By Bradford DeLong   (originally published at Grasping Reality with Both Hands)
THE DAMNATION OF THE PROFESSIONAL REPUBLICAN POLICY INTELLECTUALS

I have long known that the thoughtful and pulls-no-punches Amitabh Chandra has no tolerance for fuzzy thinking from Do-Gooder Democrats. He is one of those who holds that not even a simulacrum of utopia is open to us here, as we muck about in the Sewer of Romulus here in this Fallen Sublunary Sphere. ”There are always trade-offs“, he says. “Deal with it“, he says. But here he leans to the other side, and, well, snaps: Amitabh Chandra: “GOP thinktanks https://twitter.com/amitabhchandra2/status/1007261629547982849 are the biggest milksops. From healthcare policy to environmental policy, from national security

(Dan here…lifted from Robert’s Stochastic Thoughts.)

by Robert Waldmann
In a generally good article on how Trump got nothing out of Kim in Singapore, David Nakamura, Philip Rucker, Anna Fifield, and Anne Gearan make a false claims “Deals reached between Washington and Pyongyang under Presidents Bill Clinton, George W. Bush and Barack Obama collapsed after North Korea conducted additional missile and nuclear tests.” This implies in particular that the deal reached between Washington and Pyongyang under President Bill Clinton collapsed after North Korea conducted additional missile and nuclear tests. which is a totally false claim. the deal reached under Clinton collapsed when Bush decided to abandon it, because North Korea had bought centrifuges from

By Steve Roth
What Causes Recessions? A Physicists’ Complex Systems Model

I received some very interesting comments from Yaneer Bar-Yam to my recent Evonomics post— “Capital’s Share of Income is Far Higher than You Think.” He pointed me to his very interesting paper, “Preliminary steps toward a universal economic dynamics for monetary and fiscal policy.”
I’m using this space to reply with with some stuff that can’t display in that comments space.
I haven’t gotten to the full-boat, multipart reply that I have floating in my head, but wanted to get back on two items for the nonce, a question plus a response on recession prediction:
1. What is the function in this model that “causes” capital gains? This always strikes me as the core problem in a complete SFC

By Dale Coberly
SOCIAL SECURITY TRUSTEES REPORT:
There is yet time, brother.

But not much.
The Social Security Trustees have issued their annual report. It is not much changed from last year. In fact it is a little better.  Last year’s Report projected that by this year Social Security would have reached “short term financial inadequacy.” This year’s projections put that off for another year or possibly two.
Short term financial inadequacy means that in ten years the Trust.  Fund reserves will fall below the level of one full year’s benefits if no action is taken.
This would not be a catastrophe, but it does mean we really ought to take action now. If we raise the payroll tax by one tenth of one percent per year until the total raise reaches about two

By Joseph Joyce
The Spillover Effects of Rising U.S. Interest Rates
U.S. interest rates have been rising, and most likely will continue to do so. The target level of the Federal Funds rate, currently at 1.75%, is expected to be raised at the June meeting of the Federal Open Market Committee. The yield on 10-year U.S. Treasury bonds rose above 3%, then fell as fears of Italy breaking out the Eurozone flared. That decline is likely to be reversed while the new government enjoys a (very brief) honeymoon period. What are the effects on foreign economies of the higher rates in the U.S.?
One channel of transmission will be through higher interest rates abroad. Several papers from economists at the Bank for International Settlements have documented this

By Steve Roth  (originally published at Evonomics)
The shares of income going to “capital” and “labor” are vexed issues. How much is received for doing work, and how much is unearned “property income”— interest, dividends, etc.? For a long time, economists thought these relative shares stayed roughly unchanged over time. But since the 70s, and especially sincely the latter. And the ownership share of income goes to a small slice of households that own almost all the stuff.

