it - or maybe augment the federal statute such that there's a "teen wage" or something of the sort - and expand the EITC, which is a low-wage subsidy. It's similar to what Germany did, and it's the only large country that didn't see youth unemployment soar faster than overall employment amid the financial crisis. Not to mention, the EITC addresses all the harms of the MW without the negative employment effects.

That's all for now. If there's anything else you think I ought to know you can add it.
~ResponsiblyIrresponsible

DDO's Economics Messiah
Varrack
Posts: 2,410
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6/19/2015 11:41:34 AM
Posted: 1 year ago
At 6/19/2015 1:14:50 AM, ResponsiblyIrresponsible wrote:
At 6/19/2015 12:29:55 AM, Varrack wrote:
Since I know so little about econ and have been pretty much oblivious to econ-related discussions on this site, I thought I'd start a thread to ask some basic questions to learn a bit more about this area of knowledge. So here they are.

1. What exactly is the Federal Reserve. Does it serve a good purpose, or should it just be rid of?

It's the central bank of the United States that deals with the supply of - and to some extent value of, though that's largely the purview of the Treasury - of money. It is statutorily required by Congress to address two core objectives: maximum sustainable employment (unemployment around the NAIRU) and price stability, which it defines as 2 percent inflation. To that end, it will generally adjust interest rates, or more specifically set a target for its benchmark overnight rate, the federal funds rate (the rate at which banks lend to each other), by adjusting the supply of reserves in the system: more reserves means lower interest rates, ad thus more economic activity, and vice versa for less reserves.

I would think the opposite since making a reserve ensures that the bank will pay me interest for making that deposit, and more reserves would mean more interest.

It's a tad complex at the moment with a deluge of reserves being held on bank balance sheets, which is why the Fed has resorted to a number of unconventional measures (I'd recommend my stickied post on this if you're interested).

I really don't know of a single serious person who would want to do away with the Fed. The notion that monetary policy would set itself - or, worse yet, that Congress could do it - is positively asinine, and we know from decades of research that the best way to reign in inflation and produce the best outcomes is with an independent central bank free of short-term political pressures.

I see. How does the banking system affect unemployment/inflation though? It doesn't seem like jobs should be affected by how much money the federal bank contains.

2. Are there any circumstances in which you think the rich should have to pay more than the poor?

As a dollar amount or as a percentage of their income?

I'd go with income.

I would say yes to both, and my reasoning for that is that inequality is higher than it's been since the late 1920s and it has tangible harms that have to be addressed in some ways. I don't think *soaking* the rich would be effective, and clearly policy would need to be tailored such that it comports with the bounds of the reason, but I don't have a problem with the rich paying a slightly higher marginal rate than poor people. In fact, I wouldn't mind a negative income tax in the form of, say, an expansion of the EITC (which I'll get to in a minute) for poor people.

My issue with progressive bracket taxation is the lower incentive a poor person has to climb the income ladder knowing they will have to pay higher taxes once they make more money, which would lead to a higher percentage of people not working toward the top. I know that's only theoretical reasoning, but it seems plausible to me.

3. Should the minimum wage be kept in place. If so, should it be altered at all?

This is something that I'm split on. A lot of the empirical literature suggests zero effect, but there's still other research suggesting sharper or even modest disemployment effects. I went on a rant earlier today about dumb arguments against the MW, such as "Well, why shouldn't it just be $100 or some other such absurd value?" That's a silly argument, but weighing the harms - that there likely are negative employment effects, but it likely reduces inequality, produces greater efficiences, and reduces poverty - is really the only sensible way to approach a debate as complex as the MW. In my view, it does reduce employment, and thus the ideal approach would be to get rid of it - or maybe augment the federal statute such that there's a "teen wage" or something of the sort - and expand the EITC, which is a low-wage subsidy. It's similar to what Germany did, and it's the only large country that didn't see youth unemployment soar faster than overall employment amid the financial crisis. Not to mention, the EITC addresses all the harms of the MW without the negative employment effects.

The MW does strike me as kind of a flawed system in that it doesn't benefit anyone who works under minimum wage. For some employers, if you're not earning MW then they're not going to pay you anything. It tends to take the whole point out of ensuring people a basic amount of money when they can't make MW at all. In my view I don't see it helping employment rise or teen wage be benefited from the concept.

