I’ll post a few links to posts by the economists Brad Delong and Brad Sester. First, Brad Delong quotes David Leonhardt, who is arguing that the official inflation rate (in the U.S.) is still over-stating how much inflation is actually occuring (that is, Leonhardt is arguing that there is less inflation than the government reports): (more…)

Which presidential candidate have the soundest economic policy? Well, these economists don’t really seem to want to tell you: (more…)

Brad Delong quotes Paul Krugman, regarding the effects of global trade. My own view is that we all tend to underestimate the importance of earlier periods of globalization. This is what Krugman has to say: (more…)

Robert Hull is a friend of mine and he writes a terrific weblog focused on pop culture and the history of music over the last few decades (for instance, A Double History of the Supremes’ “Love Child”). Robert’s seen a fair amount of that history first-hand - he used to be an executive at Time Warner, in the music division, and before that he was a writer at Creem magazine. Robert doesn’t often write about politcal issues, yet, while reading over his recent posts, a very political question came into my head: why doesn’t the government do a better job defending the copyright of music? (Mind you, it’s a rhetorical question, as I’ve already got several possible answers in my head, but please add your own ideas in the comments.) For perspective, the current music scene needs to be contrasted against the way things used to be, a perspective which for me was sparked upon reading this history of K-Tel, an old article which quoted Robert and which he has recently reposted: (more…)

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This graph shows the increase in income inequality that America has seen since the year 2000. The poorest 90% of the population have seen their real wages erode by 4%.

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This graph, which I saw over at Brad Delong’s website, shows the value of the dollar since the early 70s (when the dollar was first allowed to float). Its peak in the 1980s corresponds to a period of massive deindustrialization and high unemployment in the Rustbelt (America lost 2 million industrial jobs during the 1980s). It’s low point in 1995 corresponds to the beginning of the only period of the last 30 years during which real wages rose for most workers (1995-2000). This graph, more than most, suggests that a weak dollar might offer real benefits for most Americans, even if it (a weak dollar) causes quite a bit of pain on Wall Street.

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Regular commenter quasibill, on the LeftLibertarian2 list, linked to an excellent article on Federal Reserve policy and inflation.  Here’s the money quote (no pun intended):

A popular misconception is that inflation cannot occur in an economy without wage inflation to transmit prices into all-goods prices. Indeed the Fed has waged war on wages since the early 1980s so this point of confusion is understandable…. But wage inflation is but one of a long list of factors that can create an inflation spiral.

Labor discipline, in fact, has been a central objective of Federal Reserve policy since Volcker’s recession in the early ’80s.

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Economics, John McCain says, is “not his strong suit.” So it’s nice to know he’s being tutored on the subject by one of the best. His new economic adviser, Carly Fiorina, is the former CEO of Hewlett-Packard.

During her stint in that company, she was a classic textbook case of MBA Disease: stripping assets, gutting human capital, downsizing, piling work on the survivors–and getting a big, fat pay package for herself.

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Obama really knows how to harsh a guy’s buzz.

A while back, I expressed the hope that he was to some extent a departure from establishment liberalism.  Establishment liberalism, I had previously argued, was the ideology of the professional and managerial New Middle Class, which managed the new large organizations that had sprung up in the corporate economy of the late nineteenth century, and wanted to manage society as a whole the same way they managed their corporations.  It was exemplified by Herbert Croly who, in The Promise of American Life, called for the achievement of “Jeffersonian ends by Hamiltonian means.”

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Why do I find this insanely amusing?

Sept. 27 (Bloomberg) – A famous series of jokes uses the actor Chuck Norris, martial artist and star of “Walker, Texas Ranger,” as a paragon of masculinity and omnipotence. “Guns don’t kill people, Chuck Norris kills people,” goes one. “Chuck Norris doesn’t get wet, water gets Chuck Norris,” goes another.

Similar thinking can be applied to the current state of financial markets. Here, then, is the world of money recast in Chuck Norris terms.

Chuck Norris doesn’t target inflation. He roundhouse-kicks it until it begs for mercy.

The Chuck Norris dollar buys 3 Canadian dollars, and trades at parity with the euro.

