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

Ben Bernankepoulos mets Erskine Fatas

Antonio Fatas debates Paul Krugman. Fatas noted that there is limited evidence that using the Euro is correlated with extreme economic distress. Krugman argued roughly that there is a strong theoretical presumption that the Euro is the work of the devil. Fatas praised Krugman’s unshrill analysis and then chose to debate his basic claim. This […]

Projecting the utilization of labor and capital

So the cobra equation has made me re-evaluate the dynamics of the effective demand limit. The main reason is that the graph of the Cobra equation shows that capital utilization decreases as employment increases at the effective demand limit. I was assuming that as employment increased, the utilization of capital would also increase. That was […]

California v. Red States, What Causes Growth, and the Great Stagnation

by Mike Kimel California v. Red States, What Causes Growth, and the Great Stagnation Lately there has been a small cottage industry of California v. Texas comparisons, with California getting the apparent short end of the stick.  Heavily regulated, high tax, big gubmint California is the past, and free wheeling low tax small government Texas […]

The Young, the Shutdown, Austerity, and Wealth

I can not help but wonder if Friedman takes delight in the predicament of the Young and Baby Boomers as he writes about Druckenmiller excursions on to college campuses . I envision  a bit of Schadenfreude as evidenced by his choice of titles for his latest column. October 15, 2013, Tom Friedman writes in the […]

The shutdown is over, but the austerity fight continues

One thing that several people have requested (including Mrs. Rdan) is more easily read material more accessible to non-finance readers, or with our AB audience also people well versed in finance and macro, without dumbing down the issues into ideas that have no context nor links to what actually happens in the world.   We […]

Damon Silvers Smackdown of CNBCs Kelly Evans and Simon Hobbs on Social Security

Damon Silvers appears to have his wheels on correctly answering two CNN talking heads on their version of Social Security. Kelly Evans: “Of course people want to make sure that our citizens are taken care of. But that’s almost not the point.” (It’s not?) Evans proceeds to assail Silvers and the AFL-CIO for refusing to […]

A natural rate of unemployment in the Cobra equation

This post continues the exploration into the Cobra equation, which measures the profitability of utilizing labor and capital as a function of labor share. Now it looks as though the Cobra equation is implying a natural rate of unemployment. The simplified Cobra equation is now… Measure of profitability in the aggregate = (x + y) […]