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