More Competition

U Chicago economist John Cochrane is now blogging.

A Half Dozen Short Takes

To bring in the New Year, Sunday's NY Times offers up short pieces by all six economics columnists, including yours truly.

The Burden of the Debt

Paul Krugman has several posts discussing the burden of the national debt.  Some readers have asked me for my take on the topic.  Let me refer them to this old paper I wrote with Larry Ball.  It provides a nontechnical overview.  Even though it is 16 years old, I think it holds up pretty well.

Jeremy Stein to the Fed

President Obama has nominated my Harvard colleague Jeremy Stein to become a Federal Reserve Governor.  This is an excellent choice.  Congratulations, Jeremy!

(The President has also nominated Jerome Powell, whom I do not know.)

How do the rich earn their livings?

Here is an interesting paper that answers the question.  Some highlights from Table 3 about the top 0.1 percent:

• 18 percent are financial professionals.
• 42 percent are executives, managers, or supervisors in nonfinancial businesses. More than half of those are in closely-held (presumably often small) businesses.
• 7 percent are lawyers.
• 6 percent are in medicine.
• 3 percent are in arts, media, or sports.
• Less than 1 percent are professors or scientists.  :(

I win a journalism award

Sort of.  NY Times blogger Gene Marks puts one of my columns on his list of the Best Reads of 2011.

I wish you all a Merry Christmas, and also a New Year full of miracles

Why, who makes much of a miracle?
As to me I know of nothing else but miracles,
Whether I walk the streets of Manhattan,
Or dart my sight over the roofs of houses toward the sky,
Or wade with naked feet along the beach just in the edge of the water,
Or stand under trees in the woods,
Or talk by day with any one I love, or sleep in the bed at night
with any one I love,
Or sit at table at dinner with the rest,
Or look at strangers opposite me riding in the car,
Or watch honey-bees busy around the hive of a summer forenoon,
Or animals feeding in the fields,
Or birds, or the wonderfulness of insects in the air,
Or the wonderfulness of the sundown, or of stars shining so quiet
and bright,
Or the exquisite delicate thin curve of the new moon in spring;
These with the rest, one and all, are to me miracles,
The whole referring, yet each distinct and in its place.

To me every hour of the light and dark is a miracle,
Every cubic inch of space is a miracle,
Every square yard of the surface of the earth is spread with the same,
Every foot of the interior swarms with the same.
To me the sea is a continual miracle,
The fishes that swim--the rocks--the motion of the waves--the
ships with men in them,
What stranger miracles are there?

-- Walt Whitman

The Ron Paul Portfolio

As reported by the Wall Street Journal:

Most members of Congress, like many Americans, hold some real estate, a few bonds or bond mutual funds, some individual stocks and a bundle of stock funds. Give or take a few percentage points, a typical Congressional portfolio might have 10% in cash, 10% in bonds or bond funds, 20% in real estate, and 60% in stocks or stock funds.

But Ron Paul’s portfolio isn’t merely different. It’s shockingly different.

Yes, about 21% of Rep. Paul’s holdings are in real estate and roughly 14% in cash. But he owns no bonds or bond funds and has only 0.1% in stock funds. Furthermore, the stock funds that Rep. Paul does own are all “short,” or make bets against, U.S. stocks. One is a “double inverse” fund that, on a daily basis, goes up twice as much as its stock benchmark goes down.

The remainder of Rep. Paul’s portfolio – fully 64% of his assets – is entirely in gold and silver mining stocks....

At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.

The secret is out

Click on image to enlarge.

Lessons from 2011

As seen by Olivier Blanchard.

Holiday Gift Suggestions

If you are looking for gift ideas for that special econonerd in your life, let me suggest a couple of books I recently enjoyed:

1. Grand Pursuit: The Story of Economic Genius by Silvia Nassar.
2. Boomerang: Travels in the New Third World by Michael Lewis.

Both are intelligent, well written, and fun.

A Family Holiday Trip to NYC

I just returned from New York City.  My wife, three kids, and I went down to the city for a couple days, mainly to see the Broadway show How to Succeed in Business Without Really Trying before Daniel Radcliffe and John Larroquette step down from the lead roles.

It was much fun.  Daniel Radcliffe in particular was fantastic.  He provided the Mankiw family much consumer surplus.

his and hers wooden peg dolls

I assume you've all seen the adorable wooden doll projects at Lil Blue Boo?  (They are plastered all over pinterest.)

