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

Casey Mulligan Wonders Why People Use Unemployment Insurance

Casey Mulligan is curious: what could have caused the big uptick in the uptake on unemployment insurance in recent years? It’s a mystery. Or, maybe not: Sorry, the JOLTS data only goes back to 2001. Which directly addresses Mulligan’s basic assertion: People are lazy. They don’t like to work. Well yeah. (People especially don’t like […]

This Time Is Different: Federal Debt Didn’t Dive Before the Depression

Randall Wray made a fascinating observation a while back: Since 1776 there have been six periods of substantial budget surpluses and significant reduction of the debt. … The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. And I confirmed it (graphs): Every depression in U.S. history was […]

It’s Beginning to Look a Lot More Riskless (To the tune of…)

There’s such fun in disastering. When you’ve won the mastering.Of the u-ni-verse! Hat tip to RJ Sigmund: Lyrics by Marcy Shaffer (Dan here … lyrics under the fold) It’s beginning to look a lot more riskless.At least for guys like me.It’s neat being this elite.The government makes it sweet.Complete with robber baron guarantee! It’s beginning […]

A Surfeit of Dearth? Tight "Money" and the Decline of AAAs

This Credit Suisse graph posted by Cardiff Garcia on December 5 has been getting some serious attention in wonkier sections of the econoblogosphere: And Angry Bear‘s own Rebecca Wilder gave us this on December 21: 2007-2011 in charts: moving down in quality 2007… …Vs. 2011 Brad DeLong discussed this on December 21, riffing off David […]

“Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity Is Not Expensive”

Real Reasons Bankers Don’t Like Basel’s Rules: Clive Crook – Bloomberg. Why bankers’ whining about higher equity requirements is just that: A much-cited paper by Stanford’s Anat Admati and colleagues — “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity Is Not Expensive” — should have ended this debate once […]

It’s the Private Debt, Stupid

I’ve gone on about this elsewhere, but thought I should bring it up front and center here. While everyone hyperventilates about government debt, they don’t seem to be aware of the massively greater load of private debt, and its spectacular runup compared to government debt: This from Steve Keen’s latest. (It’s not very long. There […]

250 Billion Reasons Why the Fed Hates Inflation (and Doesn’t Care About Employment)

Let’s start with the basics: Increased inflation results in (in a sense, is) a wealth transfer from creditors to debtors. Debtors get to pay off their loans in less-valuable dollars — dollars that can’t buy as much real-world stuff, stuff that humans can consume, that they value. If you’re holding a hundred million dollars in bonds — […]