The Ridiculousness of Politics

David Frum points out that most seniors still net moochers:

Among today's elderly, the great majority will receive more in Medicare benefits than they ever paid in taxes - dependency again. You can do the math for yourself and your parents right here

Romney promises to free the makers from the moochers by reducing transfers to the poor. Unfortunately the actual spending problem is too many transfers to the middle class via Medicare and Social Security (oh and a giant military).

We have a serious entitlement problem. The most serious part is that those who receive the majority of the entitlements in dollar terms have no idea.

To The Apple Fanboys

I read a comment that got me seething  in response to Apple winning their suit against Samsung:

"if you like the way iPhone does things, why don't you just buy an iPhone"

In words even fanboys can understand, the answer to this is:

1. I like pinch to zoom, but I hate iTunes. I'd like an alternative that does that. Overly restrictive patent laws reduce consumer choice.

2. Only Apple wins with restrictive patent laws. EVERYONE else loses. Even Apple Fanboys. This is because Apple is allowed to rest on their laurels instead of coming up with better products to stay ahead of the competition.

*Update: removes non sequitur

And if it's all Structural?

QE3 has been announced. Inflation hawks will no doubt complain that either inflation is just around the corner, or it's already here and the government is cooking the books.

Here's an answer for the cooking the books crowd. If high inflation is here, then since nominal gdp has been growing sluggishly for years, then by definition the real economy has been shrinking. Should the Fed tighten money in a shrinking economy? Most would say no.

The fact remains, that even if inflation is 10%, if real growth is -8% due to structural factors, the Fed will pile on a cyclical component if it allows ngdp to fall. If NGDP is allowed to fall precipitously, then people cannot service existing debt and continue to buy things, resulting in a giant drop in demand on top of the supply limitations.This is on top of the massive unemployment sticky wage/price theories would predict.

In the end I think the Fed should focus on a slow steady growth in incomes: NGDP growth is a pretty good target.