The Daily Beast
Hitler’s Strange Afterlife in India
In a laboratory experiment run by James Andreoni and Tymofiy Mylovanov and presentedhere, the researchers induced common probability priors, and then told all participants of the actions taken by the others. Their findings is very interesting, and says something rather profound on the value of the rational expectations hypothesis in standard neoclassical economic models:Lars P. Syll's Blog
I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to complete the text by the end of this year. Comments are always welcome.
Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.
Chapter 10 The Labour Market
Sections 10.1 and 10.2 were sketched in this blog – The labour market is not like the market for bananas, while Section 10.3 was started in this blog – Labour market measurement – Part 1.Bill Mitchell — billy blog
We resume Section 10.3 today.
Though I support the government’s ability to offset private sector deleveraging with budget deficits, I find it troubling that more specifics on the distribution of funds and current tax laws are often omitted from the discussion.Bubbles and Busts
Salmon P. Chase, Draft of Address to Congress 1, January 1863
The condition of the Finances will claim your most diligent consideration.
The vast expenditures incident to the military and naval operations required for the suppression of the rebellion have hitherto been met with a promptitude and certainty unusual in similar circumstances, and the public credit has been fully maintained.
The continuance of the war, however, and the increased disbursements made necessary by the augmented forces now in the field demand your best reflections on the best modes of providing the necessary revenue without injury to business & with the least possible burdens upon labor.
The suspension of specie payments by the Banks soon after the commencement of your last session made larger issues of United States notes unavoidable. In no other way could the payment of the troops and the satisfaction of other just demands be so economically or so well provided for..
The judicious legislation of Congress securing the receivability of these notes for loans & Internal duties & making them a legal tender for other debts has made them an universal currency; and and has satisfied, partially at least and for the time, the long felt want of a uniform circulating medium, saving thereby to the people immense sums in discounts and exchanges.
A return to specie payments, however, at the earliest period compatible with due regard to all interests concerned, should always ever be kept in view.
Fluctuations in the value of currency are always injurious and to reduce these fluctuations to the lowest possible point will always be a leading purpose in wise legislation. Convertibility -- prompt & certain convertibility into coin is generally acknowledged to be the best & surest safeguard against them; and it is extremely doubtful whether a circulation of United States notes payable in coin and sufficiently large for the wants of the people can be permanently, usefully & safely maintained.
Is there then any other mode in which the necessary provision for the public wants can be made & the great advantages of a safe & uniform currency secured?
I know of none, which promises so certain results and is at the same time so unobjectionable as the organization of Banking Associations under a general act of Congress, well guarded in its provisions. To such Associations the Government might furnish circulating notes on the security of United States Bonds deposited in the Treasury. These notes prepared under the supervision of proper officers, being uniform in appearance and security & convertible always in to coin, would at once protect labor against the evils of a vicious currency and facilitate commerce by cheap and safe exchanges.
A moderate reservation from the interest on the bonds would compensate the United States for the preparation & distribution of the notes and a general supervision of the system, & would lighten the burden of that part of the Public Debt employed as securities. The Public Credit, moreover, would be greatly improved and the negotiation of new loans greatly facilitated by the steady market demand for Government Bonds which the adoption of the proposed system would create.
It is an additional recommendation of the measure, of considerable weight in my judgment, that it would reconcile as far as possible all existing interests by the opportunities offered to existing institutions to reorganize under the act, substituting only the secured uniform national circulation for the local & various circulation, secured & unsecured, now issued by them.
The Receipts into the Treasury, from all sources, including loans, & balance from last the preceding year, for the fiscal year ending on the 30th June 1862 was $583.885.247.06: of which sum $49,056,397.62 were derived from customs; 1.795.331.73 from the Direct Tax; from Public Lands 152.203.77; from Miscellaneous sources $931.787.64; & a from Loans in all forms $529.692.460,50. and The remainder, $2.257.065,80, was the balance in the from last year. The Disbursements during the same period were for Legislative Congressional, Executive, & Judicial expenses purposes, $5.939.009.29; for Foreign Intercourse $1.339.710,35; for Misallaneous Expences, including the Mints, Loans, Post office deficiencies, collection of revenue and other like charge $14,129,771.50; for expences under the Interior Department, $3.102.985.52; under the War Department, $394,368,407,36; under the Navy Department, $42.674.569,69; for Interest on public debt, $13.190,324,45; and for payment of public debt, including reimbursement of Temporary Loan & Redemptions $96.096,922,09; making an aggregate of $570.841,700,25; & leaving a balance in the Treasury on the 1st day of July 1862, of $13.043,546,81.
