Economics Roundtable

Database Maintenance 7/4/15

Routine database maintenance will induce some duplicated items for the next day or two.

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.


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August 3, 2015, 4:44 pm, 1521109

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August 3, 2015, 4:04 pm, 1521101

So Joe Biden is (maybe) going to run for president. In a moving and uncharacteristically newsbreaking column, Maureen Dowd (with apparently inside sourcing, as Bill Kristol notes) writes that Biden was urged to run by his dying 46-year-old son Beau Biden. As my Washington Examiner colleague

August 3, 2015, 3:33 pm, 1521096

Another day, another article about the gendered impacts of air conditioning.

Here's the story: North American offices are air conditioned to a temperature which is, from a female perspective, too cold. Women shiver at their desks; men are just fine.

It's a serious environmental issue. When women have office space ...

August 3, 2015, 3:33 pm, 1521095
1934 Chinese silver dollar with Sun Yat-sen
I have been hitting me head against the wall these last few weeks trying to understand Chinese monetary policy, ...

August 3, 2015, 3:03 pm, 1521034

A quick one before hitting the road. Is deficit fetishism bullshit? This is from Simon Wren-Lewis:

Is deficit fetishism innate or contextual?: In a couple of interesting posts, Jonathan Hopkin and Ben Rosamond, political scientists from the LSE and Copenhagen respectively, talk ...

August 3, 2015, 3:03 pm, 1521033

I have time for one more... This is John Whitehead at Environmental Economics:

Are all tax increases a bad thing?: Not necessarily. And yet, Greg Mankiw:

As long-time readers of this blog know, I have long advocated greater use of Pigovian taxes, such as taxes on carbon emissions.Such taxes ...

August 3, 2015, 3:03 pm, 1521032

Today we are fortunate to have a guest contribution written by Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at Harvard University, and former Member of the Council of Economic Advisers, 1997-99.

The plunge of China’s stock market that has taken place since June has received a ...

August 3, 2015, 3:03 pm, 1521031
Based on a WardsAuto estimate, light vehicle sales were at a17.5 million SAAR in June. That is up 6.4% from July 2014, and up 3.3% from the 17.0 million annual sales rate last month.

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August 3, 2015, 2:04 pm, 1521023

Singapore as an independent nation will be fifty years old this August 9.  In the comments, a number of you have asked me why I find Singapore so special.

I would cite three features of the country above all else:

1. ...

August 3, 2015, 2:04 pm, 1521022
(August 3, 2015 02:04 PM, by David Henderson) There has been a lot of excitement recently over what many people call the "sharing economy," in which new firms such as Uber, Lyft, Airbnb and other website businesses are increasing the value of capital assets. Uber and Lyft allow... (0 ...

August 3, 2015, 2:04 pm, 1521020
(Don Boudreaux)

The dominant theme of some of the great classic works in the classical-liberal tradition – books such as Ludwig ...

August 3, 2015, 2:04 pm, 1521021

August 3, 2015, 2:04 pm, 1521018

Traveling recently in what might be called “new frontline” states—Estonia, Ukraine, and Moldova—I was struck by the depth of concern I encountered about Russian propaganda. And not just propaganda aimed at the Russian population and neighboring countries. At a conference in Tallinn, a Politico reporter and experienced Russia hand who ...

August 3, 2015, 2:04 pm, 1521019

What kind of society would you desire if you had to enter it cold, sight unseen? The classic example: What would have been the opinion of antebellum slaveholders if there were an equal chance they would enter society as a slave owner or ...

August 3, 2015, 2:04 pm, 1521016

Some lunchtime reading:

New Laws Explain Why Fast Growing Networks Break- Wired  

Last month, United Airlines grounded nearly 5,000 flights when its computer system crashed. The culprit: a faulty network router. Later on the same morning, another computer glitch halted trading on the New York Stock Exchange for over three hours…

Researchers ...

August 3, 2015, 2:04 pm, 1521017

Be on the lookout for the culminating report of AEI’s American Internationalism Project this fall, written by former Senators Jon Kyl and Joseph Lieberman, which will make the case for American leadership in terms that are relevant to all Americans.

A strong, bipartisan commitment to global leadership has informed America’s foreign ...

August 3, 2015, 2:04 pm, 1521015

The deal between Iran, the United States, and the European Union on Tehran’s nuclear program, if it becomes operationalized as scheduled, will ensure that Iran will have nuclear weapons by 2025, if not well before. As Michael Mandelbaum has explained , the Obama Administration’s unwillingness to credibly threaten the use ...

