Paul Krugman wrote today the obvious criticism against the Fisher Effect. He completely based his criticism on monetary shocks, which is a short-sighted view.  He is not thinking beyond the shocks. “And we know what happens after a positive shock to policy interest rates: output and inflation both fall.” Yes, that is obvious, but what […]

That’s the conclusion of Stuart W. Elliott in his recent paper, “Anticipating a Luddite Revival.” (Hat tip: RobotEconomics.) We’ve seen that scale of transformation before. But this one promises to be roughly four times as fast, dwarfing Luddite-era concerns: …the portion of the workforce employed in agriculture shifted from roughly 80% to just a few […]

The current Chief Actuary of Social Security is Stephen Goss and on the occasion of the publication of the 75th Anniversary issue of the Social Security Bulletin he contributed what may be the most valuable single piece you will ever read on Social Security financials. The article carried the title The Future Financial Status of […]

Back in the 90’s I sat down and chatted with a philosopher from India that was passing through my local town. He said one thing that I have thought about for years. He told me that according to Indian culture, there are 4 types of people related to the elements, Fire, Earth, Air and Water. […]

Here is another comment on Krugman. It is exactly the maximum length he allows (and three periods are followed by single spaces to get the counter to 0 from -3 — I might as well tweet). His excellent post is here. He links to an even better post by Matt O’Brien at wonkblog. It’s depressing, […]

With the release of Tim Geithner’s new autobiography the old quarrel about whether Social Security does or even can add to “the deficit” has cropped up again. So rather than weigh in let me start from a more neutral spot. CBO produces a document called the Monthly Budget Review and in Nov 2013 it carried […]

Is the sun setting? On April 22nd, I wrote a comment to a reader of my Effective Demand blog. I said… “My view now is that the Dow Jones will make a publicity effort with hopes to get back up to 16800, then come down from there.” The Dow Jones made it to 16715. Today […]

Fed Treasury Holdings 5-7-2014 The above link should take you to a PDF showing the Fed’s System Open Market Accounts holdings of Treasury Bonds and Notes which the second link will tell you comprise $2.224 trillion of the total $4.017 trillion of SOMA Holdings, with that total including $1.631 trillion of Fannie and Freddie Mac […]

The problem we have in this country is not income inequality. It’s opportunity inequality. — Chris Christie, today And since there’s no causal relationship whatsoever between income inequality and opportunity inequality, this is sure to be a winning political message in 2016. Christie made the comment “at a ‘fiscal summit’ hosted by the Peter G. Peterson Foundation, which […]

by Sandwichman Microfoundations of Inequality and Sabotage “In sum, these models [efficiency wage] provide a new, consistent, and plausible microfoundation for a Keynesian model of the cycle.” — Janet Yellen (1984). Inequality and Sabotage, explored the relationship between Thomas Piketty’s “r > g” inequality and speculated, based on Veblen (1921) and Kalecki (1943), that businesses […]