Back in November, Ashley posted her Box o' Princesses and Boyville projects, and they have been on my mind ever since.  Luckily my mom also wanted to make them, so we each painted a couple of sets while she visited.  I know I wouldn't have gotten around to making them without her motivation, so thanks, mom!

First up, the boys:

I expanded the boy's set a bit to include a few more characters.  If Ruby received eight dolls and Oscar only received four, he would not be pleased.   Even with equal sets, I am still anticipating a lot of stealing between them.

My favorite boy dolls are Obi Wan Kenobi and Darth Vader (although Buzz and Woody are a very close second).   Oscar is borderline obsessed with Star Wars.  He's only seen Episode One (which pains Jared to watch), but he thinks anything Star Wars is just the greatest.

I sanded down toothpicks and painted them as light sabers.  They are super-glued to the dolls for safety, so hopefully Oscar isn't disappointed that they aren't functional.

On to the girls:

This set is the same group of princesses that Ashley made, but I tried to add my own flare to each of them.  My kids are young, so to avoid a choking hazard, I purchased bigger wood people (they are all 3 1/2 inches tall).  The larger sized dolls made it easier to add a few extra details.

My favorite ladies are Ariel, Tiana and Cinderella.  I used Martha Stewart glitter paint in silver to add sparkly scales to Ariel's fin.   Cinderella's dress was painted with Martha Stewart pearl finish paint in "aquarium" - it turned out so perfectly shimmery (I just love the MS line of craft paints!).  I didn't use any special paints for Tiana, but she sure has a fun dress.

I'm not going to lie, these dolls took a bit of time to paint.  It's not an easy project to churn out in one night!  But I sure am excited for Oscar and Ruby to open them on Christmas day.  Hopefully they will enjoy playing with them.  If so, it will give me an excuse to make more.  I'd love to add a doctor, fireman, ballerina ... peg people are fun!

Have you made any homemade gifts for Christmas this year?  I know it is only a week away, but I still have four projects on my list.  Yikes.

wood source:  I ordered my 3 1/2 inch peg people from Casey's Wood, and have always had a good experience with their products.  However, Ashley linked to a different shop, Woodworks Ltd., and they have slightly lower prices - I can't speak for the quality.

Is modern capitalism sustainable?

My Harvard colleague Ken Rogoff gives his answer.

Are economists selfish?

Yoram Bauman takes up the question in a NY Times opinion piece, based on his research.  In essence, he finds that being an economics major and taking classes in economics are negatively correlated with how much students donate to two particular charities: WashPIRG and Affordable Tuition Now.

I agree with Yoram's concluding sentence: "Learning about the shortcomings as well as the successes of free markets is at the heart of any good economics education, and students — especially those who are not destined to major in the field — deserve to hear both sides of the story." 

Yet I am not persuaded by the evidence he gives that economics classes are failing to do that.  Maybe, having heard both sides of the story, the students make better decisions, just not the ones that Yoram appears to approve of!  Perhaps the students were persuaded by this famous insight: "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." 

And no, that is not Gordon Gekko.

Books on Inequality

Recommendations from MIT's Daron Acemoglu.

Shiller on Neuroeconomics

Bob describes the research frontier at the border between economics and brain science.

no-mess glittered ornaments

One of my personal Christmas traditions is that I like to make a few new ornaments for my tree each year.   They almost always involve glitter.  I was talking to my sister earlier today and she remarked that if she could find a way to work extra glitter into every season, it would make her life a little happier.  I agree completely - glitter makes me happy.

This year I still got the glitter I love without the accompanying mess.  These kid-friendly (i.e. non-breakable) ornaments are made with wood discs and glittered cardstock.  They are totally low-fuss, low-mess, high-sparkle.  You should be able to find all of the supplies at your basic craft store.

First I used a small amount of hot glue to adhere a ribbon loop to each wooden disc.  Then I glued my cut paper to on each side of the disc using Mod Podge.  I used my Silhouette Cameo to cut the glittered circles and little shapes, but you could just as easily use a paper punch, or even cut them out by hand.

It wasn't long before I had a large set of glittery, festive new ornaments.

They really shine against the lights of the tree.

I also made a set of ornaments with my family's initials.  They found a home on our newly decorated mantel (which also features glittered trees, a holiday book wreath, and felt candy cane garland from crafts of Christmas past).

I hope you have had a very merry December so far!  We've been battling sickness at my house.  A week after Cora was born, my husband came down with shingles and then Oscar and Ruby both caught chicken pox (and yes, they were both vaccinated).  Talk about the worst transition period, ever.  I wouldn't have gotten through it without my mom being here, continually saving the day!   It looks like things are on the upswing now, though.  Keep your fingers crossed for me that this little sweetie remains chicken pox-free, would you?

