Morning Flamebait from Lynne Kiesling
Julian Sanchez: Things That Are Irrelevant to Copyright Policy

A Back-of-the-Envelope Measure of the Success of Obama Administration Banking and Fiscal Policy

More on Unemployment and Investment  NYTimes com

Paul Krugman looks at the scatter of private investment and unemployment and comments:

More on Unemployment and Investment - To follow up on John Taylor: suppose we look only at nonresidential investment, and suppose that we think (as we should) that the causation runs mainly from unemployment — a proxy for excess capacity — to business investment, rather than the other way around.... [T]he data since 1990 look like this.... Investment is low as a share of GDP; well, that’s no surprise given how depressed the economy is. And if anything investment is a bit stronger than you might have expected from past behavior.

Not just a bit stronger: substantially stronger. 2% of GDP stronger--that's $300 billion a year more in business investment than we would have expected to see with the unemployment rate this high.

Part of this relationship is reverse causation, sure. But that means that 2% underestimates the effect of policy on investment: had there been no fiscal and banking rescue policies and if investment had not been boosted by policy, the unemployment rate might as a result be at the 16% of the Blinder-Zandi Republican policy baseline, and only THE ONE WHO IS knows how low business investment spending would be--but it would surely be a lot lower than it is now.