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.

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May 2, 2016, 6:44 pm, 1632247

May 2, 2016, 6:04 pm, 1632245
(May 2, 2016 05:30 PM, by Emily Skarbek) Yesterday Ilya Somin reminded readers of the Washington Post of his ongoing support for changing May 1st from a celebration of communists, socialists, and labor unions - to a holiday that commemorates the millions who have died because of communist... (1 ...

May 2, 2016, 6:04 pm, 1632243

Libyan armed forces are now preparing to launch an offensive on the base of the Islamic State of Iraq and al Sham (ISIS) in Sirte, a major Mediterranean Sea coastal town in Libya. If and when that offensive drives ISIS from the city, world leaders will undoubtedly trumpet the development as a major victory.

Regaining ...

May 2, 2016, 6:04 pm, 1632244

Not surprisingly, given the typically vapid, incoherent, and isolationist-leaning policy pronouncements made by Donald Trump on foreign affairs, any number of respected, conservative national security figures have signaled they would vote for Hillary Clinton rather than Donald Trump next November.

They are encouraged by Mrs. Clinton’s record while serving as a ...

May 2, 2016, 5:03 pm, 1632209

Illinois Rep. Lou Lang, Rep. Christian Mitchell, and Emily Miller of Voices for Illinois Children just held a press conference to respond to criticism of their proposed graduated income tax proposal. The proposal, which Lang terms the Fair Tax, consists of (1) a proposed constitutional amendment removing the ...

May 2, 2016, 4:04 pm, 1632204

Last week, Bernie Sanders was asked why he wasn’t doing better in states with high income inequality. He said it was because poor people do not vote. And he’s somewhat correct. According to US Census data (Table 7), 51.3% of likely eligible voters with family incomes below $30,000 ...

May 2, 2016, 3:03 pm, 1632169

This spring’s college seniors are about to set another record for student debt. But they’re also likely to find a job and make a decent starting salary.

About seven in 10 seniors set to graduate this spring borrowed for their educations. Along with their diplomas, they’ll carry an average $37,172 of student ...

May 2, 2016, 3:03 pm, 1632168

From the NBER:

Growth of income and welfare in the U.S, 1979-2011, by John Komlos, NBER Working Paper No. 22211 Issued in April 2016: We estimate growth rates of real incomes in the U.S. by quintiles using the Congressional Budget Office’s (CBO) post-tax, post-transfer data as basis for the period ...

May 2, 2016, 3:03 pm, 1632167
From the Federal Reserve: The April 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices

Regarding loans to businesses, the April survey results indicated that, on balance, banks tightened their standards on commercial and industrial (C&I) and commercial real estate (CRE) loans over the first quarter of 2016.3 ...

May 2, 2016, 2:04 pm, 1632166

Having been named as Mr Nakamoto once, unconvincingly, Mr Wright has a steep hill to climb to convince the world that he is indeed bitcoin’s founder. Evaluating his claim involves the application of a multi-step paternity test. First comes the factual evidence: can Mr Wright prove that he is ...

May 2, 2016, 2:04 pm, 1632165
(May 2, 2016 02:30 PM, by David Henderson) But the standard rendition of the B&B [Bootleggers and Baptists] story leaves out something that bootleggers and Baptists need to achieve their goals: emotion. One of the common emotions is anger, and the group whose anger is most important is... (0 ...

May 2, 2016, 2:04 pm, 1632164

Well, I read Donald Trump’s foreign-policy speech from last Wednesday.

I tried to be impartial in reading it; I’m a Cruz supporter, but I’m also a senior fellow at the American Enterprise Institute, and reading and responding to speeches like this is my job.

Mr. Trump sounded a lot of the same ...

May 2, 2016, 2:04 pm, 1632163

The potential for a contested GOP convention has drawn comparisons to the 1976 Republican presidential campaign, when insurgent Gov. Ronald Reagan took on his party’s establishment. Today, it is Donald Trump who is leading a populist insurgency against the GOP establishment. But when it comes to foreign policy, the Reagan ...

May 2, 2016, 1:33 pm, 1632160
The content of this post will be available shortly.

May 2, 2016, 1:33 pm, 1632159
Andrew Ross Sorkin revisits a classic Keynesian counter-factual. Would the Great Recession have been less painful if the stimulus plan had been larger? Here is a direct quote from his NY Times Magazine cover interview with President Obama.


"Many argue today that Obama’s $800 ...

May 2, 2016, 1:03 pm, 1632128

This is by Barkley Rosser (I left quite a bit out, including the connections to the Sander's campaign):

The Legacy of Joan Robinson: ... Joan Violet Maurice Robinson (1903-1983) was without doubt the most important woman economist born before 1930 and maybe still the most important woman economist ever. ...