That's all for now. If there's anything else you think I ought to know you can add it.
ResponsiblyIrresponsible
Posts: 12,398
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6/19/2015 12:16:31 PM
Posted: 1 year ago
At 6/19/2015 11:41:34 AM, Varrack wrote:
I would think the opposite since making a reserve ensures that the bank will pay me interest for making that deposit, and more reserves would mean more interest.

It's a supply-and-demand issue. If there are fewer reserves, they're less scarce, so banks are more willing to lend them out. Not to mention, after the fed funds rate fall, an array of broader rates fall, so the opportunity cost of holding reserves (i.e., investing them in some interest-bearing asset or, as of October 2008, receiving interest payments from the Fed) also falls.

It's a tad complex at the moment with a deluge of reserves being held on bank balance sheets, which is why the Fed has resorted to a number of unconventional measures (I'd recommend my stickied post on this if you're interested).

I really don't know of a single serious person who would want to do away with the Fed. The notion that monetary policy would set itself - or, worse yet, that Congress could do it - is positively asinine, and we know from decades of research that the best way to reign in inflation and produce the best outcomes is with an independent central bank free of short-term political pressures.

I see. How does the banking system affect unemployment/inflation though? It doesn't seem like jobs should be affected by how much money the federal bank contains.

Well, first, it isn't just the Fed holding money. In fact, the banking system itself "creates" money, but the Fed provides the base for them to do so. One of the primary mechanisms is supply reserves to the banking system (monetary base), which reduces rate and prompts people to invest, to refinance their mortgage, to purchase a house or a car, etc.

Aside from that, really the primary transmission mechanism is trying to get people to do something more risky with their money. For instance, if inflation is expected to rise because the Fed's pursuing an expansionary policy, people may spend their money now in lieu of investing in Treasury bonds. If the Fed buys up a bunch of Treasuries, the lower supply may force investors into riskier assets, which pushes down an array of interest rates (thats called the portfolio balance effect).

2. Are there any circumstances in which you think the rich should have to pay more than the poor?

As a dollar amount or as a percentage of their income?

I'd go with income.

So the latter? That doesn't answer whether you mean as a percent of income or as a dollar amount of their income, though I assume you mean the latter.

I would say yes to both, and my reasoning for that is that inequality is higher than it's been since the late 1920s and it has tangible harms that have to be addressed in some ways. I don't think *soaking* the rich would be effective, and clearly policy would need to be tailored such that it comports with the bounds of the reason, but I don't have a problem with the rich paying a slightly higher marginal rate than poor people. In fact, I wouldn't mind a negative income tax in the form of, say, an expansion of the EITC (which I'll get to in a minute) for poor people.

My issue with progressive bracket taxation is the lower incentive a poor person has to climb the income ladder knowing they will have to pay higher taxes once they make more money, which would lead to a higher percentage of people not working toward the top. I know that's only theoretical reasoning, but it seems plausible to me.

I don't think that even makes sense mathematically, tbh. Let's assume just for a moment - and we shouldn't generally, but let's do it now for the sake of argument - that we have rational, intertemporally optimizing poor people. In other words, their current decisions are focused on perfect information what will transpire from those decisions.

Now, I don't know what the precise welfare payment each family receives is, and the CATO study I did find is (a) from CATO, so it's Koch-funded bulls1ht and (b) assumes that families will actually receive benefits from seven federal poverty programs, when in reality they only use one (and some use zero due to sheer lack of knowledge of enrollment requirements and etc.). It goes without question that, at least currently, welfare pays out far less than work would, and that disparity extends to such an extent that even after taxes the PV of those earnings would be greater. If anything, progressive taxation is structured such that it adjusts for diminishing returns to income - i.e., paying higher taxes means you're doing better and thus more willing to pay those taxes, because you're still able to retain most of what you make, and thus have an incentive to earn more. Sure, there's some tax rate around which people wouldn't want to work, but let's not translating that into a perpetually downward-sloping Laffer curve.

