In his NYT mag piece, Paul Krugman blames macroeconomists for believing the world behaved as well as the math behind their models. His solution? To re-embrace Keynes. But in a provocative counterpoint on VoxEU, Scott Sumner says looking back to Keynes won't solve the problem.
A decade's worth of income gains for Americans has been wiped out. Two top-notch accounts from Bloomberg on the global effects of Lehman's collapse. The FT has one too. Alaska spends more per pupil than any other state. Up to 12% of the gender wage gap is due to men working more dangerous jobs. Is a 2% inflation target too low?
From the Journal's story on the declining fortunes of the wealthy (about which more later): "At law firms, billings ballooned earlier this decade, and law-firm salaries accounted for 1.5% of all U.S. salaries in 2007, twice the share in 1980, according to Economy.com." Actually, while part of that increase was surely the stuff of conservative legal nightmares, I'm guessing a big (bigger?) chunk was boom-related. Financial engineering requires legal work, lots of it.
This was the best speech I've heard Barack Obama give as president--possibly the best since January of 2008. Unlike his inaugural address, or even his convention speech, this one really soared and inspired by the end--a bit counterintuitively for a health care speech.
One interest rate spread that's still dysfunctional. Chart of the Day: What a collapse in consumer borrowing looks like. Is there a college graduation -- or preparation -- crisis? Swaps clearing becomes more centralized. What the globalization of monetary policy looks like. Only 13% of Wikipedia contributors are women.
If the real estate market during the Great Depression is any guide, then property-owning Manhattanites will be waiting a long time for home prices to get anywhere near their bubble-era levels. Tom Nicholas and Anna Scherbina have constructed an index of home prices in Manhattan between 1920 and 1939 which shows that -- unlike most other parts of the U.S. during the 30's -- home values in the burrough flat-lined, falling by 69 percent to reach a new low at the end of 1932 and hovers around that value until the end of the 1930s.
For anyone interested in debating where the economy and financial system stand a year after the Lehman collapse, TNR is hosting a conference on the subject this coming Monday, September 14, at the Willard Hotel in Washington. We've got a real murderer's row of speakers and panelists lined up--Rep. Barney Frank, Commodity Futures Trading Commission Chairman Gary Gensler, The Wall Street Journal's David Wessel, hedge fund manager (and TNR investor) Bill Ackman, former New York Gov. Eliot Spitzer, among them.
China takes key step in internationalising its currency. A look at China's statistical creativity. Chart of the Day: % of economists who like fiscal policy improves since March. Switzerland tops U.S. as most competitive economy. Oliver Stone on "Wall Street 2" and second chances. Tuition at some Ivy League schools tops $50,000.
Bloomberg's Eric Martin and Michael Tsang have a good story on the big difference between economists and stock market analysts over 2010's growth forecasts: Never before have Wall Street stock analysts diverged more with economists at their own firms over the outlook for earnings in the Standard & Poor’s 500 Index. Profits for companies in the S&P 500 will rise 25 percent next year, according to the average estimate of more than 1,500 equity analysts tracked by Bloomberg.
As we wade through a long line of international economic meetings--G20 ministers of finance last week, G20 heads of government in Pittsburgh coming up, IMF-World Bank governors meeting in Istanbul early October (and all the associated “deputies” meetings, where the real work goes on)--it seems fair to ask: Where is regulatory reform of our financial system heading? Long documents have been produced and official websites have become more organized. Statements of principle have been made. And the melodrama of rival reform proposals has reared its head: continental Europeans for controlling pay