Tuesday , February 28 2017
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Jared Bernstein: On the economy

This AMs papers: stocks, bonds, and the budget parity principle

I’ve got a piece in WaPo this AM on the Trump stock market rally and what it tells you about the current dynamic, where the markets are just shaking off the fact that DC is pretty much in chaos. While I stress the skewed distributional implications of what’s going on… But broadly speaking, to answer the question I posed at the top, yes, the markets know something, and it’s this: For all the chaos, gridlock, ethics violations, security breaches, and even threats to democracy from media...

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Why we need a strong, activist, pro-worker Labor Department

Meant to link to this here. Obviously, we’re not going to get what we need in this space from this admin, but the downfall of Puzder is an unequivocal plus. The new nominee, Acosta, is a more serious candidate. But my key point is that the economy is changing in ways that make the DoL more germane than ever. Share the post "Why we need a strong, activist, pro-worker Labor Department"

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The On-the-Economy Podcast: Episode 3 is here!!

[embedded content] Ben and I give an overview of what full employment is and why it’s important, then bring in Slate’s very insightful Jordan Weissmann to discuss some of the Trump Administration’s comments about the labor market and how policymakers should think about increasing employment opportunities for people. Musical Interlude: “Driftin’’” by Herbie Hancock Jared’s Reading Recommendation: “Why I Voted to Keep Rates Steady” by Neel Kashkari Ben’s Reading Recommendation: “Why We Need a...

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Before you blame the robots, look to the policy (and the data)

This very incisive bit of work from the NYT editorial page makes two critical points: The data do not support the claim that there’s been an acceleration in labor-replacing technology displacing US workers. To the contrary, measures of capital investment and especially and most persuasively, productivity growth, have slowed, trends that point in the opposite direction. The adjustment to technological change (and trade, and every other structural shift) takes place in a policy context that can...

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I don’t understand this graph

I’ll have a lot more to say about this later, but I don’t understand this figure from the front page of my WSJ this AM. Source: Wall St. Journal The idea, which has some merit but is easily abused, is that the Trump admin wants to refine the way we measure trade flows–imports and exports–by accounting for re-exports, goods made elsewhere that pass through our country en route to somewhere else. There’s a cogent argument that these goods should not be treated as exports, since they were not...

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If only we could apply dynamic scoring to the rest of life

“Dynamic scoring” is one of those phrases that sounds way more innocent than it is. It’s the process of guesstimating what impact your budget proposals will have on economic growth, and in turn, revenues flowing into the Treasury. For example, if your budget includes big tax cuts, as Trump’s will, that’s obvious a revenue loser, which is exactly what the “static” scores show. But with dynamic scoring, you can claim to make back some share of that loss due to the growth effects spun off by...

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A look at a few recent articles that caught our attention: immigration, SNAP, ACA repeal.

First, Eduardo Porter of the NYT wrote a controversial piece about the negative impacts of immigration (not Porter’s view–he’s reporting, not endorsing). I’ll have a lot more to say about the research in the piece, but to put it mildly, I’m unconvinced. The piece reports on research suggesting the increase in low-skill immigration has put downward pressure on productivity growth, by lowering the skill level of the workforce. This immediately triggered my BS meter, as no one really knows what...

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Slack, inflation, and the Fed

What with Chair Yellen testifying in Congress over the last couple of days, I’ve been trying to dig into the case for forthcoming Fed rate hikes. Clearly, there is more price pressure in the system than in recent months, but there are also these factors to consider: –The data-driven case for rate hikes is far from a slam dunk, according to evidence I present in the WaPo today.* –Today’s inflation report is interesting in that it gives ammo to both hawks and doves. Here’s the figure from BLS:...

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CBO: There’s more slack in the labor market than you thought

[co-authored with Ben Spielberg] OTE readers know that in the quest for full employment, we pay a lot of attention to the extent of slack in the labor market (and btw, our next podcast episode will focus on this concept of labor market slack—what is it, how much is there, etc. We know…we can hardly wait, too!). One way economists try to gauge this concept of slack is to compare the actual value of labor market indicators to the theoretical value of where they’d be at full employment. So when...

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We’re wired to discount the future. That’s uniquely problematic in our system.

Over at WaPo. The R’s attack on regulation writ large is clearly underway and is a profound threat. We can and should fight this on a case-by-case basis–Dodd-Frank, fiduciary rule, climate–but it’s equally important to puzzle out the thematics of why this is such an effective play for them. Share the post "We’re wired to discount the future. That’s uniquely problematic in our system."

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