Link to video here. Richard Wolff is on fire here. He is explaining the cooperative model and why it will save the US. I have never seen a better video on the subject. This video should be required listening for all economists. The ideas presented should be reflected upon and understood. When I was studying […]
The middle-class came to life in January, 1914, when Henry Ford doubled wages to $5 a day. The message changed the economy for the better. 100 years later, we can do it again!
To even think that QE would cause deflation shows that some economists are simply confused about the economy. They do not understand why inflation is falling. Why try to pin it on QE? QE is simply limited in its ability to inject money into the hands of consumers (labor). QE is for those who own […]
Brad DeLong wrote a praised piece about growth… The Honest Broker: Is Growth Getting Harder? If so, Why, and What Can We Do About It? Yes, it was an interesting piece, but I have a bit of a critique of one point concerning productivity. I see productivity as blocked by demand. But he doesn’t make […]
I watch the transformation of Paul Krugman to understand the key importance of labor share. But first, let’s start with Till Van Treeck, who writes an article titled… U.S. Current Account Deficits and German Surpluses: The Role of Income Distribution in Global Imbalances. He presents evidence that labor share and inequality are creating a large part […]
While some debate whether QE is causing low inflation… there is a practical view of low inflation from an article written by Chun Wang at Advisor Perspectives. Here are some excerpts… “A key factor allowing the Fed to maintain QE is the lack of inflation. You would think after multiple rounds of synchronized global money […]
I put together a video on the natural real interest rate. There is not one single natural real rate. It is like what Steve Waldman said… “The word natural is always used to hide the constructed context in which an outcome occurs…” The natural real interest rate goes lower, as policy tries to push real […]
The Federal Reserve Bank of San Francisco published a letter titled, Consumer Inflation Views in Three Countries, written by Bharat Trehan and Maura Lynch. The letter explores inflation expectations among consumers in the UK, US and Japan. Basically the story is that inflation expectations by consumers are tied to the level of oil prices and […]
What if an economist expects the natural level of real output to be higher? How would the natural rate of interest change by expecting a lower natural rate of output? First, I personally expect a lower natural limit upon real GDP. I see that real GDP is trending on a new normal level below the […]
Economists are thinking that the natural real interest rate might be negative… one factor that would lead them to think that way is that the economy is growing so slow. The principle behind that is this… if the real Fed rate is above the natural rate, the effect is contractionary upon real GDP. So if […]