Chuck Norris doesn’t supply collateral, only collateral damage.

The tears of Chuck Norris would supply enough liquidity to solve the credit crisis. Too bad he never cries. (more…)

It wasn’t so long ago that Alex Tabarrok was wondering out loud, “What credit crunch?”

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In my post, After Greed comes Fear, I excoriated the role of the unregulated market in the current sub-prime mess we’re in. Quasibill cried foul, pointing out quite rightly that the whole concept of mortgage-backed securities started off with Fannie Mae, Freddie Mac and all the rest of those cutely acronym-portmanteau-ed government-sponsored enterprises. To quote ‘Bill directly, “to lay this turd at the feet of “unregulated markets” has the causation entirely backwards.”

My response? I both agree with ‘Bill, and I stand by my post. It is possible for there to be both simultaneously too much government influence AND too little regulation. Read on… (more…)

The economic effects of licensing and certification regimes have been the subject of a couple of recent posts by Angelica, and of extensive discussion in the comments: “Call Me Street Food Libertarian” and “The Rats of El Toro.”

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There have been so many defaults on mortgages and the housing market is in such freefall that the chief investment analyst at Johnson Illington told NPR that for now at least, nobody want’s to touch them.

JOHNSON: If there are no buyers and you can’t sell it, it’s probably worth nothing…when you can’t sell a security, it’s really worthless.

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Brad Sester is grim:

I am referring to the fact that the credit extension the fueled the most recent boom didn’t generate any real income gains for most Americans. Times weren’t all that good for most Americans even before the credit bubble burst.

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The AP came out with an article earlier this week called “Men Who Do Housework May Get More Sex”. It follows a recent report from the Council on Contemporary Families summarizing the changes that have (and haven’t) taken place on the
home front over the last several decades: (more…)

I read this in today’s New York Times, and all I can say is it’s about time! Finally someone is willing to take a risk to see what happens when we treat teachers as though they actually have one of the most important (and challenging) jobs in this country. A new charter school is set to open in New York City and what makes it different is the salary it will offer in order to attract top notch teachers: (more…)

In public schools throughout New York City an experiment is taking place using
incentive programs to encourage students and teachers to aim for higher scores on standardized tests, reports Jennifer Medina in today’s New York Times. The programs vary in what types of awards are offered, from pizza parties and McDonald gift certificates to teacher bonuses and student monetary awards. The idea was developed by Roland G. Fryer, a Harvard economist, and while it is still in its infancy, there is some indication that these programs are effecting positive changes in the classroom: (more…)

Just in case any of you are losing sleep over the economy, here’s some news to cheer you up. While it’s true that Alan Greenspan, former Federal Reserve Chairman, said earlier in the month that the chance of a recession is “50 percent or better,” Bush expressed a much more optimistic view about the economy during a press conference today: (more…)

Business Week points to the data suggesting a recession may be on the horizon: (more…)

Paul Krugman, Princeton economics professor and author of The Conscience of a Liberal, discusses the state of America’s poor in light of recent neuroscientific research establishing a link between mental health and development and growing up below the poverty line. He appeals to the country’s conscience to renew the war on poverty in earnest. Here’s an excerpt from his recent New York Times op-ed: (more…)

I recall in the 1990s there was a period when the media was full of fairly euphoric descriptions of the current era as one in which market forces were winning out over the state. The collapse of the Soviet Union, and the collapse of a world wide Communist movement, initiated a wave of triumphalist rhetoric about market economies. Those of a libertarian mindset thought they had something to celebrate. Nevertheless, despite the rhetoric, government agencies might be playing a bigger role in the process of globalization than ever before. Brad Sester explains: (more…)

The U.S. economy is increasingly run by government. But not necessarily the American government. Increased globalization means other countries have an increased desire to influence the direction of the American economy. This is especially true when it comes to the value of the dollar. Relatively poor emerging economies around the world are sending their money to the U.S. in an attempt to prop up the value of the dollar. As Brad Sester points out, foreign goverments also have an interest in proping the U.S. bank sector, partly to avoid the kind of economic depression in America that would impact their exports to America: (more…)

Nouriel Roubini argues that we are in the middle of the worst housing recession ever: (more…)