Economics Roundtable

Technical Problems 3/9/15

The website was down several hours today, but is back up now.


May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


Jobs

The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .


Click on the image to get a bigger version.


Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.


Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?


Click on the chart for a larger version.


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- Recent Entries


July 4, 2015, 5:33 pm, 1501431
Eve of Referendum Polls Split

On the eve of the referendum, Greek voters are undecided how to vote. If one believes the polls, it's essentially a dead heat with 43% 'no', 42.5% 'yes' and the rest undecided.

Of course, the accuracy of the polls is seriously in ...


July 4, 2015, 2:44 pm, 1501419

So I've been off the grid for a few weeks, and of course after months of little to talk about, the world gave us a bounty of stories about financial distress, and related topics, each of which would merit its own post. But I'm going to hit them ...


July 4, 2015, 2:05 pm, 1501417

July 4, 2015, 1:33 pm, 1501416
How costly is it for your city to adapt to new challenges posed by climate change? Today, the NT Times takes us to Cupertino, California and Seattle. In Cupertino, (close to San Jose), fireworks on July 4th have been canceled because of lingering drought conditions. To prevent fire ...


July 4, 2015, 1:33 pm, 1501415

Writing in 2006, John Hood (former president of the John Locke Foundation) explains:

The Founding Fathers were bloggers.

Well, okay, let me rephrase that. Many of the Founders were the 18th-century equivalent of a certain category of modern-day bloggers – writers on political topics, typically using a pen name, who are ...


July 4, 2015, 1:03 pm, 1501405

Larry Mishel:

Professor Hubbard’s Claim about Wage and Compensation Stagnation Is Not True: ...A New York Times editorial points out ... that Glenn Hubbard, a leading conservative economist and key adviser to GOP candidate Jeb Bush, does not seem to believe there is a wage stagnation problem. As ...


July 4, 2015, 1:03 pm, 1501406

"The macroeconomy is inherently unstable and ... booms and busts arise endogenously as the results of market incentives":

Stability of a market economy, by Paul Beaudry, Dana Galizia, and Franck Portier, Vox EU: There are two polar views about the functioning of a market economy. On the one hand, there is ...


July 4, 2015, 1:03 pm, 1501404

July 4, 2015, 12:04 pm, 1501402
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate… It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less ...


July 4, 2015, 11:34 am, 1501400
How is a Greek default different from a Puerto Rican default?

Answer: because Puerto Rico doesn't have its own banking system. It can't shut down banks. Banks in Puerto Rico are not loaded up on Puerto Rico debt, so depositors are not in danger if the state government defaults. ...


July 4, 2015, 11:33 am, 1501399

A fine reading for the Fourth. Myron Magnet:

The Founders well understood, as John Adams reminisced in 1818, that it was a change in the “principles, opinions, sentiments, and affections” of Americans that had sparked the Revolution. They considered that new culture of freedom that had arisen ...


July 4, 2015, 8:35 am, 1501365

One thing I'd like George Osborne to do in Wednesday's "emergency" Budget is to end the something for nothing culture.

I know someone who has made almost £400,000 tax-free without working - equivalent to almost 20 years of getting the maximum welfare benefits the Tories are ...


July 4, 2015, 8:05 am, 1501362

Russian urban explorer and photographer Ralph Mirebs discovered an enormous, abandoned hangar in Kazakhstan.

Inside were the remains of the Russian space shuttle program.

More amazing photos from ...


July 4, 2015, 8:04 am, 1501360
(Don Boudreaux)

Here’s a letter to the New York Times:

Your lead headline today reads “Health Insurers Seek Steep Increase in Plan Rates,” which ...


July 4, 2015, 8:04 am, 1501361

July 4, 2015, 7:33 am, 1501358

Free on Amazon Kindle(at least as of yesterday, July 3).

This chess book hasSIMPLEone-move-capture chess puzzles forkidsandbeginners.

This book is for players just learning chess, rated under 1000, that are still missing simple one move chess tactics involving hanging pieces.

Link courtesy of Michael Greenspan.


July 4, 2015, 6:05 am, 1501343

Greece is small, China is large:

The Shanghai Composite has now fallen 12.1 per cent since Monday, its third consecutive week of double-digit losses since hitting a seven-year high on June 12.

The Shanghai index is firmly in bear market territory, down 28.6 per cent since the June peak, while the tech-heavy ...