This Year's Nobel Lectures

From Tom Sargent and Chris Sims. Starts at about the 10:00 mark.

Steve Marglin on Heterodox Economics

This is a talk from a few days ago, as part of the "Occupy Harvard" movement. Steve says a lot of interesting things here, and I agree with more than many in the audience might suppose. A main disagreement I have with Steve is pedagogical. I believe his critiques of mainstream economics should be presented after students have had a standard course like ec 10. That is, I would suggest Steve aim his course at sophomores rather than freshmen. If he did, he could attract a lot of economics majors who had just finished ec 10, rather than nonmajors who are avoiding it.

Coffee and the Age of Reason

Taylor versus Krugman

1. John summarizes a recent Hoover conference on restoring robust economic growth.
2. Paul is annoyed at John.
3. John is annoyed at Paul.

The Education of the One Percent

The case for graduate school:

Apart from their bank accounts, Gallup finds education to be the greatest difference between the wealthiest 1% of Americans and everyone else. The Gallup analysis reveals that 72% of the wealthiest Americans have a college degree, compared with 31% of those in the lower 99 percentiles. Furthermore, nearly half of those in the wealthiest group have postgraduate education, versus 16% of all others.

A Discussion of Inequality

A recording of a recent panel at Harvard's Kennedy School, including my economics department colleagues Larry Katz and Ed Glaeser. It takes over a hour.

Eichengreen on U.S. Fiscal Policy

Barry writes:

Given low interest rates and the still-weak U.S. economy, it will be tempting for the U.S. government to continue running deficits and issuing additional debt. At some point, however, investors will recognize this behavior for the Ponzi scheme it is.

Continue reading here.

15 Years Later

It was fifteen years ago today that Fed Chairman Alan Greenspan gave his famous "irrational exuberance" speech, which suggested that U.S. equities were overvalued. 

Between then and now, on an annualized basis,

• the return on the U.S. stock market has been 5.55 percent.
• the return on the U.S. bond market has been 5.98 percent.

Score that as one point for Alan.

Sargent and Sims

There is a nice profile of the new Nobelists in today's NY Times.  Here is an excerpt for my army of ec 10 teaching fellows (and for teachers of introductory economics everywhere):

Economics, rather than politics, became his life’s work partly because of an inspiring teaching assistant named Jerry Kenley. Fifty years later, sitting in his office at N.Y.U., Mr. Sargent remembers his old T.A.  

“Jerry liked to say, ‘Economics is organized common sense.’ I still think that’s about right,” Mr. Sargent says. Those early classes touched on everything from farm subsidies to taxation. “Wow, it really got me going,” he says.

My View of the Ec 10 Walkout

Click here to read my column in Sunday's NY Times.

Death to Pennies

A theme I have written on before. Hat tip to Alex Tabarrok.

Is my ideology that obvious?

A perspective on the Ec 10 walkout from Connel Fullenkamp, a former student who now teaches at Duke:

I really don’t think that Professor Mankiw was trying to brainwash his students with any conservative ideology or agenda. I make this statement based on my own experiences.... I was a teaching assistant for Mankiw’s first-year Ph.D. course in macroeconomics for two years, which means that I sat in on his entire course twice.

If there’s any strong ideological undercurrent in Mankiw’s teaching, I would say that it’s Nerdism: the belief that people should listen to, and learn from, nerds.  Because believe me—and I say this with genuine respect and affection—Mankiw is a nerd’s nerd.

The Draghi Deal

If I understand the news coming out of Europe correctly, the new head of the European Central Bank is offering a simple deal: If fiscal policy becomes hawkish, monetary policy will be dovish.  In other words, as government spending is cut to put European governments on a sounder financial footing, monetary policy will do its best to ensure that any adverse impact on aggregate demand is kept to a minimum. 

That seems a sensible compromise, given all the competing risks.  Indeed a similar deal might well make sense for the United States.

My more liberal friends argue, based on Keynesian principles, that we need dovish fiscal policy as well.  They often argue for short-run fiscal expansion coupled with long-run fiscal contraction. The problem is that fiscal policymakers cannot bind their future selves. It is hard to make commitments to future fiscal contraction credible, especially as short-run actions expand the budget deficit.

My more conservative friends argue, based on monetarist principles, that a dovish monetary policy risks future inflation.  In my view, however, there are bigger risks than inflation just now.  They include prolonged high unemployment and meager growth.