Not to mention, few people know that welfare actually *expires* after 60 months. There were a number of restrictions and work requirements put on it in the Clinton era. It's not nearly as lucrative as people make it out to be, and irrespective of what CATO tells you, people don't actually live on it, nor can they sustain themselves on it, nor do they *want* to live off it.

3. Should the minimum wage be kept in place. If so, should it be altered at all?

This is something that I'm split on. A lot of the empirical literature suggests zero effect, but there's still other research suggesting sharper or even modest disemployment effects. I went on a rant earlier today about dumb arguments against the MW, such as "Well, why shouldn't it just be $100 or some other such absurd value?" That's a silly argument, but weighing the harms - that there likely are negative employment effects, but it likely reduces inequality, produces greater efficiences, and reduces poverty - is really the only sensible way to approach a debate as complex as the MW. In my view, it does reduce employment, and thus the ideal approach would be to get rid of it - or maybe augment the federal statute such that there's a "teen wage" or something of the sort - and expand the EITC, which is a low-wage subsidy. It's similar to what Germany did, and it's the only large country that didn't see youth unemployment soar faster than overall employment amid the financial crisis. Not to mention, the EITC addresses all the harms of the MW without the negative employment effects.

The MW does strike me as kind of a flawed system in that it doesn't benefit anyone who works under minimum wage.

You mean people with disabilities? That's the only group I know of that's exempt, and there are other programs to benefit them, so I don't see how their exclusion really dooms the whole system.

For some employers, if you're not earning MW then they're not going to pay you anything.

I would disagree with this because there are *still* supply and demand issues at play, though I think nevertheless the majority of the bargaining power rests with employers.

It tends to take the whole point out of ensuring people a basic amount of money when they can't make MW at all.

But, again, that only applies to a small subset of people, and notwithstanding the benefits they do reserve from the government, they're clearly earning some positive return per dollar earned. It could even be that work fulfills some sense of purpose for them.

In my view I don't see it helping employment rise or teen wage be benefited from the concept.

It wouldn't help employment. That's a silly liberal folklore. It's either zero effect or slight negative depending on several factors (size, timing, etc.). I'd also agree with you that youth employment generally speaking would fall, though those teens nevertheless are a very small portion of MW workers (about 12%, by CBO estimates).

That's all for now. If there's anything else you think I ought to know you can add it.
~ResponsiblyIrresponsible

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16kadams
Posts: 10,497
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6/19/2015 3:21:34 PM
Posted: 1 year ago
At 6/19/2015 12:16:31 PM, ResponsiblyIrresponsible wrote:
At 6/19/2015 11:41:34 AM, Varrack wrote:


It's a tad complex at the moment with a deluge of reserves being held on bank balance sheets, which is why the Fed has resorted to a number of unconventional measures (I'd recommend my stickied post on this if you're interested).

I really don't know of a single serious person who would want to do away with the Fed. The notion that monetary policy would set itself - or, worse yet, that Congress could do it - is positively asinine, and we know from decades of research that the best way to reign in inflation and produce the best outcomes is with an independent central bank free of short-term political pressures.

I see. How does the banking system affect unemployment/inflation though? It doesn't seem like jobs should be affected by how much money the federal bank contains.

Well, first, it isn't just the Fed holding money. In fact, the banking system itself "creates" money, but the Fed provides the base for them to do so. One of the primary mechanisms is supply reserves to the banking system (monetary base), which reduces rate and prompts people to invest, to refinance their mortgage, to purchase a house or a car, etc.

Aside from that, really the primary transmission mechanism is trying to get people to do something more risky with their money. For instance, if inflation is expected to rise because the Fed's pursuing an expansionary policy, people may spend their money now in lieu of investing in Treasury bonds. If the Fed buys up a bunch of Treasuries, the lower supply may force investors into riskier assets, which pushes down an array of interest rates (thats called the portfolio balance effect).


2. Are there any circumstances in which you think the rich should have to pay more than the poor?

As a dollar amount or as a percentage of their income?

I'd go with income.

So the latter? That doesn't answer whether you mean as a percent of income or as a dollar amount of their income, though I assume you mean the latter.

