Royal Wedding

Said Prince William, admiring his commoner,
"Such pageantry's cert'nly becomin' 'er,
As my bride-to-be's hot,
(Though I dare say there's not
As much as some think of my Mum in 'er)."  

Said the Chancellor of England's Exchequer:
"Young prince, have no royal home-wrecker;
For your troth, once avowed,
Brings the touristy crowd
To Big Ben and the red double-decker."  

Commerce takes a holiday in London and Limericks, as the world turns to affairs of the Heart and of State. Britain's Prince William and his fiancée Kate Middleton will join together in holy matrimony at 11:00 AM tomorrow in Westminster Abbey, broadcast live at 6:00 AM in New York and 3:30 PM in Mumbai. In Sydney, it's already over.

Fightin' Words

A woman who loved a good fight
Would demand, as she argued all night,
Philosophical heft
From those on the left
And empirical proof from the right.

A recent walk through the economic blogosphere left the impression that liberals (of the progressive variety, as in this randomly selected post by Paul Krugman) like to base their arguments on data, history and "whatever works;" while conservatives (particularly of the supply side or libertarian variety) seem to prefer philosophy, game theory, analogies or even the US constitution - anything but empirical studies.

QE2's Final Voyage

The Fed sought to raise asset prices
As a way to combat the debt crisis,
And so now we know
Half a trillion or so,
As a stimulus, more than suffices.  


Tomorrow the Fed will announce their follow-up course of action to the second round of quantitative easing, or QE2, which expires in June.  QE2, which comprised $600 billion of Treasury note purchases, was intended to stimulate the economy by increasing liquidity and lowering long-term rates, thereby goosing the appetite for riskier assets. This space is generally supportive of goosing, but notes the uncertain inflationary impact of QE2.

A Taxing Unwillingness

A peculiar American silliness
Is to claim that our taxes are killing us;
When we glob'ly compare,
We pay less than our share,
So it's not that we can't, but our willingness.  

Standard and Poor's, in putting US Treasuries on negative watch last week, noted that the American public sector takes up a smaller percentage of national income than those of other AAA-rated countries. This suggests that the US has the financial flexibility to raise taxes in order to lower the deficit. That's the good news; the bad news is we haven't mustered the political will (or maturity) to do it.

Hat tip to The Economist's Free Exchange blog.

Matzo Madness

A salad bar manager said:
"We give away rolls, but instead,
Let's leaven our margin
A little by chargin'
A dollar for unleavened bread."

Dr. Goose, who - like many economists - celebrates Passover, was surprised to find this week that his local takeout salad place, where bread is a free side dish, charges $1.19 for a matzo. He surprised himself even more by paying it; such is the price of faith.

Happy Holidays to all those celebrating Easter and Passover this week!

Higher Prices In China, Or Abroad?

If, for China to hike the renminbi,
A domestic political sin be,
But yuan 'ppreciation
Would quiet inflation,
Then therein the Yang and the Yin be.

China's Premier Wen Jiabao broke new ground for his government yesterday with a public acknowledgment of the role that a strengthening yuan could play in restraining Chinese inflation. Although the central bank had begun to allow very gradual appreciation of the renminbi ("people's currency") last summer, it has seemed until now that the government's top priority was to check the yuan's rise so as to hold down the prices of Chinese exports. Now however, rising inflation may bring Chinese policy more in line with that favored by competitors such as the USA and Germany. 

If It's Cheap Funding Yuan...

In Beijing they've enabled Hong Kong
To market yuan bonds for a song;
If they let these renminbi
In China, they'll then be
Enabling growth in Guangdong.


The Wall Street Journal reports that China is considering allowing the inflow of yuan that are borrowed in the low-cost financial center of Hong Kong.  This could not only give the domestic Chinese economy the boost of cheaper funding, but also create the first building blocks of an international capital market in their currency.

Happy Tax Day

A thrifty young fellow named Kevin, who
Was filing with Internal Revenue,
When the bottom line showed
All the money he owed,
Admitted: "I'm rich and I never knew."

Happy Tax Day to all those who didn't realize how much money they had until the IRS wanted to take it away from them.

Origin of Language

Before 60 or 70 millennia,
In the gen'ral vicinity of Kenya,
An intelligent word
Was origin'ly heard,
But is long since forgot, as so many ah.  

A new study, published in the journal Science by psychologist Quentin Atkinson of the University of Auckland, theorizes that complex language originated some 50,000 to 70,000 years ago in Africa. This theory is based on the "founder effect," the phenomenon that, when a small group of individuals breaks off from a larger group, the smaller group gradually loses some genetic complexity and variation. If the same holds true for languages, then the fact that those of Africa are the most phonetically complex would indicate that other languages broke away from there.  A fascinating follow-up question is whether anapestic meter comes "out of Africa" as well.