Krugman's setting himself up to be sure he's not on the wrong side of the fiscal cliff deal in the making when it's done --- see his blog entry today "The Deal Dilemma." He's doing this by waffling between ss cuts (via chained CPI) being "acceptable" if tax revenues increase via dividends ...
If the reported deal on breaking the "fiscal cliff" is true, and if it passes, it's going to screw the elderly big time.... a little at a time to make it not appear to be fucking retiree's in the ass.
The reported "deal" including using "chained CPI" to adjust social security payments for inflation instead of the current CPI-W which has ...
If the reported deal on breaking the "fiscal cliff" is true, and if it passes, it's going to screw the elderly big time.... a little at a time to make it not appear to be fucking retiree's in the ass.
The reported "deal" including using "chained CPI" to adjust social security payments for inflation instead of the current CPI-W which has ...
Krugman's blog today includes "Something (Everything) Rotten in the State of Macro" , in which he ends with the statement:
"The state of macro is, in fact, rotten, and will remain so until the cult that has taken over half the field is somehow dislodged."
To this statement (bold type is my emphasis) I respond that to ...
You may have already seen this article if you read economistsview.typepad.com, but if not:
This ultimately has to do with the robots (advances in technology) and labor thing, since neo-classical ...
A report by ILO today fromReuters (UN organization on International Labor) warns that global downward pressure on labor wages/salaries (excluding China) may cause another recession. The analysis says that prior to the credit boom/bust reduced interest rates and lending standards provided consumers with the ability to ...
See Baker's article here. Conventional wisdom has been that baby-boomer retirement will reduce the ratio of workers to retirees, forcing workers to pay more to support the retires. It's currently 3:1, projected to go to 2:1 demographically. But Baker argues that the workers paying more to support ...
I'm reading the on-line free book Lectures on Political Economy, by Francis William Newman, published 1851. .see it here
Newman published his collection 11 or 13 lectures on "political economy" which is the standard term for capitalism after Smith's version.
If you read it, and I recommend it, you'...
So far, all current and recent economists, left or right, of the Keynesian or Austrian variety, march to the tune of the same drummer. that drummer's beat plays the Debt/GDP ratio limit. The ratio's limit is always less than where it has been, which is another way of saying there should be no or virtually no ...
While all the comedic political posturing & rhetoric on the Fiscal Cliff is going on, and the Syrian "chemical weapons" propaganda to prepare the US public for US military involvement in the Syrian civil war is now usurping all the media headlines, talking heads, and blogs today, I thought I'd take a ...
This is an example of what I referred to earlier as "Toward a Global Nation", whether it's passed as is or watered down or rejected. It clearly illustrates the trend and tendency, not to mention the extent to which this agreement reduces the autonomy of nations in the agreement.
...
Krugman made a statement at the end of his blog of Nov 24, A Meta Modeling Meditation, which made me think about Econ as a science. Hist statement was
And yes, I?ve changed my models, mainly in the face of experience. For example, I didn?t take either the liquidity trap or the possibility of self-fulfilling currency crises ...
The fear, uncertainty, & doubt spread by the financial industry if the "fiscal cliff" occurs is pure bunk (bunk translation: has no merit in fact). The FUD is propaganda designed to scare investors and business into forcing a "grand bargain" by legislators. The oft fabled bond vigilantes will ...
In Krugman's blog today (Thanksgiving) he reminds us of his 1994 paper (Does Third World Growth Hurt First World Prosperity) purported to show that trade among rich and poor nations has no adverse real effect on the rich nations. It's a well written, easy to understand paper where he argues that third world ...
Over the years, and most especially as the housing price bubble coaxed greater investment into new housing starts, ultimately resulting in a vast overbuild of housing relative to demand, housing start rates is widely held to be a leading indicator of forward looking economic growth. This widely cited relationship implies therefore ...
All the rhetoric cast by the GOP... the party platform, the debates, political campaign slogans, candidate policy statements, etc. etc....leads to all the things we've been hearing for years. Mostly it's always about:
- Small Govt --- how small is small enough?
- Lower Taxes --- this is just in support of 1)
Viewed from the historical perspective, there's been a continual shift to larger coalitions of nations since the 1800's. One of these failed -- the USSR was a militarily enforced coalition of several formerly independent states. It failed economically before it collapsed entirely.