I would say yes to both, and my reasoning for that is that inequality is higher than it's been since the late 1920s and it has tangible harms that have to be addressed in some ways. I don't think *soaking* the rich would be effective, and clearly policy would need to be tailored such that it comports with the bounds of the reason, but I don't have a problem with the rich paying a slightly higher marginal rate than poor people. In fact, I wouldn't mind a negative income tax in the form of, say, an expansion of the EITC (which I'll get to in a minute) for poor people.

My issue with progressive bracket taxation is the lower incentive a poor person has to climb the income ladder knowing they will have to pay higher taxes once they make more money, which would lead to a higher percentage of people not working toward the top. I know that's only theoretical reasoning, but it seems plausible to me.

I don't think that even makes sense mathematically, tbh. Let's assume just for a moment - and we shouldn't generally, but let's do it now for the sake of argument - that we have rational, intertemporally optimizing poor people. In other words, their current decisions are focused on perfect information what will transpire from those decisions.

Now, I don't know what the precise welfare payment each family receives is, and the CATO study I did find is (a) from CATO, so it's Koch-funded bulls1ht

https://en.wikipedia.org...
https://en.wikipedia.org... (Bill Clinton himself funds these people)
CATO, on the other hand, only received 13% of their funding from foundations, and the Koch Brothers are one of the 11 foundations of that 13%. (https://en.wikipedia.org...)

Plus, even though I do not think the study is 100% accurate (I agree with parts of it, but I think they should have mentioned the 1996 reforms. Plus, there are easy workarounds and some of the reforms were loosened under obama), I think it is unfair to say "OMG Koch!" I mean seriously I don't know why everyone is addicted to the Koch brothers. If I read a liberal post I don't say "EW, liberal Soros Clinton slimey funded BULLSH!T". I think debating over funding is irrelevant. Plus, it assumes that Cato changes their reports for funding. Chances are, the brothers said "hey, these people agree with us" so they decided to bankroll them.

Plus, if you want to look at election funding, of the top ten biggest contributors, eight gave a majority of their money (and I mean like 99-100%) to democrats; one of the ones for republicans was a 50 something - 40 something split. (https://www.opensecrets.org...) btw, Koch brothers didn't even make the top ten.
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
ResponsiblyIrresponsible
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6/19/2015 3:35:35 PM
Posted: 1 year ago
At 6/19/2015 3:21:34 PM, 16kadams wrote:
https://en.wikipedia.org...
https://en.wikipedia.org... (Bill Clinton himself funds these people)

I this is a bit of tu quoque. I don't really care who funds left-wing think tanks because I don't pay them any credence, anyway, though I do like Brookings, primarily because they regularly put out high-quality research and hold conferences with big names - Fed economists, for instance - and employ Ben Bernanke. They're probably the one exception in my mind, though.

CATO, on the other hand, only received 13% of their funding from foundations, and the Koch Brothers are one of the 11 foundations of that 13%. (https://en.wikipedia.org...)

Sure, but they donated tens of millions of dollars and Charles Koch even sat *on the board* and executive committee for years (http://www.forbes.com...), so their influence is far more pronounced than you're letting on.

The one concession I will make, though, is that there's no real parallel between CATO and Heritage. Irrespective of the fact that CATO regularly puts out deceptive bullsh1t, Heritage is far more flagrant - and, to CATO's credit, they're libertarian, so they're at least right on social issues and immigration. And they're are a few people who have published for CATO, like Scott Sumner for instance, whom I deeply respect. So I'll give CATO a transitory pass for now.

Plus, even though I do not think the study is 100% accurate (I agree with parts of it, but I think they should have mentioned the 1996 reforms. Plus, there are easy workarounds and some of the reforms were loosened under obama),

Which reforms did Obama loosen? Obama gave the states (read: GOP governors, mostly) the ability to implement *harsher* work requirements for welfare. I don't think he in any way threw a wrench in the Clinton-era welfare reform package, though he should have.

I think it is unfair to say "OMG Koch!" I mean seriously I don't know why everyone is addicted to the Koch brothers. If I read a liberal post I don't say "EW, liberal Soros Clinton slimey funded BULLSH!T". I think debating over funding is irrelevant. Plus, it assumes that Cato changes their reports for funding. Chances are, the brothers said "hey, these people agree with us" so they decided to bankroll them.

