Economics Roundtable

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.


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.


The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.

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July 25, 2016, 5:03 pm, 1656960

Chances are, if you were to pull out your latest pay stub, you would see two important lines among the list of taxes taken out of your wages: FICA and MEDFICA. If you were to do the math, these two lines, standing for Federal Insurance Contributions Act and Medicare ...

July 25, 2016, 5:03 pm, 1656959

Chris Dillow:

Brexit: a blow to the low-paid?: The CBI reported today that manufacturers’ business confidence has fallen at its fastest rate since early 2009, causing falls in investment and hiring plans. This corroborates surveys by Deloitte, Markit (pdf), the Institute of

July 25, 2016, 4:04 pm, 1656955
(July 25, 2016 04:14 PM, by David Henderson) In a Facebook comment on my recent post on Peter Thiel and Donald Trump's foreign policy views, my friend Stephen M. Jones wrote (I quote with his permission): Tyler Cowen had an important post linking this article about Trump and... (1 COMMENTS)

July 25, 2016, 4:04 pm, 1656954

In a new report, Steve Holt offers a number of practical suggestions for how the Internal Revenue Service (IRS) can improve its administration of social benefits. He uses the earned income tax credit (EITC) to illustrate the advantages of the IRS’s role as social benefit administrator, but also describes ...

July 25, 2016, 4:04 pm, 1656953

Editor’s note: This article was originally published as part of a New York Times’ Room for Debate symposium where participants were asked the question, “Is Trump’s foreign policy really so out of line?”. To read the full discussion, click here

As with any set of tropes, there is a grain ...

July 25, 2016, 4:04 pm, 1656952

Visiting Fellow Ramesh Ponnuru discusses the latest political headlines on CBS’s “Face the Nation”.

July 25, 2016, 3:03 pm, 1656918

Today is July 25, Puerto Rico Constitution Day. A territory of the United States, Puerto Rico has been in the news lately due to its debt crisis: the government owes $72 billion it doesn’t have, and onerous and unstable tax policy has helped cause a demographic ...

July 25, 2016, 3:03 pm, 1656917

It’s the economy, stupid, and perhaps even more than you thought.

Economists have understated growth’s importance in eroding public debt burdens over time, a new analysis from the Peterson Institute for International Economics suggests.

Interest payments on outstanding government debt and budget deficits push governments’ debt-to-GDP ratios up, while economic growth drags them ...

July 25, 2016, 3:03 pm, 1656916
Economist Tom Lawler sent me the table below of short sales, foreclosures and all cash sales for selected cities in June.

On distressed: Total "distressed" share is down year-over-year in all of these markets.

Short sales and foreclosures are down in all of these areas.

TheAll ...

July 25, 2016, 2:44 pm, 1656915

July 25, 2016, 2:04 pm, 1656912

The NMRI for Agency purchase loans stood at 12.7% in June, up 0.2 percentage point from a year earlier and 1.0 percentage point from June 2014. The Agency purchase NMRI has increased year-over-year in every month since January 2014.

July 25, 2016, 2:04 pm, 1656914

Key Points

Data from the National Telecommunications and Information Administration indicate that Americans are concerned about, and recognize important differences between, online security and privacy.Press coverage has almost uniformly framed discussion of these data in terms of privacy concerns, to the exclusion of security concerns.Conflating these issues presents an easy, but ...

July 25, 2016, 2:04 pm, 1656913

There’s a group of rare diseases in which babies are born missing one of 11 different enzymes our bodies use to break down fatty sugars in our blood.

Absent these enzymes, fat molecules accumulate in critical organs like the heart and liver, often claiming the lives of those afflicted while they ...

July 25, 2016, 1:23 pm, 1656907
Published in the May/June issue of the Financial Analysts Journal (vol. 72, no. 3). I'm not sure it it's gated, so you can find a working paper (from 2013!) version here.

Robert Shiller’s cyclically adjusted price–earnings ratio, or CAPE ratio, has served as ...

July 25, 2016, 1:03 pm, 1656875

The United States places a relatively high burden on long-term capital gains income (gains on assets held for more than one year). The top federal tax rate is 20 percent. In addition, taxpayers with AGI over $200,000 ($250,000 married filing jointly) are subject to the 3.8 percent Net ...