July 4, 2015, 5:03 am, 1501327

July 4, 2015, 2:44 am, 1501321

Strengthening the banking sector through higher equity capital is one of the key elements of policies aiming to reduce the probability of crises. However, the ‘corporate debt bias’ – the tendency of corporate tax systems to favour debt over equity – is at odds with this objective. This column estimates ...


July 4, 2015, 2:44 am, 1501320

Home bias in banks’ holdings of domestic government debt could pose problems for financial stability and crisis management. This column discusses some of the determinants of this bias. Factors that increase macroeconomic instability are associated with higher home bias, while better investment opportunities in the private sector and better institutional ...


July 4, 2015, 2:44 am, 1501319

Iceland and Ireland were both rocked by the fallout of the Global Crisis. This column argues that differences in currency arrangements affected the mechanisms of the boom and the collapse. Iceland’s banks collapsed because they did not have a lender of last resort in euros. Ireland did. But Iceland’s collapse ...


July 4, 2015, 2:44 am, 1501318

Whereas some view the macroeconomy as overall stable and on a smooth long-run growth path, others argue it is unstable with repeated periods of booms and busts. This column suggests that the market economy is inherently unstable and booms and busts arise endogenously as the results of market incentives. Monetary ...


July 4, 2015, 2:05 am, 1501317

Fewer than 4,000 tigers roam across the Asian continent today, compared to about 100,000 a century ago. But researchers are proposing a new way to protect the big cats: redefine them.

The proposal, published this week in Science Advances, argues current taxonomy of the species is flawed, making global conservation efforts unnecessarily difficult.

There ...


July 3, 2015, 11:34 pm, 1501310


July 3, 2015, 11:03 pm, 1501307
Vitas Vasiliauskas, governor of Lithuania’s central bank, in Vilnius last year. Bloomberg News

VILNIUS, Lithuania—Central banks must remain focused while interest rates are low and be prepared ...


July 3, 2015, 11:03 pm, 1501305
Key numbers from a report on Greek debt as the country faces a critical referendum.


July 3, 2015, 11:03 pm, 1501306
Vitor Constancio in Riga earlier this year. He said in Vilnius on Friday that it was difficult to speculate on Greece “no” vote scenarios. Associated Press

VILNIUS, ...


July 3, 2015, 11:03 pm, 1501304

I guess William Cronon won’t have to worry any more about having his emails scoured by the Wisconsin GOP. From the Wisconsin State Journal:

Legislative Republicans on Thursday passed sweeping changes to the state’s open records law that would dramatically curtail the kind of information available to the public ...


July 3, 2015, 10:45 pm, 1501303
The Labor Department released its June jobs report—an important one, coming six years after the end of the recession—and the reviews were decidedly mixed. Here's a look at some of the highlights.


July 3, 2015, 10:04 pm, 1501302

Chris has already pointed out the failure of the core European institutions in their response to the global financial crisis. One excuse that can be made for these institutions is that they are still in the process of development, and were ill-prepared, intellectually and institutionally, for an ...


July 3, 2015, 8:45 pm, 1501293
The Labor Department released its June jobs report—an important one, coming six years after the end of the recession—and the reviews were decidedly mixed. Here's a look at some of the highlights.


July 3, 2015, 8:44 pm, 1501292
A


July 3, 2015, 7:33 pm, 1501291
30% Bail-In Haircuts Coming Up

I warned countless times over the last six months that Greek citizens need to pull their deposits before it was too late.

Today I report it's too late. 30% bail-in haircuts on Greek bank deposits are coming up.

Banks to Raid Deposits ...


July 3, 2015, 6:04 pm, 1501283
(Don Boudreaux)

I just re-watched Pierre Desrochers presentation – at Cato in June 2012 – on “buy local” myths.  It’s superb: ...


July 3, 2015, 4:44 pm, 1501272
A


July 3, 2015, 4:04 pm, 1501267
(July 3, 2015 02:22 PM, by Scott Sumner) The answer is probably yes (and the scare quotes head off complaints that big impersonal governments don't actually have human feelings.) The administration has clearly been upset that the Eurozone isn't doing more to help Greece. They complain that a... (3 ...


July 3, 2015, 4:04 pm, 1501266
(Don Boudreaux)

Anne Koeller responds to my earlier e-mail with this ...


July 3, 2015, 3:03 pm, 1501239

Roger Farmer:

Behavioral Economics is Rational After All: There are some deep and interesting issues involved in the debate over behavioral economics. ...