I don't think Soros funding is analogous - though I do think we always ought to consider funding, and much of the Koch's funding is actually under the table since there are different disclosure requirements. I have a problem with who the Koch's are and what they've dedicated themselves to: they're oil moguls who were given a giant leg up from their father - much like Trump, for that matter - who are actively funding deceptive ads to spread utter bullsh1t (i.e., there are plausible reasons to reject a law like the ACA, yet they resort to nonsense) and now exert undue influence over Congress. Look at the EPA, for instance: it's *replete* with regulatory capture, which is why regulations aren't often enforced, and that prompts the Koch's and their buddies to proclaim, "See, government is useless!" I don't think it's any mystery that they donate millions of dollars to organizations that deny climate change when their influence is in oil, for instance, and you and I both agree that climate-change denial is bull.

But, generally, I just hate agenda-driven research. I got pissed when Rick Mishkin did it - though, to be fair, it's still somewhat unknown whether the Icelandic government's contribution *actually* influenced his paper, though at least he later recanted the findings - and I'm surely going to get pissed when a think tank, masquerading as serious thinkers, does it.

Heck, I don't even take seriously research from the EPI, Center for American Progress, Center for Budget and Policy Priorities, etc. To me, those organizations are laughing stocks - and I don't even think their deception is as flagrant as that of Heritage or CATO.

Plus, if you want to look at election funding, of the top ten biggest contributors, eight gave a majority of their money (and I mean like 99-100%) to democrats; one of the ones for republicans was a 50 something - 40 something split. (https://www.opensecrets.org...) btw, Koch brothers didn't even make the top ten.

Bladerunner wrote a thorough post on this a while back. I'll see if I can dig it up, but the truth is that there are different disclosure requirements, and after accounting for those, that list changes radically.
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16kadams
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6/19/2015 4:00:32 PM
Posted: 1 year ago
At 6/19/2015 3:35:35 PM, ResponsiblyIrresponsible wrote:
At 6/19/2015 3:21:34 PM, 16kadams wrote:
https://en.wikipedia.org...
https://en.wikipedia.org... (Bill Clinton himself funds these people)

I this is a bit of tu quoque. I don't really care who funds left-wing think tanks because I don't pay them any credence, anyway, though I do like Brookings, primarily because they regularly put out high-quality research and hold conferences with big names - Fed economists, for instance - and employ Ben Bernanke. They're probably the one exception in my mind, though.

The thing I like about brookings is that even though they are left leaning, they sometimes go the opposite way. I saw an article they wrote saying that inequality isn't actually increasing. I would say they are left leaning in the same way that AEI is right leaning. AEI actually reported the Zidar study and accepted some of its conclusions; Brookings says inequality is not increasing. So yeah, I agree, there are a few exceptions on the list (and I think both Brookings and AEI are full of monetarists--I know AEI called for Rubio to support an NGDP target).


CATO, on the other hand, only received 13% of their funding from foundations, and the Koch Brothers are one of the 11 foundations of that 13%. (https://en.wikipedia.org...)

Sure, but they donated tens of millions of dollars and Charles Koch even sat *on the board* and executive committee for years (http://www.forbes.com...), so their influence is far more pronounced than you're letting on.


I still don't think that discredits them. Say I was a billionaire. I wouldn't fund the CBPP, CEPR, or Center for American progress. Even if I wanted to change their views, it wouldn't work. They would say "noob" and make an article about making taxes 100.5% anyway. I would fund people who align with my views. I would give money to AEI, Heritage, and CATO because they best represent me. Even if I became a board member, that does not mean I win. Plus, you're assuming that they are wrong ;DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD

The one concession I will make, though, is that there's no real parallel between CATO and Heritage. Irrespective of the fact that CATO regularly puts out deceptive bullsh1t, Heritage is far more flagrant - and, to CATO's credit, they're libertarian, so they're at least right on social issues and immigration. And they're are a few people who have published for CATO, like Scott Sumner for instance, whom I deeply respect. So I'll give CATO a transitory pass for now.


Heritage actually has some supports in favor of immigration. It is James Sherk, who is one of the Heritage scholars, who opposes immigration. And the Cato Journal is peer reviewed and legit, so that is good. I mean, I am not saying it should be the best thing ever, but it is an actual journal which is reputable (though, not the same as The Journal of Law and Economics).

