Krugman points out that disinflationary trends are pointing to the conclusion that we’ll shortly be in the negative range by at least some measures. And I wouldn’t personally get too excited about the significance of the number zero in this context. The point is that inflation has been running below the Fed’s target rate for a while now so what we ought to be doing is running above the target rate for a while until we catch-up with where the price level ought to be. Instead, things are moving in the other direction.

Meanwhile, the White House is meekly giving up on any kind of non-trivial fiscal stimulus. So it really does all rest with the Federal Reserve now. I know that many people are skeptical that the Fed can substantially boost growth, but academic work by Krugman and by Ben Bernanke says otherwise. Indeed, besides Bernanke at least one regional Fed President concedes “there’s plenty more we could do”, the Open Market Committee just isn’t doing it.

Business is booming again on Wall Street: “While much of the country remains fixated on the bleak employment picture, hiring is beginning to pick up in the place that led the economy into recession — Wall Street.”

I feel so much better now, don’t you?

Interesting finding from John Sides:

The majority of Americans opposes the estate tax, even though it affects only a small number of wealthy people. Scholarly investigations of this puzzle have debated the role of knowledge about the tax. Do at least some people support the estate tax because they are ignorant of its limited scope? If people were better informed, would more of them support this tax? Via experiments, I demonstrate the casual effects of information about who pays the estate tax, as well as arguments for and against it. I find that this information does reduce opposition to the estate tax, and that it does so primarily among the poorer conservatives and Republicans. The combination of this information and various arguments also tend to shift opinion in favor of the tax. These findings contrast with previous research and suggest that knowledge (or lack thereof) is central to understanding public opinion about the estate tax.

So there you go, spread the facts.

Bruce Bartlett observes:

On May 24, the latest African Economic Outlook was published by the African Development Bank. A key finding is that African countries raise less in taxation than those elsewhere at similar stages of development, making African countries more dependent on foreign aid than necessary. (Note: almost every country in Africa has a low tax/GDP ratio. If low taxes were the primary key to growth then Africa would be far richer than it is.)

Gregory Clark makes a related point about Sweden versus Malawi.

The upshot to me isn’t that “taxes don’t matter” but rather that “quality of government matters a lot.” Compared to Africa, the American state is both gigantic, and incredible honest and incredibly efficient and that’s an excellent trade.

Good post from Mark Kleiman:

But what does that obligation consist of, and how did James incur it? Did the team or the city do something in particular to help make him a star, such that his departure represents ingratitude? My understanding is that he did not choose the Cavs, but was assigned to that team in the draft. Surely, having been the victim of a conspiracy in restraint of trade, forced to negotiate with a monopsonist buyer of one’s talents, can’t create an obligation of loyalty to the monopsonist if, when the term of the indenture is up, another employer offers a more attractive deal?

As one of Mike’s commenters mentions, sports stars are the frequent targets of moralizing. It’s hard to separate this phenomenon from race and class: pro sports is one of the few very few ways of moving from the bottom income quintile to the top income percentile that won’t land you in prison, especially if you’re black or Latino. So sports stars attract some of the opprobruim traditionally directed at the parvenu in aristocratic societies: the “base-born counselors” around the King that are a traditional grievance of not only rebellious nobles but of commoners as well. Mocking the parvenu is one way of asserting that the underlying structure of inherited status is fundamentally sound.

Admittedly, the hour-long ESPN special counts as a non-classy manner of implementing the decision to go to Miami. But what Kleiman says in his second paragraph is relevant here, and the fact that the term chosen is “classy” is not a coincidence. Rich sports stars do, in fact, frequently fail to exhibit the social graces associated with high-status Americans as as their incomes exceed those of the vast majority of high-status Americans. But this is hardly the greatest moral failing in the world, and shouldn’t distract from the fact that the sports star labor force, though quite highly paid, is still fundamentally kept in a subordinate position to an ownership class that shouldn’t be allowed to create a presumption that workers have a moral obligation to do what their employers want even when their contract has expired.