In Part 1, [here at AB] I looked at factors that tie closely with Total Capacity Utilization (TCU), and saw no reason to believe that TCU is about to surge. In Part 2 I’ll be looking at more general ideas that reinforce my lack of optimism. My underlying assumption is that for TCU to surge, […]
In case you missed it, Panera Bread CEO Ron Shaich (founder) is taking the SNAP Challenge. “in an effort to find out how the other half lives by limiting grocery purchases to the average benefit amount shelled out by the Supplemental Nutrition Assistance Program. It’s not much. A typical food stamp recipient receives just $4.50 […]
In the previous post, capacity utilization is low and steady, and inflation is too. Low inflation is a sign that labor has a liquidity disadvantage to capital. Explanation below. Here is inflation (all items less food and energy on a quarterly basis). Link to graph #1. Quarterly inflation. Is this a problem? Well… One way […]
Here is the latest reading on capacity utilization. Data for August 2013 released yesterday. Link to graph. It has been flat-lining for over a year and a half. Look familiar? Similar thing was happening before the crisis. Note: To really appreciate capacity utilization, here is a table giving the sectors of industrial output involved and […]
by Robert Waldmann Kevin Drum quotes Tyler Cowen and I wrote a huge comment (without clicking the link) just about the quoted passage. “Tyler Cowen posits today that on economic issues, the right wing was both more dynamic and more correct than the left during the 70s and 80s, with “peak right” coming in 1989. After that, […]
I wrote that Paul Krugman is assuming full-employment. Yesterday Krugman basically pleaded with the Fed to not taper. I see full-employment as constrained by effective demand, which can be determined by quite simple equations. My view comes from Keynes and chapter 3 of his General Theory book. “An alternative, though equivalent, criterion is that at […]
The principles of effective demand can be used to evaluate the aggregate profit rate on capital. This measure is a useful indicator of the business cycle. When the aggregate profit rate gets sluggish or falls, the economy is tempting a recession. The basic equation to determine the aggregate profit rate on capital is… Aggregate profit […]
Via Naked Capitalism comes this video discussion FIVE YEARS ON, LEARNING LEHMAN’S LESSONS FROM THE PANIC OF 2008- Panel Discussion in a panel discussion with James K. Galbraith (Economics Professor at the University of Texas), Neil Barofsky (former Inspector General for overseeing TARP), John Coffee (Law Professor at Columbia University). A link to the entire event, including Elizabeth […]
Stiglitz on globalization: the MNE’s bought the law by Linda Beale Trans Pacific Partnership bad for the middle class, but how bad? by Kenneth Thomas Latest World Trade Organization lunacy by Dan Crawford Trans Pacific Partnership: A new Constitution by Dan Becker Letter from an angry reader by Stormy
Paul Krugman asked today… “Are we getting close enough to “full employment” that it’s time to let up on the gas? How much slack is there in the economy, really?” By letting up on the gas, he is referring to tapering by the Federal Reserve. Tapering would signal tightening as he ends his post with […]