Monday, October 09, 2017
global economy: no wage gains, Wren-Lewis
Global Economy’s Stubborn Reality: Plenty of Work, Not Enough Pay
Economists: too much ideology, too little craft by Simon Wren-Lewis
Sunday, October 08, 2017
Friday, October 06, 2017
Krugman on Fed; Corbyn
Get Ready for Prime Minister Jeremy Corbyn by Rachel Shabi
Will Trump Trumpify the Fed? by Krugman
For more than a decade the Fed chair has been a distinguished academic economist — first Ben Bernanke, then Janet Yellen. You might wonder how such people, who have never been in the business world, who have never met a payroll, would deal with real-world economic problems; the answer, in both cases: superbly.
In particular, both Bernanke and Yellen responded effectively to a once-in-three-generations economic crisis despite constant heckling from back-seat drivers in Congress and on the political right in general. And their intellectual and moral courage has been completely vindicated by events.
Monday, October 02, 2017
The Disastrous Decline of the European Center-Left
The Disastrous Decline of the European Center-Left
Among the many worrying outcomes of the recent German elections was the further collapse of the main center-left party, the Social Democrats, which received only 20.5 percent of the vote, its worst performance since World War II.
Across Europe, social democratic or center-left parties are in decline. In elections this year in France and the Netherlands, the socialist and labor parties did so poorly that many question their future existence. Even in Scandinavia, considered the world’s social democratic stronghold, long-dominant parties have been reduced to vote shares in the high 20s and low 30s.
Even if you don’t support the left, this should be cause for concern. Social democratic parties were crucial to rebuilding democracy in Western Europe after 1945. They remain essential to democracy on the Continent today.
During the postwar years, social democratic parties acknowledged capitalism’s upsides and downsides. In contrast to Communists, center-left parties recognized that markets were the most effective engine for producing economic growth and prosperity. But in contrast to classical liberals and many conservatives, social democrats did not embrace markets wholeheartedly. Instead, the center-left insisted that it was possible — indeed, necessary — for governments to cushion markets’ most destabilizing effects. Capitalism would be kept subservient to the goals of social stability and solidarity, rather than the other way around.
By the late 20th century, this distinctive message had been mostly discarded. Instead, the left became dominated by two camps.
The first was epitomized by Tony Blair of Britain and Gerhard Schröder of Germany. These new center-left politicians celebrated the market’s upsides but ignored its downsides. They differed from classical liberals and conservatives by supporting a social safety net to buffer markets’ worst effects, but they didn’t offer a fundamental critique of capitalism or any sense that market forces should be redirected to protect social needs. When the financial crisis hit in 2008, this attitude repelled those who viewed globalization as the cause of their suffering and wanted not merely renewed growth, but also less inequality and instability.
The second camp is an anti-globalization far left, represented by the Occupy movement, Jeremy Corbyn’s wing of Britain’s Labour Party and Syriza in Greece. This camp took seriously the market’s downsides but saw few upsides. Lacking a conviction that capitalism can and should be reformed, these parties generally offer an impractical mishmash of attacks on the wealthy, protectionism, increased welfare spending and high taxes. These policies may appeal to the angry and frustrated, but they turn off voters looking for viable policy and a progressive, rather than utopian, view of the future.
During the postwar decades, social democracy promoted solidarity and a sense of shared national purpose so as to avoid the fractures that undermined European democracy during the late 19th and early 20th centuries. In contrast to Communists, who exclusively focused on class conflict, the center-left built bridges between workers and others. And in contrast to the individualism of classical liberals and many conservatives, the center-left’s emphasis was on citizens’ obligations to one another and the government’s duty to promote the good of society.
By the late 20th century, however, this understanding of social democracy’s goals had been largely abandoned. Some failed to address concerns generated by social and cultural change, either out of lack of understanding or out of a hope that solving economic problems would make them disappear. Others uncritically embraced these changes, promoting both cosmopolitanism and the interests and cultural distinctiveness of minority groups. This camp became associated with the politically deadly idea that strong national identities were anachronistic, even dangerous, and citizens made uneasy by their erosion were bigots.
These attitudes have fragmented the left’s constituency and made it impossible to rebuild the social solidarity or sense of shared national purpose necessary to support high taxes, robust welfare programs and activist governments.