So I see Draghi as a fiscal hawk and monetary dove (at least under present circumstances).  I wonder, which U.S. central bankers are in the same camp?

It's all Ben's fault!

Have lunch with me

To current ec 10 students (only):

I will take up to ten students out to lunch after Wednesday's lecture at Yenching, my favorite Chinese restaurant in Harvard Square. Email me if you are interested in joining the group. First come, first served.

Richard Epstein on Inequality

Watch on PBS. See more from PBS NEWSHOUR.

What Milton Friedman might say to the Occupy movement

Some classic clips.  Thanks to Mark Perry for the pointer.

happy thanksgiving!

Today I am thankful for my family, especially healthy babies, modern medicine, and my sister-in-law's delicious chocolate pie.

Speaking of babies ... remember how I just had one?  Without further ado, I'd like to introduce Cora Margaret:

Cora is such a peaceful, sweet baby.  We just love her!  I was so worried about Ruby (a.k.a. "the brute") using her muscles on the baby, but so far it is just hugs and kisses all around.   Oscar, of course, is smitten as well  (it probably helps that she looks just like him).

We had a few hiccups in the hospital, so it has taken me longer to get back to the computer.  Between needing to recover and the holidays coming up, posting is going to be really light around here for the foreseeable future.  But can you blame me?  We are all super busy snuggling Cora.

For Thanksgiving, I crocheted Cora a silly turkey drumstick hat:

Funny, right?  After seeing it on Pinterest, I just couldn't resist!   I made up the the pattern as I went along and didn't write it down, so I don't have instructions to share with you.   You might be able to find a crochet turkey leg pattern online, and just add it to a simple hat.  After the holiday, I think I might take the drumsticks off and add some teddy bear ears for a more useful everyday hat.

At first it seemed like Cora really liked it:

But then she started making sour faces at me:

One-week-olds are so fickle.  :)

In completely unrelated news ...

I have a Black Friday Deal to share with all you Silhouette fans.  Silhouette is having a great Black Friday sale where everything in the online store (except the CAMEO, subscriptions, download cards, and gift cards) is 30% off.  You can get an extra 10% off using the online code, JILL, for a total of 40% off!

Also, the CAMEO will not be found in the regular online store, but you can find it on the "secret" Black Friday Page.  The Cameo is not 30% off, and my extra code will not apply, but it will be nicely discounted. The Black Friday Cameos are expected to sell out fast.

All shapes will be 50% off.

The Black Friday sale starts at 12:01 a.m. (MST) on Friday, November 25th.  Codes will be valid through the 28th.

Happy shopping!

Thanksgiving Shopping Advice

Don't overemphasize local foods. 

And tomorrow, be grateful to the principle of comparative advantage.

Advice for Lost Graduate Students

From Ariel Rubinstein.

Polling Economic Experts

Chapter 2 of my favorite textbook has a table showing various propositions about which economists largely agree.  It is based on the published results from several surveys.  A new project by the IGM Forum is now regularly polling a diverse group of top economists on a variety of policy-related questions.  It is a good way to see whether a professional consensus exists.  You can follow the project by clicking here.

If you are curious, I declined being a member of the panel, mainly because time is scarce.  Moreover, I have various other ways to let my opinions be known.

Straight No Chaser

Last night was date night. My wife and I went to a concert by Straight No Chaser, the a cappella group famous for its rendition of the Twelve Days of Christmas.  The tickets were a gift from our daughter.  Thank you, Catherine.

The concert was terrific! A wonderful mix of music, from traditional holiday songs to Elvis Presley and Lady Gaga. You can find out if they are giving a show near you by clicking here.

The View from Penn (a shameless plug)

My favorite textbook is used at the University of Pennsylvania.  The student newspaper writes:

[Mankiw's] textbook, Principles of Economics, has sold more than one million copies worldwide. It is used in his own class and in Economics 002, Introduction to Macroeconomics, at Penn. The class, taught by Luca Bossi, enrolls about 200 students in the fall semester and 500 in the spring. 

Bossi chose the textbook because he believes it is one of the best introductory macroeconomics texts available in the market. He adds that the material is “clearly explained” and does not contain any partisan slants. 

“I think the fact that Professor Mankiw has advised and still is advising Republican candidates running for office gives the impression to people that he is a conservative in the way he approaches economics,” he said. However, this “is not reflected in the content of the book.”

