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

Fast-Food Fight….reader Denis offers some pointers

Reader Denis Drew writes (lifted from comments) : The bottom 50% of America’s workforce now takes 12% of overall income. If the federal minimum wage is raised to $15/hr that will add 3.6% direct inflation. $15/hr being today’s median wage, half the workforce, 70 million employees receiving an average $8,000/yr raise would add $560 billion […]

Krugman & Kalecki, “injecting” to escape from a sub-optimal reality

Paul Krugman today wrote that we are in a “Keynesian crisis that calls for Keynesian policies”. Keynesian policies are monetary and fiscal policy to increase demand in the economy. I wrote a response earlier today about an article from Mark Thoma who called for the same Keynesian policies of monetary and fiscal policies to increase […]

Beyond the horse race to lead the FED

Sarah Binder is a professor of political science at George Washington University and a senior fellow at the Brookings Institution, offers some thoughts on the FED and its changing role ( re-posted with authors permission, for the complete post go to original): Beyond the horse race to lead the FED …As the horse race for […]

The state as “Market maker”

For a point of view we don’t see much lately: Mariana Mazzucato, a Professor of Economics at the University of Sussex, discusses the role of government in innovation and economic growth. In her latest book The Entrepreneurial State she argues that active state investment has been the secret behind most radical innovations, and that this requires economists […]

Mark Thoma, cyclical unemployment & insufficient effective demand

Mark Thoma, professor at the University of Oregon,, posted an article about why labor markets are struggling, “What is driving changes in the job market?” at CBS Money watch. He basically says that the labor market problems are cyclical, which means a Keynesian demand-deficient unemployment. There isn’t enough demand to allow unemployment to fall more […]

EITC refund withheld in student loan default

Jared Bernstein writes about the EITC today (Earned Income Tax Credit), which is a program to help lift people out of poverty when they fall into low-paying jobs. I just want to add another wrinkle to the story. When a student defaults on their student loans, which is something that will happen more and more […]

Are Government Bonds Net Poverty ?

Some economists seem to argue that expansionary fiscal policy is both completely ineffective and will place the burden of debt on our children. Yes I am arguing with a straw man (it is time for the two minutes Chait). Straw economist argues two things. First there is Ricardian equivalence so temporary tax cuts do not […]

OBAMACARE,THE SEQUESTER and part time employment

It is time to get serious. There are widespread claims that firms are cutting  hours worked and converting full time jobs into part time jobs because of Obama-care. So what does the data say.  Below is a table of unpublished data from the Bureau of Labor Statistics (BLS) of part time employment by private and […]

High-Frequency Traders are Eating Investors’ Brains. For Free!

It can be tough to articulate a cogent argument against high-frequency trading in the context of highly liquid, efficiently functioning securities markets, but I think Rajiv Sethi has done so (riffing off Michael Lewis’s typically scathing and revealing article on Goldman’s recent bad behavior). In brief, in my words: 1. Value investors are trying to buy shares in […]