The Angry Bear

Will North Korea Explode After Biden Becomes President?  This is what was forecast in a column in the Washington Post by Victor Cha. He sees a combination of economic collapse, a massive spread of Covid-19, and a standard desire when a new US president to enter the office to be behind a possible outbreak of military assertiveness, possibly exacerbated by a much more serious collapse of the DPRK economy and society.  I suspect this is overdone, but...

David Hopkins has an interesting take on the failure of Trump’s presidency: Regardless of these challenges, the general verdict on Trump among historians and political scientists, reporters and commentators, and most of the Washington political community (including, at least privately, many Republicans) is guaranteed to range from disappointment and mockery to outright declarations that he was the worst president in American history. And there...

There is evidence from Israel that one dose of the Pfizer vaccine is less effective than was suggested by the few person-days of evidence in the phase III trials. In Israel  “over 12,400 have people tested positive for coronavirus after receiving vaccine shots” Israeli health officials estimate that one shot is about 50% effective after 14 days . The control group is not matched, it’s not a randomized trial, but it is evidence that the second dose...

This is an extended post on the caveat to debt and taxes 1. It is joint work with Brad DeLong and Barbara Annicchiarico. The point is that, in his Presidential Address, Olivier Blanchard notes that the argument that higher debt causes increased welfare is weaker than the argument that it is feasible. The Treasury can afford to increase debt D_t just by just giving bonds away and can pay interest and principal without ever raising taxes so long...

“Restoring Medicaid,” What happens when states switch to Block Grants? I came across a NYT article citing Seema Verma’s approval of the Tennessee’s Block Grant recently. The Tennessee Block Grant is mentioned in section ” Revoke The Block Grant Initiative” of my post Restoring Medicaid. What Are Block Grants? Government funded normal Medicaid has established rules for coverage and benefits. In an exchange for greater freedom offered to...

Good news (industrial production) and bad news (retail sales) This morning’s two reports on industrial production and retail sales for December were a case of good news and bad news. Let’s do the good news first. Industrial production, the King of Coincident Indicators, rose 1.6% in December. The manufacturing component rose by 1.0%. Needless to say, these are strong positive numbers. As a result, overall production is only -3.3% below its...

There might be such a thing as a free lunch. There will soon be a Democrat in the White House and Republicans will soon rediscover their hatred of deficits (which were no problem when they were cutting taxes on firms and rich individuals). We are going to read a lot of arguments about irresponsibly burdening our children with debt (which ignore the fact that they will also inherit most of the bonds). We will be reminded that sooner or later we...

The Federalist Papers #74 on insurrections, treason, and the pardon power: an argument that such pardons would be invalid as “arising in a case of impeachment” The Insurrectionists from January 6 are already asking Trump for pardons. Probably the only thing that would hold him back from doing so is his innate selfishness: what would be the benefit to *him*? The thought that Trump could issue Got Out of Jail Free cards to the very people he...

This is the third post in a series. I will discuss advantages of income taxation different from the obvious advantage that taking from people with high income hurts them less than taking from people with low income. Here again, I will assume that, in equilibrium, income tax is returned to the people who pay it as a lump sum. I do this to focus on the incentive effects of income taxation. The first two posts are here and here. In standard...