Ugly Discrmination

Chapter 19 of my favorite textbook has a case study on the economics of beauty, highlighting research by economist Dan Hamermesh.  So I thought some blog readers might enjoy this Daily Show clip featuring Hamermesh and his work on this topic.

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

The British 1 Percent

This figure, via Paul Krugman, shows the income share of the top 1 percent in the United Kingdom.  The broad pattern is very similar to what U.S. data shows.  The figure suggests that the explanation of growing inequality over the past several decades cannot be U.S.-specific but must have broader applicability.

You can generate more plots like this here.  You find a similar U-shaped pattern in Australia, Canada, Ireland, and New Zealand but much less so in France, Germany, Japan, and Sweden. Might the rising share of the top 1 percent be related to the increasing use of English as a global language?

bringing home baby - she'll probably need something to wear

Unbelievably, the week has already arrived when we get to welcome our new baby - we'll meet her on Friday!  Some of my friends started asking about her "coming home" outfit, and I realized I didn't have anything planned.  Come to think of it, I have never planned a special coming home from the hospital outfit for my own kids.  I'm not super sentimental about that kind of stuff.  But this baby needed something, poor third child that she is.

First, I made her a really simple knot-top cap.  It is modeled after my favorite store-bought newborn cap that I bought for Oscar years ago.  I sketched out a simple template for you, which you can print out HERE.  You'll need to cut two pieces of stretchy knit fabric from the template, and then another rectangular piece for the border at the bottom.  I cut my border piece to 3 inches tall, and double the width of the bottom of the template piece.  I'm not going to go into detail how to piece it together, but Make It and Love It has a really great baby hat tutorial that should give you a pretty good idea.  Keep in mind that her hat brim folds up, but mine does not.

I also have basic instructions for a really easy baby hat from a t-shirt sleeve from my early sewing days - you can find it HERE.

Besides long sleepers, my favorite newborn clothes are the basic kimono-style snap shirts you can buy in packs.  I even did a tutorial a few years ago about how to dress one up with ric-rac and some pretty buttons (find it HERE). For this shirt, I simply added a lace trim around the shirt's opening - really easy, really fast.  This is actually the exact shirt that Oscar wore home from the hospital, and possibly Ruby, too (I don't actually remember what I put her in).

So there you have it, possibly the easiest coming home from the hospital outfit, ever.  Add a pair of leggings and some cute socks, and you're all set.

The Long, Sad History of Industrial Policy

Solyndra is only the latest chapter.

Supply-side Policies as a Way to Boost Aggregate Demand

A new paper from the Philadelphia Fed makes an important point:

This paper examines how supply-side policies may play a role in fighting a low aggregate demand that traps an economy at the zero lower bound (ZLB) of nominal interest rates. Future increases in productivity or reductions in mark-ups triggered by supply-side policies generate a wealth effect that pulls current consumption and output up. Since the economy is at the ZLB, increases in the interest rates do not undo this wealth effect, as we will have in the case outside the ZLB. We illustrate this mechanism with a simple two-period New Keynesian model. We discuss possible objections to this set of policies and the relation of supply-side policies with more conventional monetary and fiscal policies.

On Leverage and Financial Regulation

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

A Profile of Daniel Kahneman

By Michael Lewis.

Darkness in Europe

Berkeley economist Barry Eichengreen surveys the situation.

A Profile of OWS

A Harvard colleague recommends this article on Occupy Wall Street.

Input from Cornell

A student defends mainstream economics and endorses my favorite textbook:

Having used Mankiw’s textbook in an Introductory Economics class at Cornell, I can attest to the fact that the book lays a thorough and necessary foundation upon which to continue the study of economics and outlines the basic economic principles through which we understand much of our economy and society.

Why I am waking up so early

I am scheduled to be on Fox and Friends this morning.  The hit will be around 6:50 am, if you are awake, curious, and happened to be near a TV.

Update: Here is the clip.

What would John Maynard Keynes have said about Obamacare?

It is impossible to know, of course, but this passage from an open letter Keynes wrote to FDR in 1933 offers some hints (emphasis added):

You are engaged on a double task, Recovery and Reform;--recovery from the slump and the passage of those business and social reforms which are long overdue. For the first, speed and quick results are essential. The second may be urgent too; but haste will be injurious, and wisdom of long-range purpose is more necessary than immediate achievement. It will be through raising high the prestige of your administration by success in short-range Recovery, that you will have the driving force to accomplish long-range Reform. On the other hand, even wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action, before you have had time to put other motives in their place. It may over-task your bureaucratic machine, which the traditional individualism of the United States and the old "spoils system" have left none too strong. And it will confuse the thought and aim of yourself and your administration by giving you too much to think about all at once.

