John Irons's Blog


Economic News, Data and Analysis

Instant Ben: A Fake FOMC Press Release Generator

Excellent! Click on the link to generate a new release.

Instant Ben: A Fake FOMC Press Release Generator — October 31, 2007

Fake Federal Reserve Release
Release Date: October 31, 2007
For immediate release
The Federal Open Market Committee decided to increase its target for the federal funds rate by 50 basis points to 5 3/4 percent.
The Committee thinks on evenly-numbered days that a miserly stance of monetary policy, coupled with wondrous underlying growth in Tiger Woods game, is providing qualified support to economic activity. However, the precipitous decline of crop-circle incidents has lowered, generally speaking, ethanol prices, increased earnings upgrades, and lowered, generally speaking, equity and debt markets. These developments, along with the neutral stance of monetary policy and ongoing ebbing in wages, should foster moderated economic stability over time.
Although the timing of that decline remains uncertain, the Committee perceives that over the thirty-three seconds the upside and downside risks to the attainment of sustainable growth are not balanced. The Committee believes that, taken together, the balance of risks to achieving its goals is weighted toward ass-kicking growth for the next little while.
Click Fed Chairman Bernanke Ben to create another fake FOMC release!

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Home Prices Are Down, and So Is Confidence

Will be interesting to see if the housing downturn (and financial worries) will show up in tomorrow’s GDP release. In the morning, check in at to see Josh Bivens’ take.

Home Prices Are Down, and So Is Confidence – New York Times

Home prices dropped again in August and consumer confidence remained at the lowest level in two years, reinforcing investors’ bleak expectations for the economy, a new report showed today. The trouble signs came as Federal Reserve policy makers began a two-day meeting that could culminate in an interest rate cut.
The Case-Shiller survey found that prices of homes across 20 major United States metropolitan areas fell 4.4 percent for the 12 months through August, the steepest drop since 2001, when the survey began. The measure, which is released by Standard and Poor’s, is considered more accurate than comparable government reports and offers investors more evidence that the housing sector is facing its worst stretch since the early 1990s.

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A-List Blogs for C-Level Execs

From Conde Nast Porfolio. (This came out in July, but just saw it today…)

A-List Blogs for C-Level Execs – Business Intelligence –

A-List Blogs for C-Level Execs
by Michelle Haimoff/Hannah Trierweiler
We wouldn’t waste your time with anything but the must-reads.
A-List Blogs for C-Level Execs
This economic news, data, and analysis blog was started by John Irons, the director of tax and budget policy at the Center for American Progress. Previously, Irons served as an economics guide at

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What I did this morning…


Monday, October 29
[watch] J.D. Foster, Heritage Foundation, Economic Fiscal Policy Senior Fellow & John Irons, Economic Policy Institute, Research and Policy Director

Topic was Rep Rangel’s tax reform bill.
These call-in programs are useful as a reminder that people don’t think about taxes in isolation (as we economists often do), but rather they fit tax policy into their broader thinking about the world–the show’s callers jumped into all kind of areas including immigration, war on iraq, etc.

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The Truthiness About the Top 1%

Alan Reynolds yet again argues in the WSJ that there has been no increase in income inequality. Most objective observers agree that income inequality has indeed grown, and that the top 1% (and top 0.1%, 0.01%) have all gotten relatively richer than the rest of of us.
A similar column (and other work) from a couple yrs ago did not stand up to scrutiny: See Gary Burtless of Brookings, and Piketty and Saez.
But say he was right – and that pre-tax income inequality was always as skewed as it is today. What does that say about the tax code? Well, it might then say that the top 1% will do fine no matter what the top marginal tax rate is – we’ve had a wide range of top marginal tax rates over the last 75 years. So increasing by a few percentage points would be just fine. Somehow I don’t think he’d agree.

The Truth About the Top 1% –

The Truth About the Top 1%
October 25, 2007; Page A23
Key legislators and presidential hopefuls in the Democratic Party have proposed raising the top two tax rates. They’re also suggesting extra surtaxes for war, for alleviating the Alternative Minimum Tax, for Social Security, and for subsidizing compulsory health insurance. Barack Obama and John Edwards advocate taxing capital gains at 28%; Hillary Clinton favors taxing dividends at the surtaxed income-tax rates.
The argument for these proposals has nothing to do with the impact of higher tax rates on incentives and the economy. It is all about “fairness” — defined as reducing the top 1%’s share of income.
This political exercise invariably begins by citing dubious statistics about pretax incomes among the top 1% (1.3 million tax returns) as an excuse for raising tax rates on the top 5%, among others. Echoing speeches from Sen. Clinton, Business Week recently exclaimed, “According to new Internal Revenue Service data announced last week, income inequality in the U.S. is at its worst since the 1920s (before the Great Depression). The top percentile of wealthy Americans earned 21.2% of all income in 2005, up from 19% in 2004.”
These statistics are extremely misleading.

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Rangel’s Tax Plan

Looks like an ambitious tax plan. The individual side replaces the AMT with a surtax on high-income taxpayers and beefs up the EITC. The corporate side looks like an 1986-style reform – close loopholes in exchange for lower rates.