But the decline of the center-left has larger implications. Most obviously, it has created a space for a populist right whose commitment to liberalism, and even democracy, is questionable. In many European countries, now including Germany, these parties have succeeded in part by attracting groups that have historically supported the center-left, like workers and the uneducated, by forthrightly addressing the economic fears generated by globalization as well as those generated by social and cultural change.
During the postwar period, European politics was dominated by competition between a center-left and center-right that offered real policy differences but agreed on the basic framework of liberal, capitalist democracy. These parties were large enough to form governments, set agendas and get policies enacted. But as the outcome of the recent German elections makes clear, the center-left’s electoral demise has rendered it unable to form stable, coherent governments — which makes it more difficult to solve problems and leaves voters more frustrated with traditional parties and institutions.
This is one part of what has allowed populists to make inroads, as was clear during the German elections, where the far-right Alternative for Germany party promoted itself as the true “alternative” to the status quo. Even many within the Social Democrats acknowledged their party lacked a vision of where it wanted Germany to go.
by Sheri Berman (10.2.17)
Across Europe, social democratic or center-left parties are in decline. In elections this year in France and the Netherlands, the socialist and labor parties did so poorly that many question their future existence. Even in Scandinavia, considered the world’s social democratic stronghold, long-dominant parties have been reduced to vote shares in the high 20s and low 30s.
Even if you don’t support the left, this should be cause for concern. Social democratic parties were crucial to rebuilding democracy in Western Europe after 1945. They remain essential to democracy on the Continent today.
During the postwar years, social democratic parties acknowledged capitalism’s upsides and downsides. In contrast to Communists, center-left parties recognized that markets were the most effective engine for producing economic growth and prosperity. But in contrast to classical liberals and many conservatives, social democrats did not embrace markets wholeheartedly. Instead, the center-left insisted that it was possible — indeed, necessary — for governments to cushion markets’ most destabilizing effects. Capitalism would be kept subservient to the goals of social stability and solidarity, rather than the other way around.
By the late 20th century, this distinctive message had been mostly discarded. Instead, the left became dominated by two camps.
During the postwar decades, social democracy promoted solidarity and a sense of shared national purpose so as to avoid the fractures that undermined European democracy during the late 19th and early 20th centuries. In contrast to Communists, who exclusively focused on class conflict, the center-left built bridges between workers and others. And in contrast to the individualism of classical liberals and many conservatives, the center-left’s emphasis was on citizens’ obligations to one another and the government’s duty to promote the good of society.
By the late 20th century, however, this understanding of social democracy’s goals had been largely abandoned. Some failed to address concerns generated by social and cultural change, either out of lack of understanding or out of a hope that solving economic problems would make them disappear. Others uncritically embraced these changes, promoting both cosmopolitanism and the interests and cultural distinctiveness of minority groups. This camp became associated with the politically deadly idea that strong national identities were anachronistic, even dangerous, and citizens made uneasy by their erosion were bigots.
These attitudes have fragmented the left’s constituency and made it impossible to rebuild the social solidarity or sense of shared national purpose necessary to support high taxes, robust welfare programs and activist governments.
During the postwar period, European politics was dominated by competition between a center-left and center-right that offered real policy differences but agreed on the basic framework of liberal, capitalist democracy. These parties were large enough to form governments, set agendas and get policies enacted. But as the outcome of the recent German elections makes clear, the center-left’s electoral demise has rendered it unable to form stable, coherent governments — which makes it more difficult to solve problems and leaves voters more frustrated with traditional parties and institutions.
This is one part of what has allowed populists to make inroads, as was clear during the German elections, where the far-right Alternative for Germany party promoted itself as the true “alternative” to the status quo. Even many within the Social Democrats acknowledged their party lacked a vision of where it wanted Germany to go.
If the Social Democrats and other center-left parties are unable once again to offer voters solutions to the challenges their countries face, their decline will continue, populism will flourish and democracy will decay.
Friday, September 29, 2017
Tuesday, September 26, 2017
Doug Henwood on Hillary's What Happened
Doug Henwood Dispatches Hillary and Her New Book to Remainder Bin of History
She actually says (though maybe it was her three ghostwriters): “Bernie proved again that it’s important to set lofty goals that people can organize around and dream about, even if it takes generations to achieve them.” Rejecting a generation of neoliberal orthodoxy, she continues:
Democrats should reevaluate a lot of our assumptions about which policies are politically viable. These trends make universal programs even more appealing than we previously thought. I mean programs like Social Security and Medicare, which benefit every American, as opposed to Medicaid, food stamps, and other initiatives targeted to the poor. Targeted programs may be more efficient and progressive, and that’s why during the primaries I criticized Bernie’s “ free college for all ” plan as providing wasteful taxpayer-funded giveaways to rich kids. But it’s precisely because they don’t benefit everyone that targeted programs are so easily stigmatized and demagogued…. Democrats should redouble our efforts to develop bold, creative ideas that offer broad-based benefits for the whole country.
