Felix Salmon

Why ZIRP doesn’t work

Bill Gross has a wonky column in the FT, saying that setting interest rates at zero doesn’t boost economic growth:

Unreliable housing statistic of the day

How many existing homes (as opposed to new homes) were sold between 2007 and 2010? The job of counting such things is outsourced to the National Association of Realtors, which up until yesterday said that the number was 20,629,000. Today, however, it released revised figures, saying that the true figure is 17,680,000 — a difference of 3 million homes. At an average of say $250,000 apiece, that means the economy saw $750 billion less in economic activity, over those four years, than the NAR had given us to believe. That’s real money.

Immigration datapoint of the day, entrepreneurship edition

I love this idea from the National Foundation for American Policy, a pro-immigration think-tank. Take the WSJ’s list of the top 50 venture-backed companies, complete with the names of all the founders — and then calculate how many of those founders are first-generation immigrants. The results?

Counterparties

EU governments are propping up their banks in unusual ways — WSJ (paywall)

Why China is the “Michael Jackson” economy — Streetwise Professor

Income distribution charts of the day, middle-class edition

Ian Ayres has an excellent post at Freakononomics today, explaining some of the background thinking behind his inequality tax proposal:

The plight of the 1%

Max Abelson has a fantastic column today from simply asking prominent members of the 1% about their embattled status. There’s Home Depot co-founder Bernard Marcus, who characterizes any potential critic of his wealth by asking the timeless question “who gives a crap about some imbecile?”. There’s BB&T‘s John A. Allison IV, who says that any rule requiring public companies to disclose the ratio between the compensation of their CEO and their median employee would constitute “an attack on the very productive”. And then there’s Steve Schwarzman, displaying his legendary deftness of touch in a TV interview:

Missouri, payday-lending haven

Is there an expert out there on the subject of payday lending in Missouri? It certainly seems to be something of a haven for payday lenders, despite the state’s attempts to paint itself as a strict regulator:

Counterparties

To survive, Italy must drastically reduce wages — VoxEU

Warren Buffett’s already down $1.5 billion on his BofA investment — WSJ Deal Journal

Adventures with the new plutocracy, wealth-beta edition

Robert Frank — the WSJ writer, not the Cornell economist — had a fascinating column about what he calls “wealth beta” this weekend. If you’re a member of the 1%, it turns out, you don’t just have a lot of money; you’re also likely to be seeing a huge amount of volatility in your wealth and your income. And this volatility has been measured according to the familiar scale where the broad stock market has a beta of 1: