Chrystia Freeland has a good piece in the NYT on the rise of plutocratic politics in the United States and elsewhere and the populist opposition it has provoked. The piece makes many interesting points but then towards the end strangely tells readers:
“Part of the problem is that no one has yet come up with a fully convincing answer to the question of how you harness the power of the technology revolution and globalization without hollowing out middle-class jobs.”
No, this is very far from true. There are very convincing answers to this question, it’s just the plutocrats block them from being put into practice.
Topping the list of course would be aggressive stimulus to bring the economy back to something resembling full employment. This not only would give tens of millions of people more income, it would make many bad jobs into decent jobs.
In a tight labor market employers will pay someone $15-$20 hours to work as a retail clerk at big box stores or fast food restaurants or as custodians. These jobs pay very low wages in the current economy because government policy acts to limit employment. If we didn’t have policy (fiscal and exchange rate policy) that reduced employment, then there would be more demand for labor and the wages in low-paid occupations would rise.
In terms of globalization, we have deliberately structured globalization so as to put downward pressure on the wages of low and middle wage earners. There is no reason, except for political power, that we could not have designed globalization to put downward pressure on the wages of the doctors and other highly paid professionals. This was a policy choice, it has nothing to do with the inherent dynamics of globalization.
Also, the high pay on Wall Street would be brought down to earth with the end of too big to fail subsidies. This policy reversal coupled with the imposition of financial speculation taxes or other taxes that would bring taxation in the financial industry in line with taxation in other industries (a policy even advocated by the IMF), would substantially reduce the take of Wall Street plutocrats.
And replacing government granted patent monopolies in the drug and high tech sectors with more efficient mechanisms of supporting innovation would also go a long way towards both reducing high end incomes and making essential medicines more affordable. These and other issues are discussed in The End of Loser Liberalism: Making Markets Progress, among other places.
Anyhow, it is bizarre that Freeland would end her piece by asserting the problem is a lack of answers. As she effectively documents, the plutocrats have managed to seize control over politics in the United States and elsewhere. There is no lack of good answers, the problem is that the plutocrats have power to stop them from being put into practice.
Chrystia Freeland has a good piece in the NYT on the rise of plutocratic politics in the United States and elsewhere and the populist opposition it has provoked. The piece makes many interesting points but then towards the end strangely tells readers:
“Part of the problem is that no one has yet come up with a fully convincing answer to the question of how you harness the power of the technology revolution and globalization without hollowing out middle-class jobs.”
No, this is very far from true. There are very convincing answers to this question, it’s just the plutocrats block them from being put into practice.
Topping the list of course would be aggressive stimulus to bring the economy back to something resembling full employment. This not only would give tens of millions of people more income, it would make many bad jobs into decent jobs.
In a tight labor market employers will pay someone $15-$20 hours to work as a retail clerk at big box stores or fast food restaurants or as custodians. These jobs pay very low wages in the current economy because government policy acts to limit employment. If we didn’t have policy (fiscal and exchange rate policy) that reduced employment, then there would be more demand for labor and the wages in low-paid occupations would rise.
In terms of globalization, we have deliberately structured globalization so as to put downward pressure on the wages of low and middle wage earners. There is no reason, except for political power, that we could not have designed globalization to put downward pressure on the wages of the doctors and other highly paid professionals. This was a policy choice, it has nothing to do with the inherent dynamics of globalization.
Also, the high pay on Wall Street would be brought down to earth with the end of too big to fail subsidies. This policy reversal coupled with the imposition of financial speculation taxes or other taxes that would bring taxation in the financial industry in line with taxation in other industries (a policy even advocated by the IMF), would substantially reduce the take of Wall Street plutocrats.
And replacing government granted patent monopolies in the drug and high tech sectors with more efficient mechanisms of supporting innovation would also go a long way towards both reducing high end incomes and making essential medicines more affordable. These and other issues are discussed in The End of Loser Liberalism: Making Markets Progress, among other places.
Anyhow, it is bizarre that Freeland would end her piece by asserting the problem is a lack of answers. As she effectively documents, the plutocrats have managed to seize control over politics in the United States and elsewhere. There is no lack of good answers, the problem is that the plutocrats have power to stop them from being put into practice.
Read More Leer más Join the discussion Participa en la discusión
Paul Krugman is wrongly beating up on the euro zone for its current account surplus, showing that it is now larger than China’s. The problem with the comparison is that China is an extremely fast growing developing country. This is the sort of place that in the good old days we expected to run trade deficits.
