Naked Keynesianism

Central planning (Socialism?) in democratic societies There is a lot being written on the causes and cures for the economic consequences of the Coronavirus (COVID-19). The predictable distinction is among those that think that this is essentially a demand shock, mostly to services, and those that are concerned with the disruption to supply chains. And to some extent both are correct. But that is not the more relevant problem here, which is whether we need just more government or a...

I gave a talk last year in Argentina that forced me to think about the notion of the developmental state and its limits for Latin America. I discussed it in Mexico too, and I added a bit more about the notion of failed states, also discussed in my first presentation. This week I presented at Boston University, for the first time for a mostly English speaking audience. This is a brief summary of some of my ideas, based on those presentations.National state formation in Latin America,...

By Thomas PalleyThere is an old saying “Fool me once shame on you, fool me twice shame on me.” That saying is relevant for the current healthcare debate in which former Vice-President Biden and elite Democrats are touting a reheated version of Obamacare with a public option. It is a case of trying to fool the American public twice.Adding an Obamacare public option will not solve the healthcare problem. Worse yet, it misses an historic opportunity to heal the festering wound of healthcare...

From the recent report, written to a great extent by David Fields: Rising housing costs and stagnating real wages are the primary causes of worsening housing affordability in Utah. From 2009 to 2016 real income only grew at 0.31% per year while rent crept upward at a rate of 1.03% per year in 2017 constant dollars. Now, more than 183,000 low-income Utah households pay more than half their income for rent, becoming more likely to be evicted and moving closer to homelessness. Housing has...

By Thomas Palley“The only thing we have to fear is fear itself.” Eighty-seven years ago those were the words of Franklin Delano Roosevelt in his 1933 inaugural speech. Today, they resonate with Senator Bernie Sanders’ presidential campaign, which confronts a barrage of attack aimed at frightening away voters.Fear is the enemy of change and the friend of hate. That is why both sides of the political establishment are now running a full-blown campaign of fear-mongering against Sanders. The...

If you are in London go see Scott Carter talk on Sraffa tomorrow, organized by Andrés Lazzarini. Time: Friday Feb. 14, (11:30 to 13:30). Location: Margaret McMillan Building, MMB room 224, Goldsmiths University of London, New Cross, SE14 6NW

Godley-Tobin Lecture later this month in Boston, during the Eastern Economic Association Meetings.

Thomas I. Palley, Esteban Pérez Caldentey and Matías Vernengo Professor Robert Rowthorn delivered the second annual Godley–Tobin lecture in New York City on 1 March 2019. The title of his lecture was ‘Keynesian economics – back from the dead?’ and it is published in this issue of the Review of Keynesian Economics. The lecture was attended by a large audience and the Question & Answer session provoked a stimulating discussion. Prompted by that discussion, we thought it would be...

By Thomas PalleyThe US is currently enjoying another stock market boom which, if history is any guide, also stands to end in a bust. In the meantime, the boom is having a politically toxic effect by lending support to Donald Trump and obscuring the case for reversing the neoliberal economic paradigm.For four decades the US economy has been trapped in a “Groundhog Day” cycle in which policy engineered new stock market booms cover the tracks of previous busts. But though each new boom...

Two short clips from Lawrence Summers talk at the ASSA meeting in San Diego. So he first says that secular stagnation is more plausible now than before. He sees that it can be explained as a shift of the IS curve backwards. His IS has a somewhat marginalist foundation, with a natural rate, and a fairly conventional story for investment. Of course, the negative shift has bee compensated by some sort of stimulus, that is now weaker. I would say a smaller multiplier that affects the slope of...