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Jared Bernstein: On the economy

A verse for Trump as he meets w/ Yellen on Thursday

Trump’s meeting with Fed Chair Janet Yellen tomorrow. Here’s some free advice, in verse! When it comes to Cohn, Leave him alone. I worry that Powell Might throw in the towel. Sorry to be harsh But do not go with Marsh. We’ve all seen the trailer Don’t be ruled by Taylor. By now you’re probably smellen’ The idea that I’m sellen’ Steady as she goes, Trump: Stick with Yellen. For a bit more substance, here’s a piece from a few weeks ago about why reappointing Chair Yellen is the right move, not...

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Lynx

Over at WaPo, thoughts on strengthening a weak link in our tax system: that between asset appreciation and tax revs. Also, re NAFTA, mend end but don’t end it. And less fear mongering over tariffs. I don’t want to see them either, but the extent to which the reporting has largely featured advocates of the status quo got under my skin a bit. Muscular Larry Summers takedown of those implausible results out of Trump’s CEA yesterday. Share the post "Lynx"

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I got issues with the new CEA report

First, full disclosure: Kevin Hassett, the chair of Trump’s CEA, is an old friend, a good dude, and a guy I’m happy to see in this prominent post. But even as I endorsed him for the job, I publically worried about one area of his research where his claims go way beyond the evidence and ignore the counter-evidence. That area is the impact of tax cuts on growth, jobs, and particularly wages and incomes. Thus, CEA’s new report on the wage-boosting effects of the proposed cut in the corporate...

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Tax versus fax

Of course, we must inject factual analysis into a tax debate that is dominated by fantasies about how tax cuts pay for themselves as their benefits trickle down from zillionaires to the middle class. But the salesforce behind these cuts have not been moved one iota by these facts, and I thus conclude it will... Read more

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Data note re WaPo wage story

Here are my thoughts on why wages aren’t growing more quickly, in WaPo. The model I used is sort of like that of the Fed’s in the Yellen speech cited in the piece. Using quarterly data for the hourly wage of production, non-supervisory workers from 1989q1-2017q2, it regresses year-over-year nominal growth on “slack” (the unemployment rate – CBOs NAIRU), lagged inflation expectations (as in the Fed model), smoothed productivity growth (HP filter; two lags), and 2 lags of the DV. Share the...

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Two must read opeds on the Trump tax plan

There are a few must-read opeds out there today on the administration’s tax plan. I found this first one to be extremely resonant as it’s just a bucketful of common sense from an entrepreneur who lives in the real world, as opposed to the world of the DC tax cut debate, where, as former Treasury Secretary Larry Summers strongly argues, falsehoods flourish. Marcus Ryu, co-founder of a successful software company (Guidewire Software), writes: As an entrepreneur myself and a friend to many...

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Thanks to Harvey and Irma, payrolls fell last month, but underlying job market remains strong

Payrolls contracted by 33,000 last month due to the impacts of hurricanes Harvey and Irma. The unemployment rate, which BLS tells us was not affected by the storms, fell to 4.2 percent, its lowest rate in over 16 years, and it fell for “good reasons” last month, i.e., not because discouraged workers left the labor force. In fact, the closely watched labor force participation rate rose to 63.1 percent, its highest level since March of 2014. Thus, to evaluate the strength of the current US job...

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Increasing wealth inequality, the ill-begotten tax plan, and some potentially good news!

Over at WaPo, including this section on the need to, as no less than Warren Buffett puts it, stop coddling the super-rich! “Stop coddling the super-rich!” That was the name of a Warren Buffett op-ed from a few years ago, and while I know this is a heavier lift for Rs — “coddling the rich” is analogous to assuaging the donors — it makes no sense to waste revenue loss on the one group that’s consistently been crushing it for decades. New data from the Federal Reserve reveals that over the past...

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Once again, rather than write a decent plan, the administration attacks the scorekeepers. And this time their attack is particularly hypocritical.

There’s an argument increasingly being made by supporters of the Trump tax plan regarding the preliminary score of the plan by the nonpartisan Tax Policy Center. Critics of the TPC analysis maintain that the analysts should have waited until the full details of the plan had been made public before trying to determine its distributional and deficit impacts. Kevin Brady called the TPC analysis “a work of fiction that Stephen King would’ve been proud of.” Paul Ryan chimed in that TPC, a group of...

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