Will the taper start next week? That’s certainly the conventional wisdom, and I’d put the probability above 50%. Still, there are more headwinds pushing against that idea than tailwinds at its back: long rates already up a point over the past few months, labor market stuck in second gear, GDP barely at trend (1.6% year/year), [...]
Over at the NYT Economix blog, I argue for no tapir taper in Sept.
I posted on this last week and the NYT has some interesting back-and-forth today on this question of whether economics is a legitimate science. The original piece on this claimed that since its variables are social, not physical, constructs, economics is generally unable to make reliable predictions that test, reject, or advance its theories. I [...]
Working on a book chapter on figuring out how to turn fiscal policy right-side up again, riffing off of my CDSH hobby horse: Me, I think the best position is to be a Cyclical Dove and a Structural Hawk (CDSH). If you’re a CDSH, your fiscal question in recessions and sloggy periods like the US [...]
Riffing off of an important new study from EPI, over at the NYT Economix blog. BTW, there’s one thing I wanted to add here, as the NYT piece was already getting too long. This is a key point of the piece: …when it comes to economic policy, the difference in recent years between Democrats and [...]
As I recently suggested, the idea that the Federal Reserve will begin to taper its asset buying program next month is less of a slam dunk than many market participants think. The minutes of the Fed’s July meeting, released yesterday, do not add a lot of clarity (from the NYT): There were hints that some members [...]
“I wouldn’t want Larry Summers to mow my yard.” That little gem was uttered Monday by Senator Pat Roberts (R-Kan) in what has to be a fight the White House really doesn’t want to have right now. They’ve got two very strong candidates in Summers and Janet Yellen, and beyond pointing out that any chance [...]
While much of DC has gone to the beach, apparently my CNBC pal Jimmy P (aka, James Pethokoukis) has decided to spend August challenging my posts. He raises some good points to which I’ll briefly respond. But broadly speaking, I’m unsurprisingly unconvinced. In both posts he’s written about, I was careful to point out that [...]
Back when we used to argue about the Keynesian stimulus known as the Recovery Act, I posted charts like those you see here: very simple pictures showing that real GDP started growing shortly after the Act’s implementation at the same time that job losses decelerated. I’ll be the first to admit that there’s lots of [...]
I usually find economist Robert Shiller’s commentaries resonant and insightful, but this one seemed more confusing than enlightening. The thrust of the piece is the concern that government activities to promote innovation can just as easily stifle it. The piece introduces the notion of corporatism, from a new book by Ed Phelps. What means “corporatism”? [...]
This one’s pretty weedy but worth it for those of us interested in the important question of whether our high levels of income inequality are affecting macroeconomic growth. I laid out the basic issues in this earlier post and elaborate on them in a forthcoming piece from CAP, but the part I want to get into [...]
Over at the WaPo, Barry Ritholtz has a resonant and interesting piece questioning economists’ value-added to investors. He reports that while they’re “…intelligent, engaging and often charming folks, …their work is often of little use to investors.” Though he makes many great points here (about which more in a second), he leaves out a few interesting wrinkles. [...]
On the NYT’s Economix blog–An Economy Stuck in Second Gear. Really, in between first and second right now, but you’ll see what I mean. BTW, I read that only 7% of new cars have manual transmissions, so clearly I need to start mining for a new analogy. Though this one has so much going for it [...]
I’ve read a number of commentaries around this morning’s job report that lead me to believe people are scratching their heads much too hard as regards the recent data flow and the Fed’s next move (see analysts’ comments in Bin Appelbaum’s piece here, e.g.). Of course there’s uncertainty, and not every single indicator points the [...]
Dean Baker and I on the GDP revisions–what’s put in and what’s left out.
If you’re anything like the nerd I think you are, today’s GDP report, with revisions back to the beginning of time—that’s 1929 in government accounting—is nothing short of fascinating. Not so much in that it changes the world as we knew it, though there’s a little of that, but just because of all the nuanced [...]
I didn’t hear Treasury Secretary Jack Lew on TV yesterday, but I read this AM that he was asked “how come the Obama administration bailed out the banks but isn’t talking about doing so for Detroit?” Fair question. The answer is, I think: the correct motivation for federal bailouts–meaning some combination of managing a bankruptcy, paying [...]
I’ve got a new commentary up at the NYT about a theme that was central to the President’s speech the other day: linkages between income inequality and economic growth. One thing I didn’t have space to get into in the piece was the evidence for this theory, some of which was helpfully discussed by Jim [...]
I thought the President gave a resonant and powerful speech today, as he often does when he’s covering this material on the road. The analysis flowed insightfully from diagnosis to prescription, with a correct and strong emphasis on how the economy and policy has changed over recent decades in ways that exacerbate the disconnect between [...]
I’ve been getting that question a lot lately, so I thought it might be useful to offer some thoughts here. President Obama is giving an economics speech later today at Knox College in Illinois, focusing on the economy from the perspective of the middle class. As he did in a speech at this same locale [...]
Yesterday, the WSJ featured a piece explaining how the economy’s “stuck in neutral.” Today, it features “reasons for economic hope,” including repaired balance sheets, the shale boom, reduced health care inflation, and falling budget deficits. So, which is it? At this risk of being a little too folksy, I think the gear shift analogy is [...]
To review, I recently suggested that based on Janet Yellen’s version of the Taylor rule (really, my slightly tweaked version of her version), the Fed should be following the accommodative stance suggested by Bernanke last week as opposed to the slightly more hawkish view he sorta kinda espoused the week before. John Taylor, he who [...]
My take on the bankruptcy, over at the NYT Economix blog. And here’s what we ought to consider doing about it.