The labor and capital-share measures you commonly see start by measuring total labor compensation — wages, salaries, and benefits. That’s labor’s share, in dollars. Subtract labor share from GDP, and you get the share of GDP going to owners (to “capital”). Owners’ share isn’t measured,

By Jeff Soplop
H-2B, or Not to Be? A Look at Labor Shortages and Immigrant Labor
Several publications recently ran stories on issues with the H-2B visa program and impending shortages that are affecting local economies of various parts of the country. For those who aren’t familiar, the H-2B program allows US employers to bring in temporary workers for non-agricultural jobs. While the length of stay varies and can sometimes be extended, typically these workers come for about six months and then return home.
Some of the recent coverage is being driven by the fact that shortages are happening in parts of the country that voted for President Trump and yet, ironically, are highly dependent on H-2B workers. This NBC News piece, for example, covers H-2B worker

Dan here….Downsizing the home when retiring? How is that done? Anecdotal evidence in the Boston area reveals to me several reasons why downsizing is only a small percentage of the housing market:  Aside from being able to handle maintenance to a later age than in the past, and wishing to maintain personal community that a move would disrupt, downsizing is not necessarily as affordable as a cursory look might suggest.   Here is one look at data:
Via Calculated Risk:
Some interesting analysis from economist Josh Lehner, at the Oregon Office of Economic Analysis on whether people actually downsize in retirement. This is important since so many baby boomers are reaching retirement age. Will they downsize or will they age in place?
A few excerpts: Do People

By Joseph Joyce
A Guide to the (Financial) Universe: Part III
Parts I and II of this Guide appear here and here.
4.      Stability and Growth
Is the global financial system safer a decade after the last crisis? The response to the crisis by central banks, regulatory agencies and international financial institutions has increased the resiliency of the system and lowered the chances of a repetition. Banks have deleveraged and possess larger capital bases. The replacement of debt by equity financing should provide a more stable source of finance.
Indicators of financial volatility, such as the St. Louis Fed Financial Stress Index, currently show no signs of sudden shifts in market conditions. The credit-to-GDP gap, developed by the Bank of International

Angry Bear made the list again on the Intelligent Economist list of top blogs. We are listed in the general category seventh from the top. I see some new names on the list. Congratulations to all contributors for making a fine publication.
The Angry Bear is a multi-author blog. Each author has his or her own unique area of expertise. Authors include a tax law expert, historian, numerous economists, and business and financial professionals. The varying degree of topics makes this an informative blog and a great overview of economic issues.
Intelligent Economist

(Dan here…unemployment rates were about the same at 3.1 per cent (M) and 3.0 per cent (W). Taking a look at other measures of the success of an economy for the average person is well displayed here)
Via

Via PR Watch for the Center for Media and Democracy points to the impact of tax cuts for nine companies:
The Center for Media and Democracy just concluded an analysis of nine companies that are major players in ALEC, showing that even with the tax cut, those corporations have laid off or will lay off employees. Comcast, for example, said it will save $128 million from the tax cut, and announced 500 layoffs. Caterpillar reported that it will pay 9 percent less in income taxes, but also announced it is closing facilities.
Eli Lilly reported that it lowered its corporate income tax rate by almost one-third but announced 3,500 layoffs at the end of 2017, layoffs that are still taking place. Energy companies are expected to be major beneficiaries of the tax

In the Public Interest has published a new report (pdf) on the impact of charter schools and public school funding in CA:
In a first-of-its-kind analysis, this report reveals that
neighborhood public school students in three California school
districts are bearing the cost of the unchecked expansion of
privately managed charter schools. In 2016-17, charter schools
cost the Oakland Unified School District $57.3 million, the San
Diego Unified School District $65.9 million, and Santa Clara
County’s East Side Union High School District $19.3 million. The
California Charter School Act currently doesn’t allow school
boards to consider how a proposed charter school may impact
a district’s educational programs or fiscal health when weighing
new charter

(Dan here…there is a lot of discussion about reasons for wages not keeping pace with productivity and the like.  There are also discussions on the impact outsourcing, the role of monopolies and monopsony. and outright making it a policy to keep wages from rising.)
Spencer thinks:
Even though the year over year change in average hourly wages appears stable, if you look at the 3 month rate of change it shows wage growth accelerating significantly.

Moreover, my wage equations is still calling for wage growth to accelerate.

Meanwhile the monthly job numbers continue to show that employment growth is not significantly different under Trump than it was during the expansion phases of the cycle under Obama.