Rossputin.com: Rational Thinking About Our World

If any of you are interested in receiving short daily or almost-daily emails from Brian Wesbury (mostly about the real economy, economic statistics, financial markets, etc.) and/or from Don Boudreaux (mostly about political economy, economic philosophy, taxation and regulation, etc.), please contact me with your email address and I will ask either or both to add you to their distribution list.

Here are examples of each gentleman's writing.

First, Brian Wesbury:

Fed Makes Emergency Rate Cut
To view the full report, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein - Senior Economist
Date: 1/22/2008

Early this morning, as an emergency action, the Federal Reserve cut both the federal funds rate and discount rate by 75 bps. The funds rate is now 3.50%; the discount rate is now 4.00%. This is the first inter-meeting change in rates since September 17, 2001.

The next scheduled Fed meeting is on January 30th. Unless the stock market is up sharply between now and then, maybe even if it is, rates will be cut again. The Fed is no longer treating the situation like the 1987 stock market crash or the freezing of credit market conditions in 1998. In those situations, the Fed cut by no more than 75 basis points. The Fed is increasingly treating the current situation like the economic slowdown and recession of 2001.

We do not believe the economic outlook is nearly as bleak as the Fed believes and remain very concerned about inflation. That said, the Fed clearly does not share our view.

Please follow the above link to access the entire Research Report

And here's Don Boudreaux:

23 January 2008

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Len Burman proposes to avoid recession by repealing the Bush tax cuts two years early, in 2009 ("Make the Tax Cuts Work," January 23). He asserts that "If people knew that their tax rates were going up next year, they'd work to make sure that more of their income is taxed at this year's lower rates." And investors would "cash out their capital gains now to avoid paying higher taxes later."

Strange argument. First, Milton Friedman's permanent-income hypothesis (which has much empirical support) shows that people spend according to their expected incomes over the long-run. Promising to raise taxes next year, especially because doing so reduces people's future take-home incomes, would do little to promote more spending in 2008. Second, since when is disinvestment - which is what cashing out capital gains amounts to - good for the economy?

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

The one minute a day you might spend reading these guys' work will add to your economic literacy more than any course you took in college.

If you'd like to be added to the list, click on the "e-mail Rossputin" link near the top right of the page and send me a note, or just post a comment to this article. I won't make the comments publicly visible, so you don't have to worry about your email address being viewed by the world.