A Tax Plan as Trial Run for ’09 Law – New York Times

On individual taxes, the heart of his plan calls for eliminating the alternative minimum tax — which was originally created to prevent millionaires from taking too great advantage of tax breaks but now touches people with upper middle incomes and is poised to affect tens of millions of families with incomes as low as $50,000 a year.
Eliminating the alternative tax would reduce projected revenue by almost $800 billion over the next 10 years, according to Congressional estimates.
Mr. Rangel’s bill would also expand some tax breaks for middle- and low-income people. It would increase the standard deduction, at a cost of $48 billion over 10 years. And it would widen the earned- income tax credit, which primarily benefits working single parents with low incomes, to include more low-income workers who do not have children. That would cost $29 billion over 10 years.
To offset the cost of those reductions, the bill would impose a new “replacement tax” for the top 10 percent of income earners who would have otherwise had to pay the alternative minimum tax.
The replacement tax would not apply to couples with incomes as low as $200,000, but aides to Mr. Rangel said many people with incomes as high as $500,000 would still end up with at least slightly lower taxes than under current law.
In effect, the bill would roll back a big part of Mr. Bush’s tax cuts for people with top incomes. In that respect, it is similar to the general positions on taxes that most of the Democratic presidential contenders have taken.

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Fighting fires in Iraq so we don’t have to fight them here

Well, so much for that theory…

Think Progress — CA Guard Warned Of ‘Less Effective Response’ To Fires Due To Equipment Shortages Caused By Iraq

CA Guard Warned Of ‘Less Effective Response’ To Fires Due To Equipment Shortages Caused By Iraq
The San Francisco Chronicle reported last May that the California National Guard had been depleted and warned that severe “equipment shortages could hinder the guard’s response to a large-scale disaster,” such as a “major fire”:
In California, half of the equipment the National Guard needs is not in the state, either because it is deployed in Iraq or other parts of the world or because it hasn’t been funded, according to Lt. Col. John Siepmann. While the Guard is in good shape to handle small-scale incidents, “our concern is a catastrophic event,” he said.
At a press conference five months ago, Gov. Arnold Schwarzenegger (R-CA) echoed these concerns, stating, “A lot of equipment has gone to Iraq, and it doesn’t come back when the troops come back.” The Chronicle reported that the California National Guard was missing about $1 billion worth of equipment.
Now, as 14 major wildfires rage across the state, those earlier warnings are materializing. While California currently has approximately 1,500 Guardsmen serving in Iraq, the strains on the disaster response teams are compounded by the missing personnel and equipment.

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Tax Evasion: Online Only: The New Yorker

DeLong steers us to Surowieki in the New Yorker (online) re: supply siders.
At some point long ago I think people would occasionally use the phrase “supply-side economists” – but now it’s just “supply-siders” — which is much better, since “supply-side economist” has since become an oxymoron.

Tax Evasion: Online Only: The New Yorker

Tax Evasion
The great lie of supply-side economics.
by James Surowiecki October 29, 2007
In American politics, supply-side economics is the monster that will not die. The supply-side argument that, in the United States, tax-rate cuts pay for themselves–that, after cutting taxes, the government actually ends up with more revenue–has little or no support within the mainstream economic profession, and no hard empirical data to back it up. Myriad studies have demonstrated that both the Reagan tax cuts of the nineteen-eighties and the tax cuts put through under the current Administration shrank government revenues and led to bigger budget deficits.
Yet the absence of proof for supply-side theory has not dimmed Republicans’ devotion to it. Last month, President Bush told Fox News that his tax cuts had “yielded more tax revenues, which allows us to shrink the deficit.” Dick Cheney insists that “sensible tax cuts increase economic growth and add to the federal treasury.” Every major Republican Presidential candidate–including John McCain, who actually voted against Bush’s 2001 tax bill–is on the record as saying that tax cuts pay for themselves. And, just last week, a New York Sun editorial published a list of what “the Republican Party stands for.” First on the list? “Reductions in top marginal tax rates . . . lead to greater government revenues in the long run.”

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Age of economics blogs

Looks like I am an econo-geezer. Aaron Schiff’s website — Age of economics blogs

As far as the oldest blog goes, it seems like ArgMax has genuine posts going back to 1997, although they could be articles reposted to the blog, it’s hard to tell. Anyway, this graph shows the trend of the starting month for the 140 blogs in my list. Around 2004 seems like when economics blogging really took off.

For the record, the oldest of the posts on this site (going back over 10 years(!) from May 1997) were written as a weekly or bi-weekly online posting at At the time, there were not really things called “Blogs”, but there were a scattering of online journals and the like (Wikipedia says the term “weblog” was created in December of 1997, adn “blog” in early 1999.) My postings at my previous site would probably be called a blog today. as a separate stand-alone site was started in early 2002 with a variety of services including a continuation of my regular (and irregular) postings.
Thinking back to 1997, I can’t remember if there were other economists who were posting short articles online on a regular basis (though Krugman had a monthly column in Slate starting around that time). And there was little discussion/referrals across websites as there is now (though there were discussion boards, listservs, etc). So, if you consider my earlier stuff a “blog” I suppose I could be the oldest.

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TaxVox: the Tax Policy Center blog

Yet more to read…

TaxVox: the Tax Policy Center blog :: Main Page

View Article Welcome to TaxVox
by Len Burman on Tue 16 Oct 2007 01:00 AM EDT
Welcome to TaxVox, the Tax Policy Center’s new tax and budget policy blog.
We started TaxVox to communicate directly and quickly with an online community interested in fiscal policy issues. We’ll be commenting on federal, state, and local legislation; tax administration; and new research on individual and business taxation. We’ll also have lots to say about the Presidential candidates’ tax agendas.
Our chief blogger is Howard Gleckman, former senior correspondent in the Washington bureau of Business Week, who covered tax and budget issues for nearly 30 years. He plans to post items every few days. Other TPC policy experts will join the fray as well.
We want your comments too. We don’t want TaxVox to be only the voice of the Tax Policy Center. So please help us make it a forum for the entire tax and budget policy community.

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