And I don't dismiss Heritage, CATO, CBPP, or CEPR off the bat. I mean, I take it with a grain of salt, but I give credit when credit is due. CATO, for example, pointed out valid flaws in the Heritage immigration paper and offered substantial evidence to show why they are correct. Heritage, in their reports (not their blogs) has some quality ones (like wages vs productivity). Heritage also offered good analysis on an EPI paper on unions and wages. I am not saying that Heritage or CATO is 100% accurate, but they do have quality papers they publish. Even CEPR has some good policy papers on the wage issue. EPI, though, gives me cancer. :P
Plus, even though I do not think the study is 100% accurate (I agree with parts of it, but I think they should have mentioned the 1996 reforms. Plus, there are easy workarounds and some of the reforms were loosened under obama),

Which reforms did Obama loosen? Obama gave the states (read: GOP governors, mostly) the ability to implement *harsher* work requirements for welfare. I don't think he in any way threw a wrench in the Clinton-era welfare reform package, though he should have.

Well I mean the requirements can easily be worked around. I just apply to be CEO every day and get it. There are cases of people doing that XD

I am not going to go as far as this op-ed and say that "Obama" has gutted the work requirement, but he has altered it to make it easier for people to access welfare and use it longer (http://www.washingtonpost.com...). Also, I may be wrong, but the CATO report talked a lot about SNAP benefits, which were not reformed in 1996. So people can live off of those food wise. And people like to sell them, too.




I don't think Soros funding is analogous - though I do think we always ought to consider funding, and much of the Koch's funding is actually under the table since there are different disclosure requirements. I have a problem with who the Koch's are and what they've dedicated themselves to: they're oil moguls who were given a giant leg up from their father - much like Trump, for that matter - who are actively funding deceptive ads to spread utter bullsh1t (i.e., there are plausible reasons to reject a law like the ACA, yet they resort to nonsense) and now exert undue influence over Congress. Look at the EPA, for instance: it's *replete* with regulatory capture, which is why regulations aren't often enforced, and that prompts the Koch's and their buddies to proclaim, "See, government is useless!" I don't think it's any mystery that they donate millions of dollars to organizations that deny climate change when their influence is in oil, for instance, and you and I both agree that climate-change denial is bull.

I think actual funding on the climate change is solidly against climate change skeptics. And no, it is not bull. But the weight of the evidence seems to oppose them. Very reasonable scientists, like Nir al Shaviv, present a good skeptics case--even though it is probably wrong.

And according to the liberal Mother Jones magazine, Labor owns a huge amount of congress. People getting energy money (e.g. Koch Brothers) have tiny influence compared to them (http://www.motherjones.com...).

But, generally, I just hate agenda-driven research. I got pissed when Rick Mishkin did it - though, to be fair, it's still somewhat unknown whether the Icelandic government's contribution *actually* influenced his paper, though at least he later recanted the findings - and I'm surely going to get pissed when a think tank, masquerading as serious thinkers, does it.

I don't like it either. But I read a lot of think tank stuff. I personally believe AEI and Brookings produce the best stuff. I mean those two really are the best. Heritage produces the best stuff, imo, if the others (they are usually the best at sourcing their sh!t and proving that what they are saying is from other people, not just them). EPI = cancer, Cato = sometimes cancer, CBPP = usually cancer, CEPR = Heritage level on the other side of the spectrum




Bladerunner wrote a thorough post on this a while back. I'll see if I can dig it up, but the truth is that there are different disclosure requirements, and after accounting for those, that list changes radically.

Maybe if you look at individuals. Then it is 5 GOP and 4 Dem, which is more even (https://www.opensecrets.org...). I still think it is unfair to talk about the Koch brothers only when their influence is small compared to the Clinton Foundation and Soros. And if I become a scholar I would totally accept Koch funding--but it won't change my results. I would even accept Soros bankrol
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6/19/2015 4:26:33 PM
Posted: 1 year ago
At 6/19/2015 4:00:32 PM, 16kadams wrote:

I actually had to use ellipses to respond to everything here, lollol.

The thing I like about brookings...So yeah, I agree, there are a few exceptions on the list (and I think both Brookings and AEI are full of monetarists--I know AEI called for Rubio to support an NGDP target).