Thursday, September 21, 2017
Saturday, September 16, 2017
corn cob fail: Drum, DeLong, PGL
Should-Read: Keven Drum: Here's Why I Never Warmed Up to Bernie Sanders: "As Bill Scher points out, the revolution that Bernie called for didn't show up...
...In fact, it's worse than that: we were never going to get a revolution, and Bernie knew it all along. Think about it: has there ever been an economic revolution in the United States? Stretching things a bit, I can think of two: (1) The destruction of the Southern slave economy following the Civil War. (2) The New Deal. The first of these was 50+ years in the making and, in the end, required a bloody, four-year war to bring to a conclusion. The second happened only after an utter collapse of the economy... unemployment at 25 percent....
We're light years away from that right now. Unemployment? Yes, two or three percent of the working-age population has dropped out of the labor force, but the headline unemployment rate is 5 percent. Wages? They've been stagnant since the turn of the century, but the average family still makes close to 30,000, only 27 percent are dissatisfied with their personal lives. Like it or not, you don't build a revolution on top of an economy like this. Period. If you want to get anything done, you're going to have to do it the old-fashioned way: through the slow boring of hard wood.
Why do I care about this? Because if you want to make a difference in this country, you need to be prepared for a very long, very frustrating slog.... There's a decent chance that Bernie's failure will result in a net increase of cynicism about politics, and that's the last thing we need. I hate the idea that we might lose even a few talented future leaders because they fell for Bernie's spiel and then got discouraged when it didn't pan out.... If you don't want your followers to give up in disgust, your inspiration needs to be in the service of goals that are at least attainable. By offering a chimera instead, Bernie has done the progressive movement no favors...
pgl said...
Sanders lost me when he derided "establishment" economists. I do not trust any politician that picks adviser that only tell him what he wants to hear.
Reply September 11, 2017 at 05:36 AM
...In fact, it's worse than that: we were never going to get a revolution, and Bernie knew it all along. Think about it: has there ever been an economic revolution in the United States? Stretching things a bit, I can think of two: (1) The destruction of the Southern slave economy following the Civil War. (2) The New Deal. The first of these was 50+ years in the making and, in the end, required a bloody, four-year war to bring to a conclusion. The second happened only after an utter collapse of the economy... unemployment at 25 percent....
We're light years away from that right now. Unemployment? Yes, two or three percent of the working-age population has dropped out of the labor force, but the headline unemployment rate is 5 percent. Wages? They've been stagnant since the turn of the century, but the average family still makes close to 30,000, only 27 percent are dissatisfied with their personal lives. Like it or not, you don't build a revolution on top of an economy like this. Period. If you want to get anything done, you're going to have to do it the old-fashioned way: through the slow boring of hard wood.
Why do I care about this? Because if you want to make a difference in this country, you need to be prepared for a very long, very frustrating slog.... There's a decent chance that Bernie's failure will result in a net increase of cynicism about politics, and that's the last thing we need. I hate the idea that we might lose even a few talented future leaders because they fell for Bernie's spiel and then got discouraged when it didn't pan out.... If you don't want your followers to give up in disgust, your inspiration needs to be in the service of goals that are at least attainable. By offering a chimera instead, Bernie has done the progressive movement no favors...
pgl said...
Sanders lost me when he derided "establishment" economists. I do not trust any politician that picks adviser that only tell him what he wants to hear.
Reply September 11, 2017 at 05:36 AM
Juggalos and montary regime change
Class Clowns by ADAM THERON-LEE RENSCH
Monetary Regime Change: Mission Accomplished by David Beckworth
Friday, September 15, 2017
troll wants a revolution
"But those who argue for incrementalism, who want to make the goal more modest, should be asked: “How much longer do millions stay without insurance? How much longer do families have to deal with the insecurity of sky-high health costs? How much longer can anyone’s savings be wiped out because of one accident?”