May 2, 2016, 1:03 pm, 1632127
Earlier today, the Census Bureau reported that overall construction spending increased 0.3% in March compared to February:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2016 was estimated at a seasonally adjusted annual rate of $1,137.5 billion, 0.3 percent above the ...

May 2, 2016, 12:04 pm, 1632120

May 2, 2016, 12:04 pm, 1632119
(May 2, 2016 10:29 AM, by Scott Sumner) Back on March 7, 2011, Japan was hit by the worst national disaster to strike a developed country in modern times. Last week, Japan was hit by a human made disaster with a comparable effect on the economy (albeit obviously... (2 ...

May 2, 2016, 12:04 pm, 1632118

May 2, 2016, 12:04 pm, 1632116

My Eurosceptic bona fides run deep. I wrote my first diatribe against the EU in my teenage years. When I was in university, I interned for the office of the President of the Czech Republic, Václav Klaus – yes, the one who famously compared the EU to the former Soviet ...

May 2, 2016, 12:04 pm, 1632117
Defense scholars

May 2, 2016, 12:04 pm, 1632115

Recent debates over Europe’s future are permeated by a sense of impending doom. The eurozone is an economic basket case, we’re told. The Continent is flooded with Muslim asylum-seekers, and inept political elites are about to be replaced by political extremists.

There are good reasons to be concerned about the Continent’s ...

May 2, 2016, 12:04 pm, 1632114

Conservatism in America is often associated with a strong preference for spending restraint and low taxation. That’s as it should be. Sound fiscal policy is essential for sound governance. History shows that powerful nations that engage in reckless spending and borrowing eventually fall into periods of decline. It would be ...

May 2, 2016, 12:04 pm, 1632112

The unexpected success, forecast by almost no one 12 months ago, of Donald Trump and Bernie Sanders in winning 40 percent and 42 percent in Republican and Democratic primaries and caucuses is widely taken as evidence of raging discontent among American voters.

May 2, 2016, 12:04 pm, 1632113

In the wake of the political protests in Baghdad, Barham Salih, a senior Patriotic Union of Kurdistan (PUK) official who has held a variety of positions in both the central Iraqi government and in Iraqi Kurdistan, tweeted, “Chaos in Baghdad; definitive end to 2003 polity. It is no longer ...

May 2, 2016, 12:04 pm, 1632111

The Economist presents a mystery in the decline of global fertility rates (seen in the above chart) since the Great Recession and ...

May 2, 2016, 12:04 pm, 1632110

Some interesting light is shed on the immigration issue by a Pew Research Center report issued this month.

Democratic and Republican voters tended to be in agreement on immigration issues from 1994 (the beginning of Pew’s time series) to 2006. When given the choice of a positive view (immigrants “strengthen ...

May 2, 2016, 11:34 am, 1632108

|Peter Boettke|

May 2, 2016, 11:33 am, 1632107
The Smithsonian has published an excellent piecethat reports on an academic study which examined the productivity of 6 people working in a climate controlled building who were exposed to different levels of VOC and carbon dioxide emissions. Yes, this is a very small sample of observations and I ...

May 2, 2016, 11:33 am, 1632106

Today’s WSJ “Notable and Quotable“:

From economist Mark J. Perry’s Carpe Diem blog for the American Enterprise Institute, “Prediction: No commencement ...

May 2, 2016, 11:03 am, 1632078

Today is May 2, the anniversary of the first scheduled commercial flight of a jet aircraft in 1952. Not many taxes on commercial air flights then; today, a few more. Here are some interesting links I came across:

Puerto Rico Will Default on Government Development Bank Debt: The island has ...

May 2, 2016, 11:03 am, 1632077

"How should we think about these incredibly low interest rates?":

The Diabetic Economy, by Paul Krugman, Commentary, NY Times: Things are terrible here in Portugal, but not quite as terrible as they were a couple of years ago. The same thing can be said about the European ...

May 2, 2016, 11:03 am, 1632076
Black Knight Financial Services (BKFS) released their Mortgage Monitor report for March today. According to BKFS, 4.08% of mortgages were delinquent in March, down from 4.66% in March 2015, and the lowest since March 2007. BKFS also reported that 1.25% of mortgages were in the foreclosure process, down ...

May 2, 2016, 11:03 am, 1632075
The ISM manufacturing index indicated expansion for the second consecutive month in April, following five months of contraction. The PMI was at 50.8% in April, down from 51.8% in March. The employment index was at 49.2%, up from 48.1% in March, and the new orders index was at 55.8%, ...

