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April 30, 2014

Latest Posts from Economist's View

Latest Posts from Economist's View


'Where the World Is Headed'

Posted: 30 Apr 2014 12:15 AM PDT

This panel brings together prominent economists to debate a range of issues with global scope: from inequality and emerging markets to austerity policies and the impact of technology on employment. This will be a free-ranging discussion focused on where the world is headed and what can be done to improve economies and people's lives everywhere.

  • Speakers: Ken Rogoff, Professor of Economics, Harvard University; Former Chief Economist, International Monetary Fund
  • Nouriel Roubini, Chairman, Roubini Global Economics; Professor of Economics, Stern School of Business, New York University
  • John Taylor, Mary and Robert Raymond Professor of Economics, Stanford University; George P. Schultz Senior Fellow in Economics, Hoover Institution
  • Moderator: Gerard Baker, Managing Editor, The Wall Street Journal; Editor-in-Chief, Dow Jones & Company

Can't Keep Up With Email

Posted: 30 Apr 2014 12:06 AM PDT

If you've written me, and haven't heard back, apologies. I try, I really do, but I can't keep up: Photo

I feel like a real jerk when I don't reply to people who write to me, but I just can't answer all the email I get no matter how hard I try.

Sincere apologies if I haven't responded to your email.

Links for 4-30-14

Posted: 30 Apr 2014 12:03 AM PDT

Inequality and Mobility in America

Posted: 29 Apr 2014 01:59 PM PDT

If you want a tutorial on how the political right responds to inequality and mobility concerns, this video is for you (Chrystia and Jared do their best to respond, and Jared has a nice summary of all of the potential causes of inequality in his opening remarks):

Income inequality has diminished in many parts of the world--Chile, Turkey, Mexico and Hungary being a few examples. But in America, the gap has widened. Ironically, the same forces may be responsible for both: globalization and technology, which have eased poverty in the developing world but led to the loss of unskilled but well-paying middle-class jobs in the United States and other developed nations. For the first time in nearly a century, the top 10 percent of American earners take home more than half the nation's income. New research suggests that it's harder than ever for the poor to move up into the middle and upper classes, an issue that has potential consequences for our economy, government, institutions and people. What can--or should--be done to narrow this disparity? Is education the key? With many Americans falling behind, these questions are stirring concern among policymakers and the business community as well. This panel will examine the magnitude of this complex challenge and strategies for reversing the trend.

  • Speakers: Jared Bernstein, Economic Policy Fellow, Milken Institute; Senior Fellow, Center on Budget and Policy Priorities; Former Chief Economist to Vice President Joe Biden
  • Edward Conard, Author, "Unintended Consequences"; Former Senior Managing Director, Bain Capital
  • Robert Doar, Fellow in Poverty Studies, American Enterprise Institute; Former Commissioner, Human Resources Administration, City of New York
  • Chrystia Freeland, Member of Parliament, Canada; Author, "Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else"
  • Moderator: Alan Schwartz, Executive Chairman, Guggenheim Partners

'America's Debt and the Economy: A Hard Look at Public Spending and Finance'

Posted: 29 Apr 2014 08:41 AM PDT

This session, as I thought it would be before it started, was annoying:

America's Debt and the Economy: A Hard Look at Public Spending and Finance: With mandatory programs consuming 13.6 percent of GDP and rising, security spending at 5 percent, debt service at 1.5 percent (under benign interest-rate conditions), and revenue at 19 percent, there is little or no room in the nation's budget to fund the discretionary programs that support competitiveness and growth over the long term. That will require investment in infrastructure, technology, environmental protection, education and job training, among other areas. Despite the shutdowns and threats of default, both Republicans and Democrats understand that our future prosperity demands a responsible focus on these imperatives. But how can the government's budgeting process move beyond short-term fixes? This discussion will identify areas for strategic bipartisan collaboration to put the U.S. on track for meaningful reform, leading to the creation of a budget that better addresses our challenges and reflects our priorities.

Speakers:

  • Douglas Holtz-Eakin, President, American Action Forum; Former Director, Congressional Budget Office; Former Chief Economist, Council of Economic Advisers
  • Maya MacGuineas, President, Committee for Responsible Federal Budget
  • Steven Rattner, Chairman, Willett Advisors; Former Counselor and Lead Auto Advisor to the U.S. Secretary of the Treasury
  • Gene Sperling, Former Director, National Economic Council, The White House
  • Moderator: Maria Bartiromo, Anchor and Global Markets Editor, Fox Business Network

I heard things such as:

Need to get spending under control to create a good investment climate.
Large spending programs are crowding out discretionary programs such as defense and infrastructure.
One of the most serious issues we face.
Wait until rates go up.
Nobody in Washington is interested in talking about it.
We have to cut entitlements (Medicare, Medicaid, Social Security).
Our economic growth is lower because of the debt. Our economy is worse off because of it.
Huge benefit right now from cutting deficit.
Anyone who is sensible would agree with us.
Neither Bush nor Obama has been willing to explain to the public what a huge problem the debt is.
We need to do this, it is an important thing for our children.
President needs to make this a national priority, like it did with income inequality.
With all the problems in the world, is now the time to be cutting defense spending?
Simpson Bowles was a very, very, very good plan.

You get the idea. There was very little about tradeoffs, e.g. higher unemployment when we reduce the debt during a not so robust recovery, though Sperling did address this a bit, not enough on revenue enhancement, and -- though it did come up at times -- the relationship between health care costs and our long-term debt problems was not made as clear as it should have been.

When it comes to recovering from the recession, these people are the problem, not the solution.

But maybe I'm just being cranky (and biased from the start) -- watch the video and tell me what you think...

'Narrow Banks Won't Stop Bank Runs'

Posted: 29 Apr 2014 08:20 AM PDT

This is from a new blog by Stephen Cecchetti and Kermit Schoenholtz:

Narrow Banks Won't Stop Bank Runs: Every financial crisis leads to a new call to restrict the activities of banks. One frequent response is to call for "narrow banks." That is, change the legal and regulatory framework in a way that severely limits the assets that traditional deposit-taking banks can hold. One approach would require that all liabilities that are demandable at par be held in the form of deposits at the central bank. That is, accounts that can be withdrawn without notice and have fixed net asset value would face a 100% reserve requirement. The Depression-era "Chicago Plan" had this approach in mind.
In the aftermath of the financial crisis of 2007-09, Lawrence Kotlikoff, Jeremy Bulow and Paul Klemperer, John Kay, and, most recently, John Cochrane, and Martin Wolf have resurrected versions of narrow banking. All of these proposals, both the old and the new, have a common core: banks should be split into two parts, neither of which would supposedly be subject to runs. ...
Naturally, we share the objective of these reformers: preventing bank runs. The key issue is how to do so and at what cost. We suspect that narrow banking would be costly in terms of economic performance, yet unlikely to achieve this goal. ...
We know that a combination of transparency, high capital and liquidity requirements, deposit insurance and a central bank lender of last resort can make a financial system more resilient. We doubt that narrow banking would.

(The original post is much more detailed.)

Links for 4-29-14

Posted: 29 Apr 2014 12:03 AM PDT

 A bit late with theswe today, so there are more than usual:

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