I am not for incrementalism. Nor is Kurt. In fact, I'm for something to the left of the Sanders proposal.
So when you say I am for incrementalism - you are doing what you always do. Lying. It is all you got. Pathetic!
Tuesday, September 12, 2017
Monday, September 11, 2017
identity politics
black nationalism versus identity politics = equality
What Liberals Get Wrong About Identity Politics by MYCHAL DENZEL SMITH
What Liberals Get Wrong About Identity Politics by MYCHAL DENZEL SMITH
Saturday, September 09, 2017
Jacinda Ardern
In New Zealand, fired up the youth vote w/ free higher education and legalized medical marijuana
Election September 23.
Election September 23.
Thursday, September 07, 2017
Tuesday, September 05, 2017
Sunday, September 03, 2017
The Wire
Wire marathon on HBO. Season 1 episode 3, "The Deal," Avon Barksdale and I share the same birth date. (Same birthday as Jennifer Lawrence.) Also first appearance of Omar.
2020 Gillibrand and Harris
Kamala Harris and Kirsten Gillibrand will lead Democrats to 2020 victory by Michael Starr Hopkins (lawyer and member of the Clinton and Obama campaigns)
Saturday, September 02, 2017
Friday, September 01, 2017
Thursday, August 31, 2017
Sunday, August 27, 2017
Thursday, August 24, 2017
Socialism by Judis
The Socialism America Needs Now by John Judis
On Piketty's Capital: The Sovereign Wealth Fund Solution by Matt Bruenig
Fully Automated Luxury Gay Space Communism
Dean Baker, replace corporate taxes with government holding common ownership shares.
Paine, social dividend to every citizen.
Health care, housing, food, transport, education. Decommodify stuff people need.
Fully Automated Luxury Gay Space Communism
Portugal
No alternative to austerity? That lie has now been nailed by Owen Jones
For years we’ve been told that only deep cuts can save our economy. Portugal’s socialist-led government has proved the opposite
For years we’ve been told that only deep cuts can save our economy. Portugal’s socialist-led government has proved the opposite
Wednesday, August 23, 2017
Tuesday, August 22, 2017
Monday, August 21, 2017
fascism and economic anxiety; centrists
Sunday, August 20, 2017
Saturday, August 19, 2017
Inherent Vice
Was it possible, that at every gathering--concert, peace rally, love-in, be-in, and freak-in, here, up north, back east, wherever--those dark crews had been busy all along, reclaiming the music, the resistance to power, the sexual desire from epic to everyday, all they could sweep up, for the ancient forces of greed and fear?
― Thomas Pynchon, Inherent Vice
Moon the Klan
Molly Ivins:
Our Texas freedom-fighters have been prone to misbehavior ever since. A recent Ku Klux Klan rally in Austin produced an eccentric counter- demonstration. When the fifty Klansmen appeared (they were bused in from Waco) in front of the state capitol, they were greeted by five thousand locals who had turned out for a “Moon the Klan” rally. Citizens dropped trou both singly and in groups, occasionally producing a splendid wave effect. It was a swell do.I was there and participated!
Friday, August 18, 2017
Thursday, August 17, 2017
Wednesday, August 16, 2017
Baffler on "Goodbye, Pepe"
Goodbye, Pepe by Angela Nagle
Similarly, leftists who opposed Hillary Clinton or have stressed the role of “economic anxieties” of downwardly mobile whites in the rise of the Trumpian right may start catching flak for excusing and thus enabling Nazis. Indeed, if any of the great historians of the Nazi period wrote their books today, they’d be denounced for larding their accounts with such interpretive context, as they all did, because context has now been reclassified as blame-shifting.
Dylan Matthews Foppish Vox Hipster
Trump's idea that jobs will solve racism is just wrong by Dylan Matthews
It’s not a totally implausible theory, that the country becomes more tolerant during economic booms and that white Americans become more racially prejudiced during recessions or stagnation.
But the evidence for the theory is mixed at best. In many cases, it’s hard to see much correlation between objective economic conditions and the status of race relations.
Who Were the Counterprotesters in Charlottesville?
Who Were the Counterprotesters in Charlottesville?
In Charlottesville, about 20 members of a group called the Redneck Revolt, which describes itself as an anti-racist, anti-capitalist group dedicated to uniting working-class whites and oppressed minorities, carried rifles and formed a security perimeter around the counterprotesters in Justice Park, according to its website and social media.
