John Irons's Blog


Economic News, Data and Analysis

Stiglitz: No Futures in Terrorism

Stiglitz on the defunct terrorism futures marklet…

Terrorism: There’s No Futures in It
In its own peculiar way, the administration has once again recognized the limitations of markets — as it did with the airline bailouts, steel tariffs and agriculture subsidies. But once again, the lack of intellectual foundation or a firm grasp of economic principles — or the pursuit of other agendas — has led to a proposal that almost seems a mockery of itself.

Filed under: Economics

New Blog in Town

There’s a new blog in town – one of the authors should be familiar to ArgMax readers…

OMB Watch Announces New Weblog

OMB Watch – Federal Budget – Weblog
OMB Watch’s budget group is pleased to announce the launch of a new federal budget “weblog.”
A “weblog,” also known as a “blog,” is a popular term to denote a website (or a portion of a website) that contains short, frequent posts, often containing web links. The entries are usually sorted in reverse chronological order and are often archived by category as well as by date.
OMB Watch’s new weblog will cover a wide range of tax and budget issues, and will be updated throughout the week by OMB Watch budget staff. We hope you will find this to be a useful resource.
The weblog is located at

Filed under: Economics

CBO analysis

Some light reading…
How CBO Analyzed the Macroeconomic Effects of the President’s Budget

Filed under: Economics

Return to Budget Deficits

Yet another insightful article by OMB Watch!
OMB Watch – Interpreting the Return to Budget Deficits

Filed under: Economics

Interest rates to zero?

As somone thinking about applying for a mortgage – I’d love to see this…

Fed Gov. Bernanke sees rates as low as zero if need be – Jul. 23, 2003
Federal Reserve Governor Ben Bernanke said on Wednesday that the central bank would be prepared to cut interest rates all the way to zero if necessary to prevent a fall in inflation.
Speaking to a university audience, Bernanke said if the Fed were to reduce overnight borrowing costs to zero, it would look at so-called nontraditional methods of trying to spur growth, such as buying long-term bonds.
He expressed confidence that those methods would work if the Fed needed to turn to them. But policymakers still appear focused on using their central tool of controlling short-term interest rates for now.

Filed under: Economics

Recession Dating Questions

Some very good questions from a reader.
FYI, the change in the methodology mentioned below, I assume, refers to the apparent de-emphasis of employment and the additional emphasis placed on monthly GDP estimates by Macroeconomic Advisors.
Also FYI, the political question should be raised since the Martin Feldstein, the head of the NBER and a member of the dating committee, was at the Whitehouse, meeting with G. Bush, the day before the committee released the announcement.
Name: Taxed
Email Address:
I, too, heard that news today, but have heard very little opinion as to whether others agree or disagree; especially considering that the NBER has apparently changed their methods of determining the business cycle. Most importantly, I haven’t heard the opinions of other economists on this determination.
So, my question for you is: Do you agree or disagree with the NBER’s assessment and does it concern you that they changed their methodology to make this determination? Also, is there any possibility that there was a political reason, rather than an academic reason, for the change in their methodology?

Filed under: Economics, Economy, Politics, Recession

NBER: Recession is Over

The NBER has announced that the recession bottomed out over a year and a half ago in November, 2001.

Business Cycle Dating Committee – Release
The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in November 2001. The trough marks the end of the recession that began in March 2001 and the beginning of an expansion. The recession lasted 8 months, which is slightly less than average for recessions since World War II.

Filed under: Economics

Federal Deficit well over $400 billion

OMB today released its mid-session review, which updates budget and deficit projections.
The deficit is now projected to be $455 billion (4.2% of GDP) for FY 2003, and $475 billion next year.
The report says that about half of the deterioration since 2001 was due to the weak economy, and about a quarter was due to tax cuts, with the final quarter due to the war and other enacted legislation. These figures are, however, misleading. To the extent that the economic projections were overly optimistic in 2001 (as they turned out to be), the share of the deterioration due to economic factors is overstated.
In addition, it looks like the report is yet again counting on projections of a strong economy to keep the deficit numbers down.
“The Administration’s economic projections for the Mid-Session Review show growth accelerating sharply beginning this summer, leading to more jobs and rising incomes. This projection assumes the economy will be free of significant, new negative economic shocks”
The report also states that “…during the second half of 2003, projected growth in the Mid-Session Review is stronger than in the [previous projection].” In addition, growth is projected to be higher in 2004 and 2005, which, they claim, is a result of recently enacted tax legislation. Finally, the report assumes that the unemployment rate will drop to 5.8% (from the current 6.4%) by the end of the year.
If any of these predictions fail, look for the deficit to increase even more.
Budget Deficit May Surpass $450 Billion (
War Costs, Tax Cut, Slow Economy Are Key Factors

Filed under: Economics

State Supported Colleges and University See Massive Tuition Increases

One of the reasons I’m gald to be out of College.
OMB Watch – State Supported Colleges and University See Massive Tuition Increases
Some of the increases:
* University of Maryland: up to 21%
* Penn State: minimum 9.8% increase
* Ohio State University: 15.4% increase
* University of New Hampshire: 6.8% increase
* State University of New York (SUNY): 28% increase
* Kansas University: 20.7% increase
* University of Wisconsin: between 15 and 18%
* Oklahoma University: 17.5% increase
* Clemson: 18.8% increase
* Rutgers: 9% increase
* University of Illinois: asking for an 8% increase
* Auburn University: 16% increase
* University of Alabama: seeking 16.25%
* University of Tennessee: expected 14% increase
* University of Southern California: 15% increase
* University of Minnesota: 14.7% increase

Filed under: Economics

Behind the Curve

We’ve had three tax cuts in the past three years, all of which were supposed to have stimulated the economy and added jobs.
So what policy do we need now? More stimulus! (or so says Madrickin the NY Times).

Stimulus Should Focus on Jobs

Many people criticized President Bush’s “growth” policies — mostly tax cuts on income and dividends weighted toward the well-off — for providing too little bang for a buck’s worth of stimulus. This seems ever truer.

Given the disturbing state of the economy, a jobs program is what the nation now needs. It might even be just what the electorate wants to hear.

Filed under: Economy, Fiscal Policy, Policy, Politics, Recession