Economics Roundtable
Calculated Risk
Read the Bill McBride interview.
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.
June Payroll Employment
The slowndown in employment growth over the past few months is starting to become more apparent in the graph below.
Click on the image to get a bigger version.
Focus on the Problem
U.S. payroll employment peaked at 132.5 million jobs in February 2001. For April 2012, U.S. payroll employment had reached 133.0 million jobs, marking the third month in a row above the February 2001 level.
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.
Finally, it's hard to argue against the payroll employment graph below (straight from FRED) and the comparison across recessions (courtesy of Calculated Risk).
Looking Up At 2001
In February 2001, U.S. payroll employment peaked at 132.5 million. The November 2011 figure of 131.7 million still falls 800,000 jobs short of the earlier peak.
Click on the chart for a larger version.
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
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“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”
~Murray Rothbard ...
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Here’s a letter to an e-mail correspondent. I use his real name with his kind permission.
Jeremy Harris, M.D.
Dear Dr. Harris:
Thanks for e-mailing in response to my recent review of Cass Sunstein’s book Simpler. While I disagree with the thrust of your argument, I appreciate its civility and thoughtfulness.
The heart ...
Thomas Sowell, in his voluminous writings, is – on my understanding – sometimes wrong. But he’s wrong only rarely. Very rarely. And on those very many occasions when he’s right he is brilliantly insightful and impressively forceful in his argument.
… is from page 108 of Peter Drucker’s 1967 volume, The Effective Executive:
The need to slough off the outworn old to make possible the productive new is universal. It is reasonably certain that we would still have stagecoaches – nationalized, to be sure, heavily subsidized, and with a fantastic research ...
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Summary via publisher, Palgrave Macmillan
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Two from Tim Duy:
First, "Dollar Up":
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Just sayin....
And second, "Confidence Boom?": ...
US Economics
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The official English language translation of Pope Francis’ address for the New Non-Resident Ambassadors to the Holy See: Kyrgyzstan, Antigua and Barbuda, Luxembourg and Botswana (16 May 2013):
Your Excellencies,
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Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com.
Why might Yahoo want to buy Tumblr, as AllThingsD reported last ...
After hinting at it for months, I can finally post the abstract of and a link to
“Top Marginal Taxation and Economic Growth”
by my student Santo Milasi
The paper explores the relationship between statutory top marginal tax rates on personal income and long-run economic growth. While theoretical models of endogenous growth ...
TODAY'S recommended economics writing:
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François Hollande promised an “offensive” to bring “more growth and less austerity” to Europe as he launched a bid to ...
A lot has happened this week. We learned that IRS higher-ups have known about targeting conservative groups since 2011. And yet they did nothing. On Wednesday, IRS acting commissioner Steven Miller resigned. On Thursday, Joseph Grant, commissioner of the tax-exempt entities division, announced his retirement. Congressional hearings began.
At today’s House ...
Here’s a video repoort about the “fried chicken arbitrage” that was featured yesterday on CD.
HT: Hitssquad
Narayana Kocherlakota on how he sees the balance between keeping interest rates low for an extended time period to help with the unemployment problem (the benefit) and potential financial instability that low rates bring (the cost). He doesn't give a precise statement about how he sees the tradeoff, but does ...
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Richard Epstein lays the lumber to Obamacare. Here’s his opening sentence:
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John grew up in the hoity-toity land of Derby Hats and Mint Juleps. Me? Well...here's a walk down memory lane (Some potentially NSFW content).
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The Great ...
I’d like to reply to one confusion and one set of pushbacks on yesterday’s post:
Currency and Reserve Balances
I buried one fact: banks can reduce total Fed reserve balances by withdrawing currency — physical cash — from their Fed reserve accounts. I only gestured toward this in a parenthetical and a ...
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Click on graph for larger image.
The preliminary Reuters / University of Michigan consumer sentiment index forMayincreased to83.7 from the April reading of 76.4. This is ...
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A couple of weeks ago, I mentioned Hyman Minsky’s new book, Ending Poverty: Jobs, Not Welfare (there is also a Kindle version). Take a look at the cover – Minsky looking like a bit of a rougue!
I thought you might enjoy my powerpoint presentation, given at the Levy-Ford annual ...
A recentFree exchange columndiscusses the European Central Bank's troubles in providing support to peripheral economies (summaryhere). We are inviting experts in the field to comment on the piece and related research. Michael McMahon, a macroeconomist at the University of Warwick commentedhere. Gilles Moec, co-head of European economic ...
Saw this on my way home yesterday and got a chuckle (at a stop light in case you think I was violating Ohio's driving laws by taking a picture with a handheld device while moving). The bumper sticker reads "TOO POOR TO BE A REPUBLICAN." The car is a Lexus ...
So which economy in the world is “suffering” most from austerity? As Capital Economics notes, the combination of US tax hikes and spending cuts means that over the next two years the federal budget deficit is expected to fall by 3.6 percentage points as a share of GDP (3.2 percentage ...
A recentFree exchange columndiscusses the European Central Bank's troubles in providing support to peripheral economies (summaryhere). We are inviting experts in the field to comment on the piece and related research. Michael McMahon, a macroeconomist at the University of Warwick commentedhere. Gilles Moec, co-head of European economic ...
… is from pages 49-50 of the 1979 Liberty Fund edition of Hayek’s deep and profound and important 1952 book, The Counter-Revolution of Science:
But the concrete knowledge which guides the action of any group of people never exists as a consistent and coherent body. It only exists in the dispersed, ...
In 1720, the very same year that England was experiencing the “South Sea Bubble” (see our post), France was experiencing a bubble as well—the “Mississippi Bubble.” France’s bubble was brought on by government debt and the advice of the head of the country’s finance ministry, John Law ...
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To do ...
For example, on Thursday I stated "Philly Fed Slips Into Contraction (Again); Current Conditions Recessionary, Future Expectations Far Too Optimistic".
Here is the chart I posted:
What would happen if the ECB immediately and directly ran a helicopter drop of money to the periphery? I don’t find that an easy question to answer. Here is one recent report:
But the indicator [interest rate spreads] has since risen again and reached a record of 3.7 percentage points ...
On Thursday's data:
Busy Data Day, by Tim Duy: Something of a busy data day. Not all of it pleasant, but I suspect that the Fed will attempt to see through that unpleasantness. Start with the surprise jump in initial unemployment claims:
Dan Little:
What about Marx?, by Dan Little: At various points since the death of Karl Marx in 1883 his work has been regarded as a dead ...
From The Economist:
The humble shipping container is a powerful antidote to economic pessimism and fears of slowing innovation. Although only a simple metal box, it has transformed global trade. In fact, new research suggests that the container has been more ...
… is from George Will’s current column:
Leaving aside the seriousness of lawlessness, and the corruption of our civic culture by the professionally pious, this past week has been amusing. There was the spectacle of advocates of an ever-larger regulatory government expressing shock about such government’s large capacity for ...