It’s been pretty fun to watch the GOP presidential race and all of the non-Mitt-on-Mitt violence going on, as you may imagine. However, never did I expect to hear people like Newt Gingrich and Rick Perry attack Mitt Romney using language that sounds like it would be more at home coming out of the Occupy Wall Street protesters: “vulture capitalist”, “crony capitalism”, and everything else. It’s evident that those barbs are creating some sting, since Romney is firing back that anybody who attacks him for Bain Capital is attacking capitalism itself. I find that particularly odd, especially from a party that essentially takes the opposite approach when liberals attack, for example, guns. Here’s a hint to Romney: you’re not doing it right.

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• Current Mood: Sore
• Currently Listening To: "Long, Long, Long", The Beatles
• Currently Reading: "The Compass of Pleasure", David J. Linden

It may be the night of the Iowa caucuses, but I don’t feel like commenting on the hilarity therein: if you want to read about how Michele Bachmann thinks one of the most important issues facing the U.S. is light bulbs, how Rick Santorum wants to allow states to outlaw birth control, or how Herman Cain thinks he is qualified to be Secretary of Defense because he was on a Navy boat once, there’s plenty of places to do that. Instead, let’s talk about debt!

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• Current Mood: Exhausted
• Currently Listening To: "Take Me to the River", Talking Heads

Congress has capped the interchange fees that banks can collect from retailers for debit card transactions. As a result, some banks are now charging customers directly for the use of a debit card, up to several dollars a month. This has prompted some people to blame Congress for the increase in fees. And while it’s true that Congress did pass the regulation capping interchange fees, this change is a good one, not a bad one.

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• Current Mood: Weekend
• Currently Listening To: "Cosmic Charlie", Grateful Dead

The quickest explanation of why we are in such a huge economic contraction/retrenchment is this: the real estate bubble of the aughts gave more equity to consumers in the form of rising home prices. They turned this equity into cash to fuel their spending. Now the bubble has burst, consumers have more debt than their homes are worth, and so they have cut back on spending and don’t plan on increasing it until they pay off debt. I’m avoiding how the bubble got inflated, who was responsible, etc. for simplicity. It’s boiled down two pretty much one thing: too much debt.

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• Current Mood: Rested
• Currently Listening To: "Young Americans", David Bowie

Unfettered competition is the lifeblood of the free market. So you would expect that those businesses that love the free market would love as much competition as possible, right? Not always. Competition is certainly good for consumers, but more competition is often the last thing that businesses want, precisely because it is good for consumers. Most of the time, despite what businesses may desire, the market is full of competition and the free exchange of information. Take fast food: all prices clearly spelled out, all products clearly described and manufactured, no gotchas. Or most retail. It’s easy to compare products based on price, quality, and preference, and then decide what you want to get. Consumer surplus galore, and we all win!

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• Current Mood: Chilling
• Currently Listening To: "Let It Loose", The Rolling Stones

George Will thinks we need to stop extending unemployment benefits because it just subsidizes unemployment: clearly, those who have been unemployed for 99 weeks are choosing to live off their unemployment checks instead of filling all those empty jobs that are available. Alan Greenspan is warning us that the bond markets are going to put a halt to U.S. borrowing, and the fact that treasury yields have gone down lately is a sign that the problem is even more real than we think. No wonder Paul Krugman thinks that we could be on the precipice of a third Depression.

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• Current Mood: Cybered
• Currently Listening To: "Crosseyed and Painless", Talking Heads

The news is awash with stories about how Wall Street bonuses are reaching all-time highs this year, despite the near-total collapse of the economy last year and the continuing woes in just about every sector except for finance that we are still seeing. It didn’t take long for Wall Street to bounce back from its nadir, and now, buoyed by taxpayer bailouts, they are resuming the party for their employees. Understandably, this has caused outrage among just about everybody who doesn’t work in finance, along with calls to regulate Wall Street pay. But pay regulation misses the point completely, as these huge bonuses are just the symptom of the real problem. To correct the egregious bonuses, you have to solve the underlying problem.

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Well, three actually, but two concepts: Price of Government and Tax Incidence. They are pretty important in understanding Minnesota’s budget and tax issues.

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• Current Mood: Tired
• Currently Listening To: Achilles Last Stand, Led Zeppelin