Category: economics

Nouriel Roubini: Greece will leave the eurozone sooner or later. Sooner is better.

Nouriel Roubini: Greece will leave the eurozone sooner or later. Sooner is better.

The first option, a sharp weakening of the euro, is unlikely, as Germany is strong and the ECB is not aggressively easing monetary policy. A rapid reduction in unit labor costs, through structural reforms that increased productivity growth in excess of wages, is just as unlikely. It took Germany 10 years to restore its competitiveness this way; Greece cannot remain in a depression for a decade. Likewise, a rapid deflation in prices and wages, known as an “internal devaluation,” would lead to five years of ever-deepening depression.
If none of those three options is feasible, the only path left is to leave the eurozone. A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth.

This is a must read. Nouriel Roubini on why Greece must leave the Eurozone.

Untitled

In 47 of America’s fine states, if you want to accept people’s money in order to give them advice on decorating and other people want to pay you to give advice on decorating, then congratulations—you’re an interior decorator. In the other three states, and the District of Columbia, you need undergo 2,190 hours of training… Continue reading Untitled

Untitled

Japan, which is spending heavily for post-tsunami reconstruction, is growing quite fast, while Italy, which is imposing austerity measures, is shrinking almost equally fast. There seems to be some kind of lesson here about macroeconomics, but I can’t quite put my finger on it If austerity worked, the bars for the UK and Italy would… Continue reading Untitled

Scott Walker to campaign on made-up jobs data.

Scott Walker to campaign on made-up jobs data.

Wisconsin lost 23,900 jobs between March 2011 and 2012, according to the bureau, which will release fresh estimates tomorrow. Walker, who promised to create 250,000 jobs by the end of his first term in 2014, says the state is performing better than that. He said while campaigning this week that he would release his own figures as early as today, the Associated Press reported.

The numbers show my policy isn’t working so I will change the numbers we use so I can still promote my policy as a success. Wow.

Bruce Bartlett: What Rule Should the Federal Reserve Follow?

Bruce Bartlett: What Rule Should the Federal Reserve Follow?

Representative Paul is here reciting the “Austrian” theory of the Great Depression. It says that even though there was no inflation during the 1920s, somehow or other inflation nevertheless caused the Great Depression. According to the Bureau of Labor Statistics, prices were either flat or falling throughout the 1920s – i.e., deflation.
But the Austrian school believes there was actually some sort of double-secret inflation because the money supply increased. They believe the same thing is happening right now.

Bruce Bartlett explaining Austrian views and how they get basic facts wrong.

America’s Helium Privatization Fiasco

America’s Helium Privatization Fiasco

in 1996 when Congress decided that the United States did not need a giant strategic helium reserve, Chris Cox, R.-Calif., and his colleagues passed a Helium Privatization Act that ordered the helium supplies to be sold down at a formula-driven price rather than auctioned. That price has turned out to be way below the market rate. That’s encouraging overconsumption of helium, discouraging new helium production, and all-in-all creating a big helium shortage.

I’ve asked this question before and I will ask it again. If you think government can not run anything right, why do you think it can run a privatization program? Second, it looked like the state run helium system worked better (the fact that it was set up by people who actually think the public center can run things might have something to do with it) would you consider going back?

Untitled

I didn’t believe in the liquidity trap and was pretty down on old-fashioned Keynesianism until 1998, when a hard look at Japan and an attempt to understand what was happening there led me to change my mind. Krugman on Japan and Keynes. Macroeconomic Morality – NYTimes.com

Tourism: America should make it much easier for foreign visitors to come here.

Tourism: America should make it much easier for foreign visitors to come here.

Talk of exports normally conjures up images of factories and container ships, but many of America’s exports are services. The nation’s biggest service export is in some sense not an export at all—it’s travel and tourism

So can we now start arguing that the national security state is hurting exports?