Larry Summers, like Tim Geithner, wants the public to believe that rescuing banks and leaving citizens to rot was the right crisis response. But neither experts, nor people who followed the crisis, nor voters at large are buying what Team Obama is trying to sell.
Read more...Thomas Piketty’s new book has been widely praised for its empirical contribution, but his prediction of rising inequality rests on economic theory. This column argues that Piketty’s pessimistic forecast is based on an extreme – and unrealistic – assumption about households’ saving behaviour. According to standard theory, the wealth–income ratio would increase only modestly as growth falls, so declining growth would not be a powerful force for generating high inequality.
Read more...David Cay Johnston is a clear and lively conversationalist, and I anticipate readers will enjoy his discussion of his work over the last 20 years on inequality.
Read more...A pending economic incentive deal in Alabama is a case study of why these proposals need hard, skeptical reviews.
Read more...Deflation proves that austerity policies are failing, but the media is doing a remarkable job of keeping readers confused and ignorant.
Read more...A good discussion of why the weak economic recovery has only helped those at the very top, and why economists who know better continue to enable that.
Read more...The Piketty postulate that r > g, meaning the return on wealth exceeds overall economic growth, is simply not a universal truth. This post provides a tidy and accessible debunking.
Read more...Transfers don’t matter for investment, and most savings are transfers. Thus Piketty’s wealth tax won’t hurt investment.
Read more...The US press and newscasts make it appear that Europeans have voted against poor immigrants and foreigners. What they voted against was the super-rich, the oligarchy.
Read more...How the Vietnam War helped usher in neoliberalism, financialization of the economy, and the use of military spending as stealth stimulus.
Read more...Were the results of the European elections a tremor or an earthquake?
Read more...Chris Giles of the Financial Times has charged Thomas Piketty with making Reinhart and Rogoff-like data and methodological errors in his best-selling book on wealth inequality, Capital in the 21st Century.
Read more...How America facilitates a labor and environmental race to the bottom, helping companies based in Europe, Canada, and Mexico.
Read more...Although Piketty’s Capital has garnered a great deal of praise, the criticisms were initially overlooked. They are finally getting the attention they warrant.
Read more...Yves here. A lot of people argue for redistributive taxes, contending that they were very successful in the golden age of the American middle class, from the end of World War II through the Reagan era, in constraining the concentration of income and wealth at the top. However, that tax structure reflected a broad social consensus in favor of fostering prosperity for ordinary Americans, in no small measure to keep Communist impulses at bay.
In Yankee terms, Wray’s argument against using taxes to create a more egalitarian distribution of income is “You can’t get there from here”.
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