Talking Points: Robots, Wages, Technology, Peter Thiel

I was supposed to go on Bloomberg News this afternoon to talk about robots, wages, and is very smart but differently-thinking Peter Thiel. But 10 minutes before I was supposed to go on the air the CDC announced that a case of Ebola had been diagnosed in Dallas. So I had to play public health economist for five minutes... Very smart but differently-thinking Peter Thiel is a techno-optimist--he sees the extraordinary increases in human productivity that robots and computers make possible, and seems that is... More >

Afternoon Must-Read: Paul Krugman: The Pimco Perplex

Paul Krugman: The Pimco Perplex: "Why was Gross betting so heavily against Treasuries?... ...Brad DeLong tries to rationalize Gross’s behavior in terms of a coherent story about an impending U.S. recovery.... But Gross wasn’t saying anything like that. Instead, he... warned that the impending spike in rates when QE2 ended would derail recovery. So why did he believe all that?... Since 2008 the basic logic of the economic situation has been that the private sector is trying to run a huge surplus, and the public... More >

Things to Read on the Afternoon of September 30, 2014

Must- and Shall-Reads: Charles Goodhart: It is time to shake up housing finance Helene Jorgensen and Dean Baker: The Affordable Care Act: A Family-Friendly Policy Martin Wolf: Even Beijing balks at price to pay for renminbi to become a reserve currency Joe Nocera: The Hole in Holder’s Legacy Michael Bauer: Options-Based Expectations of Future Policy Rates Erica Schoenberger: Los Angeles: Planning to Sprawl Robin Greenwood, Samuel G. Hanson, Joshua S. Rudolph and Lawrence H. Summers: Government Debt Management at the Zero Lower Bound Siri Srinivas:... More >

Afternoon Must-Read: Dan Davies What’s Really Wrong With Bank Supervision

Dan Davies: What’s really wrong with bank supervision: "The banks treat supervisors like punks, and the supervisors let them.... ...The supervisor was, originally in the privacy of his office and talking to his own team, outraged. But then when he went to meet with the bank, all the vim and vinegar went out of him.... The problem, as everyone who is familiar with bank supervision knows, is that there is a cultural disinclination to challenge banks on their behaviour.... The biggest problem is that senior... More >

Afternoon Must-Read: Ryan Avent: Crises: They Let It Happen

Ryan Avent: Crises: They let it happen: "THE argument that American officials lacked the capability... ...or authority to save Lehman Brothers—and, potentially, to spare the world the most wrenching financial crisis since the 1930s—never really withstood close scrutiny.... This morning the New York Times publishes a remarkable piece of reporting drawing on accounts from insiders at the Federal Reserve Bank of New York, who were there during the crisis of 2008. The Fed officials say that they were tasked to conduct analyses of Lehman's books in... More >

Afternoon Must-Read: Joe Stiglitz: Reconstructing Macroeconomic Theory to Manage Economic Policy

Joe Stiglitz: Reconstructing Macroeconomic Theory to Manage Economic Policy: Any theory of deep downturns has to answer these questions... What is the source of the disturbances? Why do seemingly small shocks have such large effects? Why do deep downturns last so long? Why is there such persistence, when we have the same human, physical, and natural resources today as we had before the crisis?... The apparent liquidity trap today is markedly different from that envisioned by Keynes in the Great Depression, and why the Zero... More >

Afternoon Must-Read: Daron Acemoglu et al.: Offshoring and Skill-Biased Technical Change

Daron Acemoglu et al.: Offshoring and Skill-Biased Technical Change: "When labour is sufficiently cheap abroad... ...firms have incentives to offshore low-skill tasks and invest in skill-biased technologies at home.... The production structure of Apple’s iPod illustrates some of the potential effects.... Though most production jobs are offshored, a significant number of high-skill engineering jobs and low-skill retail jobs are created in the US, and more than 50% of the value added of the iPod is captured by domestic companies. With more limited offshoring, some of... More >

Afternon Must-Read: Martin Wolf: Why Inequality Is Such a Drag on Economies

Martin Wolf: Why Inequality Is Such a Drag on Economies: "A report written by the chief US economist of Standard & Poor’s... ...and another from Morgan Stanley, agree that inequality is not only rising but having damaging effects on the US economy... two economic consequences... weak demand and lagging progress in raising educational levels.... The costs to society of rising inequality go further--the greatest costs are the erosion of the republican ideal of shared citizenship.... As the US Supreme Court seeks to bend the constitution... More >

Why Was Bill Gross so Certain Interest Rates Were on the Rise Back in February 2011?: Tuesday Focus for September 30, 2014

Joshua Brown: “Do we need to fire Pimco?”: "In February of 2011, [Bill] Gross loudly proclaimed... ...[that] Pimco Total Return had taken its allocation to US Treasury bonds down to zero. As recently as the previous December, Pimco Total Return had been carrying as much as 22 percent of its AUM in Treasurys.... Gross compounded the move by being extremely vocal about his rationale--he went so far as to call Treasury bonds a 'robbery' of investors given their ultra-low interest rates and the potential for inflation. He... More >

Evening Must-Read: Ryan Avent: Monetary Policy: Why Is the Fed Planning to Fail?

Ryan Avent: Monetary Policy: Why Is the Fed Planning to Fail?: "THE members of the Federal Open Market Committee... ...are not overly fond of being stuck at the zero lower bound (ZLB) [as they have been] since December of 2008.... Policy-making since then has been a monetary mess.... I'll put things more plainly. Central bankers should hate the ZLB. Whether or not policy at the ZLB tends to raise financial instability, the central bank simply can't do its job when its main interest rate is... More >