Newmark's Door

Public Choice scholars needed

In "Goodbye to Reforms of 2002" Floyd Norris of the New York Times writes:

Sarbanes-Oxley was passed, almost unanimously, by a Republican-controlled House and a Democratic-controlled Senate. Now a Democratic Congress is gutting it with the apparent approval of the Obama administration.

What theory of regulation or public choice gives us that result?

(Not that I'm complaining. Sarbanes-Oxley seems to have been a mostly bad law.)

Some useful background from someone who opposes Sar-Ox.

Absolutely definite evidence the economy's prospects are excellent

Dealbook, New York Times:

Fewer Harvard M.B.A. graduates took jobs on Wall Street this year than in the past as a result of the sharp contraction in the financial services industry. But for Ray Soifer, a former banking analyst and Harvard Business School alumnus, the reduced number of graduates flocking to Wall Street isn’t a bad thing. In fact, it may actually be a positive signal for the market.

People respond to incentives, part I've-lost-count

"Tax refugees staging escape from New York". 1.5 million from 2000 to 2008. "More than 250,000" left for Florida; they were problably "escap[ing]" into retirement.

But the outflow is still impressive and this is rather ominous sounding for New York's fiscal future: ". . . the families fleeing New York are being replaced by lower-income newcomers, who consequently pay less in taxes." 

Now that we're getting to where the rubber meets the road on health care reform . . .

. . . it's worth remembering that our elected representatives have almost always vasting underestimated the cost of health care laws.

"Is Market Efficiency the Culprit?"

Are "our current economic problems . . . due to blind acceptance of the efficient markets hypothesis (EMH)"? Hell, no. Fama and French dispatch that dopey idea quickly and efficiently. 

"Federal stimulus prolonging hard times by delaying state restructuring?"

Philip Greenspun argues "yes".

The stimulus money is apparently not being used to invest in infrastructure that can be used by the future generations who will be paying for it. It is being used to delay restructuring by states whose payroll and pension expenses cannot be sustained via local taxation. The overhang creates fear among private investors. Fear causes them to hold back, thus prolonging the recession, as noted in The Forgotten Man, a history of the Great Depression.

Scott Adams has an interesting suggestion . . .

. . . for health care reform. I'm not at all convinced it's necessary, but at least it's more reasonable--and cheaper-- than many of the ideas proposed:

I think a better role for government would be shining a light on the existing private healthcare plans in a way that would help consumers choose the most economical option. The government did this successfully with the bank loan industry when it required all loans to have an APR, which is a single number that allows consumers to compare one loan to another. Healthcare can't be boiled down to a single number, but I suspect you could come up with a report card and some sort of average cost per subscriber. That way, consumers could shop wisely, and the free market might work the way it is meant to work.

"How People Count Cash"

Now all we need is an anthropologist or somebody to explain the interesting cross-country differences. (Link via Metafilter.)

Capitalism is a wonderful system--yet another example

In this recession there's a lot of vacant space in shopping centers. And merchants are concerned about signing long-term leases.

Answer? "Pop-up" stores.

To highlight its new denim offerings for the back-to-school season, J.C. Penney opened pop-ups at a handful of local malls, including Westfield Santa Anita in Arcadia and Montclair Plaza.

The spaces, which closed in September after a few weeks, featured interactive displays of the department-store chain's jeans. To appeal to tech-savvy teens, the pop-ups would send text messages to compatible cellphones when shoppers came within 35 feet.

Although the pop-ups didn't offer merchandise, getting landlords on board "was a pretty easy sell," said Gretchen Ganc, the chain's corporate strategic planning director.

"It's a win-win-win situation," she said. "It's a win for the customer -- it brings something new and different to the mall; it's a win for J.C. Penney because it allows us to step outside our traditional walls and meet a broader audience; and it's a win for the malls -- it gives them more traffic and a much prettier picture than a boarded-up storefront."

The red states' revenge is coming: "Blue State Exodus"

Joel Kotkin, Forbes 11/3:

Net migration, both before and after the Great Recession, according to analysis by the Praxis Strategy Group, has continued to be strongest to the predominately red states of the South and Intermountain West.

This seems true even for those seeking high-end jobs. Between 2006 and 2008, the metropolitan areas that enjoyed the fastest percentage shift toward educated and professional workers and industries included nominally "unhip" places like Indianapolis, Charlotte, N.C., Memphis, Tenn., Salt Lake City, Jacksonville, Fla., Tampa, Fla., and Kansas City, Mo.

The overall migration numbers are even more revealing. As was the case for much of the past decade, the biggest gainers continue to include cities such as San Antonio, Dallas and Houston. Rather than being oases for migrants, some oft-cited magnets such as New York, Boston, Los Angeles and Chicago have all suffered considerable loss of population to other regions over the past year.

Why? Pay close attention, Blue Staters:

The problem here is more than just too-large government; it lies in how states spend their money. Massive public spending increases over the past decade in California, New Jersey, Illinois and New York have gone overwhelmingly into the pockets and pensions of public employees. It certainly has not flowed into such basic infrastructure as roads, bridges and ports that are needed to keep key industries competitive. [empahsis added]