The group, which admires John Brown, a white abolitionist who led an armed insurrection in 1859, issued a “call to arms” on its website: “To the fascists and all who stand with them, we’ll be seeing you in Virginia.”
The scholar and activist Cornel West told the newscast “Democracy Now!” that anti-fascists saved his life and the lives of other nonviolent clergy members in Charlottesville. “We would have been crushed like cockroaches were it not for the anarchists and the anti-fascists,” he said on the show. “You had police holding back and just allowing fellow citizens to go at each other.”
The group, which admires John Brown, a white abolitionist who led an armed insurrection in 1859, issued a “call to arms” on its website: “To the fascists and all who stand with them, we’ll be seeing you in Virginia.”
The scholar and activist Cornel West told the newscast “Democracy Now!” that anti-fascists saved his life and the lives of other nonviolent clergy members in Charlottesville. “We would have been crushed like cockroaches were it not for the anarchists and the anti-fascists,” he said on the show. “You had police holding back and just allowing fellow citizens to go at each other.”
Tuesday, August 15, 2017
common owndership argument and fully automated luxury gay space communism
Common Ownership And The New Antitrust Movement by Matt Bruenig
The Simple Clean Route on Corporate Tax Reform by Dean Baker
Add a social wage to be distributed from the corporate tax fund.
NGDP monetary policy rule.
Larry Summers.
NGDP monetary policy rule.
Larry Summers.
Sunday, August 13, 2017
Heather Heyer
Heather Heyer
"economic anxiety," liberals and Trump voters
Economic Anxiety Didn’t Make People Vote Trump, Racism Did by Sean McElwee and Jason McDaniel
Can we finally kill off the zombie lie? Trump’s voters mostly weren’t the “white working class” by CHAUNCEY DEVEGA
Financial Insecurity and the Election of Donald Trump by Diana Elliott and Emma Kalish
Saturday, August 12, 2017
Elizabeth Warren at Vox
Elizabeth Warren fires back at centrist Democrats by Jeff Stein
Yes, the system is rigged – and if you don’t feel like anyone in politics is doing anything to un-rig it, well, that’s how a lot of folks who should have been with us last November wound up voting for Donald Trump.
Barkley Rosser on financial crisis
The Financial Crisis Tenth Anniversary by Barkley Rosser
3) In terms of the behavior of the Fed at the time of the crash, there had been some preparations for it, mostly by people at the New York Fed, and indeed the various alternative entities the Fed rolled out temporarily after the hard crash were cooked up in advance by them. However, the most important thing the Fed did remains widely unknown and unadvertised, although I have posted on it previously, and it has been publicly reported on, it not on front pages anywhere ever. That would be the half a trillion dollar save the Fed did for the European Central Bank, taking a bunch of very bad assets onto the Fed balance sheet, which were then gradually and quietly rolled off over the next six months to be replaced by Mortgage Backed Securities. The euro was crashing, and the ECB was facing the threat that both BNP Paribas and Deutsche Bank were in danger of failing. This was the immediate danger that could have led to a full blown global financial crash of a 1931 level or worse. This save was probably the most important thing the Fed did to keep the crisis from bringing about another Great Depression, although it remains not well known, partly because both the Fed and the ECB did not want it advertised. A good account of this can be found in Neil Irwin’s book, _The Alchemists_.
Friday, August 11, 2017
Thursday, August 10, 2017
agnotology
In 1979, a secret memo from the tobacco industry was revealed to the public. Called the Smoking and Health Proposal, and written a decade earlier by the Brown & Williamson tobacco company, it revealed many of the tactics employed by big tobacco to counter “anti-cigarette forces”.
In one of the paper’s most revealing sections, it looks at how to market cigarettes to the mass public: “Doubt is our product since it is the best means of competing with the ‘body of fact’ that exists in the mind of the general public. It is also the means of establishing a controversy.”
This revelation piqued the interest of Robert Proctor, a science historian from Stanford University, who started delving into the practices of tobacco firms and how they had spread confusion about whether smoking caused cancer.
...
Wednesday, August 09, 2017
4 depressing charts that show why many Americans don’t feel the economy has recovered by Pedro Nicolaci da Costa
Expectations are everything, especially in economics.
That’s why a distinct lack of progress in a few basic measures of economic progress, particularly relative to pre-crisis expectations, has left many Americans questioning how much they have personally benefitted from the economic recovery.
