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

The Appalachia Map, Yet Again

Lots of desperation talk these days by Republicans hoping to win future national elections by increasing their share of the “missing” white vote, while ignoring all those brown people. (Sean Trende’s piece seem to be the epicenter at this moment.) Nate Cone drives a very effective stake through the heart of that zombie ambition here, with […]

Humans’ Comparative Advantage: Wanting Things

Frances Coppola sums up and expresses a great deal of great thinking in her recent Pieria piece, The wastefulness of automation. I’d like to highlight one point, one that I’ve been pondering for a long time. There’s one area where machines — until they get sentient — can’t replace people (here from her response in comments): only […]

Productivity & Effective Demand: An Intriguing and Disturbing Story . . .

Edward Lambert at Effective Demand; Effective Demand = Effective Labor Income/(cu*(1-u)) points to the result of an economy left to maximize Profits at the expense of Labor. I have my own version or underlying causes of this issue and Edward gives the economic side of it. I am going to show a graph of Productivity […]

Where Did the Risk Go? (2007)

Lifted from comments from reader Juan: Where Did the Risk Go? How Misapplied Bond Ratings Cause Mortgage Backed Securities and Collateralized Debt Obligation Market Disruptions Joseph R. Mason. Louisiana State University – Ourso School of Business; University of Pennsylvania – Wharton Financial Institutions Center and Josh Rosner,  Graham Fisher & Co.    May 3, 2007 […]

Asset Reflux Disease: Explaining Koo to Krugman

Or: Why Banks Aren’t Like People Steve Keen does a good job of addressing Paul Krugman’s befuddlement with Richard Koo’s balance-sheet-based thinking, here, with detailed models showing how funds flow and stocks change over time. I’d like to address it more succinctly and I hope intuitively, by pointing out a simple misunderstanding that Paul shares […]

Subprime securities – still being downgraded

Lifted from comments by reader Juan comes this article from the Finacial Times: Subprime securities – still being downgraded Some two weeks ago Moody’s announced it was downgrading 28 tranches of various bonds (as well as upgrading two tranches, and confirming others) in an action that covered roughly $1.2bn worth of mortgage-backed securities (MBS). … […]

One Place Where Mankiw Makes Absolutely No Sense at All

In his Defending the One Percent paper, Greg Mankiw is rather grudgingly acknowledging rent-seeking (and -getting) in the financial industry, and the allocation of top talent to that industry. He sez: The last thing we need is for the next Steve Jobs to forgo Silicon Valley in order to join the high-frequency traders on Wall Street. […]