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Jared Bernstein: On the economy

Pushing back gently but firmly on Michael Strain’s non-stagnation argument

A few folks have asked me about my friend Michael Strain’s recent Bloomberg piece where he argues against wage stagnation (it’s “more wrong than right”). It’s an old argument but one worth having, and Michael makes some important points and misses some big ones too (5, to be precise). Larry Mishel and I counter a much shorter-term version of Michael’s case here but similar issues pertain. Certainly, the evidence he presents doesn’t change the basic wage story that I and many others carry...

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Jobs report: no one wants to be incautious re inflation, but…Laissez les bon temps rouler!

Payrolls rose by a larger-than-expected 263,000 last month and unemployment rate ticked down to a 49-year low of 3.6 percent. Yearly wage growth held steady at 3.2 percent, which is also its average over the past 12 months (raising the question: are wage gains on pause?). Since consumer inflation is running at around 2 percent, this implies real wage gains of a bit more than 1 percent, a welcome development for workers who are clearly benefiting from the persistently tight job market (see...

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Sen. Warren’s debt cancellation plan: Should progressive policy aim for narrow targets or structural change?

Introduction Sen. Warren’s college debt cancellation plan, which I explain here, has gotten a mixed reception. While many progressives and, predictably, student debt holders give it high praise, it has taken flak from two broad groups: those who just don’t like cancelling debt and those who view it as insufficiently progressive. The latter group objects to the extent to which it helps higher income debtholders who, in their view, don’t need the help relative to those with lower incomes. Their...

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It takes two to tango: The complementarity of the derigging project and expanded tax credits.

In a hearing last week, an exchange between Rep. Katie Porter (D-CA) and JPMorgan’s CEO Jamie Dimon caught my eye. Dimon was touting the bank’s new minimum wage of $16.50, increasing to $18 in high-cost areas, for entry level workers. That’s a decent minimum wage, above the $15 that most progressive plans call for (and those proposals typically include a phase-in of numerous years). According to recent EPI analysis, $16.50 is well north of the national 40th percentile wage of just under $15....

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Ch-ch-ch-changes! (Both personal and fiscal impulse)

Good changes: I continue to recover from the brain hemorrhage I sustained on March 23. Today’s my first meds-free day and I’ve been blessedly headache free. Thanks again for the outpouring of support–it’s been really uplifting. Neutral Changes: As I slowly rev up Ye Olde Analysis Shoppe, I found the figure below (by GS fiscal analyst Alec Phillips) to be worth a close look. It underscores a point that even seasoned budget analysts sometimes miss: the role of fiscal impulse.  One of the more...

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An update on my condition

Friends and followers — As some of you know, on March 23 I had a brain hemorrhage, technically known as a subarachnoid hemorrhage.  This is a very serious condition, often fatal or disabling. But I appear to have been very lucky.  After spending nine days in the ICU at Fairfax Hospital, I was discharged and am now recovering at home.  The recovery period is likely to take quite a while, with good days and bad days.  It could be a matter of months before I’m back to some version of my...

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The loss of a great economist and a great man

Like everyone else who knew him, I’m in shock and despair over news of the death of the economist Alan Krueger. Alan was the best kind of colleague: always inquisitive, incredibly rigorous about what constituted facts and evidence in economics, and willing and able to talk about his work in ways that made sense to anyone who would listen. I admired everything about Alan, but a few things stand out. He taught us a lot about creativity. Like the rest of us, he crunched numbers that were...

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Jobs report, Feb 2019 [truncated]: Outliers happen, and faster real wage growth!

Got a late start this AM, so just highlights for now, with more analysis to come. Outliers happen! Payrolls rose a mere 20K last month, a huge downside outlier given the recent trends as shown below in our monthly smoother. The average over the past 3-months of 186K is a much more reliable take on the current underlying pace of job growth. Consider, for example, that payroll jobs were up 311K last month, a value well above trend. So, at least for now, consider this downside miss payback for...

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There’s a new financial transaction tax proposal in town. Here’s why that’s good news.

The 2017 Trump tax cut committed at least two fiscal sins. By delivering most of its cuts to those at the top of the wealth scale, it worsened our already high-levels of pretax inequalities. And in so doing, it robs the Treasury of much needed revenues; based on our aging population, we’re going to need more, not less, revenues for the next few years. Now, along comes an idea that pushes back against both of these problems (and one other one!): a small tax on financial transactions (FTT)....

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