What’s Wrong with David Leonhardt’s NYT Piece on Inequality?
Beware of analyses that tell you that inequality is not rising.
Read more...Category Archives: Economic fundamentals
Two New Papers Say Big Finance Sectors Hurt Growth and Innovation
In a bit of synchronicity, two new papers confirm the long-held suspicion that Wall Street is sucking the life out of Main Street.
Read more...Obama Administration Throws Greece Under the Bus; ECB Leak Recommends Capital Controls; Greece Weighing Capitulation (Updated: Germany Rejects Greek Proposal)
Things are not going well for Greece. It appears Syriza has largely capitulated to the demands of the Troika.
Read more...Mathew D. Rose: Greece – It’s a Revolution, Stupid!
As Greece’s struggles to secure relief from impossible-to-pay-debt that served to prop up otherwise insolvent French and German banks, and to be permitted to implement measures to reduce distress and restore growth, more and more observers are recognizing that this is really a struggle over democratic self-control versus rule by an unaccountable technocracy with inflexible rules, using finance as their enforcement weapon. This speech in the European Parliament today by UKIP leader Neil Farage echoes some of the themes of Mathew Rose’s post. Rose also explains how the many Germans justify the counterproductive destruction of a society that they have turned into a vassal state.
Read more...Negotiation Breakdown Exposes Widening Rift Between Germany and Greece
The negotiations between Greece and the Eurogroup are on a worse trajectory than conventional wisdom would have you believe.
Read more...How Third Way Trade Agreements Study Distorts Via Omission to Pave Way for TTP and TTIP
Even cherry-picked data shows only modest gains for trade agreements, and more comprehensive looks tell a very different tale. And that’s before you get to all the nasty sovereignty-gutting provisions of the TTP and TTIP.
Read more...Greece, Its International Creditors and the Euro
his is an excellent background piece on how Greece got where it is and how its various bailouts were structured. It also helps explain the past and current roles the various members of the Troika play and discusses the prospects for Greece achieving its aims.
Read more...Eurogroup Talks Terminated; Greece “Won’t Take Orders on Bailout”
As we indicated, we were doubtful that a deal with Greece on its bailout could get done, since if nothing else the two sides had irreconcilable positions on structural reforms. That was one of the biggest reasons for Greece rejecting the idea of extending the current bailout, that they did not want the strings attached, such as continued privatizations and further “progress” on labor-crushing market reform. The only way an agreement could have been reached would have been for Greece to capitulate on these issues, which seemed unlikely given how Syriza had risen to 80% approval ratings in the polls based on its Troika-defying stance.
So it is not surprising to learn that the bailout talks are over, with no agreement reached. But what is suprising, and not encouraging, is that if anything the Eurogroup hardened its stance against Greece and expected it to capitulate.
Read more...Michael Hudson: Ukraine Denouement – The Russian Loan and the IMF’s One-Two Punch
Will America’s insistence that Europe, Russia, and Ukraine act against their economic interest ultimately lead the US to lose Europe?
Read more...Wolf Richter: Something Rotten Is Piling Up in this Economy
Given how many QE-induced distortions we have in the economy, I’m not certain the spike in inventories (in isolation) is as telling a symptom as it was last time around. But most analysts took note of how much of last quarter’s GDP figures reflected both a big increase in inventories and a negative GDP deflator, and they expect the next quarter or two to be less robust.
Read more...Is All Growth Good? The Case of China
Growth versus “groaf” had become a favorite topic of the NC commentariat. This article sets forth some of the ways for differentiating between them, using China as an example.
Read more...Why is It Hard to Land a Well-Paid Job After Losing One?
Yves here. I sometimes run posts from orthodox economic sites as exercise in critical thinking, or to remind readers of what passes for research in economics, since economic work is treated with undue reverence in policy circles.
Here, the issue at hand is why people who have well paid jobs take a while to land another one, of course assuming that they manage to land well. The analysis by the author is not bad, save its rather frightening level of abstraction. But take a good look at his summary of conventional assumptions about how job-finding and wage-setting for the unemployed is supposed to work.
Read more...Why We Won’t See An Oil Price Rebound Yet
The front page of The Wall Street Journal on Tuesday, February 10 proclaimed “Oil-Price Rebound Predicted” according to the IEA (International Energy Agency).
Not true.
Read more...Greece, Eurozone Ministers at Fundamental Loggerheads
Bizarrely, there were leaks and news reports of progress all day on the meeting of Eurogroup ministers on a bailout memorandum. But just before 6:30 PM, the Greece government announced that any discussion of a bailout memo was off.
Read more...Obama, Treasury Pushing Back Against Troika Grexit Threats; Bernie Sanders Presses for Fed to Prod ECB
The Administration realizes the risk of Grexit is real and is trying to fend that off. But even if they succeed, don’t expect that to add up to much in the way of relief for Greece.
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