Friday, January 14, 2022

Book Review: The Case for a Job Guarantee (1) — Review by Martin Watts

Review of Pavlina R. Tcherneva (2020), The Case for a Job Guarantee, Cambridge: Polity Press

NJFAN
Book Review: The Case for a Job Guarantee (1)
Review by Martin Watts, University of New Castle, Australia
Reprinted with permission, Journal of Social Policy. (2021), 50, 4, 891-901
https://njfac.org/index.php/2021/12/22/book-review-the-case-for-a-job-guarantee-1/

7 comments:

Footsoldier said...

Matt,

I watched the recent podcast with you and Mike


Question:


Why don't you graph the data to show the correlation ?


Surely if it is that obvious the real data would produce some nice graphic detail ?

Peter Pan said...

Finally, an unbiased review!

Matt Franko said...

Foot,

Correlation between what parameters?

I don’t usually do correlation studies … I’m trained to work with functional relationships between variables …

It’s of the general form P = (A-L)/A

So a sudden increase in A and L due to an external event (like a Fed intervention) will lower the price level…

Matt Franko said...

Foot,

Here is recent interview with Fed manager:

https://www.mercatus.org/bridge/podcasts/01102022/lorie-logan-monetary-policy-operations-fed%E2%80%99s-new-standing-repo-facility-and

She says here:

“ However, the conditions continue to worsen and to broaden. And so, to me, the turning point was March 12th. And it was on that day where we took more aggressive action. First, we offered almost unlimited amounts of funding through the repos. And then later that day, to help alleviate the strains in Treasury cash markets, we announced a shift in our purchases of Treasury bills to purchase across the Treasury coupon curve.

Logan: And that's an example where we actually needed approval from the chair to make that type of decision. So right there, just that one day, you can see the different types of decisions that we make and the authorities that we have. My own sense was that these moves would help stem the dysfunction. But by the end of the day, we were already seeing significant one way flows and conditions continue to worsen. And we could see that in just a broad set of metrics that we were monitoring. So very late that night, we conferenced again with the team to assess whether more aggressive actions were needed, what options we could put on the table, and then whether we could make those options operationally feasible within such a short window of time because we needed to implement whatever recommendation we'd be putting forward that next morning.

Logan: So after a very lengthy call, we decided to recommend that we pull forward an entire month's worth of Treasury purchases into a single day.”

That’s when they crashed it….

I don’t know what she is talking about she says “alleviate the strain in the Treasury market” if you look at TLT it was RALLYING before that and they added so many reserve assets they the even crashed the bond market… I was in TLT trying to hide out and it was working like up to 170 or so… then they added all of these reserves and it crashed to like 138….

System didn’t start to recover until March 23 which was the day the TGA bottomed and reserves started to REDUCE …. then on May 15th they suspended the SLR and we were ok then…

I would take great issue with just about everything she says here… I basically don’t believe any of it…

Matt Franko said...

If there was a “problem “ then why were bonds RALLYING?

Footsoldier said...

Yeah, but using the parameters in the podcast surely you can graph it ?


When talking about the tables and the reserves. Take that data from the tables and show how when the reserves increased the markets fell.


There has to be a correlation there. You detailed about it in the podcast.

Footsoldier said...

Mike will be able to graph it...


Show the correlation.


He traded it.