August 3, 2015, 1:33 pm, 1521011

Not necessarily. And yet, Greg Mankiw:

As long-time readers of this blog know, I have long advocated greater use of Pigovian taxes, such as taxes on carbon emissions.Such taxes can correct incentivesby aligning private and social costs, and the revenue from such taxes can be used to reduce other, distortionary ...

August 3, 2015, 1:33 pm, 1521010

August 3, 2015, 1:03 pm, 1520949

Gary Hufbauer is the Reginald Jones Senior Fellow at the Peterson Institute for International Economics.

A seminal thinker and world-renowned expert on international trade, commerce, and taxation, for the past decades, Dr. Hufbauer’s research has significantly influenced the arena of international economics. Few, if any, other scholars have the ...

August 3, 2015, 12:44 pm, 1520948

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August 3, 2015, 12:04 pm, 1520940
(August 3, 2015 10:36 AM, by Bryan Caplan) Interesting email from Todd Proebsting, reprinted with his permission. Dear Prof. Caplan, Your recent attempt at a wager on Iran's nuclear progress, and the subsequent exchange with the author about why you wanted 10:1 odds reminded me that the CIA... (5 ...

August 3, 2015, 12:04 pm, 1520938

August 3, 2015, 12:04 pm, 1520934

HAD anyone believed President Obama’s mantra that “all options are on the table” to deal with Iran’s nuclear weapons program, the Vienna agreement might have emerged less advantageously for Tehran. But no one took Mr. Obama’s threat of military force seriously — a credibility gap that Israel still fears and ...

August 3, 2015, 12:04 pm, 1520937

Faute de mieux. That means “for want of something better” in Secretary of State John Kerry’s second language. It’s also the best case made by its journalistic defenders for approval of the nuclear weapons deal Kerry negotiated with Iran. Or to be more exact, for rallying 34 votes in the ...

August 3, 2015, 12:04 pm, 1520939

Part One:

Part Two:

August 3, 2015, 12:04 pm, 1520936

It must be getting lonely for Google in the battle over Europe’s increasingly extraterritorial demands regarding the (misnamed) “right to be forgotten.” As Europe raises the stakes yet again, Google is still not seeing any support from the Obama administration.

To review, in May 2014, the European Court of Justice ...

August 3, 2015, 12:04 pm, 1520935

Bill Kristol: “I’m very pleased to be joined today by Christina Sommers, resident scholar at the American Enterprise Institute, former philosophy professor. Once a philosophy professor, always a philosophy professor, right? Author of many important works, including most recently, Freedom Feminism, and, of course, star of the wonderful series ...

August 3, 2015, 12:04 pm, 1520933


We examine the impact of the Affordable Care Act (ACA) on part-time employment. Because the ACA’s employer health insurance mandate applies to individuals who work 30 or more hours per week, employers may try to avoid the mandate by cutting workers’ hours below the 30-hour threshold in order to avoid ...

August 3, 2015, 11:33 am, 1520931
On July 24, the Conference Board asked the question: Is Wage Growth Accelerating?

The Board's answer was "All signs point to Yes!"

One big question regarding the US economy is whether wage growth is accelerating. You might think that this is a pretty straightforward question ...

August 3, 2015, 11:33 am, 1520930
As long-time readers of this blog know, I have long advocated greater use of Pigovian taxes, such as taxes on carbon emissions.Such taxes can correct incentivesby aligning private and social costs, and the ...

August 3, 2015, 11:03 am, 1520867
The Census Bureau reported that overall construction spending increased slightly in June:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2015 was estimated at a seasonally adjusted annual rate of $1,064.6 billion, 0.1 percent above the revised May estimate of $1,063.5 ...

August 3, 2015, 11:03 am, 1520868
Note: This was released early.

The ISM manufacturing index suggested expansion in July. The PMI was at 52.7% in July, down from 53.5% in June. The employment index was at 52.7%, down from 55.5% in June, and the new orders index was at 56.5%, up from 56.0%.

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August 3, 2015, 10:34 am, 1520862

It's widely agreed that Jeremy Corbyn's popularity is due in large part to the mediocrity of the alternatives. As if to demonstrate this, Chris Leslie - Shadow Chancellor - claims that Corbynomics would be inflationary.