May 2, 2016, 10:44 am, 1632074

May 2, 2016, 10:04 am, 1632071
(Don Boudreaux)

Here’s a letter to a correspondent who asks a frequently asked question:

Mr. Gordy Robicheaux

Dear Mr. Robicheaux:

Thanks for your e-mail.

You ask ...

May 2, 2016, 10:04 am, 1632070
by Linda Beale Defending the IRS Against Right-Wing Attacks The IRS is a government agency that endures all kinds of hostile attacks.  Most people don’t really like to pay taxes.  Even I don’t really “like” paying taxes, though I do recognize the importance of paying taxes and supporting the societal ...

May 2, 2016, 10:04 am, 1632069

Just as government-subsidized easy money fueled a real-estate bubble in the 1990s and 2000s, boosting house prices while promoting unwise borrowing and lending, today government-subsidized easy money is fueling an education bubble — boosting tuition rates and reducing students’ incentives to choose education options smartly.

The progressive approach for addressing the ...

May 2, 2016, 9:34 am, 1632065

|Peter Boettke|

Labels are useful shorthands, but labels can also confuse and distort. Labels are tricky. Consider discussions of economists and their various views about the way the world works. In the grand scheme of the economics profession it used to be commonplace to describe various thinkers as "freshwater" ...

May 2, 2016, 9:33 am, 1632064

A highly leveraged financial system is one prone to collapse. This notion underlies modern financial regulation: the control of systemic risk requires controlling leverage. And, it is what drives proposals for high capital requirements and to tax leverage. But, as is always the case with regulation, ...

May 2, 2016, 8:44 am, 1632038

May 2, 2016, 8:44 am, 1632037

May 2, 2016, 8:35 am, 1632036
Global markets continued to rebound in April. Other than US REITs, which fell modestly in the kick-off to the second quarter, all the major asset classes posted gains last month, building on March’s strong rally. Leading the way: commodities broadly defined. The Bloomberg Commodity Index surged 8.5% in April, dispensing ...

May 2, 2016, 8:05 am, 1632035

Guru, a 2007 movie from India starring Abhishek Bachchan and Aishwarya Rai and directed by Mani Ratnam, is one of the most pro-free market movies ever made and perhaps the best.

Guru follows Gurukant “Guru” Desai from his small village in India to Turkey where in a series of evocative scenes he shows ...

May 2, 2016, 8:04 am, 1632034
(Don Boudreaux)

… is from page 50 of UCLA economist William Allen’s marvelous 1989 collection of the transcripts of his radio addresses, ...

May 2, 2016, 8:04 am, 1632033

America’s economic recovery since the recession ended in 2009 has been the weakest in decades, principally because the 2010 Dodd-Frank financial law suppresses risk-taking. Now another Dodd-Frank rule—proposed restrictions on incentive pay in the financial industry—could be the coup de grace for U.S. growth.

May 2, 2016, 7:34 am, 1632028

Professor Peter Gordon offers a concise and powerful reply to the folks who bemoan our "lack" of infrastructure investment.

May 2, 2016, 7:34 am, 1632027

More than I'd expected.

But since this is the federal government we're talking about maybe I should have expected that.

May 2, 2016, 7:34 am, 1632026
Jacob Adenbaum, David Hubbs, Antoine Martin, and Ira Selig

In a recent Important Notice, the Fixed Income Clearing ...

May 2, 2016, 7:23 am, 1632025

My latest Macro Musings Podcast is with Cardiff Garcia, U.S. senior editor of FT Alphavilleand host of the podcast FT Alphachat.After ...

May 2, 2016, 6:44 am, 1631996

Arnold Kling, economist and author, speaks with EconTalk host Russ Roberts about his latest book, Specialization and Trade: A Reintroduction to Economics. Kling argues that macroeconomics ignores the challenges of buyers and sellers working together in the real world ...

May 2, 2016, 6:35 am, 1631995
● US Personal Income Rises Slightly More Than Expected In Mar | RTT ● US consumer spending growth slows in Mar despite higher income | LA Times ● Consumer sentiment for US edges lower in Apr | CNBC ● US labor costs rise modestly in first quarter | Reuters ● ...

May 2, 2016, 5:34 am, 1631992

David Andolfatto has a very good post on "Monetary Policy Implications of Blockchain Technology". In passing (it's not a central point of his post), David says:

"However, it's worth pointing out thatthe leading economic theory of bank sector fragility, the

May 2, 2016, 5:34 am, 1631991

"On the academy’s latest folly."