The last ...
The year of pubication Ricardo's 3rd edition was 1821, not 1831.
Re;
("machines" as they are referred to at the dawn of the industrial revolution --- Ricardo's 3rd edition of "Principles of Political Economy" written in 1831) . Replace 1831 with 1821.
Also, the full title of his book was On the Principles of Political Economy and Taxation
As you may or may not know, I started my retirement with an intense curiosity about the history of economic thought. In particular I'd noted in casual thought that capitalism had in fact existed since lands and nations were "owned" by the leader of army's that had conquered them... i.e. that all capital assets ...
There's something inherently illogical, or dishonest? about a rating's agency "downgrading" US Debt. By "downgrade" a ratings agency is saying that the risk of default is greater on paying interest & or principle on that debt.
So what's illogical or dishonest about that you ask? The US can print all the ...
I read saw this article and read it sometime in the last month, but see it again referenced on economistsview.com yesterday. Have you read this article? or have I forwarded a link to it before?
If not here it is --- recommended reading to begin to understand the causes for changes in US real GDP growth rates (...
Read this article -- very interestig questions on how to make democracy and corporations mutually inclusive. The article's title is Can Corportions be Made to Fit Democracy Theory & Vision? My answer is that they cannot... not with the current chartered definition of Corporation, since by defintion they are entites for ...
The paper's theme is that innovation as it relates to productivity growth and GDP growth peaked circa 1970 and has been on a continuous decline since ----- due to the lack of recent innovation's effects on productivity gains.&...
I've described and shown the divergence of median family income growth from GDP growth beginning in the late 1970's in several posts before. I also attempted to discern the underlying reason for the divergence since no such divergence had occurred before --- i.e. median family incomes grew in lock step with the growth of GDP for ...
The so called "Beveridge curve" is a time series measure of the relationship of job openings rate to unemployment rate. .... with job openings rate on the vertical axis and unemployment rate on the horizontal. In general it's supposed to (purports to) show a relatively consistant negative correlation of ...
Summers' op-ed op-ed of Aug 19 in the WP "The reality of trying to shrink shrink government" provides 3 basic reasons why gov't will not shrink. These are, without my providing the details:
- Demographics of aging
- Federal debt even under the most
S&P 500 Price 1995 - Present.
Looks like a new, unsustainable bubble is in the works to me. Unsustainable dot-com bubble in 2000,the next unsustainable one was the housing bubble in 2007, and looks like another unsustainable one in the works to peak sometime later this year or early 2013. Note that the dot-com bubble ...
As I've said many times before, in my own case, my successes (& hence also failures) are all a matter of having had a long string of luck.... chance events in which I just happened to randomly be in the right place at the right time (for either eventuality... good luck having been dominant). Skills & personality traits ...
From a link on economists view --- using Krugman's divergence chart (divergence of income from productivity and GDP) a blog entrant poses the assertion: Something Big Happened in the Early 70's. Seems like the question I pursued several months ago might finally be getting some attention from economists in the wings now ...
http://www.epi.org/publication/ib330-productivity-vs-compensation/
I'm linking to a good article that describes the gross diversion income to productivity since mid-late 1970's. I've described the content of the article in my own analysis on divergence of median family income and GDP before ... finding that the underlying ...
Over the past few months I've begun to see a couple of green shoots related to economics of strategic import... the kind of things I spend my time trying to figure out and understand ---- basically I put these into two strategic areas:
- How to sustain &/or grow GDP (economic health of the nation)...
At least there's some economics work now going on to try to understand the sources & cause of inequalities' increase over the last 30 years.
However, it still doesn't appear that they've identified it (them). In the following piece Dean Baker rips apart an OECD analysis of cause while substituting some other ...
There are many examples of failed nation-states over time. In the US though we have a good example of the same thing (were it not for federal subsidies) in Mississippi... which for all intents and purposes has all the characteristics of a failed state... high rates of impoverishment, poor health, corrupt political system, ...
Norway Intervenes to Avert Oil Industry Closure
http://news.yahoo.com/norway-intervenes-avert-oil-industry-closure-005718546--sector.html
OSLO (Reuters) - Norway's government ordered on Monday a last-minute settlement in a dispute between striking oil workers and employers in a move to alleviate market fears over a full closure of its ...
