Bob Cropf

Archive for the ‘miscellaneous’ Category

Some businesses find the recession “sweet”

In economics, miscellaneous on March 24, 2009 at 7:21 AM

While the last few months have brought a steady stream of bad economic news–layoffs, home foreclosures, failing banks, drop in consumer demand–the list can go on and on, there is some good news that is hidden away if you look for it. One industry that has seen its fortunes move in the opposite direction of the rest to the rest of the economy is the candy business. This article in NY Times shows that it might be a smart idea to invest in a chocolate company for the duration of the recession. The sweets industry is enjoying its biggest boom since the Great Depression. It looks like the last indulgence consumers are willing to give up is feeding their sweet tooth.


In miscellaneous on February 24, 2009 at 5:51 PM


Just a little humor as I sit here watching President Obama’s address to Congress.

Keynesian vs. Neo-Classical

In miscellaneous on February 8, 2009 at 7:19 PM

In the January 30 show, “The New Boss” (Act Three), This American Life has a very clear break down of the neo-classical vs. Keynesian economists battle since World War II, culminating with the debate of the current stimulus. Includes interviews with Blinder and Cowen. Also includes a brief biography of Keynes – interesting guy.

This American Life also did two other shows in 2008 that were very helpful in outlining the whole mess that we are in. The first one was in May, “The Giant Pool of Money’, about the mortgage crisis. The second one was in October, “Another Frightening Show about the Economy”, about the credit market collapse.


Job Losses

In miscellaneous on February 7, 2009 at 6:00 PM

Speaker Pelosi’s office put out this graph on Friday:
Job Losses in Recent Recessions


Executive Pay

In miscellaneous on February 6, 2009 at 1:35 PM

Reed Hastings, Netflix CEO, wrote an op-ed in the New York Times today criticizing the moves to limit CEO pay in general and specifically for companies getting bailout money. He argues instead of capping pay, tax it at a much higher rate. I find this a bit disingenuous because there isn’t much argument that the nomial and real tax rate that the top 20% of the income distribution has declined precipitously over the past 30 years.

The questions I would pose to him if given the opportunity are:
(1) If all CEO pay is capped, what alternative is there for the current pool of CEOs? Retirement, something else? What else pays as well that they are also qualified to do? Or is the argument that they will simply go abroad? Might not other countries institute similar caps if the US leads? We are in fact the American in the Anglo-American style of capitalism. If we change our rules, would that not make political room for others to follow?

(2) If the current pool of CEOs is unwilling work for the new pay cap, will not a new pool be created out of the next, possibly better equipped (not married to the “old way” of doing things), generation of business people? $500K is nothing to sniff at… unless of course you’re are used to $20m.

(3) If the companies are not able to attract star CEOs with better compensation packages (note to Congress: if you want this to be effective, you have to limit TOTAL compensation), would they not be “reduced” to looking for the CEO that best meets their actual needs. Wouldn’t both sides be more concerned with finding the right fit instead of trying to attract the biggest name?

(4) Do we really like what this “star culture” has done to the business? Are the stars actually more effective or have they been more beneficiaries of good timing? For example, is a banking CEO who retired in 2007 really a star or someone who jumped ship before anyone realized there was a problem? Or is a CEO who took over in July 2008 really awful?

Thoughts anyone?

Is more spending the solution?

In miscellaneous on February 5, 2009 at 11:26 AM

Hi everyone!

I thought this article was pretty interesting and relevant to what we have been talking about in class. Two local economists, David Rose and Lawrence White, challenge the assumptions of a “Keynesian cause and a Keynesian cure” regarding the current recession and advocate for a classical, free market approach to fixing the economy.

Click here for article

(I’m not sure I agree with everything they say, but it is an interesting perspective)


Privatizing roads

In miscellaneous on February 5, 2009 at 5:29 AM

In response to yesterday’s post on previous government efforts to deal with recession, Kathleen sent in this article on the Huffington Post by Thomas Frank.

Not so long ago, before Wall Street imploded and the US automakers went bust, the article says that “Private businesses did everything better than the state, we were told. And that meant even tasks as inherently public as maintaining bridges and roads.”

Frank discusses the wisdom of privatizing a public function like highways.

The Section on Globalization for this Weeks Class

In miscellaneous on February 2, 2009 at 7:25 PM

The main reading for the Globalization lecture this week is “Why Revisit Public Finance Today?” For the other one “Making sense of Globalization” only read section 2 from p.17 to 32.

The learning objectives for this week’s globalization lecture will be to understand what globalization is and how global issues are increasingly affecting local policy considerations, creating a need for a broader view for public Finance (the new public finance).

National policy choices and decisions are determined by among other considerations, “public (social) goods. In a globalized world, we are increasingly hearing of the concept of “global public goods” which include several issues such as health, environment/global warming, security/terrorism, global financial stability, etc. By the end of the lecture we should grasp the complexity of providing such global public goods in the absence of a global government (with many sovereign nations), and also the fact that the global mobility of capital and labor are decreasing the degree of latitude in policy making for national governments (like the US). How should such goods be financed in the absence of global taxation? How are nations and institutions responding to these issues?

As you think about this section, consider what responses various theorists we have discussed in class so far would provide to Globalization.

Good weekend

In economics, miscellaneous, statistics on January 30, 2009 at 10:29 AM

A little later today, Joshua will be uploading the question for the short essay assignment. I am looking for a paper that is between 700-1,000 words in length, double-spaced, and APA format. The due date is February 11. You can hand it in before class by emailing it to me or you can give it to me in class.

I came across this interesting article on income inequality. The article basically documents the redistribution that has been occurring since the 1970s, which has seen income flow increasingly to wealthy Americans. The authors note that “Excluding capital gains, the richest one percent claimed 17.4 percent of all pre-tax income in 2005, more than double what that figure was in the 1970s. (It bottomed out at 7.8 percent in 1973.) This is the greatest concentration of income since 1936, when the richest one percent received 17.6 percent of total income.”

The article, which is found on (a project of Demos and the Institute for Policy Studies) is chock full of graphs and tables that underscore the massive transfer of wealth from middle-income and lower Americans to the well-to-do. There is also an excellent section at the end that takes the reader to the original sources for the data.

We will be discussing income inequity in some detail in a couple of weeks. This article will serve as a good backdrop for that discussion. One thing to keep in mind as you are thinking about income inequality is “How much of this transfer of wealth is a result of public policy?” “If much of the redistribution is the consequence of public policy, how much of it was supported by the voting public?

This is a Test Post

In miscellaneous on January 29, 2009 at 10:05 AM

Testing 1, 2, can you read me?