July 25, 2016, 1:03 pm, 1656874

Marilyne Tolle at the Bank of England's Bank Underground blog:

Central bank digital currency: the end of monetary policy as we knowit?: Central banks (CBs) have long issued paper currency. The development of Bitcoin and other private digital currencies has provided them with the technological means to ...

July 25, 2016, 1:03 pm, 1656873
The FOMC will meet on Tuesday and Wednesday, and no change to policy is expected.

There will no economic projections released at this meeting, and there is no scheduled press conference by Fed Chair Janet Yellen (in the unlikely event there is a change to policy, Yellen will probably ...

July 25, 2016, 12:44 pm, 1656872

July 25, 2016, 12:44 pm, 1656869

July 25, 2016, 12:44 pm, 1656871

July 25, 2016, 12:44 pm, 1656870

July 25, 2016, 12:34 pm, 1656868
Tags A A Home | Feed | Blog.rssMedia and CulturePolitical TheoryPrivate PropertyAre Advertising "Bribes" Unethical?

July 25, 2016, 12:34 pm, 1656867
Tags A A Home | Feed | Blog.rssDid Debt Exist Before Money? It Doesn't MatterMonetary Theory

July 25, 2016, 12:34 pm, 1656866

July 25, 2016, 12:04 pm, 1656862

July 25, 2016, 12:04 pm, 1656861
This is genuinely amazing (h/t @jbarro)
of-dnc-is-clear-attack-by-putin-on-clinton/ New York Observer is a weekly newspaper… . Since July 2006, the paper has been owned and published by the American real‑estate figure Jared Kushner.
I quote without comment It’s no secret that the DNC was recently subject to a major hack, ...

July 25, 2016, 12:04 pm, 1656860
Yesterday, I wrote about the connection between inflation and corporate profits. (link) I posted this graph. The graph shows how inflation drops net corporate profits rise. Net corporate profit rate = Corporate profits/GDP – nominal interest rate The trend line (bright red curving downward) implies an exponential decay of inflation. ...

July 25, 2016, 12:04 pm, 1656859

“Making America one again.” That was the stated theme of the last night of the Republican National Convention. In the welter of analysis of Donald Trump’s acceptance speech, few have commented on it but it’s worth taking it seriously.

Liberal commentators have dwelled repeatedly on Trump’s “dark” and “dystopian” view of ...

July 25, 2016, 12:04 pm, 1656858

Key Points

There are burgeoning opportunities for graduates of community colleges across the country, particularly in the southeastern US where both unemployment and job growth are high.Mapping locations of community colleges on top of the socioeconomic contexts of the region demonstrates that community colleges are not always located in the areas ...

July 25, 2016, 12:04 pm, 1656857

Politically there isn’t much reason for Donald Trump to revise his trade views. Some of what he said at the Republican convention makes sense. But there are also glaring mistakes, mistakes which translate to harmful trade policy in a Trump administration.

Trump started his discussion of trade by claiming America ...

July 25, 2016, 12:04 pm, 1656856

AEI Resident Fellow Michael Barone and “Q&A” host Jay Nordlinger discuss Barone’s extensive knowledge of American politics.

July 25, 2016, 12:04 pm, 1656855

Washington’s post-World War II Asia strategy and policy long have been bipartisan endeavors.

Despite the bemoaning of partisan rancor in Washington there is in fact a new emergent bipartisan consensus, just one that internationalists in both parties will not like. The most ascendant and dynamic forces within both parties want to ...

July 25, 2016, 12:04 pm, 1656854

Key Points

The IRS primarily serves as our nation’s tax collector, but it is also one of our nation’s largest conduits for delivering social benefits, most prominently the earned income tax credit (EITC).The EITC is a hybrid of tax and social policy; it is neither just a refund of all taxes ...

July 25, 2016, 11:03 am, 1656822
From the Dallas Fed: Texas Manufacturing Activity Stabilizes

Texas factory activity held steady in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in near zero after two months of negative readings, suggesting output stopped ...

July 25, 2016, 10:44 am, 1656821

July 25, 2016, 10:35 am, 1656820

The CBI reported today that manufacturers’ business confidence has fallen at its fastest rate since early 2009, causing falls in investment and hiring plans. This corroborates surveys by Deloitte, Markit (pdf), the Institute of Directors and, to a lesser extent the Bank of

July 25, 2016, 10:04 am, 1656818

I remember spending a fair portion of the 2000s, during the presidency of George W. Bush, fighting the casual anti-Americanism that existed in Europe at the time. I used to explain to my friends on the old continent that Republicans were not the dumb party. Their commitment to a hawkish ...