It should be observed that the sum of $96.096,922.09 expended for Reimbursement & Redemption of Public Debt being included also in the Loans made may be properly deducted both from Receipts & Expenditures, leaving the actual Receipts for the year $487,788,324,97; and the Expenditures $474,744,778,16. Other information on the subject of the Finances will be found in the Report of the Secretary of the Treasury; to whose Statements & views I invite your most candid and considerate attentionThere is this note at the end which identifies the context of Chase's letter:
[Note 1 The following document was prepared by Chase for Lincoln to deliver to Congress in January 1863 when he signed a joint resolution that provided for the immediate payment of the military forces. Lincoln took the opportunity to urge Congress to consider Chase's plan for a national banking system that would supply a uniform currency. For the final text of Lincoln's message, see Collected Works, VI, 60-61.]
January 17, 1863 To the Senate and House of Representatives:
I have signed the Joint Resolution to provide for the immediate payment of the army and navy of the United States, passed by the House of Representatives on the 14th, and by the Senate on the 15th instant.
The Joint Resolution is a simple authority, amounting however, under existing circumstances, to a direction to the Secretary of the Treasury to make an additional issue of one hundred millions of dollars in United States notes if so much money is needed for the payment of the army and navy.
My approval is given in order that every possible facility may be afforded for the prompt discharge of all arrears of pay due to our soldiers and our sailors.
While giving this approval, however, I think it my duty to express my sincere regret that it has been found necessary to authorize so large an additional issue of United States notes, when this circulation, and that of the suspended banks together have become already so redundant as to increase prices beyond real values, thereby augmenting the cost of living to the injury of labor, and the cost of supplies to the injury of the whole country.
It seems very plain that continued issues of United States notes, without any check to the issues of suspended banks, and without adequate provision for the raising of money by loans, and for founding the issues so as to keep them within due limits, must soon produce disastrous consequences. And this matter appears to me so important that I feel bound to avail myself of this occasion to ask the special attention of Congress to it.
That Congress has power to regulate the currency of the country, can hardly admit of doubt; and that a judicious measure to prevent the deterioration of this currency, by a reasonable taxation of bank circulation or otherwise is needed, seems equally clear. Independently of this general consideration, it would be unjust to the people at large, to exempt banks, enjoying the special privilege of circulation, from their just proportion of the public burdens.
In order to raise money by way of loans most easily and cheaply, it is clearly necessary to give every possible support to the public credit. To that end, a uniform currency, in which taxes, subscriptions to loans, and all other ordinary public dues, as well as all private dues may be paid, is almost, if not quite indispensable. Such a currency can be furnished by banking associations, organized under a general act of Congress, as suggested in my message at the beginning of the present session. The securing of this circulation, by the pledge of United States bonds, as therein suggested, would still further facilitate loans, by increasing the present and causing a future demand for such bonds.
In view of the actual financial embarrassments of the government, and of the greater embarrassments sure to come, if the necessary means of relief be not afforded, I feel that I should not perform my duty by a simple announcement of my approval of the Joint Resolution which proposes relief only by increasing circulation, without expressing my earnest desire that measures, such in substances as those I have just referred to, may receive the early sanction of Congress.
By such measures, in my opinion, will payment be most certainly secured, not only to the army and navy, but to all honest creditors of the government, and satisfactory provision made for future demands on the treasury.
ABRAHAM LINCOLN January 17. 1863.Looks like in 1863, both President Lincoln and his Treasury Secretary Chase at best reluctantly issued US Notes to pay for US Government war provision.
Many people assume that Ayn Rand was a champion of libertarian thought.
But Rand herself pilloried libertarians, condemning libertarianism as being a greater threat to freedom and capitalism than both modern liberalism and conservativism.Washington's Blog
As long as we cannot show, except under exceedingly special assumptions, that there are convincing reasons to suppose there are forces which lead economies to equilibria – the value of general equilibrium theory is nil. As long as we cannot really demonstrate that there are forces operating – under reasonable, relevant and at least mildly realistic conditions – at moving markets to equilibria, there cannot really be any sustainable reason for anyone to pay any interest or attention to this theory.Lars P. Syll's Blog
I thought I should share what I found recently about who was to state the sectoral balances identity first – since it comes across as enlightening to say the least. I found the identity in Nicholas Kaldor’s 1944 article Quantitative Aspects Of The Full Employment Problem In Britain.The Case for Concerted Action
Even Newt Gingrich knows the "fiscal cliff" is a scam
by David Atkins
Deficit hysteria is an integral part of the Republican Party's starve-the-beast economic sabotage. The idea is to spend like crazy on wars, tax cuts for the rich and boondoggles to favored corporate interests, blow the up the deficit, and then declare a crisis, demanding spending cuts that directly hurt people as human sacrifices to the Bond Lords, Confidence Fairies, and other Objectivist gods.