I know that some people would dismiss this appeal to the "confidence fairy," but clearly Keynes was a big believer in her importance to the short-run business cycle.

Race Against the Machine

MIT economist Erik Brynjolfsson emails me:

I agree with your recent blog post that "the timing suggests that the two trends--the increasing value of education and the rising share of the top 1 percent--may be related." But how are they related?  I think the biggest single factor is the digital revolution, which is boosting the economy and benefitting you, me and Paul Krugman, while leaving many people behind.  The median worker's skills and our institutions aren't keeping up with accelerating technological change.

I discuss this in my very short new ebook (about 20,000 words) with Andrew McAfee called "Race Against the Machine: How the Digital Revolution Accelerates Innovation, Drives Productivity and Irreversibly Transforms Employment and the Economy".  In it, we seek to reconcile the fact that the 2000s has been the best decade since the 1960s for productivity growth, better than the roaring 1990s even. And yet median wages have largely stagnated and employment actually has fallen since 2000. We attribute this in part to the fact that tech. progress is driving productivity even has it leaves many types of workers behind.  In fact, a large group has been made worse off, even as those with education and talent have gained immensely, and opportunities for entrepreneurs are better than ever.  In my judgment, the underlying trends are on track to accelerating in coming years.

Educating Oligarchs

In a couple of recent posts (here and here), Paul Krugman claims that it is just wrong to think that increasing income inequality is largely about education, because much of the income gains have accrued to the very top of the income distribution--the much discussed 1 percent.  Instead, he says, increasing inequality is about the growing influence of oligarchs.

I have been puzzled by Paul's argument.  My initial reaction was that it struck me as a non sequitur.  Even if the income gains are in the top 1 percent, why does that imply that the right story is not about education?

I then realized that Paul is making an implicit assumption--that the return to education is deterministic.  If indeed a year of schooling guaranteed you precisely a 10 percent increase in earnings, then there is no way increasing education by a few years could move you from the middle class to the top 1 percent.

But it may be better to think of the return to education as stochastic.  Education not only increases the average income a person will earn, but it also changes the entire distribution of possible life outcomes.  It does not guarantee that a person will end up in the top 1 percent, but it increases the likelihood.  I have not seen any data on this, but I am willing to bet that the top 1 percent are more educated than the average American; while their education did not ensure their economic success, it played a role.

Let me give you a couple examples.  I am comfortably in the top 1 percent.  I believe that Paul, with his Princeton professorship, regular Times column, speaking fees, and moderately successful textbook, is there as well. I suspect (although cannot prove) that if he and I had stopped our educations after finishing high school, we would not have been anywhere near where we are in the income distribution.  If that is correct, might it be better to think of education as the key rather than focusing on the growing influence of oligarchs?

I am inclined to think that education is important here in part because the large increase in the share of the top 1 percent from the 1970s to the present occurred together with the increase in the rate of return to education during this period documented by labor economists.  It is possible, of course, that the the two phenomena just happened to occur simultaneously.  But the timing suggests that the two trends--the increasing value of education and the rising share of the top 1 percent--may be related.

Addendum: Here is a related old post.

a very halloween birthday

I'm sure by now you are all sick of hearing about Halloween, but I had to share a few more photos of Oscar & Audrey's double birthday party.  My friend, Sonja, and I put so much work into it, but it was such a great time!  Both of the birthday kids were in Halloween heaven.

I wish I had taken more photos of the decorations!  Sonja's house looked awesome - she made several cute felt buntings, including the bats pictured above.  There were also decorated lanterns, lots of bat silhouettes, and a gigantic yarn spiderweb that covered an entire wall in her hallway.

I made a simple cake (vanilla with blackberry filling and chocolate frosting), and decorated the top with cardstock cutouts to look like a haunted house, or "house of spooks" as Oscar called it.  Sonja made yummy nutella mini cupcakes, decorated with the cupcake toppers.  Sonja's husband, Jake, cooked up a delicious dinner of pulled pork burritos with all the fixings, and we also had clementines dressed up as jack-o-lanterns, spooky mummy sugar cookies on a stick, cookie bones, and brownies with cute jack-o-lantern wrappers (there was no shortage of treats).

Since the kids were mostly 3-years an under, we kept the activities simple.  After handing out the treat bags Sonja and I made, we sent them on a mini trick-or-treat to the doors inside her house.  The kids received stickers, spider rings, a piece of candy, and a pumpkin-wrapped brownie.  Afterward, we sent them outside to break open a pinata to fill their bags with a few more treats.

