For those who are unaware, street protests have come to Wisconsin. Literally tens of thousands (a local Fox news affiliate admitted they numbered at least 70,000 on Saturday) for what is now at least 4 consecutive days of protests in Madison, Milwaukee, and other cities. The issue that has brought them out is a proposal … Continue reading On Wisconsin
Brad DeLong is as puzzled as I, but is more eloquent in expressing it. In so doing he does my classes a favor in expressing a quick version of the history of addressing macro economic crises. For nearly 200 years economists from John Stuart Mill through Walter Bagehot and John Maynard Keynes and Milton Friedman … Continue reading Why the Austerity Talk?
From James Kwak at Baseline Scenario: "No, No. It's Already Priced In. " That was undoubtedly the response of theoretical law and economics devotees to the premature retirement of Kansas City Royals pitcher Gil Meche a few weeks ago, which we discussed in one of my classes last week. Meche signed a five-year, $55 million, … Continue reading Micro Theory vs Reality: Baseball Edition
James Kwak writes about how bad data and mismeasurement in almost any field of endeavor leads to not only bad decisions but misaligned incentives and bad behavior. Whether it's for productivity, employee performance, baseball, or the macroeconomy, measure matters. Our abilities using computers and the net are (mis)leading us in many perverse ways. Just because … Continue reading James Kwak On Measurement and Bad Data
The following is an excellent and thought-provoking post at Washington's Blog. It is about a puzzle. And, in light of the successful revolutions in Tunisia and Eqypt, and the protests now occurring in Bahrein, it is quite timely. The puzzle is this: Why, if the U.S. is supposedly all about democracy, why does the U.S. … Continue reading Democracy, Economic Growth and Development: Do They Fit?
So following up on my post on the types of unemployment, when unemployment is high, how do we know if it's due to structural or cyclical causes? The answer is important because it tells us what kind of policy actions to take. Do we need stimulus? (addresses cyclical), or do we need job-retraining, relocation, and … Continue reading Is Our High Unemployment Structural?
Economists classify unemployment into four types according to what caused the unemployment. If we assume the goal is "full employment" (never mind how we might define or measure "full" right now - there's mischief there), then what we're really saying is that our goal is for the economy to create an appropriate a job for every … Continue reading Types (Causes) of Unemployment
I will repeat: Social Security is NOT in financial trouble. Social Security does NOT contribute in any way shape or form to the U.S. Federal government's deficit, now or in the future. It cannot. If anything, it has enabled a coverup of how big the real deficit has been for years. News media does not … Continue reading Social Security Under Attack By Media
One of the claims that Tea Partiers, Republicans, and conservative/neo-liberal economists have been making for some time is that "the stimulus has failed". They conclude that Keynesian economics and economic policies are failures. Since, like most claims of Republicans and other politicians, these assertions are usually repeated uncritically by the news media, it's close to … Continue reading There Was No “Stimulus” Spending in Aggregate
Income distribution changes, namely, the rich getting richer and the bottom half struggling to stay even is true for both men and women. It is only partly explained by educational level. Mark Thoma extracts from a CBO report about how workers' hourly compensation (wages) have changed from 1979 to 2009: Changes in the Distribution of … Continue reading Income Inequality Widening for Both Men and Women