“The way to make a train go fast is to keep it from going slow.” July 29th, 2014 at 2:59 pm
That bit of Zen was told to me by one of the nation’s foremost rail experts back when I worked on that issue. He was explaining that part of developing a high-speed rail system entails straightening out existing curves in the track. But to me, it’s become a metaphor for the importance of financial market oversight.
We don’t yet have all the data I need to update my full-monty-wage-mash-up, but a few series to which I pay attention are now available for the first half of the year: median weekly earnings (MWE) of full-time workers and two flavors of average hourly earnings. What do they show?
Not much, in terms of wage pressures. MWE is a very noisy series–medians are a more volatile statistic then means–so in order to show underlying pace in nominal weekly earnings, I’ve smoothed the series (using an HP filter; both figures show year-over-year changes). Amidst the jumpiness, the deceleration is clear.
My CBPP colleague Chuck Marr flags something important from a recent press release by Rep. Dave Camp, the Republican Chair of the tax writing committee in the House.
Lew Daly has an interesting, but unfortunately misdirected, critique of the measurement of the public sector’s contribution to GDP. He notes several areas, such as infrastructure and education spending, where the government contributes to our well-being, but which are not directly picked up in GDP as contributions from the government. While the point is true, the piece fundamentally mistakes what GDP is and also grossly understates the government’s role in the economy. Continue reading Dean Baker: GDP and the Public Sector | CEPR→
For much of the past five years readers of the political and economic news were left in little doubt that budget deficits and rising debt were the most important issue facing America. Serious people constantly issued dire warnings that the United States risked turning into another Greece any day now. President Obama appointed a special, bipartisan commission to propose solutions to the alleged fiscal crisis, and spent much of his first term trying to negotiate a Grand Bargain on the budget with Republicans.
That bargain never happened, because Republicans refused to consider any deal that raised taxes. Nonetheless, debt and deficits have faded from the news. And there’s a good reason for that disappearing act: The whole thing turns out to have been a false alarm.
In August, Science published a landmark study concluding that poverty, itself, hurts our ability to make decisions about school, finances, and life, imposing a mental burden similar to losing 13 IQ points.
It was widely seen as a counter-argument to claims that poor people are “to blame” for bad decisions and a rebuke to policies that withhold money from the poorest families unless they behave in a certain way. After all, if being poor leads to bad decision-making (as opposed to the other way around), then giving cash should alleviate the cognitive burdens of poverty, all on its own. Continue reading Your Brain on Poverty: Why Poor People Seem to Make Bad Decisions | The Atlantic→
One unhappy lesson we’ve learned in recent years is that economics is a far more political subject than we liked to imagine. Well, duh, you may say. But, before the financial crisis, many economists — even, to some extent, yours truly — believed that there was a fairly broad professional consensus on some important issues.
Over at The Washington Post, the usually sensible Greg Sargent endorses the notion that divisions among Democrats are “mostly trumped up.” The tension between the Wall Street wing of the party and the Warren (as in Elizabeth) wing is an overblown fiction of a press corps desperate for some action.
It’s true that the prior divisions on social issues have dissipated, as liberals have swept the field. Obama’s halting attempts to wean the US from its foreign wars have garnered widespread support. And on economics, Sargent argues that Democrats “largely agree on the menu of policy responses to the economic problems faced by poor, working and middle class Americans — a higher minimum wage, universal pre-K, higher taxes on the wealthy to fund a stronger safety net, job creation and job training — whatever the broader rhetorical umbrella is being used.” Even Hillary says she agrees with Thomas Piketty that extreme inequality is a “threat” to our democracy. Continue reading Economic Populism at Heart of Emerging Debate Among Democrats | Bill Moyers→
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It was widely seen as a counter-argument to claims that poor people are “to blame” for bad decisions and a rebuke to policies that withhold money from the poorest families unless they behave in a certain way. After all, if being poor leads to bad decision-making (as opposed to the other way around), then giving cash should alleviate the cognitive burdens of poverty, all on its own. Continue reading Your Brain on Poverty: Why Poor People Seem to Make Bad Decisions | The Atlantic