There's no way I'm going to summarize this. If you have a few minutes, you just have to read it.

But--credit where credit is due--Professor Carey says a very smart thing about climate change models:

Carey is hardly skeptical about climate change or its ...

May 2, 2016, 5:34 am, 1631990

"But ignoring the problem won’t make it go away. In 2015, Illinois’ state pension debt reached a record $111 billion. Government-worker pensions already consume one-fourth of the state’s budget. And every day Illinois goes without a solution to its pension crisis, the state’s pension debt grows by over $20 ...

May 2, 2016, 5:34 am, 1631989

So true:

Because the island is a U.S. territory, what happens there will not stay there: America needs to prevent, or minimize, a humanitarian crisis, some of which would be exported to America. But ameliorative measures must be made conditional on fiscal, labor and other reforms on the ...

May 2, 2016, 5:34 am, 1631988

"More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut —even though their pension fund is still years away from running out of money."

More: "'This Is Going To Be A National Crisis' - One Of The ...

May 2, 2016, 5:03 am, 1631977

"As expected", is the answer to the question "How did the S&P 500 behave during Week 4 of April 2016?"

But for that to be expected, you would have to have known the following:

Investors entered the week mainly focused on the distant future ...

May 2, 2016, 5:03 am, 1631976

May 2, 2016, 4:04 am, 1631975

There are many, but they include:

J.M. Keynes,  he was the first person to think about how to really manage an information system. E.M. Forster for The Machine Stops, written in 1907, which foresees our error with a very critical eye. Alan Turing, who stayed a kind person even as he was ...

May 2, 2016, 2:04 am, 1631956

For music, at least:

The simultaneous advent of streaming music and the vinyl renaissance has led to some very interesting recording industry statistics over the past few months. Last month, the RIAA reported that vinyl revenues outpaced sales from streaming services, despite actual streams vastly outnumbering ...

May 2, 2016, 1:03 am, 1631947

The 2016Q1 advance release, discussed at length by Jim, provides additional evidence in favor extreme caution in tightening monetary policy — maybe even a reconsideration of the June rate hike that seems, according to conventional wisdom, a done deal.

First, the output gap increased slightly in 2016Q1. Even taking ...

May 2, 2016, 12:04 am, 1631943
(May 2, 2016 12:00 AM, by Bryan Caplan) Donald Trump has wildly exceeded electoral expectations at every stage of the election. But betting markets still say he has but a 20% chance of winning the presidency. Isn't Trump's record of success after success strong evidence that he's far... (0 ...

May 2, 2016, 12:04 am, 1631942

The Federal Reserve has recently cited global economic conditions as an important determinant in its monetary policy decisions. The Fed’s monthly outlook of the domestic economy obviously affects its decisions about tapering quantitative easing and raising interest rates. What role should global economic conditions play?

This seminar will discuss the degree ...

May 2, 2016, 12:04 am, 1631941

Ten years ago, imagining how people use mobile devices today might have been impossible. From banking to transportation to streaming TV, our phones and their networks do it all. What will the next 10 years bring? And what kind of broadband networks will we need to support the “killer apps” ...

May 1, 2016, 11:33 pm, 1631940

1. Chart of the Day (above). The U.S. Department of Transportation’s Bureau of Transportation Statistics reported this week that the average inflation-adjusted US domestic air fare ...

May 1, 2016, 10:44 pm, 1631934

May 1, 2016, 10:04 pm, 1631933
(Don Boudreaux)

… is from page 347 of the 2014 collection, The Market and Other Orders (Bruce Caldwell, ed.), of ...

May 1, 2016, 10:04 pm, 1631932
In 2014, Joseph Hall explained why this could be an issue. “The US Department of Justice is seeking to drastically expand its abilities to search computers remotely through an obscure change in the rules of criminal procedure. This would have the effect of making it easier for law enforcement to ...

May 1, 2016, 9:03 pm, 1631922
Schedule for Week of May 1, 2016

Energy expenditures as a percentage of PCE hit another All Time Low in March

• At 10:00 AM ET, ISM Manufacturing Index for April. The consensus is for the ISM to be at 51.5, down ...

May 1, 2016, 6:34 pm, 1631910

Dedicated as it is to “commentary on the production and distribution of economic ideas,” Economic Principals paused at the news last week that Leonard Riggio, founder and chairman of Barnes & Noble, Inc., plans to retire this autumn.  He is 75.

I wrote an article about Riggio in 1974, three ...

May 1, 2016, 5:23 pm, 1631903
The Eurozone experienced a second recession in 2011-2012, just a few years after the first one in 2008-2009. This second downturn was the fatal blow that turned Europe's Great Recession into an outright depression. The standard explanation for the emergence of this second recession is the sovereign debt ...