A new report from the Roosevelt Institute, a liberal think tank in Washington, highlights a number of ways in which "the recovery since 2009 is, in a sense, a statistical illusion."
The study finds the nation’s total economic output, its gross domestic product, "remains about 15% below the pre-recession trend, a larger gap than at the bottom of the recession." The first chart below shows that lag, while the second offers insights into just how badly the crisis dented expectations about the future.
Strong employment gains in recent months have brought the jobless rate down to a historically-low 4.3%. However, this decline has not been accompanied by rising incomes or consumer prices, generally associated with a sustainable economic boom. Some Federal Reserve policymakers have found this trend puzzling, while many labor economists point to underlying weaknesses in the job market, including high levels of underemployment and long-term joblessness, as drags on income.
Stagnant wages amid rising profits have meant that the wage share in US national income has fallen from 63% to 57% in the last 15 years, according to the report.
"It is impossible for the wage share to ever rise if the central bank will not allow a period of 'excessive' wage growth," writes J.W. Mason, who authored the report. "A rise in the wage share necessarily requires a period in which wages rise faster than would be consistent with longterm macroeconomic stability."
In other words, if Fed officials tighten monetary policy at the first sign of wage increases, they will never allow the imbalances that have built up, including deep income disparities, to be torn down. Average hourly earnings rose just 2.5% on a yearly basis in July, nothing to write home about and certainly not enough to begin the ground lost over the last decade and more.
Business investment, which is key to long-run economic growth, has also been dismal during the now eight-year expansion.
"There is no precedent for the weakness of investment in the current cycle. Nearly ten years later, real investment spending remains less than 10% above its 2007 peak," Mason writes.
"This is slow even relative to the anemic pace of GDP growth, and extremely low by historical standards. In the three previous [economic] cycles lasting that long, real investment spending had increased anywhere from 30% to 80%. Even shorter cycles saw substantially greater investment growth." Roosevelt 3 investment growth Roosevelt Institute
Finally, Mason looks at whether the economy is at risk of running hot, generating inflation, which central bank officials cite to justify interest rate increases. The Fed has raised interest rates three times since December 2015 to a range of 1% to 1.25%.
"On the contrary, we argue, while a myopic focus on one or another data series might support a story of binding supply constraints, the behavior of the economy as a whole is much more consistent with a situation of depressed demand—an extended recession," the report concludes.
"The overall picture also makes it unclear what actual danger is posed by overheating in the conventional sense. Most of the obvious costs of overheating — higher inflation, higher interest rates, a rising wage share — would be desirable under current circumstances."
Expectations are everything, especially in economics.
That’s why a distinct lack of progress in a few basic measures of economic progress, particularly relative to pre-crisis expectations, has left many Americans questioning how much they have personally benefitted from the economic recovery.
A new report from the Roosevelt Institute, a liberal think tank in Washington, highlights a number of ways in which "the recovery since 2009 is, in a sense, a statistical illusion."
The study finds the nation’s total economic output, its gross domestic product, "remains about 15% below the pre-recession trend, a larger gap than at the bottom of the recession." The first chart below shows that lag, while the second offers insights into just how badly the crisis dented expectations about the future.
Strong employment gains in recent months have brought the jobless rate down to a historically-low 4.3%. However, this decline has not been accompanied by rising incomes or consumer prices, generally associated with a sustainable economic boom. Some Federal Reserve policymakers have found this trend puzzling, while many labor economists point to underlying weaknesses in the job market, including high levels of underemployment and long-term joblessness, as drags on income.
Stagnant wages amid rising profits have meant that the wage share in US national income has fallen from 63% to 57% in the last 15 years, according to the report.
"It is impossible for the wage share to ever rise if the central bank will not allow a period of 'excessive' wage growth," writes J.W. Mason, who authored the report. "A rise in the wage share necessarily requires a period in which wages rise faster than would be consistent with longterm macroeconomic stability."
In other words, if Fed officials tighten monetary policy at the first sign of wage increases, they will never allow the imbalances that have built up, including deep income disparities, to be torn down. Average hourly earnings rose just 2.5% on a yearly basis in July, nothing to write home about and certainly not enough to begin the ground lost over the last decade and more.
Business investment, which is key to long-run economic growth, has also been dismal during the now eight-year expansion.
"There is no precedent for the weakness of investment in the current cycle. Nearly ten years later, real investment spending remains less than 10% above its 2007 peak," Mason writes.