My point here, is that neoclassical economics can absorb the criticisms of the behaviourists without a major shift in its underlying assumptions. The 'anomalies' pointed out by ...


July 3, 2015, 2:05 pm, 1501233

July 3, 2015, 2:05 pm, 1501232

Scott Sumner has the scoop:

In one important respect southern Italy is different from Greece. Like eastern Germany, southern Italy is part of a larger and more prosperous fiscal union. For many decades, Italy has been doing the things that American progressives would recommend, pouring lots of fiscal stimulus ...


July 3, 2015, 2:04 pm, 1501231

Americans love liberty and equality. They especially do on the Fourth of July, when they are free to celebrate their nation’s birth with as much or as little pomp, circumstance, and good cheer as they desire. But for all their popularity, these American-forged twins appear in greater need of elucidation ...


July 3, 2015, 1:33 pm, 1501227
There are some deep and interesting issues involved in the debate over behavioural economics. Greg Hill posted a comment on my previous blog where he says:

Now, you really have to ask yourself whether the kind of rationality involved in [Thaler's idea of a ...


July 3, 2015, 1:24 pm, 1501226

This week a slow-motion train wreck hit the wall in Europe. Greece’s Syriza government came to power earlier this year on a mandate to keep Greece in the euro but end austerity. It was clear from the start that this project could only work out if Greece’s euro partners finally ...


July 3, 2015, 1:03 pm, 1501195
By request, here is an update on an earlier post through the June employment report.

NOTE: Several readers have asked if I could add a lag to these graphs (obviously a new President has zero impact on employment for the month they are elected). But that would open ...


July 3, 2015, 12:34 pm, 1501194
Teaser:

TSA ...


July 3, 2015, 12:04 pm, 1501193
(Don Boudreaux)

Here’s a letter to a long-time correspondent (who doesn’t like today’s Quotation of ...


July 3, 2015, 12:04 pm, 1501192


July 3, 2015, 11:33 am, 1501190

Writing in the Wall Street Journal on July 2, 2011, Walter Russell Mead shared an optimistic message that “The Future Still Belongs to America,” here’s an excerpt (emphasis added):

It is, the pundits keep telling us, a time of American decline, of a post-American world. The 21st century will belong ...


July 3, 2015, 11:33 am, 1501189

It doesn’t get any better than this – Ray Charles singing America the Beautiful in 1999 in the video above. Except maybe the 1991 version below with some guests including Stevie Wonder, Michael McDonald and Michael Bolton, and the duet version ...


July 3, 2015, 11:03 am, 1501154

Was the creation of the euro a mistake? Should it be eliminated?:

Europe’s Many Economic Disasters, by Paul Krugman, Commentary, NY Times: ... Why are there so many economic disasters in Europe? Actually, what’s striking at this point is how much the origin stories of European crises differ. Yes, ...


July 3, 2015, 10:45 am, 1501153
A


July 3, 2015, 9:33 am, 1501145
Greece Roundup

A "yes" vote in favor of servitude has now reached a slight majority according to some Greece referendum polls. How accurate the polls are is an issue. Yanis Varoufakis, Greece’s finance minister, said he would resign if Greeks voted Yes in Sunday’s referendum on the country’s bailout. ...


July 3, 2015, 9:33 am, 1501144

After yesterday's announcement of a tentative settlement between BP and federal and state negotiators, BP has provided details of the payment schedule for the $18.7B settlement. The settlement consists of payments for civil penalties ($5.5B), natural resource damages ($7.33B), and state damages ($4.9B) over 18 years. An additional ...


July 3, 2015, 9:03 am, 1501122
Vitor Constancio in Riga earlier this year. He said in Vilnius on Friday that it was difficult to speculate on Greece “no” vote scenarios. Associated Press

VILNIUS, ...


July 3, 2015, 9:03 am, 1501121
Key numbers from a report on Greek debt as the country faces a critical referendum.


July 3, 2015, 9:03 am, 1501120
It feels like a Saturday ...

The key report this coming week is the May Trade Deficit on Tuesday, and the June ISM non-manufacturing index on Monday.

Fed Chair Janet Yellen speaks on Friday on the U.S. Economic Outlook.

----- Monday, July 6th -----
10:00 AM ET: ...


July 3, 2015, 8:35 am, 1501119
● US payrolls post a solid increase in June but wages are flat… ● US jobless claims jumped more than expected last week… ● And US factory orders slumped in May… ● The US consumer comfort index rose last week to its highest level since April… ● Eurozone Composite PMI ...