May 1, 2016, 4:04 pm, 1631875

I will be doing a Conversation with Tyler with him, June 15, late afternoon, Washington D.C., location to be announced.

So what should I ask?  I already know which is his favorite novel…and plan to ask about that…and of course we will cover his ...

May 1, 2016, 2:04 pm, 1631852

May 1, 2016, 2:04 pm, 1631853

Two papers suggest numeracy improves financial outcomes and can be taught.

Numeracy and Wealth: We examined the relationship between numeracy and wealth using a cross-sectional and a longitudinal study. For a sample of approximately 1000 Dutch adults, we found a statistically significant correlation between numeracy and wealth, even after ...

May 1, 2016, 1:34 pm, 1631850

May 1, 2016, 1:33 pm, 1631849

May 1, 2016, 1:33 pm, 1631848
Here is quote from a book review(of a new book by Thomas Frank) published in today's NY Times. In Econ 101 classes, young people learn that economists are skeptical that policies such as high minimum wages and rent control will achieve their intended goals. Students hear a full ...

May 1, 2016, 1:03 pm, 1631836

Dietrich Vollrath:

Technology versus the Distribution of Workers in Aggregate Productivity: There was a recent post by an engineer rebutting Robert Gordon’s (and others) thesis that technological change was slowing down. The evidence cited is a series of plots and figures showing how specific technologies (battery storage, energy ...

May 1, 2016, 12:04 pm, 1631822

Now that we’re at the beginning of college graduation season, I thought it would be a good time to show the updated chart above of the huge ...

May 1, 2016, 11:33 am, 1631821
The NY Times has published another piece celebrating the extension of the Los Angeles Expo Line (which will take place on May 20th). I am really excited about this because the extension of the train will now pass through Westwood and this will mean that I no longer ...

May 1, 2016, 11:33 am, 1631820

Now that we’re at the beginning of college graduation season, I thought it would be a good time to show the updated chart above of the huge ...

May 1, 2016, 11:03 am, 1631794
Note: Last month I noted that energy expenditures as a percentage of PCE had hit an all time low. Here is an update through the March 2016 PCE report.

Below is a graph of expenditures on energy goods and services as a percent of total personal consumption expenditures ...

May 1, 2016, 10:04 am, 1631793
(May 1, 2016 11:03 AM, by David Henderson) In my post on the late Lester Thurow on April 15, I promised to post more from his book The Zero-Sum Society. Here are some further excerpts. Thurow as Ludwig von Mises Proposition VII: Regulation Leads to Regulation Since individual... (0 ...

May 1, 2016, 8:34 am, 1631772

Just 12 months ago, Labour had a Jewish leader. Today, we’re told, it has a problem with antisemitism. How can this be?

It might be useful to distinguish between two forms of racism: verbal, and structural. Although the two often go together, they need not. For example, ...

May 1, 2016, 8:04 am, 1631771
(Don Boudreaux)

… is from page 19 of the 1991 Liberty Fund edition of Bruno Leoni’s indispensable 1961 volume, Freedom and ...

May 1, 2016, 7:34 am, 1631770

I don't believe it, but, hey, you're not supposed to argue with science!

May 1, 2016, 5:34 am, 1631759

Maybe. We'll see.

May 1, 2016, 4:04 am, 1631729

True or false? A new nuclear power station in the south-west of the UK will be the most expensive object on Earth. That’s the claim about the proposed plant at Hinkley Point in Somerset – but has anything else ever cost so much to build?

“Hinkley is set to ...

May 1, 2016, 4:04 am, 1631728
My regular column is available to subscribers on This is an excerpt. There are two things that even the most casual observer of the EU referendum debate will have heard. One is that we “send” £350m a week...

May 1, 2016, 3:23 am, 1631726

May 1, 2016, 2:04 am, 1631707

The United States Air Force never really wanted GPS.  The 621B program, the precursor to GPS, was underfunded.  After it evolved into the GPS program in the early 1970s, the Air Force largely neglected it, to the point of disowning it and defunding it.  A few times, it tried ...

May 1, 2016, 2:04 am, 1631706
(Don Boudreaux)

… is from an e-mail sent to me (and some other people) by Texas A&M emeritus professor of economics ...

May 1, 2016, 12:04 am, 1631690
Thing of beauty. Not everything worked but I haven’t seen anything so devastating since Colbert in 2006 Stephen Colbert Roasts Bush at 2006 White House Correspondents Dinner Open thread for all things 2016 related.