August 3, 2015, 10:04 am, 1520859
(Don Boudreaux)

… is from page 39 of the 1993 Reissue edition of Darrell Huff’s classic 1954 volume, How to Lie With ...

August 3, 2015, 10:04 am, 1520858

Last week, the National Journal (NJ) published an article on “social-impact financing”—often referred to as pay for success or social impact bonds—entitled: “Is Wall Street Starting to Recruit in Pre-K?” Most of the article’s focus is on describing this innovative new approach to public financing that uses private dollars ...

August 3, 2015, 9:33 am, 1520855

Greece faces a stark choice: stay in the euro and implement the policies demanded by its creditors or exit and re-introduce its own national currency. The dimensions of this decision go far beyond economics, affecting Greece’s political and cultural identity for generations. Yet, even in a narrow sense – determining ...

August 3, 2015, 9:03 am, 1520790

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, Aug. 3, 2015:

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Hilsenrath’s Take: Fed Doesn’t Demand Wage Growth Before Increasing Interest Rate Bullard: “In Good Shape” ...

August 3, 2015, 9:03 am, 1520789

The latest inflation figures aren’t making the Federal Reserve’s job any easier.

Consumer-price growth has been running below the ...

August 3, 2015, 9:03 am, 1520788
From the BEA, the Personal Income and Outlays report for June:

Personal income increased $68.1 billion, or 0.4 percent ... in June, according to the Bureau of Economic Analysis.
Real PCE -- PCE adjusted to remove price changes -- decreased less than 0.1 percent in June, in ...

August 3, 2015, 8:44 am, 1520786

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August 3, 2015, 8:34 am, 1520783
A partial rebound was in play in July after widespread losses dominated the global markets during the previous two months. Notably, last month witnessed a sharp increase in US real estate investment trusts (REITs)–the first increase after three monthly declines. Stock markets in the developed world were mostly higher in ...

August 3, 2015, 8:04 am, 1520782

Private schools for the poor are growing rapidly throughout the developing world. The Economist has a review:

Private schools enroll a much bigger share of primary-school pupils in poor countries than in rich ones: a fifth, according to data compiled from official ...

August 3, 2015, 7:33 am, 1520779

As often is the case, causality is in doubt here. But it's still either a bit funny or a bit disturbing, you decide.

August 3, 2015, 7:33 am, 1520778

Scott Sumner:

Here's the obvious solution. Privatize the DMV by letting competing companies provide this service, and compensate them per customer at the current spending level of the government service. Since the private sector is far more efficient than the public sector, they can do this at ...

August 3, 2015, 7:33 am, 1520780

According to Bank of America Merrill Lynch economists it's thePhiladelphia Federal Reserve's index of manufacturing activity.

August 3, 2015, 7:33 am, 1520775

The article's subhead is "The city’s devastating affordability crisis has an unlikely villain—its famed progressive politics."

That needs an adaptation of an old joke: "What's unlikely, Kimo Sabe?"

Related: "How Burrowing Owls Lead To Vomiting Anarchists (Or SF’s Housing Crisis Explained)". It's long and complicated, but part of ...

August 3, 2015, 7:33 am, 1520776

Chester Finn and Bruno Manno thoughtfully and self-critically examine the state of play for one of the most important changes in public education in the last 50 years.. Bottom line:

There's reason for hope. This movement is still basically bipartisan — a rarity in today's polarized policy world. Most ...

August 3, 2015, 7:33 am, 1520777

Video of a debate about possible rent control in Seattle. Co-starring for the pro-control side is a holder of an economics Ph.D. from N.C. State (don't blame me, I had nothing to do with it).

After listening to her and remembering how futilely I fought against the economic dopiness ...

August 3, 2015, 7:33 am, 1520774
Stavros Peristiani and Joo Santos

Unlike mortgage-backed and home equity-backed securities, collateralized loan obligations (CLOs), whose collateral is predominantly corporate loans, are slowly but steadily recovering. This revival, illustrated in the chart below, spotlights again a sector of nonagency structured finance that has been scrutinized for its ...

August 3, 2015, 7:33 am, 1520773
Fromthis collection of Milton Friedman quotations, here is one I had not heard before:

“I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable ...

August 3, 2015, 6:44 am, 1520710

Seafood is highly perishable and supply is often uncertain. Roger Berkowitz, CEO of Legal Sea Foods talks with EconTalk host Russ Roberts about the challenges of running 34 seafood restaurants up and down the east coast. Berkowitz draws on his 22 year tenure as CEO ...

