The next day, we took a trek out to Versailles to view the famous palace glorified by Louis XIV of France.

The busy day continued when we went east to pick up my race pack. After that excursion we took the Metro to Montmartre to the Sacre-Coeur, a large church (see below). Many people come at night with a bottle of wine or other booze and a baguette to enjoy on the steps. A fun and entertaining atmosphere.

My final day in Paris was spent running 13.1 miles in 1 hour and 31 minutes and visiting the catacombs. The race was a lot of fun and a personal best. The catacombs contain millions of skeletons and really creeped me out. After that interesting experience, I grabbed my bag from the hotel and got on the Eurostar back to London.

Overall, a really great trip, I can’t wait to return.

[Coburn and Burr's] own bill overhauls the tax code, currently stacked in favor of corporate employees, to provide a tax credit to every American to purchase insurance. It expands health-savings accounts. It creates state health-insurance exchanges, where private insurers compete to cover Americans, including the uninsured. (This is partly modeled on the Medicare drug program, which has provided seniors with choice and held down costs.)

More broadly, it seeks to reorient financial incentives so that the system is no longer focused, as Mr. Coburn puts it, on “sick care,” but on preventing the chronic diseases that eat 75% of health expenditures. These incentives would be used to lower costs and discourage insurers from cherry-picking patients. The bill also dives into Medicare and Medicaid reform.

Digging through my drafts and wondering whatever happened to this? With all of this talk of bipartisanship and summits in DC, it seems like a lot of good ideas from ages ago (last May) just went ignored.

There is an important issue looming on the congressional horizon: how to address the expiration of the Bush tax cuts at the end of this year. We believe there is a consensus way forward, which is why we are introducing the Bipartisan Tax Fairness and Simplification Act of 2010.

By streamlining and modernizing the outdated tax code, our proposal would eliminate many of the specialized tax breaks that currently benefit one group of Americans over another. The changes we propose will create policies that benefit everyone. They include: fiscally responsible middle-class tax cuts, business tax breaks to help American companies compete globally and create jobs, and a fairer and simpler tax system for all Americans.

Minnesota and Wisconsin represent the mecca of curling in the United States, with thousands of people playing in everything from mixed-doubles leagues to elite-level bonspiels. The St. Paul Curling Club, with more than 1,200 members, is the largest club in the country.

Of course, I’m certain our similar climate and border with Canada are no coincidence.

Curling’s popularity in Canada is second only to hockey; tournaments are frequently televised, top-notch skips are big stars, and it’s estimated that a million of the sport’s 1.1 million participants live in this country.

Besides having a slight affinity with respect to accents and a love and long history of hockey, it appears that we share a strange and mostly unpopular sport (as far as the U.S. is concerned). I have never curled before, but I do remember that Northwestern had a team for graduate students. An interesting phenomenon that just hasn’t really spread south of Canada or out of Europe.

So far, the men’s curling team has not won a single match to my knowledge. Maybe if we have an incredibly successful team that could turn the sport around in America.

Perhaps most impressive is that America is winning medals in traditional sports often dominated by Europeans, such as alpine skiing, figure skating and long-course speedskating. Noting that the number of Winter Olympics events has risen to 86 from 46 in Calgary, Olympic historian David Wallechinsky said, “We’re expected to do well in new events like freestyle skiing and snowboarding. But this week is not just a new-event phenomenon for the U.S.”

Link

Not too jinx things, since there are still a lot of medals yet to be one, but I think we can all be proud of the athletes representing America in this year’s Winter Olympics. Let’s hope the leadership in both overall medals and gold medals continues this week!

A pilot slammed his small plane into a seven-story building that housed the local office of the Internal Revenue Service Thursday, apparently killing himself and one agency employee, in what federal officials described as a deliberate suicide attack amid a long-running tax dispute.

He left a note on his website which isn’t worth the time to read or repeating here. Needless to say, we all have feelings about paying taxes and politics, this just isn’t the right way to deal with that. Sadly, one IRS employee lost their life. Hopefully, his/her family will hold strong even after this senseless crime.

The lesson that reality has shown is that there is only an extremely weak multiplier effect for government spending, meaning a dollar spent by the government does not spread throughout the economy in the way originally modelled by Keynes. Moreover and a lesson made clear from the 2009 stimulus bill – getting legislators to allocate money quickly and then spending it is nearly impossible. The tendency is for government spending to dovetail recoveries. This seems to be what is happening now:

The approach this week of the stimulus program’s one-year anniversary sparked a fresh round of dueling partisan statements, as Democrats sought to credit the effort with averting a deeper recession and Republicans said the program deserved a failing grade. But in terms of spending, the stimulus is largely incomplete.

As the economy is recovering, the influx of the majority of the U.S. stimulus money will make the recovery look stronger and more swift than it would be absent extra government spending.

