Obama is paying for Bush's irresponsible fiscal policy

While Obama is trying hard to increase the debt ceiling, Republicans are doing everything to make sure the US defaults for the third time in history (previous defaults were in 1790 and 1933), claiming the president is seeking a "blank cheque". But this whole mess is not due to Democrats' taste for redistribution, it's due to Bush's tax cuts and two unwinnable wars. The deficit Bush created is estimated at $5.07 trillion while Obama's stimulus spending is at $1.44 trillion. Clearly, Bush created the debt problem and now republicans are trying to make things even worse. Dumb people.

ht: Chart Porn

Does size matter?

OK this is all over the web already but still I thought I'd share this beautifully-written new development paper with everybody. Here's an extract from the abstract:

This paper explores the link between economic development and penile length... The size of male organ is found to have an inverse U-shaped relationship with the level of GDP in 1985. It can alone explain over 15% of the variation in GDP... It is also found to be more important determinant of GDP growth than country's political regime type.

Economics at its best? Apparently, the relationship falls apart when one controls for average population height.

ht: Serge

Rigotnomics Fellow Sergio Sola cited in The Economist

This week's Economics Focus cites research from Rigotnomics Fellow Sergio Sola. Here's an extract:

Mr Obama is not alone in arguing that austerity can boost growth: Britain’s deficit-slashing coalition government and the European Central Bank (ECB) also make the case. A decline in interest rates due to a lower probability of default should support investment and asset prices. Expectations of lower future taxes and higher lifetime earnings may encourage investment and spending. A new ECB working paper argues that “a fiscal contraction may turn out to be expansionary if the expectation channel becomes sufficiently strong.” In practice, however, it rarely works out that way.

The ECB working paper can be downloaded here. Al top.

How Iranians get their puppies

The Iranian government always has good ideas. For example, in April, it passed a bill to criminalize dog ownership, declaring the phenomenon a sign of "vulgar Western values." (Dogs are considered "haram," or unclean, in Islam). But people want their puppies, so guess what happens next.

Dog-selling websites like Rashtpet and Petpars confirm they import dogs by paying travelling Iranians to act as illicit couriers and claim the puppies are their own. While importing dogs for sale is illegal, passengers are allowed to bring personal pets in on commercial flights. The flight from Ukraine to Tehran has been nicknamed "the puppy flight" because many of its passengers, mostly university students, are carrying puppies for sale. When airport authorities caught on last year, they increased the tax on importing pets from $50 to $800, according to sellers. Some dog vendors diverted their operation so dogs are transported from Ukraine to Armenia and Turkey and from there smuggled in the cargo section of tour buses and trucks returning to Iran. "We have a large and very capable network expanding from Iran to Europe and beyond to help unite Iranians with dogs," says the 30-year-old owner of Petpars…

Source: Wall Street Journal. Ht: Tyler Cowen

Book review: The Cartoon Introduction to Economics, Volume 1: Microeconomics

It's always a good idea to refresh your memory with the basics of economics once in a while. There's no better way to do that than with Yoram Bauman's new book, "The Cartoon Introduction to Economics, Volume 1: Microeconomics". I just got it as a birthday present and I went through the whole book in one go. It's entertaining, easy to follow, and super clear. It's also a great way to find inspiration when teaching game theory, auctions, and marginla analysis to undergrads. A great buy, no doubt about it. I'm gonna get the macroeconomics volume for sure when it comes out next year.

easyjet luggage fees

Almost 4 years ago I blogged about easyjet's boarding problem. Yesterday I had another blog-worthy easyjet experience coming back from Stockholm. The plane was so full with onboard suitcases that we had to check-in ours once in the plane. How can this happen? Well, easyjet charges you about 30CHF for checked-in luggage. Add that to the fact that waiting for luggage upon arrival is time-wasting and you have a perfect recipe for overpacked cabins. How to solve this problem? Easy, just make it free to check-in luggage and charge 10CHF for onboard bags.  For easyjet, the money made will cover for the costs of handling checked-in luggage. For us, checking-in big bags full of beer bottles will be free and cabins won't be overpacked anymore.

The life and times of a Red Cross senior official in China

The NY Times reports:

Guo Meimei, 20, appeared to hold a senior position at the Red Cross Society of China, a government organization that is the country’s largest charity. Under the name “Guo Meimei Baby,” she had boasted on her microblog that her title was “commercial general manager” at the Red Cross.... At the same time, she posted photos and entries detailing her jet-set life, writing of the orange Lamborghini she drove in the south (her “little bull”) and the white Maserati she had in Beijing (her “little horse”)... During times of crisis, like the Sichuan and Yushu earthquakes ... officials always put the Red Cross on the front lines of charity drives.

 A Malaysian blogger posted more pics here. He asks:

"What if you found out that the money you gave in the name of charity to such non-profit organization contributes to people’s luxurious life?" 

For our Geneva readers, it should come as no surprise that non-profit organizations and corruption go hand in hand.

Military spending and danceability

Danceability is compiled by Echonest and defined as the ease with which a person could dance to a song, over the course of the whole song. It's built using a mix of beat strength, tempo stability, overall tempo, and more.

(Alleged) corruption, Aussie style

This video says it all.

Is the US really that rich?

As blogged on Carpe Diem, according to new BEA data on GDPs per capita at PPP exchange rates, US states are way richer than European countries. Of course PPP exchange rates are not perfect to capture standards of living as ham in the US is not the same as ham in Italy. But still...