August 3, 2015, 6:34 am, 1520709
● US employment costs decelerated sharply in Q2 ● US consumer sentiment softens more than expected in July ● Puerto Rico misses bond payments over the weekend ● PMI: Eurozone manufacturing output rises “solidly” in July ● PMI: manufacturing decline in China accelerates in July ● Greek stock market crashes ...

August 3, 2015, 5:03 am, 1520687

Last week, we considered what the potential impact of stock buybacks would be to the S&P 500 as if the venerable stock market index was the stock price of a single company. We concluded our analysis as follows:

August 3, 2015, 5:03 am, 1520686

Austerity for Puerto Rico would be a "terrible idea":

America’s Un-Greek Tragedies in Puerto Rico and Appalachia, by Paul Krugman, Commentary, NY Times: On Friday the government of Puerto Rico announced that it was about to miss a bond payment. It claimed that for technical legal reasons this wouldn’t ...

August 3, 2015, 4:04 am, 1520685

August 3, 2015, 3:33 am, 1520681
How often do you hear a car manufacturer (or any other manufacturer) tell people to "not" buy their product because they lose money if you do?

I highly suspect this is nothing more than a purposely calculated publicity stunt, but please consider California Has a Plan to ...

August 3, 2015, 3:03 am, 1520658

August 3, 2015, 3:03 am, 1520657

Robert Reich:

The Revolt Against the Ruling Class: “He can’t possibly win the nomination,” is the phrase heard most often when Washington insiders mention either Donald Trump or Bernie Sanders.

Yet as enthusiasm for the bombastic billionaire and the socialist senior continues to build within each party, the political establishment ...

August 3, 2015, 2:44 am, 1520656

Corporate Japan is known for avoiding uncertainty. This is one of the reasons why changes of any kind are difficult – but not impossible – to realise. This column employs firm data to show that foreign direct investment has been changing corporate Japan by pursuing risk taking in private Japanese ...

August 3, 2015, 2:44 am, 1520655

A key question for policymakers is how long-term unemployment can be effectively reduced. This column presents new evidence from a large-scale field experiment in which job seekers were provided with information and encouragement. The results indicate that targeted information provision can be an effective policy tool, in particular in the ...

August 3, 2015, 2:04 am, 1520653

Imagine if I wrote a post that just served up a list like this:

The people who deserve to be raised in status:

Norman Borlaug, Jon Huntsman, female Catholics from Croatia, Scottie Pippen, Yoko Ono, Gordon Tullock, Uber drivers, and Arnold Schoenberg,


The people who deserve to be lowered in status:

Donald Trump, Harper ...

August 3, 2015, 2:04 am, 1520652

Does the GOP have a communications problem? Consecutive elections have shown that, despite having the best solutions to problems such as poverty and declining mobility, Americans don’t trust conservatives because they fail to speak in a way that reflects concern and compassion. For too long, conservatives have been a movement ...

August 2, 2015, 11:33 pm, 1520632

Here’s the abstract from a research paper titled “Alcohol as a Gateway Drug: A Study of US 12th Graders” that was published in the Journal of School Health in August 2012 (emphasis added):

BACKGROUND: The Gateway Drug Theory suggests that licit drugs, such as tobacco and alcohol, serve as ...

August 2, 2015, 10:34 pm, 1520622

Not ...

August 2, 2015, 9:03 pm, 1520597
Schedule for Week of August 2, 2015

• At 8:30 AM, Personal Income and Outlays for June. The consensus is for a 0.3% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.1%.

August 2, 2015, 8:04 pm, 1520595
(August 2, 2015 05:40 PM, by Scott Sumner) Here's a report on China in the Financial Times: Before the release of Wednesday's second-quarter gross domestic product estimate, China's nominal GDP growth rate had plummeted from almost 20 per cent to 5.8 per cent since 2011, a much sharper... (0 ...

August 2, 2015, 8:04 pm, 1520594

August 2, 2015, 6:04 pm, 1520592

Josiah Ober, The Rise and Fall of Classical Greece.  This new history of ancient Greece has an intriguing estimate of living standards during that time, I hope to spend more time with it soon.  Ober argues there was plenty of economic growth at the time and that the ...

August 2, 2015, 5:33 pm, 1520591
Water Outing

Restaurants in California are not supposed to serve water unless asked. Will that make much of a difference?

The answer is no, but what about car washing, sprinklers, etc.?

