Friday , February 23 2018
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Jared Bernstein: On the economy

Perspective, people!

Over at WaPo. I left out one figure/point due to space constraints. The other day when the CPI report came out slightly above expectations, as I discuss in the WaPo piece, a few freaker-outers actually started talking about 70’s-style stagflation. So here’s a graph of how we measured stagflation back in the day, using the “misery index,” or unemployment + inflation. Not quite back to 70’s levels, I’d say. Sources: BLS Share the post "Perspective, people!"

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Lynx, and a comment about the political non-costs of fiscal recklessness.

I’m not exactly sure which links I’ve put here already, but I’ve been busy (there is the possibility that if you can’t remember what you’ve been writing, you’re either writing too much or getting too old; I know the latter is true; not sure re former). WaPo PostEverything Posts: —There’s a leaked proposed rule from team Trump that expands the definition of “public charge cases,” wherein immigration status is threatened by use or expected use of public benefits. Here’s why the daft draft rule...

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The President’s new budget. Sorry, but attention must be paid.

Every year around this time, we ask the Talmudic question: is there any reason to pay attention to the president’s budget? This year, given that the Congress just passed, and President Trump just signed, a spending deal covering the next couple of years, the question is particularly germane, as “dead on arrival” would be an upgrade for this year’s budget. And yet, I once again conclude that attention must be paid. People should know an administration’s priorities, but in the case of team...

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The new asymmetric risk

For years, economists, including no less than former Fed chair Janet Yellen, talked about the concept of “asymmetric risk,” or AR. In this earlier context, which related to monetary policy, AR maintained that the risk of weak demand was greater than that of faster inflation. Therefore, the full-employment side of the Fed’s mandate should get more weight in interest rate decisions than the stable-prices part. With some important caveats I’ll get to below, there’s a new AR in town, this time as...

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Links and a musical interlude from the Professor

First, here’s a post at WaPo wherein I point out that as long as new tax revenues remain off the table, then we’re implicitly agreeing to ever-higher deficits and debt. Here’s another one on how we shouldn’t let the prevailing fiscal dynamics tie us up in knots. And, far better than the above, here’s Professor Longhair telling the fabled tale of poor old Junco Partner, a dude who drank a bit too much and ended “wobblin’ all over the street.” Share the post "Links and a musical interlude...

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This moment in deficit spending

There’s an interesting argument in play right now as to whether current deficit spending is welcomed or problematic, and what its impact might be. The motivation for the argument is the deficit financing of the tax cut and the new budget deal (which adds at least $300-$400 billion to the debt over the next decade), particularly at a time when the economy is closing in on full employment. As I recently pointed out, deficits of around 4-6% of GDP, which is what we’re probably looking at over...

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Will wage growth boost price growth? Sure, but how much depends on whether the near past or the distant past is prologue.

As the stock market works out its manic episode of the past few days, let’s get into a question of great importance: if wage growth is really accelerating, what will that mean for price growth? This relationship is at the heart of the market selloff that’s got everyone pretty freaked right about now. As I wrote in the WaPo this AM: The wage pop [last Friday’s 2.9% growth in hourly wages] spooked the markets because investors, already skittish as valuations were a bit steep (though not as bad...

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Links, High vs. Low Wages

The stock market opened way down, continuing last Friday’s selloff, though it has climbed back since the open–implying the return of volatility–as skittish investors continue to fear the sequence I describe in this AM’s WaPo: tight labor market, wage pressures, higher interest rates, inflation, lower profit margins. Underneath these swings is an unsustainable, inequitable economic model with serious political implications. BTW, in discussing last Friday’s 2.9% wage pop–which I tried to put in...

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A nice wage pop in January should be welcomed, not feared!

Payrolls rose 200,000 last month, the unemployment rate held steady at 4.1% and wage growth popped up to 2.9%, it’s the fastest year-over-year growth rate since mid-2009. In other words, here’s yet another strong jobs report. Our jobs-day smoother averages out some of the monthly noise in the payroll data by taking averages over 3, 6, and 12-month periods. As shown below, payrolls are up a strong 192,000, on average, over the past three months, a very nice job-growth pace at this point in the...

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Trump’s Department of Labor suppresses an inconvenient fact re their tip-retention proposal.

[These are the comments I made on a press call just now about the revelations from this article by Ben Penn. He tells of how the Labor Dept. is denying the public access to its estimates regarding the costs to tipped workers of the Trump admin’s proposed rule to let employers take the tips of minimum wage workers. Heidi Shierholz was also on the call–I recently interviewed her on this issue I’ve developed an awfully high outrage bar over the past year, but this Dept. of Labor suppression of...

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