The euro zone on the other hand is a bloc of slow growing rich countries. We would expect them to be running trade surpluses. This does not negate the fact that the euro zone could and should be doing much more to stimulate its economy with larger budget deficits and more aggressive monetary policy, but that fact that it has a larger trade surplus with the rest of the world than China really doesn’t tell us much of anything.
Addendum:
I’m not gratuitously beating up on Krugman here, there is a real point. If a country is growing rapidly, like China, we would expect it would have a high return on capital. On the other hand, the return on capital is likely to be lower in the slow growing rich countries. This means that we should see a flow of capital from rich countries to developing countries. That would imply a trade surplus for the rich countries and a trade deficit for developing countries.
Another way to think about this is that the developing countries need to both build up their capital stocks at the same time that they continue to feed and house their people. By running trade deficits with rich countries, they can get the extra goods and services that allows them to do both simultaneously.
In reality, the capital flows from rich to poor countries have been at best uneven. This is a case where the real world has stubbornly resisted the textbook story. To my mind this is an indictment of the international financial system which has not generally accommodated this flow of capital from rich countries to poor countries. This is quite evident in the most recent reversal, which followed the botched bailout by the IMF-U.S. Treasury form the East Asian financial crisis in 1997.
But if we could somehow get things right and create a mechanism whereby excess capital in the EU and other rich countries helped finance investment in the developing world, that would be a good thing. This is why showing that the EU has a larger trade surplus than China does not necessarily mean that the EU is a bad actor in the world (although it is).
Further Note:
Reference to EU changed to euro zone — thanks folks.
Paul Krugman is wrongly beating up on the euro zone for its current account surplus, showing that it is now larger than China’s. The problem with the comparison is that China is an extremely fast growing developing country. This is the sort of place that in the good old days we expected to run trade deficits.
The euro zone on the other hand is a bloc of slow growing rich countries. We would expect them to be running trade surpluses. This does not negate the fact that the euro zone could and should be doing much more to stimulate its economy with larger budget deficits and more aggressive monetary policy, but that fact that it has a larger trade surplus with the rest of the world than China really doesn’t tell us much of anything.
Addendum:
I’m not gratuitously beating up on Krugman here, there is a real point. If a country is growing rapidly, like China, we would expect it would have a high return on capital. On the other hand, the return on capital is likely to be lower in the slow growing rich countries. This means that we should see a flow of capital from rich countries to developing countries. That would imply a trade surplus for the rich countries and a trade deficit for developing countries.
Another way to think about this is that the developing countries need to both build up their capital stocks at the same time that they continue to feed and house their people. By running trade deficits with rich countries, they can get the extra goods and services that allows them to do both simultaneously.
In reality, the capital flows from rich to poor countries have been at best uneven. This is a case where the real world has stubbornly resisted the textbook story. To my mind this is an indictment of the international financial system which has not generally accommodated this flow of capital from rich countries to poor countries. This is quite evident in the most recent reversal, which followed the botched bailout by the IMF-U.S. Treasury form the East Asian financial crisis in 1997.
But if we could somehow get things right and create a mechanism whereby excess capital in the EU and other rich countries helped finance investment in the developing world, that would be a good thing. This is why showing that the EU has a larger trade surplus than China does not necessarily mean that the EU is a bad actor in the world (although it is).
Further Note:
Reference to EU changed to euro zone — thanks folks.
Read More Leer más Join the discussion Participa en la discusión
The New York Times has committed itself to changing the way it writes large numbers so that they actually convey information to readers. A piece today on Germany’s economic policy shows the need for this change.
At one point the article referred to Germany’s infrastructure needs, telling readers:
“A recent study said that Germany would have to spend more than €100 billion, or about $135 billion, over the next 15 years just to repair its existing stock of roads, bridges and railways, which in populous areas of western Germany have been neglected for years.”
Okay, we can all appreciate the euro to dollar conversion, but how many NYT readers have any clue how large $135 billion over the next 15 years is to Germany’s economy? I suspect the number is well under 1 percent of the NYT’s highly educated readers.
It would have been a simple matter to tell readers that this is equal to about 0.25 percent of Germany’s projected GDP over this period or less than 0.5 percent of projected government spending. This would have been far more meaningful to the vast majority of the people reading the article.
The New York Times has committed itself to changing the way it writes large numbers so that they actually convey information to readers. A piece today on Germany’s economic policy shows the need for this change.