To pressure citizens to not waste water, California Launches "Drought Shaming" Website.

California ...

August 2, 2015, 4:34 pm, 1520566

Two volumes of Paul Samuelson’s Collected Scientific Papers appeared in 1966, 129 articles, 1,831 pages, published by the MIT Press. Samuelson was only fifty-one. To some it might have seemed premature, but then some part of the point must have been shock and awe: to demonstrate how far economists had ...

August 2, 2015, 3:33 pm, 1520561

August 2, 2015, 3:03 pm, 1520550

In case you somehow missed that socioeconomic mobility is low in the US relative to many other countries, this is Anne Kim at Washington Monthly:

The Myth of Mobility: ... Surveys find that nearly two-thirds of Americans believe it’s “still possible to start out poor in this ...

August 2, 2015, 3:03 pm, 1520549

Paul Krugman follows up on Paul Romer's latest attack on "mathiness":

Freshwater’s Wrong Turn (Wonkish): Paul Romer has been writing a series of posts on the problem he calls “mathiness”, in which economists write down fairly hard-to-understand mathematical models accompanied by verbal claims that don’t actually match what’s going ...

August 2, 2015, 2:05 pm, 1520546

This new book, by Algerian writer Kamel Daoud, starts with Camus’s The Stranger, and then retells the story from the point of view of the brother of the Arab murder victim.  It’s both commentary on the original and a compelling narrative in its own right.  The Guardian

August 2, 2015, 2:05 pm, 1520545

August 2, 2015, 1:33 pm, 1520543
One Brooklyn apartment building has solved its Commons Problem by having its 175 dogs all be registered and DNA tested. This has created a database that can be cross-checked when a new unwanted sample of poop is left in the commons areas. Those dog owners who are caught are ...

August 2, 2015, 1:03 pm, 1520516
From STR: US hotel results for week ending 25 July

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 19-25 July 2015, according to data from STR, Inc.

In year-over-year measurements, the industry’s occupancy increased 1.5% to 79.1%. Average ...

August 2, 2015, 10:34 am, 1520469

Dan Price announced that he’d pay a middle class salary to all his employees. His clients, customers, and even the employees themselves are unhappy.

NYT (“A Company Copes With ...

August 2, 2015, 10:04 am, 1520464
(Don Boudreaux)

… is from pages 140-141 of 1963 Norton Library edition of the superb posthumous 1951 collection of some of

August 2, 2015, 10:04 am, 1520463
(Don Boudreaux)

Tim Worstall elaborates on my recent post on how Uber and other sharing-economy innovations is helping both to increase the ...

August 2, 2015, 9:33 am, 1520462

It feels like Christmas Eve (but without baby Jesus):

Obama administration will unveil the finalized version of its unprecedented regulations clamping down on carbon dioxide emissions on Monday. The plans will require every state to reduce emissions from existing coal-burning power plants.

Regulations will require power plants to cut emissions by 32%by ...

August 2, 2015, 8:34 am, 1520403
The ISM Manufacturing Index is expected to post a modest increase to 54.3 in tomorrow’s update for July vs. the previous month, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction is well above the neutral 50.0 mark and so the current outlook still calls ...

August 2, 2015, 7:33 am, 1520401

August 2, 2015, 5:33 am, 1520359

For all--or at least some--of your classic rock needs.

August 2, 2015, 4:04 am, 1520334
My regular column is available to subscribers on This is an excerpt. An economic recovery is all about barriers and milestones. It is a story of getting over the barriers and counting off the milestones as you pass...

August 2, 2015, 3:23 am, 1520332

Photo Credit: Jon Gos

Too often in debates regarding the recent financial crisis, the event was regarded as a surprise that no one could have anticipated, conveniently forgetting those who pointed out sloppy banking, lending and borrowing ...

August 2, 2015, 3:03 am, 1520271

August 2, 2015, 2:04 am, 1520270

That is the new and excellent book by Sebastian Strangio, which you can think of as a post-Sihanouk look at the country from a political economy point of view.  Here are just a few bits:

The cruelty and callousness that allowed jilted wives to order and commit such brutal ...

August 2, 2015, 12:44 am, 1520252

The ‘zero lower bound’ on interest rates has been broken is a few nations, but only marginally. Going to seriously negative interest rates would require reform. This column, which reports the views of the leading UK-based macroeconomists, suggests that there is no strong support for reforming the monetary system to ...