There was absolutely nothing good about the most recent trade data for June. Even what looked like an improvement really wasn’t, suggesting, strongly, that conditions in the global economy are still declining. With Canada falling to recession, blaming a “puzzling” and sharp decline in non-petroleum exports (the US as that nation’s biggest customer), the decline in US import “demand” completing [...]
The San Francisco Fed just published a study in its Economic Letter that purports both that the housing bubble was exogenous and that the Fed would have had to crash the economy to a much greater extent than even the Great Recession to gain control of it somewhat pre-emptively. As you can easily surmise, there are a whole host of [...]
According to the latest GDP revisions I may have been off in my projection of where the recession began. I wrote in 2013 that if pressed I would name October 2012 as the start of the recession. There were many reasons for that assessment; retail sales suddenly and sharply slowing, durable goods and particularly capital goods orders contracting and a [...]
With the advance report on GDP for Q2 set to be released this week, economists are working hard to explain why it doesn’t represent the utopian delivery that they swear had already occurred via monetary intervention. There is, in immediate terms, the universal appearance of “residual seasonality” in the past few months as an almost complete revulsion to even the [...]
The minimum wage is not what is commonly referred, as is being proven again as parts of the US experiment directly with this boundary. In New York, fast food workers have been given a $15 per hour minimum wage which is being celebrated by the same fast food workers who will bear the brunt of the experimentation. Some of them [...]
There are numerous problems created by asset bubbles and many more as a result of a series of them. The financial system becomes highly destabilized, especially as authorities and policymaking bodies misunderstand them to the point of determined stasis rather than courting necessary evolution and reform, which in turn has the same effect on the economy. This is not a [...]
Today is the fifth anniversary of Dodd-Frank, the erstwhile government response to assure that the Panic of 2008 does not repeat. It was an ill-advised task to begin with as the panic itself took care of repetition. It is not, and never has been, past panic that should worry our future. Along with the legislation came the Consumer Financial Protection [...]
Last week, the Economist published an article ostensibly about the politics of wages. Earned income has become a populist football, apparently, with both political parties jockeying to take the most inane and fallible positions about the economy. As with the midterm elections last fall, the fact that this is in any way still a major political issue more than suggests [...]
Last week, the CBO updated some of its calculations and methods for estimating the effects of “automatic stabilizers” on the deficit. These are Keynesian concepts whereby the government increases spending or redistribution (redundant) without discretion as the economy falls into the downside of a cycle. For the CBO’s purposes, the agency measures automatic stabilizers not on their effects, intended effects [...]
There weren’t any surprises in the “final” GDP update for Q1. Going back to -0.2%, the same interpretations still apply, especially and including the inventory contribution. Economists and policymakers want to talk particularly about how Q1 is prone to “residual seasonality” but that is missing the bigger part of the problem. Whether Q1 was -0.2% or +2% doesn’t really matter, [...]
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