I don't know much about AEI, though Brookings is, at least in my reading, not ideologically driven at all - and that's, frankly, how research ought to be conducted. AEI on the other hand actually hires ideologically driven stooges, though to its credit many of its writers at least have a grasp on reality, and they substantiate their articles.

I still don't think that discredits them. Say I was a billionaire. I wouldn't fund the CBPP, CEPR, or Center for American progress. Even if I wanted to change their views, it wouldn't work. They would say "noob" and make an article about making taxes 100.5% anyway. I would fund people who align with my views. I would give money to AEI, Heritage, and CATO because they best represent me. Even if I became a board member, that does not mean I win. Plus, you're assuming that they are wrong ;DDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDD

I'm not assuming they're wrong - you know I agree with AEI on taxes, though I'm much more uncertain than many of its authors. But you're right: you would fund people who represent you - who are ideologically bent on supporting the point of view which best caters to your own interest. I think that's fine, but they nevertheless shouldn't market themselves as serious policy analysts, but as de-facto lobbyists for rich people demanding tax breaks - and I think, again, the Princeton/Northwestern study is applicable.

In other words, I want to come to the right policy conclusions because of analysis that's as objective as it possibly can be, not because I'm paid off by people who benefit from those conclusions.

Heritage actually has some supports in favor of immigration. It is James Sherk, who is one of the Heritage scholars, who opposes immigration. And the Cato Journal is peer reviewed and legit, so that is good. I mean, I am not saying it should be the best thing ever, but it is an actual journal which is reputable (though, not the same as The Journal of Law and Economics).

True, and they actually have held conferences (CATO, that is) that in many ways resemble Brookings conferences. So I guess the moral of the story is, irrespective of their ideological crap which I do - and rightfully so - ignore, they're not in the same boat as Heritage.

And, sure, they may have one libertarian-leaning writer, but it's literally run by a Tea Party Hack - Jim DeMint - and their chief economist, Stephen Moore, is an ideological tool who was caught rigging income tax data.

And I don't dismiss Heritage, CATO, CBPP, or CEPR off the bat. I mean, I take it with a grain of salt, but I give credit when credit is due. CATO, for example, pointed out valid flaws in the Heritage immigration paper and offered substantial evidence to show why they are correct. Heritage, in their reports (not their blogs) has some quality ones (like wages vs productivity). Heritage also offered good analysis on an EPI paper on unions and wages. I am not saying that Heritage or CATO is 100% accurate, but they do have quality papers they publish. Even CEPR has some good policy papers on the wage issue. EPI, though, gives me cancer. :P

This is fair. I'm not saying they're constitutionally incapable of putting out good papers, but that I don't expect it - i.e., that it's anomalous - nor do I look to these organizations for quality research. Brookings, however, I wouldn't mind using.

Plus, even though I do not think the study is 100% accurate (I agree with parts of it, but I think they should have mentioned the 1996 reforms. Plus, there are easy workarounds and some of the reforms were loosened under obama),

Which reforms did Obama loosen? Obama gave the states (read: GOP governors, mostly) the ability to implement *harsher* work requirements for welfare. I don't think he in any way threw a wrench in the Clinton-era welfare reform package, though he should have.

Well I mean the requirements can easily be worked around. I just apply to be CEO every day and get it. There are cases of people doing that XD

Applying to be CEO? What in the world, lol. I'm not even sure what you mean here.

I am not going to...work requirement...And people like to sell them, too.

^^ I truncated the hell out of that for room, lmfao.

I'll read the op-ed - though as I'm typing this I don't yet know the author, though by the title I'm assuming it's nonsense (and maybe I'm wrong in doing that) - but that isn't my understanding at all of what Obama actually did. Not to mention, food stamp outlays are about $130 per month.. I don't see how anyone could live off that. I also haven't seen any evidence of them being sold on the secondary market, though if so that's a problem. In fact, I've seen fraud in welfare estimated at about 1.3% - so I just don't see this being an issue. Sure, there's some level at which welfare would have negative supply-side impacts, but I don't think we're anywhere near that point. Not to mention, I'd doll out welfare benefits much differently (EITC).