"This is slow even relative to the anemic pace of GDP growth, and extremely low by historical standards. In the three previous [economic] cycles lasting that long, real investment spending had increased anywhere from 30% to 80%. Even shorter cycles saw substantially greater investment growth." Roosevelt 3 investment growth Roosevelt Institute
Finally, Mason looks at whether the economy is at risk of running hot, generating inflation, which central bank officials cite to justify interest rate increases. The Fed has raised interest rates three times since December 2015 to a range of 1% to 1.25%.
"On the contrary, we argue, while a myopic focus on one or another data series might support a story of binding supply constraints, the behavior of the economy as a whole is much more consistent with a situation of depressed demand—an extended recession," the report concludes.
"The overall picture also makes it unclear what actual danger is posed by overheating in the conventional sense. Most of the obvious costs of overheating — higher inflation, higher interest rates, a rising wage share — would be desirable under current circumstances."
DeLong jumps the shark
Should-Read: IMHO, the smart PGL does good here... by DeLong
What's the difference? 15 versus 10 percent? Suggesting we close the 15-10 percent output gap isn't promising "unicorns and rainbows." Well it is a big ask regarding the current Democratic Party. Maybe that's partly why Hillary lost to Trump.
What's the difference? 15 versus 10 percent? Suggesting we close the 15-10 percent output gap isn't promising "unicorns and rainbows." Well it is a big ask regarding the current Democratic Party. Maybe that's partly why Hillary lost to Trump.
Tuesday, August 08, 2017
Fully Automated Luxury Gay Space Communism
The Simple Clean Route on Corporate Tax Reform by Dean Baker
A Progressive Way to End Corporate Taxes by Dean Baker
Instead of taxes, make corporations give the government stock by Dean Baker
Modification
Shares go into a public fund that distributes the yearly dividends as a social wage based on hours worked perhaps
Uncle gets to keep zero
A Zero gravity credit system is the lynch pin
financial crisis 10 years on: turn into the curve
Looking Back: The Financial Crisis Began 10 Years Ago This Week by Schoenholtz and Cecchetti
The Fed blew it
everything EMichael writes is to exculpate the Democrats from blame nothing is ever their fault.
Monday, August 07, 2017
Sunday, August 06, 2017
remember to read "business bad for business"
Business Is Bad for Business by Andrew Elrod
tight labor markets bad for profits? Goldman Sachs warnings.
Marshall Steinbaum:
Exactly. As @JWMason1 has shown, corporations are pumping cash out to shareholders, rather than sucking it in for investment.
Gavin Wright paper
Joan Robinson on labor market and productivity gains
Cambridge capital controversy
tight labor markets bad for profits? Goldman Sachs warnings.
Marshall Steinbaum:
Exactly. As @JWMason1 has shown, corporations are pumping cash out to shareholders, rather than sucking it in for investment.
1:35 PM - 6 Aug 2017
Gavin Wright paper
Joan Robinson on labor market and productivity gains
Cambridge capital controversy
Some members of the Marxian school argue that even if the means of production "earned" a return based on their marginal product, that does not imply that their owners (i.e., the capitalists) created the marginal product and should be rewarded. In the Sraffian view, the rate of profit is not a price, and it is not clear that it is determined in a market. In particular, it only partially reflects the scarcity of the means of production relative to their demand. While the prices of different types of means of production are prices, the rate of profit can be seen in Marxian terms, as reflecting the social and economic power that owning the means of production gives this minority to exploit the majority of workers and to receive profit. But not all followers of Sraffa interpret his theory of production and capital in this Marxian way. Nor do all Marxists embrace the Sraffian model: in fact, such authors as Michael Lebowitz and Frank Roosevelt are highly critical of Sraffian interpretations, except as a narrow technical critique of the neoclassical view. There are also Marxian economists, like Michael Albert and Robin Hahnel, who consider the Sraffian theory of prices, wages and profit to be superior to Marx's own theory.
Anti-Trust
Oligopolies help create inflation via rent extraction and cost-push inflation. Competition makes inflation lower and the Fed's job easier.
Currently overseas competition keeping inflation down. Charles Evans.
Currently overseas competition keeping inflation down. Charles Evans.
billionaire benefactors
In Weary Wisconsin Town, a Billionaire-Fueled Revival
In Kalamazoo, Mich., a group of well-to-do town “elders” pay for every public school student in town to go to college. And Columbus, Ind., has become an architectural mecca thanks to the support of J. Irwin Miller, whose family made its riches manufacturing engines.
