Konczal and Vox on Clinton's plans

The "new liberal economics" is the key to understanding Hillary Clinton's policies by Mike Konczal

Summers on infrastructure investment

Building the case for greater infrastructure investment by Larry Summers

First of the Year (Equinox) by Skrillex

The Fed, Hillary, Baker, and Brainard

Hillary Clinton and the Church of the Sacred Fed by Dean Baker

The “New Normal” and What It Means for Monetary Policy by Lael Brainard

Summers on infrastructure

Building the case for greater infrastructure investment by Larry Summers

How much more do we need to invest? For the foreseeable future, there is no danger that the US will overinvest in infrastructure. An increase in investment of 1 per cent of gross domestic product over a decade would total $2.2tn and permit substantial steps both to catch up on deferred maintenance and embark on new projects.

Bernstein on Fed Targets

New paper from our full employment project: Binder/Rodrigue on updating Fed toolbox by Jared Bernstein

Note to self:

Good think tanks or "centers:"

Center for Budget and Policy Priorities

Center for Economic and Policy Research

Bake on employment rate and America's stinginess

NPR Reports on the Mystery of Rivers Flowing Downstream and Men Leaving the Workforce by Dean Baker

Okay, they only consider the latter a mystery, but for those who follow the data both are equally mysterious. The piece was titled "an economic mystery: why are men leaving the workforce?" The piece noted the reduction in the percentage of prime-age men in the workforce from nearly 100 percent in the 1960s to 88.3 percent at present. It then said that no one really knows why there has been this decline.

Actually, it really is not much of a mystery. While the piece wants to attribute it to the peculiar situation men face in the labor market, it is worth noting that there has also been a sharp decline in the percentage of prime-age women in the labor market. (Actually, a better measure is simply looking at the share of people who are employed. Many workers stop saying they are looking for jobs when they are no longer eligible for unemployment benefits. With a sharp reduction in eligibility for benefits over the last three decades, people who are not working are now much less likely to say they are looking for work.)

The figure below shows the percentage of prime-age women that are working since 1990.

[figure]

The chart shows that after rising sharply from 1993 to 2000. It then fell sharply following the 2001 recession and again in 2007–2009 recession. It has since risen in the recovery but it is still 3.8 percentage points below the peak hit in 2000. The pattern among prime-age men is similar, although the employment rate is now 4.8 percentage points below the 2000 peak. (Remember the EPOP for women had been rising before the 2001 recession and was projected at the time to continue to rise.)

The fact the EPOP for men and women has followed a very similar pattern since 2000, and the declines have been associated with weak demand in the economy, suggests that the explanation might be weak demand. In other words, the problem is not too many men getting disability or lacking the skills needed in a 21st century economy, but rather just not enough demand.

If we could get the trade deficit down or got the government to spend more money then we could boost demand and get the prime-age men discussed in this piece back to work. We would do the same for prime-age women. (We could also follow the German model and reduce the length of the average work year, thereby spreading around available work.)

So the villains are not lazy men, but rather folks like Paul Ryan, Peter Peterson, and the Washington Post who insist that we have to keep our budget deficits low even in a context of near record low interest rates and very low inflation.

It is also worth mentioning that the lazy welfare cheat story doesn't fit the data at all. Benefits of various stripes have gotten more stingy over the period when men's EPOPs were declining. Also, as the report cited in the piece from the President's Council of Economic Advisers notes, the United States ranks near the bottom among wealthy countries in the generosity of benefits. It also ranks near the bottom in prime age EPOPs.

after Neoliberalism

After neoliberalism: a snippet by John Quiggin

Bullard doesn't like the plebes

St. Louis Bank President Jim Bullard Tells Us Why the Fed Needs to Be Reformed by Dean Baker

Yellen at Jackson Hole

The Federal Reserve's Monetary Policy Toolkit: Past, Present, and Future by Yellen

Fed Up story

Fed, Eager to Show It’s Listening, Welcomes Protesters by Binyamin Applebaum

Baker and DeLong on currency values

The Washington Post's TPP Challenge by Dean Baker

Since adjusting currencies are an essential part of a "free-trade" regime, a real trade deal should have rules against currency management. While the exact provisions are more than I have time for just now, Fred Bergsten (the president emeritus of the Peterson Institute for International Economics) and his colleague Joe Gagnon give us a good start here.

 Must-Read: Very good thoughts in a Kaleckian mode...
by DeLong

It is very odd. Back in 1988-1994, when I was a deficit hawk, there was reason to be: interest rates were relatively high, bad news about future deficits appeared to no longer strengthen but to slightly weaken the dollar--suggesting that the hot-money Unconfidence Fairy and the Bond Vigilantes were near if not at hand--and there was a large disconnect between the revenues and the spending that the laws in place would generate.