But when curbing deficits actually means increasing taxes on the wealthy, suddenly those who are more interested in preserving their bloated offshore bank accounts than in their ideology find that the scam doesn't look so good after all.
One such huckster is none other than Newt Gingrich, who stopped by Simi Valley and had this to say:
Politician and author Newt Gingrich, speaking in Simi Valley on Wednesday night, said there is no pending "fiscal cliff."Gingrich, of course, frames the whole deal as a con of the President's creation to raise taxes. He's a gasbag. But the point remains that he knows it's a scam, and doesn't want to see his precious wealth impacted by an artificial deficit crisis.
The "fiscal cliff is a fantasy. It is an excuse to panic," said the former speaker of the House and candidate for the 2012 Republican presidential nomination.
Gingrich told a sold-out audience at the Ronald Reagan Presidential Library and Museum that the fiscal cliff is a way to scare politicians into raising taxes.
"It is a device to get all of us running down the road so we accept whatever Obama wants, because otherwise we will have failed the fiscal cliff, and how can you be a patriot if you don't do what the fiscal cliff requires?" Gingrich said.
The only people who don't know it's a scam are the Very Serious People in the beltway, their ideological friends, and those disconnected 20% who depend more on the stock market for their retirement and their wealth than on their actual wages plus medicare and social security.
It may well be that going over the cliff is temporarily bad for the Dow Jones Industrial Average and might impact a few 401Ks for a while. But the Dow Jones has been doing extremely well as the rest of the country suffers. Maybe it's time the Dow Jones investor class crowd felt a little bit of the pinch, too, rather than people on fixed incomes and those who depend on Medicaid.
Since the discovery of cells in the 17th century, scientists have understood that these building blocks of life are constantly exposed to myriad chemical signals, which are then recognized, interpreted, and translated into a cellular response. But until around 20 years ago, how cells did this was a mystery.
Taking on the problem in the late 1960s, Lefkowitz set about trying to isolate receptors from cell membranes. He attached iodine isotopes to various hormones to track their paths through cells in the lab. His experiments revealed several cell surface receptors, including the β2-adrenergic receptor, which responds to adrenaline to regulate the body’s fight-or-flight response.So it can be looked at as though these biochemical sub-units of our bodies "communicate" based on the input from our "real world" or cognitive language communication in the brain.
It is time to take the debt ceiling off the table as a negotiating ploy, time to call their bluff, recognize that time is on our side, and turn up the heat on a Republican house leadership that has a weak hand.
Play hardball Mr. President. It feels good, and you’ll win.Slate
The most dangerous conventional wisdom in the world today is the idea that with an older population, people must work longer and retire with less.
This idea is being used to rationalize cuts in old-age benefits in numerous advanced countries -- most recently in France, and soon in the United States. The cuts are disguised as increases in the minimum retirement age or as increases in the age at which full pensions will be paid.
Such cuts have a perversely powerful logic: "We" are living longer. There are fewer workers to support each elderly person. Therefore "we" should work longer.
Even without the Bay Area’s vote, Democrats would still be favored to win California by solid margins. So why does any of this matter?
The reason is that Democrats’ strength in the region is hard to separate out from the growth of its core industry — information technology – and the advantage that having access to the most talented individuals working in the field could provide to Democratic campaigns.
Companies like Google and Apple do not have their own precincts on Election Day. However, it is possible to make some inferences about just how overwhelmingly Democratic employees at these companies are based on fund-raising data. (The Federal Election Commission requires that donors to presidential campaigns disclose their employer when they make a campaign contribution.)
Among employees who work for Google, Mr. Obama raised about $720,000 in itemized contributions this year, against only $25,000 for Mr. Romney. That means that Mr. Obama took almost 97 percent of the money between the two major candidates.
Apple employees gave 91 percent of their dollars to Mr. Obama. At eBay, Mr. Obama took 89 percent of the money from employees.
Over all, among the 10 American-based information technology companies on the Fortune’s list of “most admired companies,” Mr. Obama raised 83 percent of the funds between the two major party candidates.
