The Angry Bear

Last week Timothy  Taylor at Convertible Economist did a very good post on  gross vs net capital spending. http://conversableeconomist.blogspot.com/2017/02/declining-us-investment-gross-and-net. He showed that in recent years the more rapid growth of  high  tech  spending has had an unanticipated impact.  The new high tech equipment has a much shorter life span that more traditional equipment. Consequently, more and more of gross capital spending is just...

CPAC had a gathering of Republican Governors today. As Jennifer Hayden (@Scout_Finch) on Twitter noted, the Brownback/Walker/etc. panel was called “How to ruin your state’s economy with one easy tax cut.” So naturally my thoughts shifted to the one way blowing up your state’s economy could be ameliorated: if some unearned windfall occurred. Could a Legislature be saved from itself? Lo and behold, the PowerBall jackpot was won by a ticket in Lafayette, IN,...

In the last few months I have gotten accused of racism a few times at this blog. I don’t think I am misrepresenting my accusers by stating that their claim is based primarily because of my views on a) immigration and b) the differences between the economic performance of different countries. The two issues actually collapse into one. I have stated repeatedly that I believe that culture is a key factor affecting the difference in economic outcomes (and many...

For nearly a half a century, from 1947 to 1996, real GDP and real Net Worth of Households and Non-profit Organizations (in 2009 dollars) both increased at a compound annual rate of a bit over 3.5%. GDP growth, in fact, was just a smidgen faster — 0.016% — than  growth of Net Household Worth. From 1996 to 2015, GDP grew at a compound annual rate of 2.3% while Net Worth increased at the rate of 3.6%. Responding to an editorial in the New York Times, Jared...

by New Deal democrat Wages and household income vs. housing: which leads which? Sometimes I look into a relationship that doesn’t quite pan out, but it’s still useful to flesh out the process. That’s the story of real wage growth vs. housing. In the last few months I ‘ve pointed out that real wage growth has been slowing. In January, it went negative YoY.  Since, all else being equal, having less money to save for a downpayment, or to pay the montly mortgage...

From the Roosevelt Institute comes this graphic on the overall reality of macro policies: The Republicans’ underlying assumption—that corporations invest more and create more jobs only when they are relieved of burdensome tax rates—is false. American businesses already enjoy a historically low cost of capital, and they have more than enough cash on hand to invest, raise wages, and create jobs. Corporations are choosing to make dividend payments and stock...

by Barkley Rosser  (originally published at Econospeak) Saint Janet Yellen: The Best Fed Chair Ever? OK, so the immediate reaction of many to this title might be to laugh, but I challenge anybody reading this to name another Fed Chair who was clearly better than she is.  I do not think you can.  However, one reason why one may not think much about her is that things have been so inconsequential since she has been Chair.  Nothing much has happened.  She...

A little Ella Fitzgerald for you today. Kind of fits with what is going on in the US today. [embedded content] Over at Vox, Matt Yglesias has an interesting article on the Trump Transition Team ordering government economists to cook up rosy economic forecasts. With his far reaching economic “it will be great” promises during the election, delusional Trump has laid out a “blue skies” future which is likely unobtainable with the past economic growth of less...

by New Deal democrat The shallow industrial recession is fading in the rear view mirror A year ago the “shallow industrial recession” induced by the strong US$ and imploding oil patch was bottoming.  At that time I described the historical pattern: Typically new orders turn positive first (red, left scale in the graph below), followed by sales (green, right scale), and finally inventories (blue, right scale): At that time I concluded: If this is an incipient...