It’s the end of the month, and the end of a holiday week. What better time to catch up on a few old stories with new updates?
When is the value of something not its true value? When you’re adding up Gross Domestic Product (GDP) of course. That may sound ridiculous, given that the rise and occasional fall of GDP is the yardstick by which we measure how we’re doin’ as an economy. Isn’t it just the sum total of all the goods and services that we produce?
The short answer is “no”, but the long answer is “yes”. It depends a lot on what you mean by “goods” or “service” or “produce”. If that sounds like a huge amount of fudge for something so important, you may want to just enjoy the chocolate induced coma for a bit. Because some goods, like computers and software, have been falling in price but increasing in potential and quality dramatically for a while. Hardware is “hedonically adjusted” to take care of this, but software isn’t. And that difference might be extremely important.
A storm had been brewing in the North Atlantic, but as of this weekend the clouds had passed over the Irish Sea. As is common with the nasty storms that come from the roiling sea, the landscape was left forever changed – softened, gentler, and deeply appreciative of the all too rare sun.
The storm that passed over Ireland was the debate on whether to enshrine Marriage Equity in the Constitution, a document that has weathered similar storms in the scant 78 years since it was adopted. This time, however, Ireland was changing not just to catch up with the times but to lead them. It’s worth discussing on both sides of the stormy Atlantic and around the world.
The scraggly oak trees intertwine their branches in a tall ceiling that shades the entire drive. Here, the appropriate view of the eternal isn’t blue and bright, but sheltered and close to the ground. The rows of marble and granite dazzled by bright flowers have their own quiet redemption as the slow speed limit and a gentle wave from each passerby gives the setting grace.
This is Oakland Cemetery, Saint Paul’s municipal cemetery, founded in 1853.
Big incentives lure a big employer into town. It’s the dream many rural regions coping with high unemployment and a “brain drain” of their best and brightest long for and have often put up big subsidies to make it happen. Sadly, however, the dream doesn’t last long and many small cities which put their futures on the line saw the big employer move on. We’ve seen this happen for decades, and usually call it “corporate welfare”.
Today is no different, except for one thing – business is moving much faster and the net time from groundbreaking to heartbreaking is only a few years. That was the experience in Dubuque Iowa and Columbia Missouri who spent a total of $84M luring IBM to expand in their towns. Six years on, a struggling IBM has let go of half of their staff in those places.
How effective are these subsidies? And why does this keep happening?
Everyone has the experience at some time. You’ve read a book or seen a movie that you absolutely loved, and you want to tell the world about your new obsession. You might even know someone that you’d love to share this new world with. So you start telling them about the intricate details of the plot and characters and after rambling on and on … and then you see their eyes slowly glaze over. What went wrong? Often it’s that you had suspended your disbelief in something that sounds too absurd to tell easily. It makes sense to you, but the retelling leaves you sounding a bit crazy.
This doesn’t just happen with fiction. A disconnected world requires a lot of suspension of disbelief.
When will the Fed raise interest rates? If you ask investors, the answer is “Not this year”. Bets have been placed on bond futures which imply that the Fed Funds Rate will be no higher than a quarter of a percent at the end of the year – hardly any rise at all.
But if you ask the Fed, it’s going to come soon. Why doesn’t anyone believe them?