The Economic Populist
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The Yuan is Undervalued
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US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
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The Return Of The Robber Barons
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Submarine telecom/datacom cables cut in Middle East -- another "good" reason to outsource to India/Asia ?
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New York Post Claims Census Falsifies Unemployment Figures
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The Yuan is Undervalued
- 19495 reads
US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
- 185282 reads
The Return Of The Robber Barons
- 33975 reads
Submarine telecom/datacom cables cut in Middle East -- another "good" reason to outsource to India/Asia ?
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New York Post Claims Census Falsifies Unemployment Figures
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The Golden Rule
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Will the NY Attorney General Bring Doomsday Charges Against Wall Street? If So, How Long Will He Survive?
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New York Post Claims Census Falsifies Unemployment Figures
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How Many Jobs Are Needed to Keep Up with Population Growth?
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VAT or Value Added Tax is Getting a Look in D.C.
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U3 and U6 Unemployment during the Great Depression
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The war on the middle class
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House discusses 401k/IRA confiscation
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Tax Cuts for the Rich Do Not Generate Jobs
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The faster the rate of growth the more quickly it gets paid off and the less goes to servicing interest. And the more likely we are to crash and burn again sooner rather than later.
Even better, there are some things that will clearly help (not spending so much on the military, closing tax loopholes, more progressive tax rate, investing in technology, infrastructure and people instead of investing in debt) but those are just as clearly out of bounds for discussion.
Which is why if you see someone who really is an exceptional, insightful economics blogger to invite them over. I personally have a major project right now and while as usual various people with incredible skills and expertise get fired right and left and thus have more free time....reality is we're all having to feed the cat around here. By joining forces we can "feed the pig" otherwise known as a blog, yet keep the quality up on high. (If you don't feed the pig it dies, maybe I should call it the swimming shark of finance ;))
which in fact will be MUCH harder than "proof" (if economics wants to be a science it has to abandon that term. Science doesn't do proofs, only disproofs). Because "compelling" doesn't mean logically compelling, it means emotionally compelling to those whose emotions are hard-wired to money. IOW, the people the system selects for.
Exhibit A: bankers are doing their damndest to get back to double digit returns and the practices that got us here, which logic tells us is beyond stupid.
Exhibit B: The practices that got us here were widely touted by everybody from the 401K holder to the Washington Consensus neoliberals to the Chair of the Federal Reserve to Joe House-flipper to be a New Economy where the old rules no longer apply. Not by any logically compelling "proof", despite far more compelling disproof, but because they were making money hand over fist.
It is easy to make a logically compelling argument for wealth inequality for being a destructive force in a consumer driven economy. It is not so easy making one that is emotionally compelling to those in power.
But it will take a while. I need to finish another piece I'm working on for an entire other set of cooked books...and try to keep my business afloat in this ungodly mess.
that would make one paranoia inducing fantastic blog post to detail this out with graphs, stats.
This is a pet peeve of mine. The government, as we all know full well, has invented all kinds of interesting and dubious means (that are not permitted in the business world)to hide the full measure of its failures. The budget deficit as reported is a sham. It removes a large number of outlays (but no receipts) that are "off-budget". The real deficit is the actual difference between outlays and receipts. For the 2008 fiscal year that number was 760 billion not including intra-governmental debt (e.g. social security) and 1.02 trillion if you include the latter. As of August 11, the corresponding numbers for this year are 1.52 trillion and 1.64 trillion. That ain't chump change. It doesn't change the point of the post, but the bottom line is that it's worse than you think. But hey, what's a couple of hundred billion dollars here or there?
economic circumstances dictated some form of economic stimulus (I thought we could have done better).
The important issue is whether, if we do start to truly recover, there will be serious deficit reduction policies implemented.
But to have a true recovery, and not one masked by increased leverage, we must change our economic growth model.
RebelCapitalist.com - Financial Information for the Rest of Us.
I'm going to stay out of the entire "Gold" issue myself but gold bugs can crawl around on EP, fine with me...
I'm just aware that there are forces out there pushing Gold based on "impending economic Armageddon implosion" fears.
I'm back to writing, commentary off on all things shiny.
Based on the Fed's statement this afternoon, it appears that they are going to end the quantitative easing by October. This would actually help the dollar, although I bet that in 2010 and/or 2011 as the economy worsens again, the Fed will resort back to their usual money printing tactics. Deflation is their #1 enemy, and they will continue to fight it tooth and nail. And I believe that the best way for the average person to protect his welath from these measures is by continuing to invest in gold, which will benefit from a weaker dollar and/or an economic recession due to its safe haven status. The following article further discusses the Fed's efforts and its potential effects on the gold price:
Frankly I have been kind of scratching my head at the signs and signals of "recovery" which there are quite a number and that just explains it for me...
government spending at a record. Question is what kind of government spending and for each buck what's the bang?
Then, the deficit, these numbers, the use of "trillions" has become so mind numbing, it's like it is all ignored as you point out.
What is the tipping point (as one who does believe Keynesian works when the economy is not a full capacity)?
if you have been reading anything on this site, you would know that the crash and the methods used to do the crash could not only be predicted by economics and statistics but also has nothing to do with Macro economic theory as a science.
Look, go argue elsewhere trying to claim somehow all economic theory is wrong or whatever. This site and esp. my time is assuredly not devoted to someone raving on about how all economic theory is wrong...
Now look, I have warned you repeatedly, temporary suspended your account and for the life of me I cannot understand why you want to even be here for EP is am economics blog! It's not going to change...that's it's niche topic!
And yet these numbers are important to those with alternative values to profit- for they tell a tale of fewer workers doing more work for less pay- EXACTLY the thing that causes a greater gap between the rich and the poor (which apparently, isn't important to Dean Baker because like most economists, he's tenured and could care less if people are starving).