At one point the article referred to Germany’s infrastructure needs, telling readers:
“A recent study said that Germany would have to spend more than €100 billion, or about $135 billion, over the next 15 years just to repair its existing stock of roads, bridges and railways, which in populous areas of western Germany have been neglected for years.”
Okay, we can all appreciate the euro to dollar conversion, but how many NYT readers have any clue how large $135 billion over the next 15 years is to Germany’s economy? I suspect the number is well under 1 percent of the NYT’s highly educated readers.
It would have been a simple matter to tell readers that this is equal to about 0.25 percent of Germany’s projected GDP over this period or less than 0.5 percent of projected government spending. This would have been far more meaningful to the vast majority of the people reading the article.
Read More Leer más Join the discussion Participa en la discusión
Most people have no clue how much the government will spend this year and even less idea of how much money it will spend over the next decade. That is true even of the highly educated people who listen to National Public Radio. That is why it is just awful reporting on NPR’s part when it tells listeners about a $5 billion cut to food stamps this year or a Republican proposal to cut benefits by $40 billion over the next decade.
This provides no information whatsoever to the overwhelming majority of NPR’s listeners. On the other hand, it would be informative to tell listeners about a cut to food stamps equal to 0.14 percent of the budget this year and the Republican proposal to cut benefits by an amount equal to 0.09 percent of projected spending over the next decade. (Both numbers immediately available through use of CEPR’s extraordinary Responsible Budget Calculator.)
The key point that many NPR listeners likely missed is that these cuts could be a big deal for food stamp beneficiaries, but they are trivial in terms of total federal spending. Many NPR listeners may wrongly been led to believe that the decision on these cuts will have a substantial impact on the budget and the deficit.
Unlike NPR, the New York Times recognizes this problem and has committed itself to present big numbers in a way that are understandable to its audience. Maybe one day NPR will begin to take news reporting seriously.
Most people have no clue how much the government will spend this year and even less idea of how much money it will spend over the next decade. That is true even of the highly educated people who listen to National Public Radio. That is why it is just awful reporting on NPR’s part when it tells listeners about a $5 billion cut to food stamps this year or a Republican proposal to cut benefits by $40 billion over the next decade.
This provides no information whatsoever to the overwhelming majority of NPR’s listeners. On the other hand, it would be informative to tell listeners about a cut to food stamps equal to 0.14 percent of the budget this year and the Republican proposal to cut benefits by an amount equal to 0.09 percent of projected spending over the next decade. (Both numbers immediately available through use of CEPR’s extraordinary Responsible Budget Calculator.)
The key point that many NPR listeners likely missed is that these cuts could be a big deal for food stamp beneficiaries, but they are trivial in terms of total federal spending. Many NPR listeners may wrongly been led to believe that the decision on these cuts will have a substantial impact on the budget and the deficit.
Unlike NPR, the New York Times recognizes this problem and has committed itself to present big numbers in a way that are understandable to its audience. Maybe one day NPR will begin to take news reporting seriously.
Read More Leer más Join the discussion Participa en la discusión
Glenn Kessler, the Washington Post’s fact checker, gave President Obama four Pinocchios for telling people that under the Affordable Care Act (ACA) they would be able to keep their insurance plan, if they liked it. Kessler points out that many plans are being terminated because they do not comply with the minimum standards laid out by the ACA. The people on these plans are not able to keep their insurance.
Kessler notes that the plans in existence as of the time the ACA was passed would be grand-fathered, which would mean that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA. The plans being terminated because they don’t meet the minimal standards were all plans that insurers introduced after the passage of the ACA, knowing that they would not meet the standards that would be put into law in 2014.
However Kessler points out that the ACA sharply restricts the ability of insurers to alter the grandfathered plans and still maintain their status. For example, they can only raise their premiums or deductibles by a small amount above the rate of medical inflation.
Kessler interprets this as a narrow restriction that would cause many plans to lose their grandfathered status. However, the price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.
Whether such a decision can be blamed on the ACA and interpreted as a violation of President Obama’s pledge depends on how people think about the commitment. Insurers change and drop their plans all the time. (As the co-director of a small business, I can give personal testimony on that one.) If people thought that Obama’s pledge meant that he would freeze the insurance market — in effect have the government take over the industry and prohibit any changes to existing policies — then Kessler is absolutely right, Obama broke the pledge. Under the ACA insurers still can change and eliminate plans.
However, if people interpreted the pledge as meaning that the ACA would not directly eliminate the insurance plans that people had at the time, then Obama was being honest. The ACA did not end plans that were in effect at the time the plan was being passed.