Mr. Obama’s popularity among the staff at these companies holds even for those which are not headquartered in California. About 81 percent of contributions at Microsoft, which is headquartered in Redmond, Wash., went to Mr. Obama. So did 77 percent of those at I.B.M., which is based in Armonk, N.Y.
It does not require an algorithm to deduce that the sort of employees who might be willing to donate substantial money to a political campaign might also be those who would consider working for it.The New York Times | FiveThirtyEight
There's a lot of bearish yen talk going around and I can understand the traders' mind of wanting to short a currency that has been so strong for so long (think Jim Rogers or Kyle Bass or Peter Schiff shorting Treasuries for years and years and years) and I also understand that this time it could be different as Japan has shown an inclination recently to sell yen for euros in an effort to support exports to the Eurozone. However, what makes me suspicious about this short yen trade is that it's coming from all the same people and they are making all the same, stupid and failied arguments that they made for Treasuries (and JGBs) and QE and hyperinflation, etc.
Here's an example of what I am talking about. Axel Merk, who runs a currency fund, who's been predicting a dollar collapse for years (like Schiff) because of Fed "money printing" is bearish on the yen now (presumably because none of his other trades worked out) and he wrote this:
|The size of the current account deficit represents the amount foreigners need to buy in assets (local financial assets or real assets) to keep a currency from falling. With a current account deficit, Japan's debt to GDP ratio of over 200% may suddenly matter, as Japan may need to offer higher rates to attract foreigners to buy local assets (e.g., Japanese government bonds). The trouble is that Japan’s debt might be unsustainable at higher interest rates. To the extent that Japan has a current account surplus, it doesn't matter whether foreigners buy the yen, but those surpluses have fallen to deficits recently and that trend looks set to continue.|
Once again Merk is showing his lack of understanding of macro. Lets have a look. Take thus sentence, for example:
|"The size of the current account deficit represents the amount foreigners need to buy in assets (local financial assets or real assets) to keep a currency from falling."|
Those assets that Merk says foreigners need to buy, well, they've already bought. A nation's current account balance is equal but opposite to its capital account. So if a country has a current account deficit it has a capital account surplus of the same magnitude. In practical terms it means that it paid for those imports in yen, and those yen sit at the Bank of Japan, parked in Japanese gov't instruments. They're the very financial assets Merk worries that foreigners will have to buy, but they've already been bought. It's all just accounting.
Merk has this notion that Japan needs to go looking around for investors to "finance" this trade deficit, but that's already done in the capital (or, cash) side of the transaction.
Furthermore, the current account balance has no impact on interest rates whatsoever (as Merk suggests) as we clearly have seen with th U.S. which runs HUGE current account deficits and interest rates are at historic lows. And even if the BOJ were to raise its interest rates it doesn't make Japan's debt "unsustainable." They can pay any rate because they print yen, just like the US can pay any rate because it prints dollars. The debt never becomes unsustainable.
And on and on it goes. Another example of clueless idiots who just keep repeating the same, old, tired, misinformed crap even as they are proven wrong over and over and over and over and over.
For what it's worth, I am long yen.
Profit. Profit above all. That's America's new MO. Cut safety nets, kill unions, reduce incomes, engage in harmful speculation and financial engineering. Then, when the ordinary incomes of workers can't afford the products these companies sell, they must find cheaper and cheaper ways to produce the stuff, often employing slave labor toiling away in horrible conditions.
We saw this here in America back at the turn of the 20th century. Remember the Triangle Shirtwaist Fire? Eerily similar. In that disaster 146 people, many of them children, perished in the flames or jumped to their deaths trying to escape the inferno. The company had locked the doors to the stairwells and exits. Same seems to be true in the Bangladesh fire.
The Triangle tragedy ushered in a new era of improved safety standards and unionization. I'm not hopeful we are going to see this happen in Bangladesh.
You can't sustain a business/economic model based upon reducing wages and income to support profit. Eventually something's got to give. It's just too bad that along the way to change you need so much tragedy and hardship to wake people up to how screwed up this is.
I heard some funny discussion recently between two, typically out of paradigm folks on what would happen to interest rates if the Fed didn't conduct QE. One said that rates would be lower because there wouldn't have been "stimulus." The other said rates would have been higher because the Fed was the principal buyer of the government's paper and without that buying rates would have shot up.
First, it's important to understand that QE is just another monetary policy tool and these tools are all designed, or I should say, capable, of doing only one thing and that is change an interest rate somewhere along the term structure. In so doing the Fed changes the composition and duration of the financial assets held by the public. It's not stimulus, it doesn't enable gov't spending and it's not money printing. These are asset swaps, that's it, pure and simple.
