Econamici

Category: Essay

  • How to Fix the Great Real Estate After-Bubble

    The Washington Post April 21 headlines an article “Wall Street betting billions on single-family homes in distressed markets.” The article continues, “Drawn by the prospect of double-figure profit margins on rents and the resale of homes whose prices plummeted in the crash, hedge funds, Wall Street investors and other institutions are crowding out individual home…

  • Is New Technology Destroying Jobs?

    On the NewsHour Friday night, in response to the dismal new jobs numbers, Andrew McAfee of the MIT Center for Digital Business blames the loss on “powerful” new labor-saving technology. But if he’s right, is it the technology itself, or the large corporations that install it?

  • Joseph Stiglitz Is Right About Inequality, but for the Wrong Reason

    Joseph Stiglitz says that “Inequality is Holding Back the Recovery”. He’s right, but he gives the wrong reason, that “our middle class is too weak to support the consumer spending that has historically driven our economic growth.” This “Keynesian” spending model does not effectively address inequality and thus can lead to poor policy prescriptions. The…

  • Raise the Minimum Wage or Cut Low-Wage Taxes?

    My son is a low-wage worker, a short-order cook. President Obama just called for an increase in the federal minimum wage from $7.25 to $9.00 an hour. Yet he made no effort to save the “temporary stimulus” 2% payroll tax cut, which expired at the end of 2012. That will cost workers like my son…

  • The Prophetic Work of Barry Lynn

    What’s the connection between the battery fires that grounded Boeing’s 787 Dreamliner and the massive failure and recall of Johnson & Johnson’s metal hip implants? Both are consequences of the recent transformation of multinational corporations from manufacturers to monopolistic distributors who contract out production–a transformation first documented by journalist Barry C. Lynn

  • Is Paul Krugman’s Liquidity Trap Really an Inequality Trap?

    Paul Krugman says the economy suffers from a “liquidity trap” due to insufficient demand. In my view, we’re in an “inequality trap” as the One Percent, big corporations and banks hoard cash, starving small businesses for capital.

  • The Keynesian Stimulus Spending Fallacy

    It’s a truism of pop Keynesian economics that consumer spending drives the economy; if spending slows in a recession; government must make up the difference. In reality, consumer spending merely signals what consumers want; producers may be unable or unwilling to deliver. Government spending may compensate—or make matters worse—depending on the type of spending and…

  • Capturing the Multinational Dragons’ Gold

    As medieval dragons do, the dragon in the Beowulf epic sleeps on a pile of gold. With magic sword and shield, Beowulf kills the dragon and, mortally wounded, distributes the gold to his grateful people. Today’s multinational dragons sleep not on gold, but on hoards of cash. Meanwhile little firms—the true “job creators”—perish for want…

  • Pity the Poor Child Molester

    Imagine that you woke up one day and found, not that you had turned into a giant cockroach, but that you felt unacceptable sexual urges towards little girls or boys. What might you do?

  • Yves Smith on The Finance-led Counterrevolution and the Rush to Destroy the Safety Net

    We are in the midst of a finance-led counterrevolution. The long standing effort to roll back New Deal reforms has moved from triumph to triumph. The foundation was laid via increasingly effective public relations efforts to sell the Ayn Randian world view that granting individuals unfettered freedom of action would produce only virtuous outcomes, since…