July 25, 2016, 10:04 am, 1656819

July 25, 2016, 10:04 am, 1656817

“We’ve reached a national milestone,” proclaimed Hillary Clinton on the evening of June 7, after her primary victories that day together with commitments from superdelegates gave her a majority of delegates to the Democratic National Convention.

It was, as she said, “the first time in our nation’s history that a woman ...

July 25, 2016, 10:04 am, 1656816

July 25, 2016, 9:33 am, 1656812

Michael Greenstone:

We are on course to set another record for the hottest year, the third year in a row, and 2016 may well have the most billion dollar weather disasters. Adaptation to a changing climate looks both necessary and inevitable.

July 25, 2016, 9:33 am, 1656811

Professor Larry Ball, our friend and colleague, has written a fascinating monograph reexamining the September 14, 2008 failure of Lehman Brothers. Following an exhaustive study of documents from a variety of sources, Professor Ball concludes that the Fed could have rescued Lehman. The firm had sufficient collateral to ...

July 25, 2016, 9:23 am, 1656810

My latest Macro Musings podcast is with David Andolfatto. David is a vice president of the St. Louis Federal Reserve Bank and a professor of economics at Simon Fraser University. He has published widely in the area of monetary economics and ...

July 25, 2016, 9:03 am, 1656778
Note: I follow several house price indexes (Case-Shiller, CoreLogic, Black Knight, Zillow, FHFA, FNC and more). Note: Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.

From ...

July 25, 2016, 8:35 am, 1656777

Summertime sizzle was on full display last week for US real estate investment trusts (REITs). These securities delivered the strongest gains for the five trading days through July 22, based on set of ETF proxies for the major asset classes. US REITs also continue to hold the top spot ...

July 25, 2016, 8:04 am, 1656775
(Don Boudreaux)

… is from page 13 the 2015 English edition (translated from Chinese by Matthew Dale) of Weiying Zhang’s excellent 2010 ...

July 25, 2016, 7:34 am, 1656772

I think the author is probably too optimistic on health care and education--government interference will have to besubstantially decreased--but he may well be correct on the others.

July 25, 2016, 7:34 am, 1656773

This is a very sad story.

The situation was further exacerbated by the Romney operation’s apparent inability to comprehend that ORCA was not a smartphone application like Angry Birds but rather a website designed to be viewed on a smartphone. This created a massive confusion among volunteers who ...

July 25, 2016, 7:34 am, 1656771

Fine, concise discussion until the conclusion: "We need a well-funded Social Security program for everyone who needs it (and not those who don’t need it because they are wealthy)."News flash: Social Security is run by the same types of folks, facing the same lousy incentives, as the ones badly ...

July 25, 2016, 7:34 am, 1656770

Amazing story and one to bear in mind as we get older.

July 25, 2016, 7:34 am, 1656769

Nobody I've read puts it better than Jonah Goldberg.

I hate discovering that so many people are disappointed in me for not playing my part in a racket. Every day, if not every hour, I am told that my true motives are in reality desires, goals, and ambitions ...

July 25, 2016, 7:03 am, 1656738

Whether a worker has access to paid sick leave varies widely by income, a new Labor Department report found.

Among the top 25% of income earners in the private sector—those earning $28.60 an hour or more—84% had access to paid sick leave, the Labor Department said. Among the bottom quarter ...

July 25, 2016, 6:44 am, 1656737

How important is grit relative to talent? Can grit be taught? Angela Duckworth of the University of Pennsylvania and author of Grit: The Power of Passion and Perseverance talks with with EconTalk host Russ Roberts about the nature of ...

July 25, 2016, 5:34 am, 1656734

What's the "right" thing? Take a guess. Go ahead, guess.

The unresponsiveness of housing supply to demand and price changes is blamed in part on restrictive zoning laws.

Economists measure this responsiveness as elasticity; in markets with higher elasticity, homebuilding responds to higher demand and prices at ...

July 25, 2016, 5:23 am, 1656733

Cherry picking of data means we look for particular data and statistics that help to illustrate our point of view. It can also mean we present data in a certain way which is more favourable to creating the impression we want. Even the same statistic can be presented in different ...

