Relevant and even prescient commentary on news, politics and the economy.

Where Does Wealth Come From?

Wrong answers only: “saving” Originally Published at Wealth Economics In my last post, I tried to say precisely what the words “wealth” and “assets” mean as they’re used in this blog. This post tackles the question of wealth accumulation. Where does wealth come from? What are the mechanisms that create assets? Households and the accounting-ownership pyramid […]

What is Wealth?

The wealth of people and the wealth of nations Originally Published at Wealth Economics If you read this blog much, you’ll find many careful definitions of terms — something that the economics profession is terrible at. A blog called Wealth Economics really has to start at the top, with wealth. So here it is. “The only real, true wealth is…” You hear that […]

Biden Says Billionaires Pay an 8.2% Tax Rate. What Do Other Households Pay?

Let’s compare apples to apples here. Originally Published at Wealth Economics Uncle Joe has thrown out this 8.2% figure a couple of times, including in last night’s SOTU. Multiple folks have unpacked it; it’s not the standard “tax rate” measure. The usual “tax rate” is taxes divided by personal income, which doesn’t include accrued holding gains. The alternative […]

Earned Labor Income Is a Small and Weak Lever. Unearned Property Income, and Wealth, Rule

Reversing extreme wealth concentration means going after property income. Originally Published at Wealth Economics Economists and pundits have been cheered of late by the labor-share increase during the first couple of years of the Covid era. And even, for a moment, lower-income workers were making progress vs higher-income folks. This is good news. In the […]

Is More Work Better? Think Again?

Is More Work Better? Think Again? The freedom of free time, branded as unproductive “leisure,” gets no respect. Originally published at Wealth Economics This post is prompted by a recent tweet from the excellent Joey Politano, but it’s not singling out Joey in particular. “We could be working so much more.” It’s hard to come away with […]

John Maynard Keynes Doesn’t Seem to Know What He Means by the Word “Spending”

Is investment spending “spending,” or isn’t it? Steve Roth (@ Wealth Economics) J.M. Keynes’ brief Preface to the French edition of General Theory is sometimes held up as the most concise, cogent, and coherent expression of his economic understandings. It achieves that, but in doing so it also reveals a core incoherence in that thinking. An obligatory nod here […]

The Bottom 80% of U.S. Households Persistently Dissaves, Spending more than Income.

Only the top 20% saves. Originally published at Wealth Economics Newly released data series from the Bureau Economic Analysis have revealed a pretty eye-popping economic reality that’s been invisible in the national accounts…forever. Subtract households’ Personal Taxes and Personal Outlays from Personal Income to yield Personal Saving, and it turns out that the bulk of U.S. […]

(Not) Thinking About Money

It’s tempting to abolish the word entirely Originally published at Wealth Economics J.W. Mason offers a bang-up post on economists’ thinking about “money,” how economists have thought and talked about it over decades and centuries. There’s even a class syllabus and reading list from his class for his John Jay MA econ students. It’s a very deep dive. (“Thirteen Ways […]

MMT and the Wealth of Nations, Revisited

Steve Roth  (at Asymptosis) I just had occasion, in replying to a correspondent, to reiterate much of the thinking in my recent MMT Conference presentation. I thought it might be a useful and comprehensible form for some readers, so I’m reproducing it here. I’ve also explained this at somewhat painful length here. Correct me if I am wrong […]

How Redistribution Makes Us All Richer

Modeling the numbers on bottom-up and middle-out economics. How Redistribution Makes Us All Richer, Wealth Economics, Steve Roth You hear a lot about bottom-up and middle-out economics these days, as antidotes to a half-century of “trickle-down” theorizing and rhetoric. You’re even hearing it, prominently, from Joe Biden. They’re compelling ideas: put more wealth and income […]