The middle-class came to life in January, 1914, when Henry Ford doubled wages to $5 a day. The message changed the economy for the better. 100 years later, we can do it again!

This quote is right up there with the great Will Rogers line: “I don’t belong to an organized political party. I’m a Democrat.” Matthew Yglesias opens his recent post with it. I don’t know if he coined it, but if so, A Huge Kudos. It’s utterly and painfully true. A deservedly iconic statement. Here’s what […]

To even think that QE would cause deflation shows that some economists are simply confused about the economy. They do not understand why inflation is falling. Why try to pin it on QE? QE is simply limited in its ability to inject money into the hands of consumers (labor). QE is for those who own […]

Some years ago Paul Krugman gave perhaps the best argument against the inequality-causes-underconsumption theory of secular stagnation: the idea that rich people spend less of their income/wealth, so if wealth/income is more concentrated there’s less spending and less GDP/prosperity. (It’s curious how liberal economists are the ones who most commonly shoot down this argument. That’s […]

Brad DeLong wrote a praised piece about growth… The Honest Broker: Is Growth Getting Harder? If so, Why, and What Can We Do About It? Yes, it was an interesting piece, but I have a bit of a critique of one point concerning productivity. I see productivity as blocked by demand. But he doesn’t make […]

by Linda Beale Does Lowering Corporate Tax Rates Create Jobs? Answer is a resounding “no” For years (decades, actually), the American pro-wealthy right has argued that lowering corporate tax rates will create jobs.  That is the presumed purpose behind the push by Dave Camp to enact a tax reform package with lower corporate rates, and […]

I’m rather terrified to find that Brad DeLong has replied to my recent post on this subject. I would expect greater inequality coupled with a higher propensity to save on the part of the rich to drive all asset yields down. Yet what we have seen has been a steep, prolonged fall in Treasury bond yields […]

I watch the transformation of Paul Krugman to understand the key importance of labor share. But first, let’s start with Till Van Treeck, who writes an article titled… U.S. Current Account Deficits and German Surpluses: The Role of Income Distribution in Global Imbalances. He presents evidence that labor share and inequality are creating a large part […]

While some debate whether QE is causing low inflation… there is a practical view of low inflation from an article written by Chun Wang at Advisor Perspectives. Here are some excerpts… “A key factor allowing the Fed to maintain QE is the lack of inflation. You would think after multiple rounds of synchronized global money […]

Update: Brad DeLong has replied, and I have replied to him. Dean Baker quite rightly takes Robert Samuelson to task for his op-ed on the causes of secular stagnation. Samuelson: The problem might not be a dearth of investments so much as a surplus of risk aversion. For that, candidates abound: the traumatic impact of the Great Recession […]