Tuesday, December 7, 2010

QE3?

So now we get to the part where we take a substantive look at QE2, and make a criticism. This follows my previous post: Taking Down the QE2 Straw Men

As nifty as the 2-5 year range is for job creation with it's double whammy of durable goods and small business lending, might there be better places for the money the Fed is printing to go? And now we finally get to a reasonable critique of QE2.

A question you have to ask is are there people out there looking to buy durable goods but are being held back from doing so simply because they can't get a good enough rate on the financing? Another: are there entrepreneurs out there refraining from starting new business because they can't get the financing?


Taking down the QE2 Straw Men

So, there continues to be much controversy with QE2, and in general with the Fed's monetary policy over the past two years. I've been paying close attention to this stuff because frankly this is the marker by which we will know when the current economic crisis is on it's way to closing. It's a complicated subject, though, mostly because you have to learn to cut through the economic jargon.

It's also become highly politicized, because ultimately this is tied to decisions made on the behalf of the government, impacting the deficit and taxes. Taxes are political for obvious reasons; people want to pay less in taxes, but that is balanced against maintaining a stable economy, which means sufficient employment and is tied to how much we all make. The politics is how I cam to the discussion, but over the past couple years I've learned a lot.


Tuesday, November 16, 2010

Economists Hate Math

So, this is the inaugural post to this blog. And I am dedicating it to the impetuous for starting the blog, namely, economics. I have an interest in economics for a number of reasons, one of them being I am interested in my financial well-being, especially because I am paying student debt. It also intersects with my political interests, and with, well the fact that I like money.

When I was in engineering school, there was a common joke amongst my fellow to-be rocket scientists. That joke was a mathematical formula, and it went like this Lim (GPA -> 0) AERO = BMGT, or in English, the limit as GPA approaches 0 of an Aerospace Major is a Buisiness major, which is a fancy way of saying that most Aero students who couldn't keep up with their coursework eventually became Business majors. This might as well have been Lim (GPA -> 0) AERO = ECON, which is to say that a fair amount of them became Economics majors instead of Business majors. This has a follow-up, in that a lot of Math majors make money tutoring Econ majors, but we'll get to that.