July 25, 2016, 5:03 am, 1656708

The S&P 500 in the third week of July 2016 ran a bit to the hot side for what our future-based model forecast, but still well within the typical volatility that we would expect. In the chart below, we find that investors are largely continuing ...

July 25, 2016, 5:03 am, 1656707

The phrase "trumped up" comes to mind:

Delusions of Chaos, by Paul Krugman, NY Times: Last year there were 352 murders in New York City. This was a bit higher than the number in 2014, but far below the 2245 murders ... in 1990, the city’s worst year. In ...

July 25, 2016, 5:03 am, 1656706

Political Calculations makes some more ([1], [2]) elementary errors with chained quantities, to arrive at incorrect — and misleading — measures of real GDP excluding government consumption and investment.

First, here is the figure that Political Calculations displays:

July 25, 2016, 3:03 am, 1656686

July 25, 2016, 2:05 am, 1656685

That is my next book, now finished, due out February 2017 from St. Martin’s Press.  You can pre-order it from Amazon or Barnes&Noble.  Recommended!

Very little of the content of this book has appeared on Marginal Revolution.  It contains my thoughts on the death ...

July 25, 2016, 2:04 am, 1656684
In Doctor Strangelove, General Ripper explains to Captain Mandrake why Clemenceau’s dictum on war is now obsolete: He said war was too important to be left to the generals. When he said that, 50 years ago, he might have been right. But today, war is too important to be left ...

July 25, 2016, 12:34 am, 1656672
Tags A A Home | Feed | Blog.rssOur Monetary System Favors the Rich and Hurts the PoorBusiness CyclesMonetary Theory

July 25, 2016, 12:04 am, 1656667
(July 25, 2016 12:09 AM, by Bryan Caplan) Immigrants use less welfare the natives, holding income constant. Immigrants are far less likely to be in jail than natives, holding high school graduation constant.* On the surface, these seem like striking results. But I've heard a couple of smart... (1 COMMENTS)

July 25, 2016, 12:04 am, 1656666
(Don Boudreaux)

I linked earlier today to this 1978 video of Milton Friedman speaking on trade.  But ...

July 25, 2016, 12:04 am, 1656665
Of course the big news is that Russian hackers (probably linked to the Russian government) hacked Democratic National Committee servers and leaked embarassing e-mails (and deliberately leaked social security numbers) via Wikileaks. This supports the hypothesis that Putin is trying to get Trump elected. It sounds like a fringe tinfoil ...

July 24, 2016, 10:44 pm, 1656659

July 24, 2016, 10:05 pm, 1656658

Markus K. Brunnermeier, Harold James, and Jean-Pierre Landau, The Euro and the Battle of Ideas.

Larry Elliott and Dan Atkinson, Europe Isn’t Working.

Philipp Ther, Europe Since 1989.

All three appear to be useful…

The post Three new books on Europe appeared first on

July 24, 2016, 10:04 pm, 1656657
(Don Boudreaux)

… is from page 487 of the great Armen Alchian‘s 1975 essay “An Introduction to Confusion,” as reprinted ...

July 24, 2016, 9:03 pm, 1656651
Schedule for Week of July 24, 2016

The Future is Still Bright!

• At 10:30 AM ET: Dallas Fed Survey of Manufacturing Activity for July.

From CNBC: Pre-Market Data and Bloomberg futures: S&P and DOW futures are down slightly ...

July 24, 2016, 8:04 pm, 1656650
Or so The Brookings Institute would like us to believe. What would cause Brookings to take such a stance especially since parts of the PPACA increased costs dramatically and premiums have increased dramatically? Coverage such as: mandated guaranteed issue regardless of health status; restrictions on the ability to charge different ...

July 24, 2016, 6:04 pm, 1656642
(July 24, 2016 07:24 PM, by David Henderson) Watching and analyzing the Republican convention so that you didn't have to. I watched more of the Republican national convention than I usually do, mainly because it promised to be more interesting than the usual. It was. Here are some... (1 COMMENTS)

July 24, 2016, 6:04 pm, 1656641
(Don Boudreaux)

It is a fact as scientifically valid as any in the social sciences: anyone so hungry for power that he or she ...

July 24, 2016, 6:04 pm, 1656640
Is there a relationship between Inflation and Corporate Profits? I think so. But I do not know of anyone talking about the relationship, so I will. The point I want to make is that corporations control prices. They set prices. They are not just price-takers. Corporations will change prices with ...