We ended the evening with cake, of course.  After Audrey beat Oscar to the punch of blowing out the candles, we re-lit them at least five more times.  I hope they got all their wishes in.

You can find many of the ideas and tutorials from projects mentioned above linked on my Halloween Party Pinterest Board.

I speak with NPR

ruby's wonder woman costume

Hello! You'll find me over at Lil Blue Boo today, sharing a bit more about Ruby's Halloween costume.

If you aren't already keeping up on Ashley's story, you'll want to check out her posts on her recent battle with cancer.  I've always admired Ashley's work, but even more I admire her positive attitude and tenacity.  She is truly an inspiration, and it sounds like things are finally turning around for the better.  Hurray! 

Keep fighting, Ashley!  We love you.

Occupy Wall Street comes to Ec 10

The Harvard Crimson has the story.  Ironically, the topic for today's lecture is the distribution of income, including the growing gap between the top 1 percent and the bottom 99 percent.  I am sorry the protesters will miss it.

Updates:

1. The open letter that attacks ec 10.
2. A student comes to ec 10's defense.
3. Here's what happened: About 5 to 10 percent of the class participated in the walk-out. At the same time, some previous ec 10 students came in to sit in the lecture as counter-protesters. The lecture then proceeded as planned.
4. The Crimson offers an editorial on the protest.

The Distributional Effects of the Perry Plan

...as estimated by the Tax Policy Center.

Try This One

Source.

halloween costume parade

Happy Halloween!

We had such a fun time at Oscar's birthday party this weekend - I have tons of photos, but I still need to go through them, so I'll share party details later this week.

Meanwhile, want to see all of our costumes? 

I made Jared a quick and easy robot costume by covering a large cardboard box in silver duct tape and cutting a bunch of vinyl decals with my Silhouette machine.  He really hates dressing up for Halloween, but he was sweet to humor Oscar (and me) for the party.

You've already seen Oscar's pumpkin costume.  It was too hot on Saturday to stuff him full, but we might try that for trick or treating tonight.  He was such a happy birthday boy.  The ear-to-ear smiles he wore all night made all the party prep worth it.

I made a pregnant pumpkin shirt with a simple freezer paper stencil and the new Martha Stewart Glitter Paint.   Not an elaborate costume, I know, but it was about all I could muster and it made Oscar happy.  We felt like a pretty cute pair of pumpkins. 

Here's our happy gang all together.  Ruby was Wonder Woman, and I am thrilled with how her dress came out.   She even wore the accessories happily, which was a miracle.   I'll post more on her outfit later.

I also made the costume for our friend Audrey (Oscar's party companion), as her birthday present.  She loves Beauty and the Beast, so I made her a Belle dress using the Crafterhours tutorial again.  Her baby sister wore Ruby's old Belle dress, so we had two little princesses running/crawling around the party.

I hope you have a very happy and safe Halloween!  Don't make yourself sick with candy.  :)

Here are the kids' costumes from previous years:

2010:  Skeleton and Baby Aerobics Instructor
2009:  Bluebird

More on a Nominal GDP Target

Christy Romer makes the case for a new framework for monetary policy.  She is kind enough to remind us of this old paper that Bob Hall and I wrote on the topic.  For more on this subject, including further links, click here.

The Impact of Economics Blogs

If this study is right, my providing you with this link will greatly increase its visibility.

My Lecture at Princeton

I gave a lecture at my alma mater last week.  You can watch it by clicking here.  It's a bit over an hour.

rollie-pollie pumpkin

Oscar is a Halloween kid through and through.  He waffled on his costume selection at first (bat, pirate, star wars guy), but eventually he had only one request: a pumpkin! 

When I asked him to try on his costume for a photo, he said, "wait! I need a pumpkin.  It looks just like me."  So cute.

The hat was made using Delia Create's hat-ette tutorial.  It was so fast and easy to put together (literally less than a half hour!) and totally completes the look.  I used elastic instead of a ribbon tie, because I wanted it to be quick to put on and take off.

For the felt pumpkin suit, I used the Rollie Pollie bean bag pattern from MADE, with the small bag pattern pieces scaled down slightly.  The zipper in the pattern makes the costume really easy to get in and out of.  Instead of adding the top and bottom pieces, I made an elastic casing.   I cut arm holes in the side, and edged them with "bias" tape made from felt.   The arm holes are cut a little too large, but you can't win them all.

