I think Buce has a very good point. There were many causes of the Global Financial Meltdown (GFM) in 2008 and it's siamese twin, The Great Worldwide Recession That Won't Recover (TGWRTWR). Some causes are superficial and others are more systemic. Certainly perverse incentives in the banking industry were among them. This is the stuff … Continue reading Incorporation as a Cause of the Global Meltdown?
From Calculated Risk and the government: The headline GDP number was revised up to 5.9% annualized growth in Q4 (from 5.7%), however most of the improvement in the revision came from changes in private inventories. Excluding inventory changes, GDP would have been revised down to around 1.9% from 2.2%. Not really any encouragement here. Yes, … Continue reading 4th Qtr 2009 GDP, 1st Revision
from Angry Bear: globalization--the idea that corporate entities should be able to operate their business world-wide without any "barriers" from the nations themselves--is at the heart of our systemic economic problems. The rage at the base of the tea party movement is real--it has been misdirected at government, as though government were the source of … Continue reading Best Idea I’ve Read Today
Krugman explains "core inflation" and the measurement thereof: So: core inflation is usually measured by taking food and energy out of the price index; but there are alternative measures, like trimmed-mean and median inflation, which are getting increasing attention. First, let me clear up a couple of misconceptions. Core inflation is not used for things … Continue reading Explanation: “Core Inflation”
Fascinating story of the history of money and economists' attempts to explain / theorize money. Long, but an easy read at http://www.monetary.org/bromsgrovetalk04.htm
In the previous montrous, global financial meltdown (the Great Depression), the leading economists at University of Chicago sang a very different tune from what they promote today. They actually called for nationalizing the Federal Reserve Banks and giving total control of money creation to government. They argued it was necessary to provide the proper environment … Continue reading History: Chicago School Didn’t Always Support the Banks
Some more detailed background on a common question asked by students in macro classes: Who Owns the Fed? This question and confused answers to it also form the basis of many conspiracy theories and misunderstandings of our monetary system. To set the record straight, I quote from http://www.monetary.org/federalreserveprivate.htm Therefore most Americans would be surprised to … Continue reading Who Owns The Federal Reserve?
I know I sound like a gloomy-gus when considering the prospects for the economy, but I'm not totally alone. Calculated Risk quotes from Cleveland Fed President Sandra Pianalto: When the Small Stuff Is Anything But Small. A few excerpts: (bold emphasis is CR's, red is mine): ... The recovery from the recession may also end … Continue reading The Details Make The Future Look Dark
Interesting blog post about how people go about doing their economic business in Thailand - 7-11! The most popular destination in Thailand is? Phuket? Bangkok? Chang Mai? No, wrong, nope. The 7-ELEVEN store across from my apartment- always busy 7-ELEVEN. As in the 7-Eleven convenience store. Yep, but not the 7-Eleven we know and ignore … Continue reading The Center of Commerce in Thailand: 7-ELEVEN
According to reports coming from Washington today, the Senate has failed to reach any agreement on extending unemployment benefits. Next week benefits run out for hundreds of thousands of would-be workers and this economy is still not creating jobs. So, as a stopgap, the Senate proposes a "15-day" extension. Yes, you read that right: 15 … Continue reading Washington Fiddles While Would-be Workers Get Burned