We also know that a currency issuing government, like the U.S. Federal Government, spends by electronically crediting bank accounts and there is no constraint on its ability to do this other than the occassional political constraint, like when we have to go through these ridiculous debt ceiling shenanigans every now and then. Furthermore we know that when the government spends it adds to the level of bank reserves in the system and this accumulation of reserves causes the Fed to engage in monetary operations on a fairly regular basis (like, daily) to maintain reserves at a level that is consistent with whatever target interest rate they have decided upon. If the Fed were to allow reserves to build and build and build as a normal consequence of ongoing gov't spending, then the overnight lending rate (Fed Funds) would quickly fall to zero and all other rates out along the term structure would follow suit.
So the fact of the matter is the Fed has to work quite hard to KEEP RATES FROM FALLING TO ZERO ON THEIR OWN if the banking system were just left alone without its intervention. Those who say the Fed is keeping rates "artificially low" have got it backward. On the contrary, high rates or rising rates for a currency issuing nation are artificial.
The notion that rates would have been higher if the Fed had not done QE is false. Nor can one say thay rates would be lower absent QE because there "wouldn't have been any stimulus." That's patently absurd. QE simply was the Fed's way of reducing the rate on some specific instrument (mortgages, longer dated Treasuries, etc.) in the hopes that such a move would have some desired effect on the economy, despite the fact that the causal relationship there is spurious.
And perhaps we are seeing a slow-motion revolution. Credit unions and peer-to-peer lenders, owners of coffee shops competing against Starbucks, the steady rise in the numbers becoming self-employed, the growth of bloggers, tweeters and file-sharers are all taking small - not necessarily deliberate - steps away from hierarchical capitalism, just as early factory owners made small contributions to the industrial revolution.
What Erik Olin Wright calls (pdf) interstitial transformations can ultimately add up to more radical economic change than windbags on marches.Stumbling and Mumbling
BUT, if you raise the retirement age and keep a lot of older people working, they will be forced to put their money back into the market. Well, they won’t be able to retire until they’re much older than their parents were at retirement. If they have any hope of ever taking time out to go travel or garden, they’re going to have to risk their money in the market, hope that it will pay off so they can get out of the job market before they’re dead and forget about social security.
My theory is that raising the retirement age forces more savings to stay in the market longer and that with a pool of people who can’t retire yet still working, the amount of money going into 401Ks and IRAs is going to go up. Stripville!The Confluence
The only political party linked to organized ‘voter fraud’ in 2012 was the one loudly denouncing it....
As [Richard] Viguerie has explained, over the decades, and as part of its long term strategy to take power, the New Right has built a net- work of alternative media outlets, think tanks, political operatives and elected officials, the likes of which progressives cannot begin to match. And it’s why they control the national conversation.In These Times
Peter Schiff...what more need I say?
Wrong on interest rates
Wrong on unflation
Wrong on US growth
Wrong on the dollar
Wrong on gold
Wrong on China
Wrong on US stocks
Wrong even on housing
And there's poor little Lauren Lyster of RT, trying so hard to save this fool and make him look smart. Keep trying, Lauren...keep trying.
Representative-elect Alan Grayson (D-FL) said Monday that he will put mega-retailer Walmart squarely in his sights during the next Congress for the company’s liberal use of public assistance programs to supplement their workers’ wages.
Speaking to Current TV host Cenk Uygur on Monday’s episode of “The Young Turks,” Grayson called Walmart “the largest recipient of public aid in the country,” saying their low wages force workers to take food stamps, housing assistance and Medicaid just to get by....The Raw Story
“In state after state after state, Walmart employees represent the largest group of Medicaid recipients, the largest group of food stamp recipients....
I’m rather taken with this spending + surplus = income dynamic approach to modeling. (But I would be, wouldn’t I?) I’d be delighted to see how others might analyze and display results using various parameters, and how they might adjust, improve, or dismantle the model. In particular: are there obvious, gaping flaws here?Whaddya think?
The American Conservative
My life on the Republican right—and how I saw it all go wrong.
The internationally acknowledged energy consultant Chris Cook addresses in this exclusive interview the new IEA report; the pre-dominant factors in the oil market; his version of a commodity-based currency; why an attack on Iran is rather unlikely; and the consequence of a rising oil price for gold.GoldSwitzerland
Senate Minority Leader Mitch McConnell (R-Ky.) on Monday said "fiscal cliff" talks are at an “impasse” and only President Obama can break the logjam.
