“Stressing output is the key to improving productivity, while looking to increase activity can result in just the opposite.” Paul Gauguin Policy seeks to increase activity in spite of weak effective demand for output. So is it any surprise that zero-lower-bound monetary policy has not normalized the economy? If only economists would understand Effective Demand […]
by Mike Kimel Explaining Trump’s Appeal, Part 1 The reason Donald Trump has been unstoppable so far is that Republicans, and now Democrats as well, don’t seem to understand what motivates Trump voters. The single most important driver is, as (almost) always, the economy. The table below illustrates the problem: Figure 1 As the graphs […]
As far as I can tell the Trump train tweet is authentic (and authentic click bait). Checking his time line I found this more recent tweet FRED begs to differ The tweet might show Trump cherry picking (and cheating on “through”). After Bush and the Republicans (with assistance from Democrats including Bill Clinton) left the […]
There have been calls for a 4% inflation target. But a 3% target would work better. Let me show you why. I will use this chart that plots net profit rate with core inflation… (quarterly data since 1958!!!) Net profit rate = Corporate profit rate – nominal interest rate The plot has hugged and slid […]
Paul Waldman has a lengthy post today at the Washington Post’s Plum Line blog titled “Despite what you’ve heard, Democrats aren’t in disarray. Their party is under attack from the outside.” He argues that the Democratic Party itself isn’t that divided, and that the divisions really are between Democrats and the outsider Sanders supporters who […]
Yesterday, I wrote about the connection between inflation and corporate profits. (link) I posted this graph. (quarterly data since 1958 to 1st quarter 2016) The graph shows how inflation drops as net corporate profits rise. Net corporate profit rate = Corporate profits/GDP – nominal interest rate The trend line (bright red curving downward) implies an […]
Or so The Brookings Institute would like us to believe. What would cause Brookings to take such a stance especially since parts of the PPACA increased costs dramatically and premiums have increased dramatically? Coverage such as: mandated guaranteed issue regardless of health status; restrictions on the ability to charge different premiums based on anything besides […]
Is there a relationship between Inflation and Corporate Profits? I think so. But I do not know of anyone talking about the relationship, so I will. The point I want to make is that corporations control prices. They set prices. They are not just price-takers. Corporations will change prices with an eye on their profits. […]
For days, I have felt morally obliged to report on the Italian slow motion crisis of banks with tens of billions of non performing loans. I’ve had trouble making myself work (as usual). So I hand the mike to Daniel Davies. The background is that the world’s oldest bank Monte Dei Paschi di Sienna is […]
$19 billion? $8 billion? A few hundred million? Estimates are all over the map regarding the European Commission’s imminent decision on whether Apple received illegal, unnotified state aid (subsidies) from Ireland. As I mentioned two years ago, two factors go into the Commission’s claim: Ireland’s creation of a corporate entity that is taxable nowhere, and […]