Tag Archives: US/Global Economics

Rumble on Wall St. — No Other Way of Keeping Profits Up! At Jacobin, Seth Ackerman did an interview with J.W. Mason about The Class Struggle on Wall Street that considers the trade-off between relative profit and wage shares of income. Whether you agree with his analysis or not, Josh teases out some of the implications of the relationship, both for profit expectations and for political prospects. One assertion I would question is “there is absolutely no...

Baumol Cost Disease and Relative Prices – Part 2 Many thanks to the Angrybear for reposting this as well as some excellent comments (save that absurd contention I’m a Luddite). If you check the comments over at Mark Perry’s place you will see that Paul Wynn made the same point I made and even linked to Timothy Lee: This became known as Baumol’s cost disease, and Baumol realized that it had implications far beyond the arts. It implies that in a world of...

The WaPo Gang Going After The Usual Suspects On the Budget Falls On Its Face Factually All right, all right, that is not completely fair.  Yes, they dump all over Trump and the GOP-run Congress for their massive tax cut directed at the rich, as well as the hypocrisy of the Republicans in so smoothly switching from denouncing budget deficits during the Obama era to a “what? me worry?” attitude now with deficits set to soar in a period of near full...

Mark Perry Has Never Heard of William Baumol Otherwise why would Mark Perry write this nonsense: The chart above (thanks to Olivier Ballou) is an update of a chart we produced last year about this time, and shows the percent changes since January 1997 in the prices of selected consumer goods and services, along with the increase in average hourly earnings in this version … Blue lines = prices subject to free market forces. Red lines = prices subject to...

Drastically Changing the Rules On Infrastructure Spending Most observers have figured out that the Trump infrastructure spending plan seems to be weirdly lopsided in an unrealistic way, with $200 billion in federal spending somehow supposed to inspire a total of $1.5 trillion in spending by state and local sources along with private ones.  What has not been made all that clear publicly is how this plan upends decades of established practice in fiscal...

Bitcoin prices are an attractive topic for people who study behavioral finance. Behavioral means anything but rational expectations, Nash equilibrium and the Efficient Market Hypothesis. It is easy to argue that the fundamental value of Bitcoin is zero — it doesn’t yield income and there is no limit on the supply of cryptocurrency, because new cryptocurrencies can be introduced. I certainly consider the positive price of Bitcoin to be a failure of the...

Interest rates: no shift in the economic weather yet I wanted to make two comments about what has been happening recently with interest rates, a short term look and a long term look. Today let’s discuss the short term. Since September, long term Treasury interest rates have risen from roughly 2.1% to 2.8%. The two year Treasury yield has risen from roughly 1.3% to 2.1% — which means that for the first time in years, the 2 year Treasury is giving you...

Why Tax Cuts for Rich Dude Will Lead to Little Stimulus Over at Brad DeLong’s blog jonny bakho adds an interesting comment: How much stimulus did the GWBush tax cuts provide? They came during a recession followed by “jobless recovery” made somewhat better by the housing bubble, then burst big time in 2008. How different would the multiplier be if given to infrastructure repair and broadband extension, investments that create domestic jobs? In a global...

By  Steve Roth   (reposted from Evonomics) Consumption tax may not make sense You often hear calls out there — mostly from Right economists but also from some on the Left — for a consumption tax in the U.S. As presented, it’s a super-simple idea: tally your income, subtract your saving, and what’s left is your consumption. You pay taxes on that. We want to encourage thrifty saving and discourage profligate consumption, so what’s not to like? Lots. Before...

This is a post I’ve been meaning to put up all week (after all, this week was going to be very slow on data and news, right?). As the expansion gets more and more mature, the *relative* performance of certain measures of improvement become more interesting.  One of those is the comparison between U3 unemployment, and the broader U6 underemployment measure. While we only have about 25 years of data, so caution is warranted, generally speaking,...