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Automobiles
Geneva Motor Show to Showcase Extreme Opulence
From a $3 million special edition Bugatti to a “midrange” $360,000 McLaren, many of the cars unveiled in Geneva will be aimed at the very rich.
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N.Y. / Region
Hoffman Killed by Toxic Mix of Drugs, Official Concludes
The actor Philip Seymour Hoffman was killed after using not only heroin but also cocaine, amphetamines and sedatives, the New York City medical examiner announced.
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N.Y. / Region
Contracts for Milk in New York City Schools Are Flagged
An audit shows no direct evidence of wrongdoing, but the city comptroller said it was curious how four milk distributors won and then delivered on $134 million in school contracts in 2008.
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Business Day
For the Fed, a Recipe for Crisis Without Leverage
Even without the buildup of borrowed money that caused so much instability in the Great Recession, the Fed could find that winding down its stimulus tightens financial conditions much more quickly than it considers desirable, authors of a new paper argue.CBO Mix-And-Match
Floyd Norris makes a really good point in criticizing the Congressional Budget Office;
he argues that the office’s latest budget projections aren’t
consistent. CBO has marked down its expectations for future growth, but
it hasn’t marked down its expectations for future interest rates. And
that leads to excessive fiscal pessimism.
Indeed. CBO seems to think, for some reason, that this represents the new normal:
but that this does not:
You can make the case that US long-term
growth prospects have worsened substantially. But it’s hard to make that
case without thinking that we will be at least flirting with secular stagnation, which will mean persistently very low interest rates.
One way to think about why this matters this
is in terms of the relationship between “r”, the real interest rate, and
“g”, the economy’s long-run growth rate. The extent to which public
debt is a problem depends a lot of this relationship. If r is close to
or even below g, debt is hardly a burden at all; if revenues pay for
non-interest outlays, debt as a share of GDP will steadily erode. Only
if r>>g should we worry about debt spirals and all that.
So what CBO has in effect done is mark down
its estimate of g but not of r. And that’s surely not right. As Floyd
says, we should expect lower g to lower r too. In fact, I think there’s
good reason to believe that a fall in g will reduce r more than one for
one, so that slow projected growth actually reduces the urgency of doing
anything about debt. More about that when I have time to get to it.
Important stuff."
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U.S.
GTT ★
Our quirky, discerning picks for the most interesting things to do around the state this week.
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World
Suicide Bomber Attacks Cafe in the Somali Capital
A suicide bomber drove a car loaded with explosives into a Mogadishu cafe frequented by members of the security forces on Thursday, killing at least 10 people.
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Sports
Bags Barred at Boston Marathon
This year’s Boston Marathon will have a no-bags policy as part of increased security after last year’s deadly bombing.
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Travel
On the Beach, on the Cheap, in Mozambique
A cultural exchange involving pizza and coconut beer and a big directional assist from two children are all part of this Frugal adventure to the country’s southern coast.
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Your Money
Save for Retirement First, the Children’s Education Second
Parents who put saving for retirement ahead of saving for their children’s educations may be doing the best thing for themselves and their offspring.
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N.Y. / Region
Christie Allies Joked of Disrupting Traffic at a Rabbi’s House
Two people who were pivotal in the plan to close access lanes to the George Washington Bridge wrote of creating traffic problems in front of the home of a New Jersey rabbi, documents show.
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World
Lawyers for American Couple Seek Inquiry in Qatar
Matthew and Grace Huang face a verdict soon in the death of their adopted daughter, but they have questioned the results of her autopsy.
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N.Y. / Region
Rift at Jewish School in Manhattan Over Canceled Plan for Israeli-Palestinian Talk
A student group at an Orthodox Jewish school extended an invitation to a Columbia professor to give his views on the Israeli-Palestinian conflict, but the head of the school rescinded it.
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World
Hamas Chases Protesters From Gaza-Israel Border
The group says it is trying to protect those who face Israeli soldiers on the other side of a fence, after two people were killed by Israeli fire this year.
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U.S.
Pivotal Point Is Seen as More States Consider Legalizing Marijuana
A little over a year after Colorado and Washington made the drug legal, more than half the states are considering decriminalizing or legalizing it for medical or recreational use.
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Business Day
Orders for Durable Goods Rose in January
Separately, a report from the Labor Department showed initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 348,000.CBO Mix-And-Match
Floyd Norris makes a really good point in criticizing the Congressional Budget Office;
he argues that the office’s latest budget projections aren’t
consistent. CBO has marked down its expectations for future growth, but
it hasn’t marked down its expectations for future interest rates. And
that leads to excessive fiscal pessimism.
Indeed. CBO seems to think, for some reason, that this represents the new normal:
but that this does not:
You can make the case that US long-term
growth prospects have worsened substantially. But it’s hard to make that
case without thinking that we will be at least flirting with secular stagnation, which will mean persistently very low interest rates.
