Kash noted the endorsement of the Division of Dynamic Analysis from Bruce Bartlett which had me dusting off my copy of the General Theory as I read this from Bruce: The great recession of 1973-75 was a severe blow to Keynesian economics because inflation was high while at the same time there was significant unused […]
Ben Bernanke has testified before Congress numerous times in the past, but today was the first time that he spoke as the Chairman of the Board of Governors of the Federal Reserve. Overall, Bernanke’s testimony struck me as quite optimistic. He mentioned the potential hazards for the economy in 2006 of growing inflation and a […]
Bruce Bartlett jumps on the dynamic analysis bandwagon, applauding the creation of the “Division on Dynamic Analysis” at the Treasury Department. Menzie Chinn and PGL have covered the prinicpal problems with this political exercise disguised as economic analysis, so let me just add two small points to what they’ve said. First, Bartlett is quite wrong […]
Expert marksman and Nobel laureate Dick Cheney delighted the Conservative Political Action Conference with the suggestion that free lunch supply-side spin is solid economics: Cheney touted President Bush’s recently announced proposal to create a tax analysis division as a move toward providing more evidence for the administration’s side of the argument. “The president’s tax policies […]
Michael Mandel’s piece in Business Week yesterday ended by posing the following question. Suppose the doomsayers are right, and the housing bubble bursts in 2006. Suppose that the fall in real estate prices is large enough and widespread enough to cause significant economic problems for the US. What should Democrats propose that the US government […]
The American consumer has not yet showed any sign of slowing down, despite higher interest rates and slower house price appreciation. Today’s release of January retail sales by Census reported the following: The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and […]
While Tyler Cowen is playing the Ricardian Equivalence card, he opens with the central concern that an increase in consumption means a reduction in investment: Assume that government spends some money today on consumption. That money could have been spent on a durable bridge, but it wasn’t. Some current people benefit from the consumption and […]
Dr. Thoma excerpts from Paul Krugman’s NY Times Commentary: Debt and Denial. Dr. Krugman writes: “In 2005 spending on home construction as a percentage of G.D.P. reached its highest level in more than 50 years. People who already own houses are treating them like A.T.M.’s, converting home equity into spending money: last year the personal […]
Tyler Cowen cuts through a quarter of a century of free lunch Republican spin in just two sentences: Taxes already were raised when the government spending occurred. In that sense the “tax cuts” never were permanent. This is what I love about conservative economists – they get right to the point. Twenty-five years ago, I’m […]
It seems that we can now move beyond talking about a flat yield curve to talking about a truly inverted yield curve: Yield curve inverts after strong auction NEW YORK (MarketWatch) — The Treasury yield curve turned completely upside down early Friday, pushing the 2-year yield above the yields of both the 10-year and 30-year […]