I’m going to walk through this article and try and break down some of the points because I think it is worthwhile to understand the workings of a currency and a federal-style system.

No, the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites — specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.

The narrative that I have been reading primarily follows the line of fiscal irresponsibility on the part of Greece and Spain or the recession for Ireland. Some have also tried to blame speculators for the troubles plaguing the Greek government. The opinion that the article goes on to argue is that monetary inflexibility across borders amplifies these small issues when adjustments cannot be made at the national level.

The result was rapid growth combined with significant inflation: between 2000 and 2008, the prices of goods and services produced in Spain rose by 35 percent, compared with a rise of only 10 percent in Germany.

And there’s not much that Spain’s government can do to make things better. The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe.

Sustained inflation can prove quite damaging for an economy. Think – if the cost of your goods increase by 25% more than your neighbor of an 8 year period, then your value menu goes from $1 to $1.35. As prices increases, wages also have to increase so those fast food workers can afford to pay an extra $0.35 for part of a meal. Spain’s goods just don’t stay within the country’s borders though. Now, all of the goods Spain exports are relatively more expensive than other parts of Europe, making them less competitive.

Central bakers have well-tested tools for combating inflation. Control of the money supply and the ability to devalue the currency could have assisted Spain. Had they retained their own currency this would have been possible. Of course, had they retained their monetary system, they wouldn’t have experienced the advantages of participating in the Euro. So, I’m not arguing and neither is this article that Spain should abandon the Euro to reinstate some form of monetary sovereignty, but for the Euro to be sustainable through financial and economic crisis, the EU will need tools to deal with problems like this.

It’s an ugly picture. But it’s important to understand the nature of Europe’s fatal flaw. Yes, some governments were irresponsible; but the fundamental problem was hubris, the arrogant belief that Europe could make a single currency work despite strong reasons to believe that it wasn’t ready.

Wait….what?

Fresh from the FT:

Gordon Brown said on Wednesday the world’s leading economies were close to agreeing a global bank tax, amid hopes in Downing Street that a deal can be concluded at the G20 summit in Canada in June.

The prime minister said those with the “broadest shoulders” should pay more, and insisted that the tax would raise “a substantial amount of additional money”. He admitted: “It’s not as high as you would like it to be because of avoidance.”

I actually have no intention of answering the question posed in the title of this post, far too challenging for a blog post and likely too soon to really tell.

I do want to make a point though. As a response to the financial struggles of the past nearly 2 years, how are the most powerful nations in the world coming to this conclusion?

Logic –

1.Banks were profitable throughout the 90’s and early 2000’s
2. Some of this profit was derived from crazy financial instruments lacking transparency or regulation
3. Housing market started to fall
4. Banks balance sheets reveal mortgages are heavily wrapped up in these crazy financial products
5. Financial meltdown
6. Bailouts
7. They’re starting to recover…apply tax

1-6 is a bit of history of the last decade or so, 7 marks what the quotes from the FT indicate. We’ve had this same discussion before regarding the oil industry and the auto industry. During the good times rent seekers like governments and unions like to go after the “extra” profits of corporations (many of which are owned by average citizens through retirement investments). In the run up to the 2008 election and during the summer of record gasoline prices, it was all the rage to levy a windfall profit tax on oil companies. During the recession and a period of falling oil prices, the oil industry struggled a bit. Too bad the government didn’t take more money during the good times, right? That seems so obviously wrong that I shouldn’t have to say so. Take the profits now so we can bail them out later…is that really the answer? The auto industry seems to confirm this as well.

Let’s use the example of an individual again to make this a bit more clear. Let’s start with Person A. In the first 10 years of his life, Person A makes a lot of money, but never saves any. Instead, A buys things for his friends. In the second 10 years, Person A struggles with the economy and goes bankrupt. Now Person B. Person B also does well or himself, but saves money along the way in the first 10. When the economy goes sour, he relies on his savings and investments that he’s made.

The example is a bit crude, but it’s clear that when A acts with disregard to the second period, he’s worse off than had he planned for the uncertainty of the second period. Academically, I think this falls into the category of bounded rationality and probably some other temporal phenomenon, but the point is that people value their immediate situation more. On a collective scale, this might explain the rent seeking activities of governments, unions, and even shareholders during times of growth.

On the other hand, this does not explain the current reaction to the financial crisis. Populist angst against banks seems to lead people to support policies like this. Struggling governments seem to frame it as an easy solution. However, considering the recession and financial meltdown does it really make sense to tax the group that just broke down? Furthermore, does this do anything to remedy the root cause of the financial crisis? It seems to do the opposite. Taxes often have a tendency to discourage behavior that is transparently taxable. Read another way – could this be a recipe for more complex financial products that regulators (including the IRS) don’t understand?