McConnell laid the blame for the slow-going discussion on liberal Democrats who are dragging their feet on reforms to Medicare, Medicaid and Social Security.
“So we’ll continue to wait on the president, and hope that he has what it takes to bring people together to forge a compromise. If he does, we’ll get there. If he doesn’t, we won’t. It’s that simple,” McConnell said.Through last Friday, Current Debt Limit: $16,394B ... Public Debt Subject to Limit: $16,268B ... Fiscal Policy Space Available: $126B
When recessions become prolonged and long-term unemployment rises, the conservative denial machinery always scapegoats the most disadvantaged by recommending cuts to welfare to make people more desperate. This is dressed up in terms that attempt to make this sort of policy sound reasonable – like we should all be adventurous and entrepreneurial. The facts are that mass unemployment represents a macroeconomic failure that can be addressed by expansionary fiscal and/or monetary policy. It has nothing to do with the provision of the miserly amounts that are given to the unemployed via income support arrangements. Cutting those benefits will not cure involuntary unemployment. In all likelihood, cutting benefits will make the aggregate demand shortfall that caused the unemployment to worsen. The result is that the cuts will only make the lives of the unemployed more desperate than they already are. It is time that the conservatives learned about macroeconomic constraints....
Macroeconomics teaches us that individual choice can be rendered powerless as a result of the presence of macroeconomic constraints – most usually spending constraints on the product market that ration the number of overall jobs and working hours that will be on offer at any point in time to an economy.
Once an economy is operating under such a demand constraint, the supply-side of the economy loses traction – that is, no longer influences the market outcome, which renders much of the orthodox labour market analysis irrelevant, if not false.Bill Mitchell — billy blog
Osborne's choice for governor of the Bank of England will do nothing to prevent the next collapse of the financial system...
Carney is a central banker steeped in the culture and practices of Goldman Sachs's investment banking arm. Before becoming Canada's central bank governor, he spent 13 years with Goldman Sachs in its London, Tokyo, New York and Toronto offices. He held a range of senior positions. The most significant was as managing director of investment banking.
In a speech made recently Carney made the right noises. He complained of "a system that privatises gains and socialises losses" and endorsed the approach that sets capital and leverage ratios for banks. He's even commended the Occupy movement for being "constructive".
The Guardian (UK)But there is nothing in his speeches that indicates that he will help give Britain's real economy the protection it needs from its over-mighty – and still very dangerous – banking sector. Nothing, in other words, that indicates the real economy – the productive sector – will be given priority over the City's preference for reckless global speculation.
Can economics be morally centered? And perhaps more importantly, should it be?
These are questions that society is grappling with in the face of the economics profession's failure to confront the global impact of exploding inequality within and between countries.
Limitations of the Dismal Science
Economists are very good at studying mechanisms for efficiently allocating things. But they are less effective at addressing more fundamental questions related to these things' social value. Indeed, economists typically leave values unexamined in their mathematical formulas. Social utility is simply not explored.Yahoo Finance
But what happens when economists' implicit value assumptions break down?
Wynne Godley would have been happy – had he been alive and known that Carney is perhaps the only central banker to have recognized his foresight.The Case for Concerted Action
I find that median wealth plummeted over the years 2007 to 2010, and by 2010 was at its lowest level since 1969. The inequality of net worth, after almost two decades of little movement, was up sharply from 2007 to 2010. Relative indebtedness continued to expand from 2007 to 2010, particularly for the middle class, though the proximate causes were declining net worth and income rather than an increase in absolute indebtedness. In fact, the average debt of the middle class actually fell in real terms by 25 percent. The sharp fall in median wealth and the rise in inequality in the late 2000s are traceable to the high leverage of middle class families in 2007 and the high share of homes in their portfolio. The racial and ethnic disparity in wealth holdings, after remaining more or less stable from 1983 to 2007, widened considerably between 2007 and 2010. Hispanics, in particular, got hammered by the Great Recession in terms of net worth and net equity in their homes. Households under age 45 also got pummeled by the Great Recession, as their relative and absolute wealth declined sharply from 2007 to 2010.The paper is behind a pay wall unless you have a key, but this abstract is probably enough to get the point across if you don't have need of the numbers.
Here’s the math: We need at least $4 trillion of long-term deficit reduction, with a substantial portion — on the order of $1.2 trillion — coming from new revenues.This is a textbook example of how math can be misapplied and misused by morons. The key with mathematics is knowing how to correctly apply it; which Rattner here exhibits no capability thereof.