Category Archives: Macroeconomic policy

Calling on Yellen: Time for a Modest, Dull Fed

Most of the news accounts of Obama’s nomination of Janet Yellen as the next Federal Reserve Chairman focused either on what type of monetary stance she was likely to take or on biographical details.

But some writers have used the upcoming changing of the guard at the Fed to look at the bigger question of the Fed’s role, particularly now that it has continues to intervene in financial markets to an unprecedented degree, a full four years after the worst of the financial crisis had passed.

Joe Firestone: Stop “the Great Betrayal” – Kabuki Update

It now looks like the big media and leaders in both parties are no longer focusing on the Government Shutdown crisis, but are now moving on to the notion that the shutdown is melding with the upcoming probable breaching of the debt limit to create a combined mother of all fiscal crises. Don’t be fooled.

David Dayen: The U.S. Government Has Shut Down. Unfortunately, How the U.S. Governs Hasn’t.

Being ensconced here on the West Coast, I didn’t have to wait up all night wondering whether or not the government would shut down. You know things were over around dinnertime in California and points west, when House Republicans decided to pass a resolution to move to a conference committee on the continuing resolution to fund the government. The Senate has tried 18 times over the past six months, ever since they passed a budget, to move to conference, and were denied each time. So the clear obviousness of this stunt meant I could stop taking bets on the outcome.

And yet, it must be said that there is a very clear, however cruel, logic to this shutdown, logic employed by members of both parties for decades.

Why You Should Not Be Enthusiastic About Janet Yellen as Fed Chairman

While it’s a relief to have Larry Summers out of the running for the Fed chairmanship, it’s also important not to labor under any delusions about Janet Yellen, the nominee presumptive.

Bill Black: The New York Times is Wowed that Obama’s Six Rubinites Support Larry Summers

The Obama administration, for reasons that pass all understanding, has been running a campaign of leaks disparaging one of Obama’s few senior female appointees, Janet Yellen. Her high crimes include not being a protégée Bob Rubin and doing exceptionally well in economic forecasting. Rubin wants the job of Fed Chair to go to his top protégée, Larry Summers. Yellen, as Vice Chair of the Fed stands in the way of Rubin’s ambitions. (Rubin is too toxic to take the Chair directly.) The administration has been leaking primarily to the New York Times’ Binyamin Applebaum. His latest article contains this remarkable statement, without analysis…

David Dayen: Fast Food, Retail Worker Strikes Actually Honor King Legacy

The March on Washington’s 50th anniversary resulted in two commemorative events, including the one Saturday with comments by Eric Holder and Nancy Pelosi, and the one yesterday with a speech by President Obama. Needless to say this is a bit of an inversion of the original message of a March ON rather than WITH Washington. So I would say that the major tribute this week to the legacy of that march, a march for jobs and freedom, is actually today’s national retail worker strike for a higher wage, which takes what had been a one-off model and expanded it. Events are expected in 35 cities, maybe more. And where the initial events were just with fast-food workers at places like McDonald’s and Wendy’s, apparently workers at retailers like Macy’s are involved in some cities.

J.D. Alt: Mobilization and Money

I’m nearly finished with a very long book that may well be the best illustration of the basic principles of Modern Money Theory available. The book is “A Call To Arms,” by Maury Klein. It is an historical account of the U.S. mobilization as it prepared for, and engaged in, war with Germany and Japan. The scale of the task was unprecedented in human history—and the accomplishment of it changed not just the structure of the American economy, but American society as well. What is striking about the story—and the monumental effort to quickly build, virtually from scratch, the largest and most sophisticated war machine ever to exist on the planet—is that there is nary a peep of concern or argument about how this enormous task would be paid for. All of the anguish and struggle had not to do with finding enough “money” to pay for things, but rather with finding enough things to buy—and enough skilled labor to properly marshal it all together. In the end, virtually every real resource available in the continental U.S.—oil, gas, steel, aluminum, rubber, copper, sugar, tin, and man-hours of labor—was purchased by the Federal government to build the Army, Navy, Air Force and Marine Corps that ultimately defeated the Axis powers. The scale of the sovereign spending is almost beyond comprehension—especially given the fact that, at the starting gate, the U.S. economy was still decimated and impoverished by the Great Depression. At the finish line, however—VJ day, September 2, 1945—the U.S. had become the most powerful, efficient, and equitable economic power the world had ever seen. So how did it all get paid for? And even more important, how did we travel from that VJ day of economic triumph to our sorry state of today, where we think we are so “broke” we can’t even afford to hire enough fire-fighters and equipment to put out the forest-fires raging in our western states?

Stephanie Kelton: The Good Society: Lessons Not (Yet) Learned

John Kenneth Galbriath’s book, The Good Society: The Humane Agenda, creates a blueprint for a more just, prosperous and stable world. I’m re-reading it for the nth time because I continue to believe we might just get there one day. Indeed, I’m convinced we must.

David Dayen: Productivity Rose 7.7% Post-Great Recession; Workers Have Seen None of It

I’ve said this before in other venues, but this really is the chart that explains modern America:

Why Progressives Are Lame

Yesterday, we ran a post by Bill McKibben on leadership in social change movements. McKibben argued for a “small l” leader model versus a “big L” leader, which readers debated. Some argued that the Leader model was really code for “Great Man” that was a less viable approach than it once was due to assassinations. Others were struck by the emphasis on distributed leadership, which is an obvious analogy to modern computer and communications networks, and how political commentators to frame their ideas of social order in terms of the technology of the day. Some pointed out that the idea of minimal oversight and control of communities was a long-stading Utopian line of thought, often espoused by people who wound up implementing the exact opposite.

However, I was particularly struck by Dan Kervick’s remark, which came late in the thread:

Wolf Richter: Cisco CEO Reports Record Sales And “Lumpy” Demand, Just Like In November 2007, A Month Before Stocks Began To Crash

As Wolf Richter argues, Cisco has been a harbinger of market turns, and he describes an earnings call which struck him as eerily similar to another inflection point, that of fall 2007.

Bill Black: Rajan Calls Krugman “Paranoid” for Criticizing Reinhart’s and Rogoff’s Research

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posed from New Economic Perspectives

This article discusses a simmering feud among five of the most prominent economists in the world (two of them Nobel Laureates).