More than 250 Economists Call for Trade Reforms to Allow Capital Controls

Kevin P. Gallagher

To see the full economists statement:

http://www.ase.tufts.edu/gdae/policy_research/CapCtrlsLetter.html

For better or for worse, trade policy is back in style. In its first two years, the Obama administration largely steered clear of signing trade treaties. Yet, in his state of the union address last week, the president said he would reinvigorate efforts to pass Bush-era deals with South Korea, Colombia and Panama – as well as pursue a new treaty with numerous Pacific-rim nations. 

Plutonomy graph from J. P. Morgan

 Primary residence and total financial assets held by income percentile in the USA in 2008.

GDP: Good or Fair?

from Peter Radford

The initial reaction to Friday’s GDP report for the United States has to be positive. The U.S. economy grew at an annual rate of 3.2% in the fourth quarter of 2010, up from a revised 2.6% during the third quarter. So the recovery seems secure and well on track. Here is my usual breakdown of the parts of the economy and how much they all contributed to the total:

Video: Bank bailouts explained

Bank bailouts explained 
by the people who broght you Quantitative Easing Explained

On-the-ground Political Economy in the Middle East

from Edward Fullbrook

About seven months after the end of Israeli-Lebanese 2006 War I travelled in Lebanon for ten days.  At the time the UK Foreign Office was telling its citizens that Lebanon was not a safe place to visit, but my then partner and now wife needed to go there to do research for the novel that she was about to begin. In Beirut I made indirect contact with a Lebanese economist whom I had befriended a few years before at a conference in Venice.  After a series of phone calls and rides with strangers we rendezvoused in the south of the country, and then

On double counting debts

from Merijn Knibbe

Last Thursday, Eurostat issued a press release. It’s about public debt. Not all government debts are public debts. When a government borrows money from a pension fund, it’s counted as public debt. When one branch of the government borrows money from another part of the government, it’s counted as an increase in gross government debt – but for obvious reasons not as an increase in public debt. All the metrics on government which at the moment receive such a lot of attention are based upon public debt, not gross debt. And remember: the Eurostat metrics are the ‘official’ ones. 

Speculations on uncertainty: A respectful response to Hannes

from Peter Radford

Whoops. When I gave my off the cuff response to Paul Davidson little did I realize that would bring upon myself the scorn of neoclassical folks. I didn’t think they bothered with us little people.

Apparently my assertion that uncertainty is cause for the existence of firms and money is lacking in stringent support. I need to go a bit further. Please. Allow me to vent a little here.

Boss Immelt

from David Ruccio

Last week, Obama named the chairperson and chief executive officer of General Electric, Jeffrey R. Immelt, as the head of the Council on Jobs and Competitiveness.

What do we know about Immelt and the recent history of GE? 

Graph of the week: U.S. productivity and median hourly compensation growth, 1995-2007

from David Ruccio

The solution to the current problems of unemployment and inequality in the United States is not more education. It’s finding a way to close the gaps. 

The Real Battle With China: Goldman Sachs versus American Workers

from Dean Baker

 When China’s President Hu Jintao came for his state visit last week the White House press corps completely ignored almost all the substantive issues raised by Mr. Hu’s visit. The domestic policy issues raised by this trip were altogether invisible in the reporting in major news outlets. 

Bank Subsidies

from Peter Radford

I take slight issue with Krugman today. His blog at the New York Times has an entry about low cost funding from the Federal Reserve Board acting as a subsidy to the banks. He is too dismissive of the claim made by Axel Leijonhfvud that because the Fed is providing the banks with reserves at near zero interest rates, and because the banks can then go and invest those funds in US Treasury bonds at between 3% and 4%, that this represents a subsidy. A subsidy not voted upon by Congress no less. Krugman even ends his piece by using the deadly “alleged” word with reference to this subsidy, as if it were not a fact.

I disagree.

The tidal wave of nonsense on demography

from Dean Baker

The debate over the demographic trends in the United States and other wealthy countries can be described a debate between those who care about our children and those who want more of them. This is apparent once a little bit of logic is applied to the tales of demographic disaster being hawked by those concerned about declining birth rates and greater longevity. 

Question of the week: Is what we’re about to see a new form of ‘structural stagflation’?

A comment posted by Jon Cloke on Friday asked if “what we’re about to see is a new form of ‘structural stagflation’?  He considered the question in the context of the UK, but it deserves, as Cloke suggested, to be considered more widely and in greater detail. 

“Re-thinking economics in a time of economic distress”

The International Confederation of Associations for Pluralism in Economics (ICAPE) is having its third international conference in November near Boston.  They don’t have them every year, and this is going to be a special one: “Re-thinking economics in a time of economic distress.”  It will be easy to get to and so you should consider attending.  Here is its call for papers. 

Why Money? A light-hearted response to Paul Davidson

from Peter Radford

Say what?

I know, you all think I am nuts. Not content with bashing away endlessly at my fixation with Coase and his simple question, now I am asking an even more ridiculous one.

Why money?

Actually it’s not my question, but was posed by that sly Paul Davidson in a comment on one of my posts last week. Davidson is the patron saint and protector of American Keynesian economics, so he darned well knows the answer. 

Humans are persons, too

from David Ruccio

Humans are persons, who are forced to have the freedom to work for someone else, without union protection, when millions of jobs are disappearing, and still make much less than those at the top.

State senator Virginia Lyons has presented an anti-corporate personhood resolution for passage in the Vermont legislature. 

Doubts about debts: Reinhart, Reinhart and Rogoff on the nature of modern capitalism (1800 – 2010)

from Merijn Knibbe

I’ve  spent some quality time with Reinhart, Reinhart and Rogoff. They write about the long term development of debt and modern capitalism. It reads like a Post-Keynesian/Austrian/Institutionalist/Georgian economic history synthesis – interesting, as their findings are presented at, among other occasions, ‘The Federal Reserve Bank of Kansas city Jackson Hole Symposium’ of August, 2010.

How I learnt to stop worrying and love The Bank

from Steve Keen

Having just read the World Economic Forum’s Report on sustainable credit, I now realise that I was wrong to worry about the growth in debt. After all, since 1932, the US’s debt to GDP ratio has actually fallen at a rate of 0.2% per year! 

Meanwhile in Europe…(6). (De-)construction

from Merijn Knibbe

A chronicle of recovery, decline and structural shifts

Much has been written about housing booms and busts in Europe and the United States. How bad were these busts? And have these bust bottomed out? The USA, Spain and Ireland were not the only countries witnessing booms and subsequent busts.

The economists forgive themselves

from Dean Baker

The American Economics Association held its annual meeting in Denver last weekend. Most attendees appeared to be in a very forgiving mood. While the economists in Denver recognized the severity of the economic slump hitting the United States and much of the world, there were few who seemed to view this as a serious failure of the economics profession.