I must add my voice to Brad Delong's, Dean Baker's, and Mark Thoma's. War is NOT the answer to our economic problems. The only way war can help economically is by increasing government spending dramatically. If we could do it for a war, then we can get the same benefits without the dead bodies, the … Continue reading War Is Not the Answer
Month: October 2010
Real GDP 3rd Qtr 2010: What’s that smell?
The initial estimate on 3rd quarter 2010 U.S. GDP came out this morning. Real GDP growth was very weak. From Calculated Risk: From the BEA: Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.0 percent … Continue reading Real GDP 3rd Qtr 2010: What’s that smell?
Poorer Boomer Retirees: Macro Implications of Proposed Pension and SS Benefit Cuts
In many political circles this year, a mantra has emerged: we cannot afford the public sector pension plans and we cannot afford Social Security - we must cut the future benefits. For example, George Biggs of the conservative, right-wing think tank American Enterprise Institute argues that even though public sector workers receive lower pay than … Continue reading Poorer Boomer Retirees: Macro Implications of Proposed Pension and SS Benefit Cuts
One-liner Economics
One-liner economics: Noun. Def: the practice of making economic arguments and describing economic effects in one or two sentences. For the statements to be true or even highly probable, there are usually numerous, gross, and often un-realistic assumptions necessary. Such assumptions are always unstated since they are so unrealistic. When dealing with macroeconomics, one-liner economics … Continue reading One-liner Economics
Videos on History of Money and Banking
Animated "Short History of Money" - a funny, animated version of the traditional, mainstream (and somewhat factually challenged) history of money and banking. A five part series with a much better, more factual history of money and banking with focus on the U.S. called "Money as Debt". Part 1: Part 2:
Links for More Info on Social Security
The Angry Bear Blog series on Social Security, courtesy of Bruce Webb: http://bruceweb.blogspot.com/2008/08/angry-bear-social-security-series.html Andrew Biggs' Blog called Notes on Social Security: http://andrewgbiggs.blogspot.com/ The myth of the Social Security system's financial shortfall an article in the LA Times. The Washington Post: Making Social Security less generous isn't the answer From American Prospect: Social Security and the … Continue reading Links for More Info on Social Security
Myths about Keynesian Policy
From Economicshelp.org: There are quite a few misunderstandings about Keynesian fiscal policy, two of them include: Successful fiscal expansion relies on having a war and large military spending. No, fiscal expansion would work much better if it is targeted on public services under provided in a free market, such as: transport, health and education. These … Continue reading Myths about Keynesian Policy
State Unemployment Rate
The September 2010 unemployment rates by state are out. Not much change. As for Michigan, we continue to just barely inch our way in a positive direction, coming in at a 13.0%. California is creeping on Michigan with a 12.4% rate, while Nevada continues to be a black hole for employment. This is not really … Continue reading State Unemployment Rate
RIP: Efficient Markets Hypothesis – 70% of stock trades last 11 seconds or less
One of the economic theories that dominated a mainstream economic theory during the last few decades is Efficient Markets Hypothesis. Essentially, an important part of the concept is that asset prices, such as stock prices on the stock exchange, accurately reflect all available information about the future earnings of the firm. Further, it implies that … Continue reading RIP: Efficient Markets Hypothesis – 70% of stock trades last 11 seconds or less
Excess Bank Reserves: Theory vs. Reality
In the macro econ textbooks, the mainstream explanation for money creation is the story of fractional reserve banking where reserves limit the amount of loans made. In the traditional theory, the central bank (The Fed in U.S.) controls the amount of reserves banks have through either reserve reqmts or open-market operations. Commercial banks are supposedly … Continue reading Excess Bank Reserves: Theory vs. Reality
EconProph 