Relevant and even prescient commentary on news, politics and the economy.
Open thread Feb. 11, 2020
Weekly Indicators for February 3 – 7 at Seeking Alpha
by New Deal democrat
Weekly Indicators for February 3 – 7 at Seeking Alpha
My Weekly Indicators post is up at Seeking Alpha.
There were some changes in all of the timeframes this week. Of particular note, the coincident indicators of rail and steel, which were negative for almost all of 2019, have switched over to positive.
As usual, clicking over and reading helps reward me a little bit for my efforts, as well as bringing you up to date about the economy.
Open thread Feb. 7, 2020
The long leading forecast up to 12 months
by New Deal democrat
The long leading forecast up to 12 months
Last week I posted my short term forecast through midyear. This morning my long term forecast through the 2nd half of 2020 was also posted at Seeking Alpha.
As usual, clicking through and reading will help you see the longer term trends, and also rewards me a little bit for my efforts.
Open thread Feb. 4, 2020
Open thread Feb. 1, 2020
SOCIAL SECURITY A Mystery Story
by Dale Coberly
A few years ago, now getting to be many years ago, I solved a crime. Not because I was a Great Detective, but because I happened to be standing across the street where I saw it committed and took the number of the getaway car. Since then I have tried to tell the police what I saw, but they don’t want to hear about it.
I don’t want to go too far with this parable, just wanted to let you know in advance that I don’t claim to be smarter than anyone else, but what I am talking about is not an opinion and is a verifiable fact.
So back to facts. Sometime in the late 1990’s I heard on public radio (“radio for intelligent people”) an expert claiming that Social Security was bankrupt, a huge burden that was going to crush the taxpayers, especially the young.
Intuitively that didn’t seem very likely to me. How much could it cost to pay for the basic needs of retired people? I did a few calculations and saw that it wasn’t likely to be very much and certainly not unreasonable.
The simple equation to set some parameters goes something like this: If you expect to live twenty years after you can no longer work, and you can live . . . comfortably . . . on about 40% of what you were making while you were working . . . the kids are grown, the house is paid for, you don’t need expensive vacations . . . you can save enough money while you are working for forty years (age 25 to 65) by putting away 20% of your wages:
20% of wages times 40 years equals 40% of wages times 20 years
My “official” first half forecast for 2020
by New Deal democrat
My “official” first half forecast for 2020
My short term 6 month forecast has been posted at Seeking Alpha.
As usual, clicking over and reading should be educational for you, and puts un poco dinero in my pocket.
The U.S. Position in the World Economy
by Joseph Joyce
The U.S. Position in the World Economy
The election of 2016 in the U.S. saw the popularity of campaigning against international trade, foreign investments and immigration. Under the Trump administration the U.S. has implemented policies that mark a retreat from the globalization that was engineered during the 1990s and 2000s. What role has the U.S. played in the integration of global markets, and what happens if we withdraw?
Anthony Elson’s new book, The United States in the World Economy: Making Sense of Globalization, provides a thorough description and analysis of the position of the U.S. in the world economy. Elson, a former IMF staff member, shows that the U.S. retains a predominant position in international economic transactions. But the foreign sector is not as important for our domestic economy as it is for many other countries, and as a result its contributions to the domestic economy are often overlooked.
In international trade, for example, the U.S. share of global merchandise exports and imports lags China’s very narrowly, 11.46% versus 11.86% in 2015. But trade openness (the sum of exports and imports as a share of GDP) in the U.S. was 28%, lower than China’s openness of 40% and significantly less than Germany’s 86%. This disparity may explain the lack of attention paid to exports, while imports are seen as a threat. (One exception has been the agricultural sector, where China’s cutback of its purchases of U.S. soybeans and other products has forced the Trump administration to make payments to farmers).
Trump has cut back existing institutional arrangements, exiting the Trans-Pacific Partnership (TPP) and renegotiating the North American Free Trade Agreement (NAFTA). (However, its successor, the United States, Mexico and Canada Agreement (USMCA), does not substantively change the basic provisions of the earlier pact.) The administration actively uses tariffs as a tool of policy, often with little justification, and these inflict damage on the global economy. The U.S. agreement with China halts the scheduled escalation in trade measures but leaves in place tariffs that disrupt the domestic economy, leaving great uncertainty about the timing of the next stage. Training programs that could facilitate the movement of workers across sectors, on the other hand, have been underutilized.