[Greece’s referendum on whether to accept the Troika‘s proposed financial “bailout” package] showed that with the unemployment rate at 25 percent (and youth unemployment rate at 50 percent) there is only so much economic pain a sovereign nation will accept in the name of “austerity” without trying to fight back, even when the consequences of the “path less taken” (no country has ever exited the eurozone) are unknowable.
Category Archives: Economics
June jobs report: “The opposite of a dark cloud with a silver lining”
I think Neil Irwin has things accurately sized up:
There is nothing in the June jobs numbers, released Thursday morning, that signals economic catastrophe. But the closer you look, the more reason there is to feel just a little glum.
The nation added 223,000 jobs last month, which is a perfectly good number. The unemployment rate fell to 5.3 percent, from 5.5 percent, the lowest since April 2008, when the Great Recession was a mere infant. If you look only at the big glaring headline numbers, in other words, these numbers are somewhere between good and great.
The disappointments come in the finer details. This report is the opposite of a dark cloud with a silver lining…
Greece
Last updated 7/6/2015.
Paul Krugman’s commentaries on Greece have been consistently sensible. From his latest, Ending Greece’s Bleeding:
Imagine, for a moment, that Greece had never adopted the euro, that it had merely fixed the value of the drachma in terms of euros. What would basic economic analysis say it should do now? The answer, overwhelmingly, would be that it should devalue — let the drachma’s value drop, both to encourage exports and to break out of the cycle of deflation.
Yup. It worked for Iceland in 2008-9. It might have worked for Greece too but, as they don’t control their own currency, going the devaluation route wasn’t an option for them.
It makes no sense to be locked in to a currency if you lack political authority to control it, e.g., to print more when the situation demands it, issue bonds when appropriate, etc. It makes no sense to agree to debt payment terms if there is no rational basis for believing they can be met. Given those things, “No.” was the right choice in Greece’s referendum today. Vote to reject the raw deal.
Joseph Stiglitz called out the anti-democratic nature of the “troika’s” demands the other day in Europe’s Attack on Greek Democracy.
In an interview on NPR Brown Univ. economist Mark Blyth calls bullshit on the suggestion that the Greeks have profligate spenders or are just lazy, The (Perceived) Tragedy of Greece.
(If you’re only going to read or listen to one piece, listen to Blyth.)
Read the text of the Trans-Pacific Partnership agreement!
Read the entire TPP agreement for yourself. The House is likely to vote this week on the “Fast Track” bill approved by the Senate. (If the Fast Track bill passes that sets things in motion for adopting the TPP.)
Thought for the Day: 11 June 2015
Talking about exports without considering imports is like keeping score in a baseball game by counting only the runs scored by the home team. It might make you feel good, but it won’t tell you who’s winning the game.
Sen. Warren is very unhappy with SEC Chair Mary Jo White
From the outset there was reason to believe that, as head of the Securities and Exchange Commission, Mary Jo White would not be an effective regulator. Lo and behold that’s how things are playing out. Ms. White has pissed off Sen. Warren. Sen. Warren sent her a letter the other day expressing her displeasure.
Thought for the Day: 2 June 2015
Two thoughts:
- I love Elizabeth Warren.
- In the segment above she reminds me of Lewis Black. Watch her hands. Like Black, those are the gestures of someone who’s genuinely angry. She’s not just angry though. She’s on a mission. (Re her mission, see Item #1.)
Thought for the Day: Every Day
Frequent locally-owned businesses.
Josh Bivens, More Notes on the Gains From Trade and Who Gets Them
From Josh Bivens’ post today on the EPI blog (emphasis mine):
… The overall net benefits of trade are much smaller than commonly advertised, but the regressive redistribution trade causes is considerable.
First, on the gains from trade policy (i.e., how much we should expect national income to rise if we sign trade agreements), [NYT reporter Binyamin] Appelbaum refers to a piece from the Peterson Institute of International Economics claiming that trade liberalization added 7.3 percent of GDP to American incomes by 2005—about $9000-10,000 per American household. This is just not true. It’s a wildly inflated number that should not be in the policy debate (and if you need much smarter and better-credentialed people making the some point—here’s Dani Rodrik). This number is an effort to bully people into going along with today’s trade agreements by making them think the stakes are utterly enormous. In fact, even if it was correct (again, it’s not) this study would be irrelevant to today’s trade policy debates because the sum total of economic gains from all post-1982 trade agreements (this includes NAFTA, the completion of the General Agreement on Tariffs and Trade, the formation of the WTO, and the permanent normal trading relations with China) is estimated to be just $9 per household, meaning that 99.9 percent of the gains from trade estimated in the study happened before 1982. So even if trade liberalization really did spur mammoth gains at some point in the (distant) past, the effects were over by the early 1980s.
Thought for the Day: 15 May 2015
Just how goddamn awful does the TPP have to be for Senator Warren to oppose it?