Why blogs are good: Today I learned two things I didn't know. From Matt Yglesias:
Probably the greatest blow Ronald Reagan struck against American liberalism was changing tax law so as to index income tax brackets to the Consumer Price Index. Before that, each and every year inflation created a small tax hike. Consequently, the default scenario was for revenue to grow. That created a situation where for three decades following the end of World War II, politicians steadily increased the volume of public services while also offering the occasional tax cut. And until the economic malaise of the 1970s, voters liked the outcomes just fine. But by seizing the opportunity provided by the 1980 election to change this, Reagan was able to shift the structure of American politics in a fairly significant way.And from James Surowiecki, whose new blog is a bit less hand-holdy than his "Financial Page" columns:
Felix [Salmon] argues that Japan’s experience should make U.S.investors wary of buying stocks now ... because “the lesson of Japan is that even cheap stocks can continue to decline for decades." Actually, that’s not the lesson of Japan. The lesson of Japan is that a country’s stock market is not going to rise over time if, over time, its companies fail to create economic value for their shareholders. Felix says that “Japanese companies are well-run.” But in fact they’re not well run, at least by the standards that are relevant to shareholders—return on equity, profitability, growth, and managing cash flow in a shareholder-friendly way. By these standards, Japanese companies have historically been run badly, and while they’ve improved some in recent years, they’re still far behind American firms on all of these metrics.