.... and thinking or believing it has something significant to do with the EU crises, or Obama's policies, or the Fed's, or the current state of the economy... think again.
The current yields are fully within the normal range of the 22 year to date extension of 10 year treasury bond yields.. .nothing out of the ordinary or ...
Globally among major OECD's from 2008 through 2011 the empirical relationship of changes in real gov't spending to change in real GDP shows that % Change in GDP = 0.89 x % Change in Gov't Spending - 2.3%. Slope of the relationship (my line) are from my own eyeballing the data points
...
Something doesn't make a lot of sense. U.S. maximum capacity utilization (total index, not just mfg'ing) has declined from 90% to 79% over the past 45 years (1967 - 2012). That's a steady and consistant reduction in maximum capacity utilization of -0.26%/year.
So ...
One of the big myths that has been created by right wing propaganda (propaganda = information supplied with an intent to deceive) is that when the currrent generation increases the national debt the burden of repaying it falls to on later generations .... they say it puts the burden of repaying that debt on ...
Mark Weisbrot at CEPR says it best (but in my words): The financial "crises" in europe and the peripheral (generally southern) nations within the EU is being used (effectively, I might add) by the right wing to undo the left's long win streak in Europe.... essentially to force the break-up of unions and deprive gov'ts of&...
The long bond ended the day up almost three points, dropping its yield to 2.718%, its lowest close since December 31, 2008. The 30-yr yield has only seen 10 closes below today?s level, and all of them occurred at the depths of the financial crisis. Elsewhere, the 5-, 7-, and 10-yr yields all hit record lows during today touching 0.679%, ...
Robert Samuelson writes in today's WoPo Op-Ed that "...in the long run, the interests of labor and capital coincide."
He then cites the share of national income achieved by Capital and Labor at years 1950, 1980, 2000, & 2011 which show that Labor's share has declined by 8.9% since 1980, while Capital's Share has increased by 23.2%&...
It's interesting that economics uses the term "human capital" in comparison to the term "capital"... or "physical capital".
Basically this shows that economists have a "capital" centric view of economics. Why not just call it ("human capital") labor? Labor is defined as those earning income by working for a&...
The statement below is from the preface in a new econ paper looking at the relationship between the middle class and economic growth. The statement says, in a nutshell, that economists' research interest is dominantly motivated by the here and now.
For most economists, however, the concepts of ?...
From London't Financial Times via Tim Duy's blog :
Meanwhile, Germany and France are holding to the official line. From the FT:
?We want Greece to stay in the euro,? Ms Merkel said. ?We know that the majority of people in Greece see that.?
The Greek government had also agreed on a ...
From a comprehensive econ paper about the Greek debt and austerity measures required by creditors (paper, page 14):
Ten years ago, writing in the wake of Argentina?s default on its public debt ? then the largest sovereign default in history, George Soros noted that creditors as a group have an interest in punishing such ...
According to the author of this econ article in the Guardian (UK), fantasy prevailed in both the entry of Greece into the Euro, and the pending exit from it.
It took no particular talent to have seen this coming [Greece exiting EU], just the recognition that it has always been a fantasy ...
Re: Greece.
If Greece can form a government and that government signs up to the bailout agreement, then it is possible some of the targets in the program could be softened, the chairman of the euro zone finance ministers, Jean-Claude Juncker, said.
"I don't envisage, not even for one second, Greece leaving the euro area. This is ...
In my note of May 12 Consequences of Risk Decisions --- Creditors Want it Both Ways, among other things I listed the possible options available for the indebted EU sovereigns:
Greece, Ireland, Portugal, Italy, & Spain (and a host of other peripheral EU currency nations) are not in control of the value of the Euro ...
Like you have also probably been doing I've been loosely following the EU's debt woes --- Greece being mostly in the camera's lens, but also Ireland, Portugal, and of course Italy & Spain from time to time. From the onset the issue has been the kinds and extent of terms imposed on these sovereigns by creditors to ...
Don't know if you are interested in such things, but the following paper is highly enlightening. Most especially the Comments on it by Robert Topel of NBER & Univ. of Chicago.... following the body of the paper (starting on pdf "page" 58). If you read nothing else in this link, read the Topel Comments which are a good ...
