Author: Joshua Hedlund

So That’s Why the Socialist Scandinavians Are Doing So Well

The Economist brings some news from Scandinavia:

Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.

Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.

Most daringly, it has introduced a universal system of school vouchers and invited private schools to compete with public ones…

Continue reading So That’s Why the Socialist Scandinavians Are Doing So Well

Global Climate Snapshot: State of the Planet 2012

2012 has come and gone. It’s time to look at the official data and figure out how alarmed we should be about how warm the planet is getting. To help you with that, I have created the unofficial Global Alarm Bell Index (GAB Index), comprised of a highly scientific mix of seven complicated factors. Let’s begin.

Global Temperatures: 4 Alarm Bells

NOAA declared that 2012 was the tenth warmest year on record. That doesn’t sound too scary, though they are quick to explain that “this marks the 36th consecutive year” of “above average” temperatures, and that only one year before 2000 was warmer than 2012, and that 2012 was the warmest “La Niña” year ever. They also inform us that “record warmth” was observed in many specific areas, while “no record cold regions were observed.”

Most of that data suggests that the planet is warmer than it used to be a few decades ago. But it doesn’t tell us if the planet is getting exponentially warmer, or getting a little bit warmer, or just settling at this “above average” level.

2012-global-temp-anamolyRather than increasing, or even holding steadily, the global temp slope appears to have leveled off since the 90’s. I can slice the data to sound just as un-alarming as NOAA’s alarming slices. NOAA doesn’t tell us that the 10-year moving average of the temperature anomaly (a longer-term trend than any individual year) has now decreased for two consecutive years, the first time this has happened since at least the 70’s. The last ten years (2003-2012) were still warmer than the ten years before it (1993-2002), but by only 0.136 degrees, which is the smallest decade-by-decade increase since 1994.

Temperatures have gotten warmer in the last decade, but at a slower rate than the previous decade. If current trends hold (and of course they may not), the earth will not get any warmer in the next decade. For 2012, I’m giving the Global Temperature Record an arbitrary 4 alarm bells out of 10 for its contribution to the GAB Index.

Continue reading Global Climate Snapshot: State of the Planet 2012

Is The Economy Headed For Good Times or Bad Times?

In one corner, we have the Bulls. “Stocks near record highs.” “Investor risk aversion is disappearing quickly” as “Junk bond yields hit another all-time low.” The housing market is recovering! US unemployment claims are at a 5-year low! Even the deficit is looking optimistic! Etc. Etc. We’ve finally made up for the last few years and are ready to push on towards a bigger and better future!

In the other corner, we have the Bears. “The market has become dangerously euphoric” even as global growth is declining. EU unemployment is still rising. Cyprus is defaulting. Obamacare is not slowing down health insurance costs. US deficits are still over one trillion dollars per year and interest rates are still at zero, and that’s before the next recession hits. Etc. Etc. We’re sitting on top of another artificially inflated bubble that’s about to come crashing down harder than the last one!

Continue reading Is The Economy Headed For Good Times or Bad Times?

The NRA As The Big Bad Boogieman

As the debates about gun laws unfolded after the Sandy Hook tragedy, a lot of people seemed to think there was one particular force standing in the way of real reform. News articles talked about how “The National Rifle Assn. and its allies have successfully kept” reform efforts “at bay for years.” Pundits talked about “the orthodoxy promulgated by the National Rifle Association.” Liberal economists tweeted tirades about the “pricks in the gun lobby who enable this madness.” Even President Obama accused lawmakers of caring more about getting “a A grade from the gun lobby that funds their campaigns.”

All of these people seem to imagine the NRA as this Terrible Necromancer that wields an unjust amount of power with its Magic Wand of Lobbying to prevent the common-sense changes that most people really support to make the world a better place. The accusations carry a vibe similar to the oil industry: If only it wasn’t for that powerful oil lobby, we could take real steps to prevent climate change. If only it wasn’t for that powerful gun lobby, we could take real steps to prevent mass shootings!

Unfortunately, I don’t think this characterization of the NRA as a big bad boogieman has much relation to reality.

Continue reading The NRA As The Big Bad Boogieman

BREAKING: The Federal Reserve Does Not Know Everything

Transcripts have been released from some Federal Reserve meetings in 2007. I haven’t read through any of the hundreds of pages, but the word on the pundit street is that, despite having a lot of information at their fingertips, the Fed kinda didn’t really at all anticipate the big crisis that was about to unfold. Apparently this revelation surprised some of the pundits, but it did not surprise me in the least.

Continue reading BREAKING: The Federal Reserve Does Not Know Everything