Category: Politics

I’ve said many times: every economic assertion should be preceded by the words “by this measure.” For big economic questions, you need to look at lots of different measures, lots of different way, to get a feel for what’s going on. This has come home to me as I’ve considered Jared Bernstein’s ongoing takedown of…

I’ve ranted about this phenomenon for a long time: Do Businesses Borrow to Invest in Productive Assets? Quoting JW Mason: “the marginal dollar borrowed by a nonfinancial business in this period was simply handed on to shareholders, without funding any productive expenditure at all.” We Need to Spur Business Investment. Yeah, Right. Quoting Floyd Norris:…

Scott Sumner made a very important point a while back (and repeatedly since) in a post wherein he makes a bunch of other (IMO) not very good points: Income and wealth inequality data: Nonsense on stilts His crucial (and I think true) point, in my words: you can’t think coherently about inequality — especially wealth inequality — if…

Paul Krugman and assorted others have been puzzling at this question recently, one that I’ve been grinding an axe about for some years. For the first time, I think, Krugman’s highlighted the explanation that I keep going on about: Inflation helps debtors and hurts creditors, deflation does the reverse. And the wealthy are much more likely than…

If you equate wealth and prosperity (not a crazy equation), then one of the best measures of a country’s prosperity is median household net worth. It arguably says a lot more about prosperity than various income measures. It tells you how the typical household (50% have more, 50% have less) is doing. If lots of…

Matt Bruenig gives us a great breakdown of what poverty would look like if we relied on the market to solve it (as we did almost exclusively for thousands of years before the emergence of enlightened modern welfare states over the last two centuries). The poverty rate among the elderly would be > 45%. (Old…

Years of >5% Growth: Pre-Reagan? 15 Post-Reagan? 5 Post-80s-recession-recovery? 2 Cross-posted at Angry Bear. Related posts: Repeat After Me: Low Taxes (on Rich People) and Economic Growth Are Not Correlated Now (Also) Blogging at Angry Bear You Gotta Give Reagan Credit David Beckworth Scott Sumner talks very good sense sometimes Marginal Rates and Economic Growth:…

The idea of democracy is to give the people what they want, right? Ezra Klein points us to a great study by Ray LaRaja and Brian Schnaffer examining policy preferences by political donors (5% of the population) vs. non-donors (95%). Here’s my rendition of the results: Whose preferences would you say are embodied in our current government?…

A a year or so back I highlighted David Beckworth’s great post on Helicopter Drops. And the world’s best econoblogger, Steve Randy Waldman, did as well. (A “fantastic post,” he said.) I’ve been pinging ever since to see a response to that post from Market Monetarist opinion-leader Scott Sumner. (AS SRW said, what we’d gotten from him…

I’m stunned by how good the new Jacobin piece by Seth Ackerman is: “Piketty’s Fair-Weather Friends.” It gives what I find to be the best understanding so far of the whole Piketty “think space.” It’s so good that I can’t encapsulate it, so I’ll just share some of the passages I’m most taken with, with my…

As a naive young noodler on economic topics I always wondered: Why are players in the financial industry — which produces very few real, human, consumable goods and services that people value in their lives — so well-paid? I figured it out pretty quickly: it’s because they are able to control who gets that real…

I’ve bruited the notion in the past that “money” should be technically defined, as a term of art, as “the exchange value embodied in financial assets.” In this definition, counterintuitively relative to the vernacular, dollar bills aren’t money. They’re embodiments of money, as are checking-account balances, stocks, bonds, etc. etc. Money and currency aren’t the…

That’s the conclusion of Stuart W. Elliott in his recent paper, “Anticipating a Luddite Revival.” (Hat tip: RobotEconomics.) We’ve seen that scale of transformation before. But this one promises to be roughly four times as fast, dwarfing Luddite-era concerns: …the portion of the workforce employed in agriculture shifted from roughly 80% to just a few…

I’m surprised that nobody highlights what for me is the key takeaway from that report. They predict, with a $10.10/indexed increase: Low-end incomes increase $19 billion. High-end incomes decline $17 billion. For a net GDI increase of $2 billion. Table 1, page 2: Pie gets bigger, all that rot. The increase is presumably explained by…

Upate: Those who have qualms about the methodology and underlying assumptions here would do well to consider Thomas Piketty’s thinking on page 210 of Capital in the 21st Century. He distinguishes between “real” and “nominal” assets, pointing out that real asset values climb along with inflation and growth, while nominal asset values don’t. A simple rule of…

Thomas Piketty’s important new book, Capital in the Twenty-First Century, predicts a bleak future of increasing concentrations of financial assets in few hands, stagnant wages and labor share of income, and declining returns to capital — secular stagnation. He enunciates and demonstrates the part of Marx that Marx got exactly right. But Dean Baker points out where…