Rational Expectations in the financial markets is an hypothesis created in order to explain / justify why the market is the only efficient means of allocation of resources to it's best use.
Rational in the sense defined by the hypothesis means that all currently available information is used by the market's agents to make decisions ...
The abject failure of nearly 200 years of economics to supply valid and objective fundamental theory is best illustrated by the theory relating the supply of money to a nation's economic performance, prices, and employment. I used several sources for the following information --- among them was one from ...
... .but getting there was indirect and unexpected.... so this note is about how I got there. Sorry... it's not a story about the girls from Nantucket.
I was reading http://economistsview.typepad.com/ and in particular a blog article tonight by an economist who had quite neatly synopsized the three ...
From BLS.gov's data on educational attainment, employment, & weekly wage/salary for the dozen years 2000 - 2011:
For wage/salary, & employment data of full time employees over age 25 (by educational attainment) it's clear that wage/salary growth didn't keep pace with productivity growth.... so employee's ...
I've seen recent reports that keep citing expected or projected GDP growth rates over the 10 year period 2010 - 2020 at or in the close range of 3%/year. What's important isn't GDP growth rates per-se, but GDP growth per Capita. GDP's growth by itself doesn't indicate improvement if the population is ...
A recent article at CEPR estimates the change from 1979 to 2011 in the proportion of Low Wage Earners at different levels of education (and age, but my focus is only on educational attainment). I can't find their 1979 source data at the gov't source they cite, but I do have the employment by wage & educational levels ...
In my notes
ref: yesterday, 4/28/12
- Divergence (income v GDP) - a cause scenario &
- A possible source of cause, Re:Divergence of Median Family Income growth & GDP growth
I hypothesized that a significant cause for divergence of median family income and GDP growth rates was due to the change in employment ...
Enlightening perspective. It's the only econ perspective I've come across that provides a new (different) reasoning for the evolution of the shift from taxing rentiers to consumers being "taxed" in the ...
Great article with insight which explains, rationally, that recession and depression is the preferred choice of creditors when dealing with inflationary uncertainties of the alternatives to maintaining a state of recession/depression. It goes without saying that unless creditors are faced with a greater risk of ...
It only goes to show what I've been saying for a long, long time already... education isn't the panacea that differentiates between rational and irrational choices ... facts don't have too much real weight in the scheme of things human... propoganda rules all... just like it did to propel the national socialists to power in&...
Subject article is great --- comments after it are also worth the read. BTW, we'ed have a lot more interest in commercial activities if we practised the dzamalag ceremonies.
The chart shown in Krugman's blog is originally from this source this source. The chart shows:
Inflation-adjusted GDP per capita and median family income from 1947 (the earliest year for which the income data are available) to 2007. To facilitate comparison of the over-time trends, each is indexed to its 1973 level.
...I came across this document while researching why median family income growth diverged from GDP growth beginnning in the late 70s. ... specifically I was looking into historic potential gdp growth ---- and more specificaally what it's based on an how it's derived. The paper linked to below is referenced in a CBO paper that ...
This is what's meant by "trickle-down" economics... obviously a rising tide doesn't lift all boats by the magnitude of tidal rise though... the middle 5th only got 1/3rd that of the top 5th... the 2nd 5th less than 1/4, and the bottom 5th just 1/7th. "Trickle' overstates what comes down though... more like a "slow drip"...
I'm referring to the following chart:
You'll note that the divergence begins during the period where GDP was flat ... which is the period in the late '70's where interest rates were increased to tame inflation. During that period the median family income fell wrt per capital GDP. When the economy recovered, median ...
Kudlow in his last paragraph of blog entry entitled "GOP Needs a Bolder Growth Message":
...I won't link to that blog entry directly (since it eats into my free 20 entries/mo.into NYT), but you can get there without using any free entries to NYT by clicking on "go to Krugman's blog" instead of clicking on any of the individual blog entries... use this link..
Anyway, the ...
Of the 200k employment gains in Dec, over 80% were in Services (164k/200k), and that was only 1k more than the Services gain in Dec last year... basically no difference in Dec's gains in services compared to a year ago. This is typical of December's employment gains due to holiday shopping season. ...
Is there any reason to suspect or believe that the composite market (private enterprise) is any better than a gov't in allocation of resources toward some goal / objective?