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Maximum jobs, not maximum profits.
The math can work 100% and the model still be wrong. That's true with every science. But the problem in economics is that the model itself is unsustainable.
Those undergraduate textbooks led directly to the crash of 2008. Their model is WRONG. It's perfectly mathematically valid, but it trims out too many variables, deletes too much data. Without that data, at a micro level the consumer is reduced to acting on a single data point (price) to get what they want, and the producer is reduced to acting on a single data point (cost) to gain profit (which is always price-cost, and may or may not be sufficient reward to those involved in the enterprise).
There's way more to ECONOMICS than those two data points- but by ignoring everything else, capitalism becomes a failure.
I'm not saying the MATH is bad, I'm saying the MODEL is insufficient to describe reality. But you're so addicted to the model and your undergraduate textbooks that you fail to see that there are other economic systems that lasted THOUSANDS of years without a single artificial bubble or change in prices. Oh, they had their problems too- famine and labor in short supply being two big universals- but they were at least able to go a hundred years without a speculative bubble induced crash. Which is more than I can say for the model in your undergraduate textbooks.
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Maximum jobs, not maximum profits.
productivity #'s erratic around turn arounds.
But I also don't see any graphs and of the ones I have seen....productivity numbers didn't look that crazed during recession bottom calls and this report does.
Might be a good data point to examine with some graphs and regression analysis.
and I've said many, many, many times....firstly a science is not relative, you don't get to say a math equation of 1+1=2 is not believable.
Second, this site is all about economics and it is about changing many structural problems, but those proposals ideas....are also based firmly in existing economic theory and statistics.
How many times do I have to say this? EP is an "all things econ" blog and Economics means.....Economics, straight out of those textbooks from undergraduate course work.
Undergraduate economics courses in the United States are heavily *censored* to avoid talking about alternative systems to capitalism/regulated capitalism and avoid thinking about other ways to get to the same result.
Keep using the same system, and you're going to keep getting the same result- a boom/bust cycle of bubbles that splits society into a three class system with ever widening gaps between the lowest and highest, until it all falls down.
I state that you may get an "A" in the course, but I do not entirely believe the same theory set you do. In fact, there is only one theory your reality and mine share: that absent other values and influences, price is the intersection of supply and demand. Alternative systems change this by manipulating the values and influences, rather than by manipulating supply or demand directly.
And I strongly suspect it's the other theories, that I don't believe in, that makes this economic system unsustainable and focused heavily on short term gain at the expense of the long term sustainable status quo. Sometimes we get lucky and that leads to long term gain, but usually it just leads to bubble economies and the typical boom-bust business cycle, either muted by regulation or amplified by a lack of regulation.
The free market is based on chaos; and chaos is incapable of sustainable steady-state economics, no matter how you twist the regulations.
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Maximum jobs, not maximum profits.
While we may have a screwed-up system regarding sentencing, we have not come to terms with rehabilitation. Prison Industries has been around a long time (I recall my first Army-issued underwear being prison-made), it can serve a useful purpose. But we need to look at structure -- if prisoners are being paid 50 cents an hour, what happens to the "surplus value"? I know prison operators will argue that it goes back into cost of facilities and feeding the cons -- but some of it does show up in their bottom line. If you took profit and executive bonuses out of the picture, the true value of prisoners' labor could feed back into their quality of life. Here in Florida, the state budgets just over a dollar and a half a day to feed prisoners. Why not have work facilities in which they could earn more, eat a better diet, and send money home to their families. If they want, let them work overtime and get paid properly, save for when they get released, support their kids. We used to talk about the dignity of labor, but this seems another piece in the "labor arbitrage" game. I won't even comment on CCA -- if they're the same Nashville outfit that was sued big time by investors 9 years ago, the state should do its due diligence.
Frank T.
that's the main purpose of this site...
think of it this way, if you took an undergraduate economics course and wrote on the test some massive "economic replacement system" in answer to some questions, what grade do you think you would get? Try that as a litmus test and look at EP as the course companion blog.
Because in a lot of ways that's what EP is....we're reading and analyzing and commenting from an educated layman's view but we also did get an "A" in the course (literally) and are using that background to write about what is going on...
from a citizen perspective.
Firstly, anyone can write a post on EP. That said, one must read the rules first.
No "paid" bloggers, no production promotion, no referrer spam, and no "philosophy" that is not based in economic reality, statistics, theory.
Topics must be on the economy and related areas.
If one attempts to write a post that does not meet these rules you will be immediately banned and your post will not be published.
My thing, right at the moment, is it seems we have some sort of herd behavior among economists, highly vested in calling a "recession bottom" as well as predictions.
Frankly, we keep finding anomalies in the economic indicators....
So, I am wondering if people simply have "recession fatigue". Everyone is so sick of bad news and this gut wrenching fear of Economic Armageddon.....it's almost like they are wishing everything simply returns to "normal"...
so I do not understand why people simply cannot look at these statistics and not be emotionally vested in predictions.
For example, right now I am really wondering, beyond a massive "trough of doom" being stopped...precisely on what fundamentals the economy is going to recover?
We now have all sorts of reports that the $787B Stimulus "is working" but precisely how is that working? For to me that implies rebates and tax cuts actually worked...
I think Bernanke stopping the money market implosion was a very good move, but we still have all of these toxic assets sitting hidden in books, with trillions invested to prop up these financial institutions...
so I simply do not see the big picture here to understand how one could have a "recovery". I can see the "stopping of the cliff" easily with all of these funds....but how long does this last with such debt ratios?
BTW: Maybe we should discuss some of the good moves...that GM Volt looks seriously hot. Damn too expensive but super cool. G.E. supposedly is opening up some manufacturing back in the U.S.....
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