Mike Norman Economics

As recently as 2008, China’s net trade surplus accounted for 8% of GDP; by 2018, that figure was only about 1.3%—less than either Germany or South Korea, where net trade surpluses generate between 5% and 8% of GDP. The US isn’t far behind its Eastern neighbor: In 2018, US had a trade deficit of about 3% of GDP, down from 5% in 2006.... Instead, China’s economy today is driven by domestic consumption. In 11 of the 16 quarters since 2015, consumption has contributed more than 60% of GDP...

Is the Trump administration's policy toward China having the opposite effect and strengthening the hardline opposition and increasing populist nationalism, as well as preventing a mutually satisfactory solution in that any solution acceptable to the US would be seen in China as an unthinkable humiliation and loss of face? How not to negotiate 101? Which is unfortunately why it is now seems hard to be optimistic about the politics on either side. What seems to be happening is not only a...

Why Barr’s investigation is important and should be encouraged. The NationHow Did Russiagate Begin? Stephen F. Cohen | Professor Emeritus of Russian Studies, History, and Politics at New York University and Princeton University All roads lead to John Brennan. Intel TodaySpygate — Former CIA Station Chief Explains Resignations From 6 Deputy Directors of Italian Intelligence Agencies Ludwig DeBraecheleer I don't buy for a second all those Russian-China economic "integrationism"...

How to Pay for the Green New DealWORKING PAPER NO. 931 | May 2019  This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the “costs” of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as...

In this post, Stephanie Kelton takes on Paul Krugman. She appears to agree with Paul Krugman's assumption that monetary policy that is built on raising interest rates to address inflation is not backwards. Actually, central bank interest rate setting is a form of price setting, the policy rate being a variable that sets the cost of borrowing (price of money). Higher interest rates are also inflationary to the degree that increase the income of holders of securities, as Warren Mosler has...

Articles in the mainstream media had described how helicopters probably dropped the chemical weapons, but a leaked OPCW document said they were brought in by hand.The mainstream media has said nothing about this document. I would have thought that it was news, wouldn't you? [embedded content] DOUMA, SYRIA — A leaked document is casting doubt on the official narrative of the 2018 Douma gas attacks which were later used to justify American, British and French airstrikes on Syria.

The national elections in India have brought victory to the National Democratic Alliance (NDA) coalition, led by the Bharatiya Janata Party (BJP). The NDA has won a stable majority in the lower house of parliament. This means that the right-wing coalition will remain in power for at least another five years, and Prime Minister Narendra Modi will be able to continue his economic and social reforms, as well as be able to operate with a free hand in the international arena. India takes a...

For decades the US and others have pursued a free-market agenda which has failed spectacularly Joseph Stiglitz described how horrible neoliberalism is, which is about rent seeking, monopoly power, and corporate control of governments. By contrast, the third camp advocates what I call progressive capitalism, which prescribes a radically different economic agenda, based on four priorities. The first is to restore the balance between markets, the state and civil society. Slow economic...

Solid report out link to .pdf here. The aggregate net income for the 5,362 FDIC-insured commercial banks and savings institutions totaled $60.7 billion in first quarter 2019, an increase of $4.9 billion (8.7 percent) from a year ago.  During the three months ended March 31, equity capital of $2.1 trillion rose by $36.9 billion (1.8 percent).  Retained earnings in first quarter 2019 totaled $22.1 billion and dividends paid rose to $38.6 billion, an increase of $7.9 billion (25.9...

If there were two lessons that can be taken from the GFC among others then we should know, once and for all, that, first, monetary policy (in all its glorious forms these days) is not a very effective tool for influencing the level of economic activity nor the price level, and, second, that fiscal policy is very effective in manipulating total spending and activity. Of course, those lessons provided the evidence that turned macroeconomics on its head because for several decades, as the...