ECONOMICS ISN'T MATHEMATICAL POLITICS. Two economists with different world views offer similar comments on the new president's efforts to implement all sorts of new policies and investors' reactions.

Michael Boskin advised the elder President Bush.

It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.

He notes some proposals that would produce efficiency gains.

To be fair, specific parts of the president's budget are admirable and deserve support: increased means-testing in agriculture and medical payments; permanent indexing of the alternative minimum tax and other tax reductions; recognizing the need for further financial rescue and likely losses thereon; and bringing spending into the budget that was previously in supplemental appropriations, such as funding for the wars in Iraq and Afghanistan.

The specific problems, however, far outweigh the positives.

Most of those problems involve increases in marginal tax rates.

Paul Krugman, an unofficial advisor to Democrats who some on Team Obama would have preferred to make him an official advisor, offers a similar evaluation.

Why do officials keep offering plans that nobody else finds credible? Because somehow, top officials in the Obama administration and at the Federal Reserve have convinced themselves that troubled assets, often referred to these days as “toxic waste,” are really worth much more than anyone is actually willing to pay for them — and that if these assets were properly priced, all our troubles would go away.

Thus, in a recent interview Tim Geithner, the Treasury secretary, tried to make a distinction between the “basic inherent economic value” of troubled assets and the “artificially depressed value” that those assets command right now. In recent transactions, even AAA-rated mortgage-backed securities have sold for less than 40 cents on the dollar, but Mr. Geithner seems to think they’re worth much, much more.

I've been doing some work on those AAA mortgage-backed securities. A number of them are variations on the floater and inverse floater I found so puzzling. Instead of making a convex combination of two bonds that uses the principal and income of one bond as a collateral, make a convex combination of m bonds that use the principal and interest of n mortgages, where n is several orders of magnitude larger than m, as the collateral. The convex combination of interest rates on the m bonds must equal the average interest rate over n mortgages. Go to the head of the class if you deduce that there must be some part of that convex combination that offers a very high yield with an almost certain risk of default. On the other hand, some fraction of those mortgages will be current. Those payments enable the AAA-rated part of the convex combination to stay current. Let the fraction that is current decrease, and the AAA-rated part becomes just so much junk.

(As an aside, it's pathetic for the Treasury Secretary to assert that the assets have an inherent value that is somehow different from the market price. Let the starving artists make those claims for their paintings. If he's so sure of that value, why are we even having this conversation? He and a few close friends could buy them at the current prices and hold them until they recover. That takes the rest of us off the hook.)