Heather Boushey: You can’t help today’s middle class with 1930s-era policies: "America’s families look very different today... ...than a generation or two ago. Too many families fear they are falling out of the middle class or will never get there due to a combination of stagnating wages, rising and high levels of income and wealth inequality, and an increase in jobs with unpredictable schedules and too few benefits. Yet, our workplaces are matched to a very different time. The foundation for labor standards in the... More >
The Conversation About Economic Growth & Equity That Washington Should Be Having
Nick Bunker: Weekend reading: "Cardiff Garcia asks whether household formation... ...will pick up.... Matt O’Brien argues that the bad news [for the Russian economy] won’t end any time soon.... Paul Krugman points to the large private-sector debts that Russia ran up.... Neil Irwin... countries with large social insurance states have the highest employment rates. Danielle Kurtzleben... the stark gender divide in low-wage work.... Dietz Vollrath... [on] the difficulty of calculating productivity growth in the service sector...
Paul Krugman: Switzerland and the Inflation Hawks: "A lot of people have been predicting soaring inflation... ...since 2009 if not earlier, and have refused to change their views.... Inflation truthers insist that the government is hiding the real numbers.... Normally sensible conservative economists... see the non-inflationary story as somehow the result of very special circumstances.... Martin Feldstein and others have claimed that it’s all about the 0.25 percent... interest rate the Fed has been paying on excess reserves. Without that... quantitative easing would indeed have... More >
Over at Grasping Reality: David Blanchflower: [Hoisted from Other People's Archives from 2010: David Blanchflower: Welcome Back to 1930s Britain: "I am writing this from beautiful Hong Kong... ...having arrived here late at night on a flight from Beijing. It was a pleasant shock to wake this morning to see double-decker buses driving on the left-hand side of the road so far from home. I came to Beijing for the launch of Bloomberg's Chinese-language service and to sit on a panel to discuss China's role... More >
David Jolly: Swiss National Bank to Adopt a Negative Interest Rate: "Switzerland is introducing a negative interest rate... ...on deposits held by lenders at its central bank, moving to hold down the value of the Swiss franc amid turmoil in global currency markets and expectations that deflation is at hand. The Swiss National Bank said in a statement from Zurich on Thursday that it would begin charging banks 0.25 percent interest on bank deposits exceeding a certain threshold, effective Jan. 22...
As I see it, the real point at issue here is that Alan Blinder on the one hand and Jeff Madrick and Arnold Packer on the other have very different ideas of what the "mainstream" of modern American economics is. Alan Blinder believes that the "mainstream" is his brand of economics--MIT-Princeton-Berkeley. That economics is, in my view, very sensible about both market failure and government failure, and somewhat sensible (we here at Berkeley being most so) about long-run intellectual strategy. We also have--as the past... More >
Edward Luce: Too big to resist: Wall Street’s comeback - FT.com: "It was right to let Citigroup stay in business in 2009... ...even though it was effectively bankrupt. But should it be so much larger than it was six years ago? Is it healthy that Citi lobbyists wrote the clause, almost word for word, that was tucked into last week’s spending bill? The question answers itself. It also points to two glaring deficiencies that will come back to haunt Washington when the next crisis strikes....... More >
Must- and Shall-Reads: Jared Bernstein: "Why this obsession with raising at all in the near term?.... Look at the yield of the 10-year treasury... 2.05%... low inflation expectations... strong demand for a safe harbor... oil. Look at 'Strips'... market actors are willing to bet real money that inflation will be low for years to come..." Stephen Cecchetti: "Regulators forced up capital requirements... triggering fears in the banking industry of dire effects... [but] the capital increases had little impact on anything but bank profitability....Perhaps the requirements... More >
Tim Duy: Quick FOMC Recap: "In normal times the Federal Reserve moves slowly and methodically... ...Policymakers were apparently concerned that removal of 'considerable time' by itself would prove to be disruptive. Instead, they opted to both remove it and retain it: 'Based on its current assessment, the Committee judges that it can be patient.... The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate... More >