Saturday, August 05, 2017
DSA
9 questions about the Democratic Socialists of America you were too embarrassed to ask by Jeff Stein
DSA has certainly been a beneficiary of the Dirtbag Left and its iconoclastic rage; Chapo Trap House frequently directs its guests to support the socialist organization, and its founders are in Chicago for the DSA convention. Mother Jones called the podcast a “gateway drug” for democratic socialism, and DSA’s leaders recognize that’s correct. Even if DSA won’t adopt Chapo’s insult-humor shtick in its official platform, it’s hard to imagine that some of its beliefs won’t seep in some way into the organization through new membership.
Chapo’s “dirtbag” politics have alarmed other left-leaning writers. In an essay for the New Republic, Jeet Heer warned against what he called its “dominance politics” as counterproductive to building a coalition with center-left Democrats.
But in an interview last year, Chapo Trap House co-host Matt Christman countered that Donald Trump had captured the “transgressive thrill of defying the cultural expectations of the elite,” and that the left would be wise to reclaim it. Incisive put-down humor, he suggested, isn’t just useful for amassing a podcast following; it could also be helpful to an ascendant left-wing politics.
“The gonad element of politics is now totally owned by the right. All the left has now is charts and data. You cannot motivate people with charts and data and lecturing,” Christman said. “If we’re going to win, we cannot allow [right-wing provocateur] Milo Yiannopoulos and all of these carnival-barking Nazis to have all of the fucking fun.”
Friday, August 04, 2017
Kocherlakota
How a Fed inflation hawk changed his mind by Anna Saphir
Colleagues put it simply: he cares about on-the-ground data, and he knows how to listen.
That much was clear in August when Kocherlakota, who turns 49 on Friday, donned a pair of jeans and took his board's nine directors on a tour of the booming oil fields of North Dakota.
In a 14-hour, 300-mile bus trek, they visited a fracking rig, a pipeline, a workers' camp, and a natural gas plant. They heard locals speak of life in the heart of the U.S. energy boom.
"His style is to let everybody else do the talking and he listens intently," said Lawrence Simkins, one of the board members and president of Montana-based Washington Cos, a privately owned transportation and equipment firm.
As the bus maneuvered truck-clogged roads, Kocherlakota got into a discussion with another director about the mental health toll on workers separated for months on end from their families.
jinxed
Game of Thrones, People of Earth, Jeremy Corbyn, weird Twitter, Trumpcare fails, Mueller impanels grand jury. Feeling better.
Thursday, August 03, 2017
Chappelle; Econospeak circles the drain
Dave Chappelle: Trump is “a bad DJ at a good party” by Constance Grady
Chappelle also said the small Ohio town where he lives is a "Bernie Sanders island in a Trump sea." "A subversive, weird place." Colbert responded "The Austin of Ohio." Chappelle: "But with none of the money and fun stuff to do at night."
The Output Gap per the Gerald Friedman Defenders by Econospeak
Chappelle also said the small Ohio town where he lives is a "Bernie Sanders island in a Trump sea." "A subversive, weird place." Colbert responded "The Austin of Ohio." Chappelle: "But with none of the money and fun stuff to do at night."
Friedman scandal
Why are big-shot liberal economists hippie-punching Bernie Sanders? by Ryan Cooper (February 16, 2016)
Tuesday, August 01, 2017
Vox speculation on Game of Thrones
Game of Thrones season 7: Cersei Lannister is about to get a rude awakening
There is something in the previews, along with Jon Snow back in the north. Beric Dondarrion lights up his flame sword.
With Casterly Rock’s defenses, the Unsullied should be able to last long enough for Dany and her dragons to come swooping in and save the day. Since Euron doesn’t know about the sewer system, the Unsullied should be able to hold him off in time for some dragon-fueled reinforcements or to prepare a retreat.I think Daenerys is going to attack King's Landing or Jaime's army with dragons and Dothraki. She's done with holding back.
Meanwhile, it’s unclear what Jaime’s army is planning to do or where it’s going to go after plundering Highgarden. Perhaps they’ll team up with Euron to take back Casterly Rock.
There is something in the previews, along with Jon Snow back in the north. Beric Dondarrion lights up his flame sword.
Monday, July 31, 2017
Sunday, July 30, 2017
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