Yglesias reflects on bubbles

Matt Yglesias is  still trying to figure out the late housing bubble. His latest approach is to separate structures and land, which leads him to this conclusion: I think it makes more sense to restrict the idea of a “bubble” to speculative asset like land (or stocks or gold or whatever) rather than to the actual building. A building boom may be (indeed probably is) in some sense “unsustainable” but when the boom collapses it’s not like an asset price bubble that leaves nothing in its wake but debt. A boom in structure… Read More

The Fed and the class struggle

Mike Konczal assembles some striking quotes from Federal Reserve transcripts showing how obsessed the monetary overlords are with keeping wages down. I won’t recycle any of the quotes—check out his post for the full flavor. Reading these, Mike wonders what the contribution of the Fed has been to wage stagnation over the last few decades. My sense is, not much since Volcker left in 1987. There’s no doubt that the Volcker crackdown of 1979–82, with a second-wave attack in 1984–85, did cause a major shift in the relative power of capital and labor. What… Read More

NYC: more unequal than Brazil

The New York City Independent Budget Office is just out with an analysis (pdf )of income distribution in the city. It’s no surprise that it’s very unequal. The surprise is that it’s far more unequal than Brazil’s. Full details are available in the letter—which was in response to a request from City Council member James Oddo—but here are some highlights: The poorest tenth (decile) of the city’s population has an average income of $988, and claim 0.1% of the city’s total income. Since the source of this data is tax returns, the very… Read More

Credit union update

An update to my earlier skepticism about the transformative power of moving your money from a bank to a credit union (“Moving money (revisited)”). The Federal Reserve is out with the flow of funds accounts for the third quarter, its periodic detailed view of the movements of money by instrument and sector. Credit union assets rose 0.9% (not adjusted for inflation) between the second and third quarters. Consumer credit (like credit cards and auto loans) extended to members rose 0.9%, and mortgages by 0.2%. Holdings of federal agency securities, meaning mortgage-backed securities like… Read More

The boom in Food Stamps

One area where the languishing U.S. economy is breaking records these days is in need. One measure: more than one in seven Americans is now on Food Stamps, an all-time record. Here’s a graph of the share of the U.S. population drawing benefits from what used to be called the Food Stamp program, and is now known as the Supplemental Nutrition Assistance Program, or SNAP, which is no doubt some bureaucrat’s idea of catchy. As of September, the latest month available (data here), over 46 million people, or almost 22 million households, were… Read More

New radio product

Just uploaded to my radio archives: December 3, 2011 Michael Dorsey, professor of environmental studies at Dartmouth, on the Durban climate summit • Bélen Fernández, author of The Imperial Messenger, on that egregious blowhard Thomas Friedman November 26, 2011 Greg Graffin, lead singer of Bad Religion and author of Anarchy Evolution, on evolution and punk rock • Jeffrey Sachs, the economist formerly known as Dr Shock, on the mess that is the USA, a topic he explores in The Price of Civilization (see my review of his last book here)

Clarifying executive power

Peter Frase is right (“Are CEOs workers, and should we care?”) that talking only about ratios of CEO to worker pay ignores positions in the M-C-M’ circuit. The pay of CEOs and other top executives is almost entirely a return on capital. Perhaps there’s some reward to skilled labor there, but nothing approaching $11 million. Unlike workers, who live under harsh labor discipline, your average CEO is lightly supervised by a board. It’s a rare day when a bad CEO gets fired. The CEO class enjoys an esprit de corps; they sit on… Read More

The CEO as humble worker

For some reason—pathological liberalism? being in the pay of the Washington Post?—Matthew Yglesias wants to blur the distinction between worker and boss. In a strange post at his new Slate playpen (“CEO Pay Drives Inequality”), Yglesias declares the old “rhetoric about ‘workers’ is really a legacy of an outdated time.” Why, you might ask, when class distinctions have a salience not only in fact but in discourse that they haven’t seen in many decades? Because unlike the rentiers of old, today’s rich work hard. Really, Matt, the point isn’t how hard you… Read More

David Brooks: making stuff up, again

Ah, the charmed life of a New York Times columnist: you can say anything you want, true or not. David Brooks has a long history of, shall we say, careless use of evidence. Back in 2004, Sasha Issenberg did a masterful fact-checking of his earlier work: “Boo-Boos in Paradise.” Our serial fictioneer is at it again. In today’s column, he defends Germany’s stubborn insistence on austerity for the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain) as a defense of “a simple moral formula: effort should lead to reward as often as… Read More

Me on money in NYC

Me and (one hopes) a bunch of other people talking about money, tonight at 7, 60 Wall St atrium. More here: Money: What is it? | The Public School