July 24, 2016, 5:34 pm, 1656638

"Do you know how many of the current SEC East head coaches have beaten a Saban-coached team?"

(And there's only one current SEC West coach with even a .500 average against him. You think the Tide'll be up for that game this year?)

July 24, 2016, 4:34 pm, 1656630

Korea is one country in the world that unambiguously has fiscal space right now. Low government debt. The on-budget deficit was, until recently, more than offset by the off-budget surplus in Korea’s social security fund. With a slowing economy and a massive (almost

July 24, 2016, 3:33 pm, 1656627
The NY Times reports that the Democratic Party seeks a winning issue. Some argue that "infrastructure" could be that issue. Why? Such bricks and mortar would create American jobs and it would build up our capital stock and presumably this would foster long term economic growth. What are ...

July 24, 2016, 3:03 pm, 1656623

David Warsh:

Dani Rodrik and Mr. Trump: David Brooks, of The New York Times, wrote the single best piece I read last week on the Republican convention: “Death of the Party.” Like him, I was riveted by Donald Trump’s acceptance speech. The scene seemed straight out of one of ...

July 24, 2016, 2:34 pm, 1656622

David Brooks, of The New York Times, wrote the single best piece I read last week on the Republican convention: “Death of the Party.” Like him, I was riveted by Donald Trump’s acceptance speech. The scene seemed straight out of one of those dystopian Batman movies of the ...

July 24, 2016, 2:05 pm, 1656615

July 24, 2016, 11:34 am, 1656597

Finance people are good people. Economics needs finance people. Some of my best friends are finance people. But (you heard that "but" coming), finance people (though there are of course honourable exceptions) just don't seem to get money.

I can hear the reply now: "Yeah, and money people don't get finance ...

July 24, 2016, 11:03 am, 1656586
Three and a half years ago I wrote The Future's so Bright .... In that post I outlined why I was becoming more optimistic. It is time for another update!

For new readers: I was very bearish on the economy when I started this blog in 2005 ...

July 24, 2016, 10:05 am, 1656585

WTOP: A Metro worker blamed for falsifying records about the tunnel fans that failed during last year’s deadly smoke incident near L’Enfant Plaza has been granted his ...

July 24, 2016, 10:04 am, 1656584
(Don Boudreaux)

… is from pages 179-180 of H.L. Mencken’s essay “On Government,” as it is reprinted in the 1996 Johns Hopkins ...

July 24, 2016, 7:34 am, 1656570

Consider this:

Koufax was certainly a good baseball player as well. During his last four years, he averaged 24 wins and 7 losses per season.

These seem like numbers from some lost epic age. By way of comparison, the Dodgers’ current superstar pitcher, Clayton Kershaw ...

July 24, 2016, 7:34 am, 1656569

Liar level: "Pants on fire".

July 24, 2016, 7:34 am, 1656568

The title is an exaggeration but this is a fine article on what transpired 257 years ago on the Plains of Abraham. (French arrogance plays--wait for it--a big role.)

July 24, 2016, 6:04 am, 1656559
My regular column is available to subscribers on This is an excerpt. 2015 was an unusual year, though not as extraordinary as 2016 is turning out to be. Last year was strange because for the first time in...

July 24, 2016, 5:03 am, 1656546

July 24, 2016, 4:05 am, 1656545

This is remarkable:

Now scientists have determined that humans and their honeyguides [a kind of bird] communicate with each other through an extraordinary exchange of sounds and gestures, which are used only for honey hunting and serve to convey enthusiasm, trustworthiness and a commitment to the dangerous business of separating ...

July 24, 2016, 3:33 am, 1656543
Larry Ball has an importantnew monograph arguing, contra Bernanke, that during the recent financial crisis,the Fedcould have savedLehman Brothers but, unadvisedly, chose not to. Here, James Stewart of the NY Times coversthe Ball piece, and it includes this tidbit:

an internal Fed team ...

July 24, 2016, 2:05 am, 1656525

Here is perhaps the least analytical paragraph in what is mostly an analytical piece by Gideon Lewis-Kraus (NYT).  It is however the paragraph easiest to excerpt:

Joseph Stiglitz is a short, oracular man with gray hair and gray stubble trimmed to equal length, which gives his head the ...

July 24, 2016, 12:04 am, 1656520
(Don Boudreaux)

… is from page 133 of UCLA economist William Allen’s 1989 collection of the transcripts of his marvelous radio ...