Since people are people, and the composite market is simply the mean of a composite of people's predictions / beliefs about a future condition (economic future ...
I was curious about GDP growth and Federal Spending when broken down by Presidential party from Eisenhower's administration through Bush's... a period of 56 years since WWII. Based on my years of hearing that the GOP was a better fiscal steward of federal policy toward GDP growth and lower spending, I was under the strong ...
I read up on the WTO rules with respect exchange rates a few years ago finding that China's following all the WTO rules since the rules don't require nations to adjust exchange rates to some "standard" or other rule.
Here's a very short article summarizing the history of WTO with respect to exhange rate rules just in ...
- Real GDP growth for 3Q2011 was 2.0% annualized (revised down from 2.3%).Just to give you some perpective on this rate ---- I've taken the real GDP growth from 1990 through 2006.... the last year before the shit began to hit the fan:
- The annual compound rate of
My small analysis (below) of banking as a viable institution finds that it really isn't a viable financial institution at all.... contrary to popular opinion. In a capitalist competitive banking environment, banking, as an institution, is at best only temporarily viable over the short term. In its fundamentals it ...
From The Subprime Crisis by Robin Blackburn:
Matthew Rothman, a Chicago PhD and head of quantitative equity strategies at Lehman Brothers Holdings, declared after a few bad days in August 2007: ?Wednesday is the type of day people will remember in Quant Land for a very long time. Events that models only ...
"...call for delegating more policy to panels of nonpolitical experts..."...
I'm starting to come to conclusion (still tentative) that Stiglitz may be the only economist (of any respect and wide economic influence) who understands that capitalism doesn't work to the benefit of society; that's its now proven to be a failure in it's supposed "promise" to provide societies with a fair and equitable distribution ...
I've commented on krugmans' failure to use a valid measure of where the economic output is with respect to stable inflation level employment in normal times.... he's previously shown only the extension of the housing bubble's economy with respect to where were at now... and since the housing bubble's economy was an artificial & ...
From Krugman's blog today
"Truly, our public discourse has been entirely about problems we don?t have, at the expense of dealing with the problems we do have."
This is not by accident or chance, rather it's a designed and executed maneuver to flank ...
In my series on growth, decline, or stagnation of Economic health I focused on the U.S.'s measure of economic health (GDP) for a 60 year period from post WWII beginning 1950 through 2010. In the prior notes I showed that the US's 10 year annual compound growth GDP grew for 33 years from 1950 through 1983 and then began a long ...
Have you noticed all the slanted not so vague negative bias about unions in newsprint articles lately? GM's "union" excuse for insolvency started the recent kick I think. Lately though it's been 'instransigent' public employee unions in cities and state gov'ts.... pensions too high, health benefits too high, etc....
"Further, a Federal Reserve Board staff study had earlier found that the GSEs, despite their large and growing portfolios and dominance of ...
"A manager at Motorola explained that his company pays workers at the 70th percentile of wages for their occupation. That way, workers know that if they don?t perform and ...
The increasingly wider gap in incomes disparity between middle class and the rich has been argued to be caused by income tax policies. I have argued this in the past by showing that income tax policy ceases to be progressive at incomes > ~ $600k, clearly giving the upper echelons of income a ...
http://www.huffingtonpost.com/
"The only budget battle that matters is the fight over what kind of "compromise" the White House cuts with Republicans to get the continuing resolution extended" -- Andew Leonard ...
http://www.epi.org/economic_snapshots/entry/income_inequality_it_wasnt_always_this_way/
http://www.cepr.net/index.php/
1) US citizen or US registered corporation were taxed heavily on
capital invested / sent outside US?
2) US citizen or US registered corporation foreign earned income
(whether brought back into US or not) were heavily taxed?
3) Non-citizen or foreign owned/controlled corporations / business's
capital ...
IAS 107 Lecture: Wrong Theories of the Recession
J. Bradford DeLong U.C. Berkeley IAS107 Lecture Notes...
... never address the underlying issues in the economy in general? They focus only and continuously on the here/now (aftermath) and immediate future. Why for example aren't they focused (or at least frequently discussing) the fundamental issues as they relate to global trade policy going forward, the labor divide between ...
Another method of evaluating the overall economy is by how the economy changes with respect to it's ...