July 3, 2015, 8:35 am, 1501118
Happy 4th of July! In honor of Uncle Sam’s birthday, The Capital Spectator will refrain from discussions of finance, economics, and otherwise engaging in analytical acrobatics… until the long holiday weekend in the US comes to a close. The standard routine commences anew on Monday, July 6. To paraphrase (and ...


July 3, 2015, 8:04 am, 1501117
(Don Boudreaux)

… is from page 312 of Thomas Sowell’s 2009 volume Intellectuals and Society:

The intelligentsia … have encouraged the poor to ...


July 3, 2015, 8:04 am, 1501116

Read the PDF.

“Governments are instituted among men,” our Founders declared two and a half centuries ago, to secure the rights to “life, liberty and the pursuit of happiness”—that is, to ensure public safety and security, defend political freedom, and foster economic prosperity. Today Americans ...


July 3, 2015, 7:33 am, 1501114

Quite cool for serious Dead fans, but at $699 I'm not interested enough. Besides, Spotify has hundreds, probably thousands, of Dead tracks for free.

Also in Dead news: "Songwriters Hall of Fame Honors Hunter and Garcia, Tuneful Wizards of the Grateful Dead". Has some interesting stories on ...


July 3, 2015, 7:33 am, 1501113
I recently had the pleasure of seeing several films at the Nantucket Film Festival. My favorite was Best of Enemies, a documentary about the TV debates between William Buckley and Gore Vidal during the 1968 presidential nominating conventions. Itis being released later this month.

Here is the ...


July 3, 2015, 7:23 am, 1501112
‘One algorithm had to cope with pairs of romantically attached doctors who wanted two job offers in the same city’


July 3, 2015, 7:03 am, 1501085
Pedestrians walk past the stone columns of the Bank of England ahead of the bank’s financial stability report news conference in London on Wednesday. Bloomberg News

LONDON—The ...


July 3, 2015, 7:03 am, 1501084

The Wall Street Journal’s Daily Report on Global Central Banks for Wednesday, July 1, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Fallout Contained So Far Following Greek Default Fischer: Rates to Increase Gradually Fed’s ...


July 3, 2015, 7:03 am, 1501081
Protesters wave EU flags during a rally demanding Greece remain in the eurozone, outside Greek Parliament in Athens on Tuesday. FOTIS PLEGAS G./EUROPEAN PRESSPHOTO AGENCY

Greece has ...


July 3, 2015, 7:03 am, 1501082
Federal Reserve governor Lael Brainard. REUTERS

Federal Reserve governor Lael Brainard on Wednesday pushed back against industry complaints that post-crisis reforms to financial regulation are reducing market ...


July 3, 2015, 7:03 am, 1501083

In a worst-case scenario of a Greek exit from the eurozone, the risks of contagion to other countries in the single currency area are less elevated than in 2010-11, but it could “easily” weaken the upturn, said Standard & Poor’s Ratings Services Wednesday.

“Yet, such a shock could lead to increased ...


July 3, 2015, 7:03 am, 1501079

 

A roofer works on a home in the Briar Chapel community in Chapel Hill, N.C. Construction spending hit a new high in May. GERRY BROOME/ASSOCIATED PRESS

U.S. ...


July 3, 2015, 7:03 am, 1501080
The New Orleans metro region was the only one to post an increase in the jobless rate, to 6.3% in May from 5.9% a year earlier.


July 3, 2015, 7:03 am, 1501075

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, July 2, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Jobs Report Seen Confirming Fed’s Growth Narrative Brainard: Little Evidence of Strains in ...


July 3, 2015, 7:03 am, 1501077
RICARDO ARDUENGO/ASSOCIATED PRESS

Greece isn’t the only country warning that it can’t pay its creditors. The government of the U.S. commonwealth of Puerto Rico said Monday that it ...


July 3, 2015, 7:03 am, 1501076
Greek Prime Minister Alexis Tsipras speaks to supports in Athens after elections in January.  MILOS BICANSKI/GETTY IMAGE

Alexis Tsipras may be about to fulfill the very vision ...


July 3, 2015, 7:03 am, 1501078
The June jobs report, due out Thursday at 8:30 a.m. EDT, could confirm that the U.S. economy is strengthening, despite rising global turmoil.


July 3, 2015, 7:03 am, 1501072
The Federal Reserve can be seen from in between trees on the National Mall. CHIP SOMODEVILLA/GETTY IMAGES

The Labor Department‘s June employment report, released Thursday, broadly ...


