Friday, December 16, 2016

Short Econ Talk

I sure let today slip away from me! I'm just gonna hit you up with some links I think you should read.

First of all, eat your veggies, and read your Dean Baker.  He tells us that everyone is suffering, but whites not especially so, employment-wise, contrary to a NY Times column.  He also knocks the WaPo down a peg by pointing out that neither job openings nor wage growth in manufacturing currently are all that impressive.  Always good to double-check the narrative.

I'd like to know what he has to say about this little wrap-up of the Obama economy by the NY Times.  It's a brief and interesting read that contains one glaring, possibly inaccurate, piece of speculation:

Income inequality is the second weak spot the White House economists identify, arguing that the Obama administration has made progress in spreading the gains from a growing economy more widely but not enough.


If Hillary Clinton had won the election, this approach to thinking about inequality would most likely have formed a central role in her economic agenda.

Maaaaaaaybe it would have.  A lot of folks didn't turn out to vote for Clinton precisely because they didn't trust her to emphasize issues such as inequality, the high, seemingly permanent, drop-out rate in the labor force, and so forth.  It's likely that for political reasons she would have had to at least rhetorically address the issue.  Who knows: maybe she would in fact have been a devoted progressive.  We'll never know.  What we do know  is that we've got an incoming GOP administration, and it would be jaw-dropping if it dedicated one iota of effort to income inequality.

The above said, the NY Times article is still worth your time.  Here are the points it makes, summed up:
  • Productivity growth has been weak.  This could be caused by a slowing rate of technological advancement, insufficient demand (and subsequently, investment), or what conservatives are always bitching about, excessive regulation, which seems pretty ridiculous when you look at this survey of small business concerns conducted by the NY Fed ("cash flow," "cost of running business" and "credit availability" all outweighing "government regulations").
  • Income inequality is getting worse.  This points bears little elaboration here; most of you, conservative or liberal, know that the rich are far richer than they've ever been and that the middle class and (heaven forfend we discuss them) the lower classes and poor are being left behind.
  • Labor force participation is down.  Basically, huge swaths of people are so discouraged by the job market that they're not even bothering to look for work.  Kudos in advance to Donald Trump if he can actually solve this problem.
  • Economic sustainability still remains a looming threat.  Can our economy cope with spiraling health care costs? Global climate change? The next big market correction (i.e., recession)? Regarding that last point: the Fed normally fights recessions by cutting interest rates, thereby giving people more of an incentive to invest/spend, thus generating economic activity and alleviating the recession.  But rates are pretty close to zero currently.  Should another recession hit, it's on the public sector to step in and spend money.  And will a Republican government do such a thing?  It certain goes against their stated ideology.  Let's not even get started on global climate change.  Who knows, maybe the Trump admin will rise to meet these challenges.  We will see, we will see.
Anyways all three links above are good, short reads.  Read them and then be on your merry way into the weekend.  Sláinte!

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