I think actual funding on the climate change is solidly against climate change skeptics. And no, it is not bull. But the weight of the evidence seems to oppose them. Very reasonable scientists, like Nir al Shaviv, present a good skeptics case--even though it is probably wrong.

I've never heard of a good skeptics case, lol. But, really, their work comprises a tiny sliver of the actual peer-reviewed articles on climate change, so I really don't much weight on their work.

And according to the liberal Mother Jones magazine, Labor owns a huge amount of congress. People getting energy money (e.g. Koch Brothers) have tiny influence compared to them (http://www.motherjones.com...).

I'm pretty sure that's looking at direct funding - again, the Koch's are able to hide their contributions. Here's a good piece going into detail on that: http://www.philly.com...

Honestly, I don't think labor should be able to fund politicians either, though I also don't think Congress is very pro-labor, so that doesn't even follow logically to me .

I don't like it either. But I read a lot of think tank stuff. I personally believe AEI and Brookings produce the best stuff. I mean those two really are the best. Heritage produces the best stuff, imo, if the others (they are usually the best at sourcing their sh!t and proving that what they are saying is from other people, not just them). EPI = cancer, Cato = sometimes cancer, CBPP = usually cancer, CEPR = Heritage level on the other side of the spectrum

I can generally agree that Brookings and AEI are probably the best, probably followed by CATO. I'd say there's a significant divide between Brookings and AEI, but I digress. The liberal think tanks do in fact suck, though.


Bladerunner wrote a thorough post on this a while back. I'll see if I can dig it up, but the truth is that there are different disclosure requirements, and after accounting for those, that list changes radically.

Maybe if you look at individuals. Then it is 5 GOP and 4 Dem, which is more even (https://www.opensecrets.org...). I still think it is unfair to talk about the Koch brothers only when their influence is small compared to the Clinton Foundation and Soros. And if I become a scholar I would

And... this cut off, lollol. Damnit, I tried to avoid that.

*reloads page*

But it isn't small: that isn't capturing all of their actual funding because most of is concealed or through the organizations they fund.
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6/19/2015 4:57:13 PM
Posted: 1 year ago
At 6/19/2015 12:29:55 AM, Varrack wrote:
Since I know so little about econ and have been pretty much oblivious to econ-related discussions on this site, I thought I'd start a thread to ask some basic questions to learn a bit more about this area of knowledge. So here they are.

1. What exactly is the Federal Reserve. Does it serve a good purpose, or should it just be rid of?

The Federal Reserve system is an institution within the United States. There is a central board (the Federal Reserve Board and the Federal Open Market Committee) and twelve regional Federal Reserve Banks. The most important regional bank is the New York Reserve Bank. The Federal Reserve Board and, to a certain extent the FOMC, are appointed by the executive. The regional Banks are not appointed and generally speaking are led by major bank executives (the current NY Fed bank president is William C Dudley.)

Within the IS-LM model (see here: https://en.wikipedia.org...), the local federal reserve banks essentially responsible for the stability of the LM (liquidity) curve. What this means is they regulate the financial system, payment systems, etc. Basically, they make sure that money can flow smoothly and efficiently through the economy. So, when the FRB and FOMC change where the LM curve is, the local reserve banks have to ensure that it stays there using a variety of tools.

The national federal reserve (FRB and FOMC) is responsible for the placement of the LM curve. They increase and decrease the amount of liquidity (which decreases and increases interest rates which leads to more investment in standard keynesian macro models, respectively) using a variety of tools including open market operations (buying and selling bonds using treasury dollars -- leading to an increase in real money -- which has the effect of increasing bond prices and decreasing yields implying a decrease in the interest rate -- this is why the FED can't affect long term interest rates, over time there will be more bonds issued leading to lower prices, higher yields, and thus higher interest rates), changing the federal funds rate (the rate at which banks can borrow from one another), and shifting the reserve requirement (the percentage of liquid cash banks have to have on hand compared to total deposits).

The goal of the federal reserve system is too keep inflation stable, and unemployment low. Although, in some instances, they have broken this mandate. Of course, the Phillips curve also makes their lives very difficult (high inflation is associated with low unemployment, low inflation is associated with high unemployment.)