The Angry Bear

W(h)ither Italy? I returned a few days ago from a conference in Italy where I spoke with some former economic  advisers of the Five Star Movement (M5S), which is now in a coalition government with the hard right wing Lega, formerly the separatist Northern League, which has now gone national, appealing to southern Italy with a strong anti-immigrant push.  While the not very exciting M5S leaders push for a minimum income guarantee,  Lega’s Matteo Salvini...

I have to link to this column, which is better than Krugman’s average. It is mostly Krugman’s usual shrill praise of fiscal stimulus. I find two things notable. One is that he has no time or column inches for unconventional monetary policy. He’s back to “monetary policy was ineffective because we were at the zero lower bound on interest rates.” Being an extreme skeptic about the effectiveness of QE and all that, I am pleased. Second he stresses housing...

If Trump applies a 25% tariff on a $1.00 item the price will go to somewhere from $1.00 to $1.25.  At $1.00 domestic producers have have been building all they can to sell at $1.00.  In the short run they can not build more capacity so the domestic producer can raise their price to $1.25, or something under $1.25 if the foreign supplier can absorb part of the tariff.  In the longer run domestic producers can produce more of the item but their costs will...

Kevin Hassett Needs Remedial Arithmetic Kevin DOW 36000 Hassett was sent out to the White House press to lie about real wage growth. Or maybe he just proved he seriously needs remedial math for another reason besides one that Brad DeLong notes: Glassman and Hassett get the math of the Gordon equation for valuing the stock market simply wrong. It’s not the earnings yield that shows up in the numerator, it’s the dividend yield. The book should have been...

This is a brilliant Twitter essay. Click the link, but I think it can be partly summarized with the first and last two tweets. 1/I noticed Brit Hume defending Tucker Carlson’s remarks about diversity today, and it made me think about how ideas go from the political extremes to the political mainstream. I kind of have a model in my head for how this process happens. if media entrepreneurs like Bannon and Carlson had chosen to focus on things like kneeling...

Some History In 1980, a letter to the editor of the New England Journal of Medicine by the Boston Collaborative Drug Surveillance Program stated “the risk of addiction was low when opioids such as oxycodone were prescribed for chronic pain.” It was a brief statement by the doctors conducting the study which was cited many times afterwards as justification for the use of oxycodone. In a June 1, 2017 letter to the NEJM editor, the authors reported on the...

New article on tax increment financing in Missouri shows impact of KS/MO border war After several years of work, my colleague Susan G. Mason (Boise State University) and I have published a new article on TIF in Missouri, specifically in the St. Louis and Kansas City metropolitan areas. “Exploring Patterns of Tax Increment Financing Use and Structural Explanations in Missouri’s Major Metropolitan Regions” appeared in the July 2018 edition of the HUD...

Scenes from the August jobs report 1. The strong trend of people entering the jobs market and getting jobs remains intact Here’s a nice graph put together by Kevin Drum at Mother Jones showing both a linear and curvilinear trend line (which are nearly identical) (red) with the prime age employment to population ratio (blue): The trend is intact and quite positive, despite the one month decline. 2. Involuntary part-time employment is near 25 year low...