One way to think about why this matters this
is in terms of the relationship between “r”, the real interest rate, and
“g”, the economy’s long-run growth rate. The extent to which public
debt is a problem depends a lot of this relationship. If r is close to
or even below g, debt is hardly a burden at all; if revenues pay for
non-interest outlays, debt as a share of GDP will steadily erode. Only
if r>>g should we worry about debt spirals and all that.
So what CBO has in effect done is mark down
its estimate of g but not of r. And that’s surely not right. As Floyd
says, we should expect lower g to lower r too. In fact, I think there’s
good reason to believe that a fall in g will reduce r more than one for
one, so that slow projected growth actually reduces the urgency of doing
anything about debt. More about that when I have time to get to it.
Important stuff."
"Mar 2, 10:19 am
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Growth and Interest Rates: I Appear To Be Wrong
In my last post I followed Floyd Norris
in criticizing the CBO, which has marked down its estimates of future
economic growth without marking down its estimates of future interest
rates. I still think that’s a fair criticism. But I also offered a
hypothesis: that interest rates fall more than one-for-one with slower
growth, so that the crucial difference r-g — interest rate minus growth
rate — actually falls, making debt easier, not harder, to handle.
So I’ve taken a quick and dirty look at US
history, and it doesn’t seem to bear my hypothesis out. Here’s actual
r-g — strictly speaking, interest rates minus the rate of growth of GDP
over the previous year — since 1952:
Interest rate minus GDP growth
Postwar US history broadly breaks into two
eras: a fast-growth generation after World War II, and generally slower
growth thereafter. If my hypothesis had been right, r-g should have been
lower in the second era than the first. Well, it looks as if the
opposite was generally true, even if you ignore the spikes around big
recessions.
Now that I think about it, the case of Japan —
although complicated by the zero lower bound — also counts in this
direction: interest rates have been low, but GDP growth even lower.
I still think that a fall in g leads to a
fall in r (as it did in Japan), so that the budgetary implications are
weaker than CBO seems to think. But lower growth does appear to make
debt harder, not easier, to carry."
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Sports
Isles Top Leafs in Overtime; Devils’ Jagr Scores No. 699
The extra period followed a seesaw third period in which the Islanders and Toronto combined for five goals in a nine-minute span.
"CONNECTICUT 72, RUTGERS 35 Breanna
Stewart and Bria Hartley each scored 20 points to help No. 1
Connecticut earn a home win over No. 24 Rutgers and remain unbeaten.
The
victory gave the Huskies at least a share of the inaugural American
Athletic Conference regular-season title. The Huskies (30-0, 17-0
A.A.C.) will play No. 3 Louisville on Monday with a chance to win the
conference championship outright. If Louisville wins, a coin flip will
determine the top seed for the conference tournament.
UConn won the Big East regular-season title 20 times before moving to the A.A.C. this season.
Kaleena Mosqueda-Lewis, who missed the previous four games with mononucleosis, scored 7 points in 27 minutes for UConn.
UConn
held Rutgers scoreless for 5 minutes 20 seconds in the first half and
gradually extended its lead. Rutgers (21-7, 12-5) missed six shots in
that span. (AP)"
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Business Day
SeaWorld Questions Ethics of ‘Blackfish’ Investigator
SeaWorld Entertainment has come under fire after a documentary criticized its practice of holding whales in captivity. Now, the company is firing back.
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World
Kerry Sees Syrian Retaliation Against Rivals in Talks
The State Department said that the government had undermined the negotiations by putting opposition delegates on a terrorist list and seizing their assets.
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Business Day
For the Fed, a Recipe for Crisis Without Leverage
Even without the buildup of borrowed money that caused so much instability in the Great Recession, the Fed could find that winding down its stimulus tightens financial conditions much more quickly than it considers desirable, authors of a new paper argue.
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This may be an expression of greed.
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15
Technology
Engineers Allege Hiring Collusion in Silicon Valley
A class-action suit by Silicon Valley engineers against companies including Google, Apple and Intel has revealed details of an agreement among them not to cold-call one another’s employees.
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Business Day
Orders for Durable Goods Rose in January
Separately, a report from the Labor Department showed initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 348,000.
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Sports
Isles Top Leafs in Overtime; Devils’ Jagr Scores No. 699
The extra period followed a seesaw third period in which the Islanders and Toronto combined for five goals in a nine-minute span.
"CONNECTICUT 72, RUTGERS 35 Breanna
Stewart and Bria Hartley each scored 20 points to help No. 1
Connecticut earn a home win over No. 24 Rutgers and remain unbeaten.
The
victory gave the Huskies at least a share of the inaugural American
Athletic Conference regular-season title. The Huskies (30-0, 17-0
A.A.C.) will play No. 3 Louisville on Monday with a chance to win the
conference championship outright. If Louisville wins, a coin flip will
determine the top seed for the conference tournament.
UConn
held Rutgers scoreless for 5 minutes 20 seconds in the first half and
gradually extended its lead. Rutgers (21-7, 12-5) missed six shots in
that span. (AP)"
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Opinion
Better Lawyering for the Poor
A New York State program will give indigents representation in court while giving third-year students full-time practical training, as well as a useful mission.
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