And now?

Not.

Interest rates are lower than anyone thought they would see in many lifetimes. The dollar's value is not in any sense threatened by deficit news. And the thirty year fiscal gap is 1.7% of GDP--a number that normal politics can deal with--and in a world of safe asset shortage many not be too high but rather, too low (and improperly backloaded).

but none of the non-Keynesian economist professional deficit hawks have shifted sides since 1992, and a new generation has grown up and started getting their deficit-panic welfare...

Duncan Weldon: Negative Yields, the Euthanasia of the Rentier & Political Economy:

I don’t understand the political economy that has brought us tight fiscal & easy money--it simply isn’t creating enough winners to be sustainable...

Rising asset values certainly have created a block of beneficiaries.... But... with gilt yields at around 0.5%... years of saving isn’t worth as much as they hoped... [and] owning a more valuable house will [not] be seen as adequate.... This cohort will get bigger each year....

Whilst the macroeconomic argument for more active fiscal policy has always been strong, the political economy conditions that may drive it are becoming clearer. Aggressive deficit-financed state spending may (unusually) create two sets of winners--the workforce who benefit from faster growth, tighter labour markets and stronger real income growth and the mass of (relatively) small scale rentiers who would benefit from higher rates.... [But the] voting public don’t seem particularly keen on deficits. I’ve wondered myself recently--whatever happened to deficit bias? It may be that, as Eric Longeran has argued, this is the best argument for helicopter money. If fiscal policy makers won’t do what is required, then perhaps monetary policymakers can.

And Paul Krugman:

fiscal policy and NGDP policy

Monetary Policy in a Low R-star World by John C. Williams

Nominal Demand Ain't What It Used to Be by David Beckworth

A Thought Provoking Essay from Fed President William by Larry Summers

Slow Learners by Krugman

Van Jones on Hillary's challenges

Van Jones on the staggering political challenges Hillary Clinton would face as president

Infrastructure, Cassidy and Krugman

AN INFRASTRUCTURE PROPOSAL THAT GOES BEYOND CLINTON AND TRUMP by John Cassidy

Wisdom, Courage and the Economy by Krugman

Now, I’m not saying that we shouldn’t try. I’d argue, in particular, for substantially more infrastructure spending than Mrs. Clinton is currently proposing, and more borrowing to pay for it. This might significantly boost growth....

Beckworth and Bernstein comment on Williams's NGDP targettting comments

The dollar’s makin’ me holler, and other tales of the macro muddle by Jared Bernstein

Nominal Demand Ain't What It Used to Be by David Beckworth

Trump voters and economic anxiety, Kwak and DeLong

That “Massive New Study” Says Nothing About Economic Anxiety by James Kwak

Must-Read: Martin Sandbu: Trump Supporters on the Couch:
by DeLong

Economic anxiety can make voters more prone to racial resentment... 

It is, of course, an old trope in social thinking that economic pressure makes it easier to wind masses up against a scapegoated group perceived as “other”. Conversely, times of widespread and rising prosperity are good for liberalism and tolerance. Brad DeLong is quite right that this is a good time to pick up Ben Friedman’s prescient pre-crisis work on the moral consequences of economic growth.... 

Racial status anxiety and economic anxiety can be one and the same phenomenon, insofar as the economic pressure is perceived as affecting a particular social group. Much is said, all correct, about how the American white working class, and Trump supporters in particular, are well off compared with minorities and the real poor. But over the past generation, the trajectory of the white working class has no doubt changed the most for the worse, compared with the previous generation. 

That is true in material, indeed plain physical, terms: while black mortality rates remain higher than those of whites, it’s only for the white working class that the secular mortality decline has gone into reverse. And it is surely true that, as a result, the relative social status of working-class whites has fallen noticeably. That reflects a sharpening of class difference with widening inequality and an unequivocally welcome reduction in racial status difference. 

All told, that is a story of tremendous progress. But there is no need to dismiss the economic roots of the racial backlash we now see...

the decline of unions and Trump

The Decline of Unions and the Rise of Trump by Neil Gross

For millennial voters, the Clinton vs. Trump choice ‘feels like a joke’ by Philip Rucker

Reich on the Democrats

Why the Shake-up at the Democratic National Committee Is Doomed by Robert Reich

Moody's and Romers on Clinton and Sanders; JW Mason on CBO

The Macroeconomic Consequences of Secretary Clinton’s Economic Policies by Moodys

SENATOR SANDERS’S PROPOSED POLICIES AND ECONOMIC GROWTH by Christina and Paul Romer

CBO Forecasts: What’s Under the Hood? by J.W. Mason