July 3, 2015, 7:03 am, 1501073

The U.S. economy created 223,000 jobs in June. WSJ’s Justin Lahart breaks down the employment report and explains the mixed messages behind the headlines.

U.S. employers added 223,000 jobs in June and the unemployment rate fell to 5.3%. U.S. employment has now increased for 57 consecutive ...


July 3, 2015, 7:03 am, 1501074
Jobs, wages, labor-force participation and more.


July 3, 2015, 7:03 am, 1501071

The U.S. economy added 223,000 jobs in June, which together with a drop in the number of Americans in the labor force reduced the official unemployment rate to 5.3%. The solid hiring gains follow a mild deceleration in growth earlier this year, underscored by downward revisions to hiring numbers ...


July 3, 2015, 7:03 am, 1501069
If the past week brought a flood of data—including a mixed report on June labor markets—this one's as dry as a California reservoir. As Greece remains the focus for investors, here's what to look for on the U.S. economy.


July 3, 2015, 7:03 am, 1501070
The headquarters of the European Central Bank in Frankfurt. ZUMA PRESS

The European Central Bank on Thursday increased the number of government-backed agencies whose securities it buys ...


July 3, 2015, 7:03 am, 1501068
Vitas Vasiliauskas, governor of Lithuania’s central bank, in Vilnius last year. Bloomberg News

VILNIUS, Lithuania—Central banks must remain focused while interest rates are low and be prepared ...


July 3, 2015, 7:03 am, 1501067
Vitor Constancio in Riga earlier this year. He said in Vilnius on Friday that it was difficult to speculate on Greece “no” vote scenarios. Associated Press

VILNIUS, ...


July 3, 2015, 7:03 am, 1501066
Key numbers from a report on Greek debt as the country faces a critical referendum.


July 3, 2015, 6:44 am, 1501065
The Labor Department released its June jobs report—an important one, coming six years after the end of the recession—and the reviews were decidedly mixed. Here's a look at some of the highlights.


July 3, 2015, 6:44 am, 1501064

Greece’s debt is 180% of GDP, which seems to make it insolvent without large primary surpluses. This column argues that since restructuring lowered the interest burden to just 2% of GDP, Greece is solvent – or would be with nominal GDP growth of just 2%. The ECB’s misdiagnosis has caused ...


July 3, 2015, 5:33 am, 1501061

Long, but I thought quite interesting.

Thomas Jonathan Jackson was known as “Stonewall,” but “the Christian soldier” would have been a more appropriate title. his military experience was in artillery, yet he excelled as a commander of infantry. Soldiers adored him, despite the fact that he was ...


July 3, 2015, 5:33 am, 1501060

The headline got me.


July 3, 2015, 5:03 am, 1501025
Vitas Vasiliauskas, governor of Lithuania’s central bank, in Vilnius last year. Bloomberg News

VILNIUS, Lithuania—Central banks must remain focused while interest rates are low and be prepared ...


July 3, 2015, 5:03 am, 1501024

Last year, videographer Jos Stiglingh risked a DJI Phantom 2 drone with a GoPro Hero 3 Silver by flying it through the heart of New York City's fireworks show. For your entertainment. Enjoy!


July 3, 2015, 5:03 am, 1501023

July 3, 2015, 4:44 am, 1501022
A


July 3, 2015, 4:05 am, 1501021

From Max Ehrenfreund:

…because of an obscure law known as the Jones Act, which bans foreign vessels from shipping goods between U.S. ports, businesses in Puerto Rico have to use the U.S. merchant marine to import anything. They can’t just hire whatever boats and crew are available, which ...


July 3, 2015, 2:05 am, 1500986

Robert Laszewski writes:

After all of this and two complete open enrollments, only 40% of those who are eligible for Obamacare have signed up—far below the proportion of the market insurers have historically needed to assure a sustainable ...


July 3, 2015, 2:04 am, 1500985
(July 3, 2015 12:05 AM, by David Henderson) About two weeks ago, I challenged the following brief statement by Arnold Kling: We can also find this normative analysis among libertarians. Blaming terrorism on blowback for foreign intervention. Arnold was claiming that many libertarians are finding government intervention in... (0 ...


July 3, 2015, 1:34 am, 1500983

This is just to record my thoughts, so I can look back on this and see what I got right and what I got wrong. Or at least, what I changed my mind about.

The Euro was a mistake. I hoped (and still hope) to see the Euro dissolved. But the ...