Happy Friday. Before you check out for the weekend, check in for my daily reads. Enjoy.
The shadow knows
First there was a virtual currency, the Bitcoin. Now there's a virtual funds rate, which economists have labeled the shadow rate. Nothing nefarious, as the Atlanta Fed's Macroblog explains. With the funds rate near zero since December 2008, economists wanted a way to capture the Fed's unconventional policies and express them in a single number for -- what else? -- their models. (A link in the post takes you to a graph of the actual and virtual funds rates.) The shadow rate was -1.68 percent in October.
A little knowledge is dangerous
I'm a big fan of George Mason University economist Don Boudreaux, who blogs at Cafe Hayek. In this post, he aims at people who don't understand economics. No, you can't hate them for that. But unlike the typical person who is ignorant on the subject of matrix algebra, our economics ignoramus thinks he understands enough about "the logic of markets to comment critically upon real-world market processes," Boudreaux writes. And that's not the worst part. "Even more annoying than economically uninformed people making unfounded economic assertions are people who have a smidgen of exposure to economic jargon or economic models but inadequate knowledge and wisdom to apply that jargon and those models helpfully to reality," Boudreaux says. Been there, seen and heard that.
Black and white Friday
First retailers decided to open their doors before dawn on the Friday after Thanksgiving to attract early shoppers. Then it was Thanksgiving evening. This year, some retailers will be open all day Thursday. But beware press releases touting statistics on how many consumers plan to "hit the stores" that day, according to Time magazine's Brad Tuttle. Many of those folks will be hitting the "enter" key, pointing-and-clicking their way to gifts. "The latest data from Nielson holds that the percentage of American consumers who will not go shopping in physical stores on Black Friday is clearly on the rise," Tuttle says. Yes, there are great deals on 50-inch flat-screen TVs for the first four people who walk through the door at Best Buy, assuming they aren't trampled first. But a head-start on Christmas shopping does not mean consumers will spend more in total. It does give local TV news some needed material for their broadcasts.
The website is a welcome distraction from bigger problems
While the rollout of Healthcare.gov was a huge embarrassment for the Obama administration, it now looks like a blessing: a distraction from the more fundamental problems with Obamacare. Just this week we learned that some insurance companies can't or won't extend existing plans for a year. Insurers are restricting choices of hospitals and doctors to contain costs. Some hospitals, including the Cleveland Clinic, have decided to participate only in plans with higher reimbursement rates. Small businesses will pay higher premiums as insurers pass along the new fees the law imposes on them. And many individuals are discovering that Obamacare is only affordable to the extent that they don't get sick -- and have to cover a high deductible. In other words, thank goodness for the focus on technical glitches!
More than promises broken
The cover of the Dec. 2 issue of Time Magazine says it all. Under a photo of a pill that is broken in two -- "Obama" on one half, "Care" on the other -- the caption reads: "Broken Promise." I'm not a subscriber so I can't read the full article, but the teaser promises "What it means for this presidency" and "What it means for your healthcare." I suspect neither is very encouraging.
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