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from William Neil We begin with some gross numbers from Das’ Age of Stagnation: the loss of wealth from the Great Recession of 2008-2009. Citing the work of three economists at the Federal Reserve Bank of Dallas (Tyler Atkinson, David Luttrell and Harvey Rosenblum), the figures they put on the loss to the U.S. economy come to 6-14 trillion dollars, “equivalent to U.S. $50,000 to U.S. $120,000 for every American household, or 40-90% of one year’s economic output”. We’ve seen figures of...

from David Ruccio I find myself thinking more these days about the fairness of Social Security and other government retirement benefits. One reason, of course, is because I’m getting close to retirement age—and, as I discover each time I raise the issue with students, young people don’t think about it much.* Another reason is because Social Security (in addition to Medicare, Disability, and other programs) is the way the United States creates a collective bond between current and former...

from Robert Wade Why have the large majority of professional economists, especially in the academy and in western-dominated international organizations like the World Bank and IMF, been committed to free trade policy, downplaying theoretical and empirical weaknesses in order to remain so? The teaching of economics in just about all universities of the western world, and in large parts of the developing world, socializes students into belief in the rightness of the “market” paradigm, and...

You can see from the chart that growth of mortgage applications for home purchases has been near 0 for quite a while, and remains historically depressed. The lines zigging downward are Saudi initiatives to lower prices, and as price setter they will necessarily prevail for as long as they have excess capacity:

from Lars Syll Paul Krugman has repeatedly over the years argued that we should continue to use neoclassical hobby horses like IS-LM and AS-AD models. Here’s one example: So why do AS-AD? … We do want, somewhere along the way, to get across the notion of the self-correcting economy, the notion that in the long run, we may all be dead, but that we also have a tendency to return to full employment via price flexibility. Or to put it differently, you do want somehow to make clear the...

from Jim Stanford However it is explained in economic theory, the fundamentally productive, entrepreneurial role of capitalist investment is essential to the political and social legitimacy of the elites who lead the system – and who own and profit from the bulk of its wealth. Indeed, the thriftiness of the early capitalists, and their willingness to plough their savings back into growth, accumulation, and innovation, is precisely what endeared this dynamic new class to the classical...

New home sales better than expected, but remember it’s about permits, as no home is built without one: Note how weak this is vs past cycles: Annualized rate of total sales keeps working its way lower from last year’s peak of about an 18.5 million pace, which also coincides with the deceleration in auto lending: From WardsAuto: U.S. Forecast: Mild Sales, Growing Inventory The report puts the seasonally adjusted annual rate of sales for the month at 17.1 million units, well...

from David Ruccio On the eve of their presidential election, the French people and politicians continue to debate how they should respond to the end of “Les Trente Glorieuses,” a period that appears to receding into ancient history. Except, as it turns out, for those at the very top, for whom the last thirty years have been quite glorious. According to new research by Bertrand Garbinti, Jonathan Goupille-Lebret, and Thomas Piketty, between 1983 and 2014, average per adult national income...