A very interesting video by an Irish economist explaining how the current reduce government spending ("austerity") approach to the Eurozone debt and currency crisis is doomed to fail. It is doomed because cutting government spending in a recession only makes the recession worse, which in turn, reduces tax collections which then makes the government deficits … Continue reading David McWilliams Explains Why Austerity Is Doomed In Europe
Any student, researcher, or #OWS protestor interested in income distribution and income growth should definitely be aware of this resource: The World's Top Incomes Database. (hat tip to Krugman, from whom I learned about it). It's a very powerful database combined with a very easy to use interface that allows you to extract exactly the … Continue reading Awesome Resource – The World Top Incomes Database
There is viewpoint that asserts that income inequality and wealth inequality are necessary, that they are the differences that motivate people to work and get ahead. This viewpoint often implies that without wide income disparities that our economy's growth would slow. Supporters of such a viewpoint seem to suggest that the only choices we have … Continue reading Income Inequality Does Matter And It Makes Us Worse Off
I've been asked what I think of the Occupy Wall Street Movements. I say it's about d*** time. The anger and discontentment that the movement has tapped into is real and has been building for a long time. The mass numbers of people - like say the 99% - have good reasons to be angry. … Continue reading On the Occupy Wall Street (and Everywhere Else) Movement
The study of economics starts with recognition of the economic problem: we (humanity) have unlimited wants but limited resources to satisfy those wants, so something has to give. Famine is perhaps the starkest reminder of the economic problem. People die simply because they cannot get enough food to eat. Yet while there have been famines throughout … Continue reading The Famine in Horn of Africa and Political Economy Failure
Ok, normally I'm writing about the disastrous effects of changes in GDP. Today, though, I'm going to write about the effects of disasters on GDP. As I write this, it's mid-day on Saturday, Aug 27. Hurricane Irene has just hammered North Carolina and the Outer Banks. Irene is continuing in both it's push up the Eastern seaboard … Continue reading Hurricanes, Disasters, and GDP
No wonder jobs aren't being created. The President listens closely to Jeffrey Immelt, the CEO of corporate welfare recipient large multinational General Electric about jobs policy. So what's GE doing about jobs? Bloomberg reports: General Electric Co.’s health-care unit, the world’s biggest maker of medical-imaging machines, is moving the headquarters of its 115-year-old X-ray business to … Continue reading President Obama’s Jobs Advisor Ships Jobs Overseas.
When people think about "income distribution" there's a tendency to think of it only in terms of what different people or households have available to spend. In other words, we focus on the fairness or equity of whether some households should only have a small amount of money to live off of vs. others who … Continue reading Income Distribution Does Matter. It’s Wrong Now and Stopping Growth.
I'm still away on the road (which is why comments and questions in the last week have gone unanswered). However, while I'm away, here's a point made by Joseph Stiglitz at Project-Syndicate.org. John Maynard Keynes famously said that today's policy-makers are the slaves of defunct economists. Joseph says, and I agree, that today's policy makers … Continue reading A Contagion of Bad Ideas. Not Only Slaves to Defunct Economists, but Slaves to Bad Ideas.
A decent article in the LA Times about the challenges facing the Chinese: China tries to put brakes on overheated economy - How well China succeeds in slowing its economy without triggering a slump holds enormous consequences for the rest of the world economy. The essence is that the Chinese economy, which has been … Continue reading China’s Challenge