Seth Klarman’s work is to take money from clients and invest it. Yet, he made news recently by returning some $4 billion back to his clients. He did not want to invest their money. Why would he do such a thing when it is his job to invest money? He says the market is not […]

There is so much to reflect upon with Michael Pettis’ new post, Economic Consequences of Income Inequality. I have been in total agreement with the way he looks at income inequality. Yet, he said some things that surprised me… things I hadn’t realized. He restates his view of how changes in labor share, which he […]

I am confused about something Paul Krugman wrote today in his post Dare to be Silly. What he wrote seems… silly. “Before I turn to Syll’s critique, let me summarize my understanding of one of the great turning points in the practice of economics – the turn away from institutional economics in the 1940s and […]

Thomas Piketty’s Capital in the 21st Century shows us where society is going. Paul Krugman summarizes this future using Piketty’s term, Patrimonial Capitalism, where inherited wealth gains economic power and where hard work returns less money than inheritance. The basic equation underlying patrimonial capitalism is… r – g. r is the investment return to capital. […]

Paul Krugman continues his illumination into the significance of a falling labor share, as he reads Thomas Piketty’s Capital in the 21st Century. Mr. Krugman rarely writes about labor share but that looks to be changing. Piketty describes the growing power of capital income as “patrimonial capitalism”, where an elite gain control through inheritance and […]

On the IMF’s global economy forum, Dennis Botman and Zoltan Jakab published an article that Japan needs to push for higher wages. They say what I have been saying for some time here on Angry Bear. … And this story of low wages in Japan applies to the US and Europe too. 1. Wages and […]

Mark Thoma is absolutely correct when he writes… “The wealthy think it’s the same — in their minds they are the job creators, what’s good for the wealthy is good for America! — but it’s not.” This is where I have to ask the question… So if loose monetary policy is good for the wealthy, […]

I sense that we are witnessing a special moment in economics with Paul Krugman’s article today, Notes on Piketty. He is exploring the new work by Thomas Piketty, Capital in the 21st century. He focuses on the difference between r, the rate of return on assets, and g, the overall rate of economic growth. When […]

I remember a couple of years ago, when I was a constant commentator on Mark Thoma’s blog, I said that low wages and rising inequality were damaging the economy. Finding that comment is like finding a needle in a haystack. But Mark Thoma criticized the remark saying that inequality was necessary in the economy. Others […]

James Kwak at Baseline Scenario writes about wealth inequality and supports systematic redistribution. And our own Steve Roth wrote on this too here at Angry Bear. What is the propensity to consume by capital income? Well, for every dollar of capital income, roughly 18% is being spent on consumption. (15% effective tax rate, 67% savings […]