Or maybe you can?

For the actual costume day, he's going to wear and orange t-shirt and his green legging pj pants underneath, and we are going to stuff the pumpkin to fill it out a bit.

I am also going to be a pumpkin, but don't require any stuffing in my costume.  Only 3 weeks to go before baby girl #2 arrives.  :)

mini cupcake toppers

The only thing cuter than mini cupcakes are mini cupcakes with mini cupcake toppers (how many times do you think I can fit the word "mini" into one sentence?). 

I used my Silhouette to cut these little cuties out from black cardstock and scrapbook paper, so other than gluing the pieces together, there was very little work involved.  All of the shapes came from the Silhouette online store.

Each topper is simply taped to a toothpick and will be popped into a mini cupcake for the kids' Halloween birthday party this weekend.

My friend Sonja and I are a bad combo for party planning, because we tend to feed off of each other's craziness.  Even this afternoon, we were discussing ideas for more things to do and make (with the party only days away) ... we have to take turns reminding each other to calm down and focus on the current to-do list.  Do you have a friend like that?  It makes me laugh.

p.s.  Just a reminder that the promo for the new Silhouette Cameo ends Monday, Oct. 31st.  Use the code JILL to get a Cameo and your choice of a free starter kit.

The Budget Deficit

A panel discussion at MIT, with Peter Diamond, Jeff Leibman, Deborah Lucas, Robert Solow, and yours truly.  It takes about 90 minutes.

The Rich Get Poorer

Here is a fact that you might not have heard from the Occupy Wall Street crowd: The incomes at the top of the income distribution have fallen substantially over the past few years. 

According to the most recent IRS data, between 2007 and 2009, the 99th percentile income (AGI, not inflation-adjusted) fell from $410,096 to $343,927.  The 99.9th percentile income fell from $2,155,365  to $1,432,890.  During the same period, median income fell from $32,879 to $32,396. 

These recent numbers illustrate the broader phenomenon, discussed in this paper, that high-income households have riskier-than-average incomes.

introducing the Silhouette CAMEO

You all know how much I love my Silhouette cutter.  I've used it to make wall art, custom shirts for my kids and husband, hair accessories, etched glassware, and to organize my pantry.   Most of all, I love to use it for parties and gifts - decorations, labels, treat boxes, etc.

So have you heard the news?  They have just released a new version, the Silhouette CAMEO.  She's a sleek little thing...

The biggest change is the increased cutting size.  The Cameo cuts paper, cardstock, vinyl, or fabric up to 12 inches wide (verses the SD's 9 inches) and 10 feet long.  The extra 3 inch width allows you to cut significantly larger designs - you can see the difference in the cutting mats below.  I love that I no longer have to trim down 12 inch scrapbook paper before running it through the machine.

Other improvements include a quieter motor and an adjustable cutting blade.   I'm a big fan of the new blade, because I was always losing my blade caps on the SD.  Now I can change the cutting depth with a simple click.  Yay!   I also find that it is much smoother to load materials, particularly the vinyl.  All in all, it is just a new and improved version of an already awesome machine.

The nice Silhouette folks also sent me one of the new starter kits to try out.  There are starter kits for vinyl, heat transfer, fabric ink, and rhinestones, and include all the tools you need to learn and make a new project.

So far, I've kept my Cameo busy with party prep - Oscar is having a Halloween themed birthday party this weekend, and my machine is working overtime.

First, I used the Vinyl Starter Kit to decorate a beverage dispenser for the party.  It's going to look awesome filled with colorful, Halloween punch.

I also cut a little vinyl wall decal for a blank space near one of the food tables.  The party will actually be held at my friend's house, because our kids are having a joint party.  Vinyl is great for making easy, temporary decor - I didn't feel bad plastering her walls with Halloween stuff, because I know it will peel right off when the party's over.

Paper buntings cut from scrapbook paper spook-ify my otherwise plain cake stands.  I can't wait to load them up with treats! 

If you've been saving your pennies for a craft cutter, I can't say enough good things about the Silhouette Cameo.  And since I love sharing a good deal, you can get one of the new Cameos plus your choice of a free starter kit (Fabric Ink, Vinyl, Heat Transfer, or Rhinestone) for $299, using the online promo code, JILL.

This promo runs starting today, October 25, through October 31.  There are a limited number of promotion bundles for the first shipment of Cameos, and they are expected to sell out. Maybe it can be an early Christmas present for yourself? I'm sure you deserve it. :)