A Demand and Supply Lesson

A recent NPR report on the changing status of marijuana in California is also a supply and demand story. The story begins in 1983 when the Reagan administration sought to decimate pot production in California. As a result, supply would…

The NYC Economy

With “Law & Order” being canceled by NBC, the New York City economy will feel it. Of course actors are affected but also the caterers who feed them, the stores that sell them the lawyers’ clothing (Barney’s and Saks), and…

The Young Old

Having read that Greek fiscal austerity involves raising their average retirement age from 53 to 67 and that their life expectancy is 79.5 years, I thought of the Social Security Act of 1935 and then 2035. When Social Security was enacted…

Orderly Markets

No one has figured out the cause of the “flash crash”. Some background information might help, though, when we try to understand what happened. On May 6th, the Dow Jones Industrial Average plunged close to 1000 points, then made up some…

A Plastic Penny?

How do you feel about the penny and the nickel? If you care about the federal budget, you might want to mint them more inexpensively. But, if you own a laundromat, you disagree.    Pennies are actually copper coated pieces…

Choosing Means Refusing

In yesterday’s Washington Post, Robert Samuelson reminded us that most developed nations will have a growing proportion of senior citizens. Comparing 2005 and 2030, for Greece, the 65 and older group will increase from 18% to 25%, for Spain, from…

Grading a Country

We could say that the graders of sovereign debt use a “rubric” to decide whether a country has a high or a low score. In the classroom, students are given rubrics which specifically describe how a test is graded. A…

A Water Dilemma

Last week, the Boston area had undrinkable water for several days. Predictably, bottled water sales soared as did bottled water prices in certain stores.  Equally predictably, politicians condemned the increases. Most economists, though, disagreed. As explained by a Boston Globe journalist, price boosters…

Deficits and the Tragedy of the Commons

Pondering Greece, I wondered about the individual and the state.  Sometimes what is good for one person is bad for all.  That took me to a graphic of the federal budget in 2020 in which entitlements, which are good for…

A Contagious Disease

Seeing the Bloomberg Businessweek headline, “Greek Contagion Spurs Surge in Portugal, Spanish Debt Swaps,” I started thinking about diagnosing fiscal illness, treating it, and contagion. How can we diagnose the illness? The illness seems to be the Greek spending disease. Just like you…