Glenn Kessler, the Washington Post’s fact checker, gave President Obama four Pinocchios for telling people that under the Affordable Care Act (ACA) they would be able to keep their insurance plan, if they liked it. Kessler points out that many plans are being terminated because they do not comply with the minimum standards laid out by the ACA. The people on these plans are not able to keep their insurance.
Kessler notes that the plans in existence as of the time the ACA was passed would be grand-fathered, which would mean that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA. The plans being terminated because they don’t meet the minimal standards were all plans that insurers introduced after the passage of the ACA, knowing that they would not meet the standards that would be put into law in 2014.
However Kessler points out that the ACA sharply restricts the ability of insurers to alter the grandfathered plans and still maintain their status. For example, they can only raise their premiums or deductibles by a small amount above the rate of medical inflation.
Kessler interprets this as a narrow restriction that would cause many plans to lose their grandfathered status. However, the price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.
Whether such a decision can be blamed on the ACA and interpreted as a violation of President Obama’s pledge depends on how people think about the commitment. Insurers change and drop their plans all the time. (As the co-director of a small business, I can give personal testimony on that one.) If people thought that Obama’s pledge meant that he would freeze the insurance market — in effect have the government take over the industry and prohibit any changes to existing policies — then Kessler is absolutely right, Obama broke the pledge. Under the ACA insurers still can change and eliminate plans.
However, if people interpreted the pledge as meaning that the ACA would not directly eliminate the insurance plans that people had at the time, then Obama was being honest. The ACA did not end plans that were in effect at the time the plan was being passed.
Read More Leer más Join the discussion Participa en la discusión
That is what the NYT told readers in its budget piece today. Apparently because people who matter in Washington have little concern about large numbers of unemployed and underemployed people, as well as the upward redistribution of income, the NYT said that members negotiating over the budget feel no need to create jobs and boost economic growth. While business groups and their allies at major news outlets like the Washington Post and National Public Radio are placing enormous pressure on members of Congress to cut Social Security and Medicare, there are no important lobbies to push for policies to restore full employment and normal wage growth.
As a result, this piece presented no views from an economic perspective, which would have pointed out that the drive to reduce the budget deficit is a drive to slow the economy, increase unemployment, and lower wages. There is no plausible story whereby private sector demand will replace demand from the government in the current economy. This means that if the government cuts spending by $100 billion, then we will see roughly $100 billion less in demand. Since much of this money would have been respent (workers spend their wages), this implies a reduction in GDP of around $150 billion, a bit less than 1 percent. The job loss associated with this cut would be around 1.3 million.
It would have been useful to include some discussion from an economic perspective so NYT readers would realize that both parties are debating proposals to slow the economy and throw people out of work.
That is what the NYT told readers in its budget piece today. Apparently because people who matter in Washington have little concern about large numbers of unemployed and underemployed people, as well as the upward redistribution of income, the NYT said that members negotiating over the budget feel no need to create jobs and boost economic growth. While business groups and their allies at major news outlets like the Washington Post and National Public Radio are placing enormous pressure on members of Congress to cut Social Security and Medicare, there are no important lobbies to push for policies to restore full employment and normal wage growth.
As a result, this piece presented no views from an economic perspective, which would have pointed out that the drive to reduce the budget deficit is a drive to slow the economy, increase unemployment, and lower wages. There is no plausible story whereby private sector demand will replace demand from the government in the current economy. This means that if the government cuts spending by $100 billion, then we will see roughly $100 billion less in demand. Since much of this money would have been respent (workers spend their wages), this implies a reduction in GDP of around $150 billion, a bit less than 1 percent. The job loss associated with this cut would be around 1.3 million.
It would have been useful to include some discussion from an economic perspective so NYT readers would realize that both parties are debating proposals to slow the economy and throw people out of work.
Read More Leer más Join the discussion Participa en la discusión
Eduardo Porter does a nice job laying out the case explaining how the budget cutters have slowed growth and thrown people out of work (and they are proud).
Eduardo Porter does a nice job laying out the case explaining how the budget cutters have slowed growth and thrown people out of work (and they are proud).
Read More Leer más Join the discussion Participa en la discusión
In an article about congressional negotiations aimed at reducing the deficit and eliminating jobs, the Washington Post explained that there had been a sharp drop in the size of the deficit since the Republicans took over Congress in 2011:
“Since then [January, 2011], a series of budget deals — and an improving economy — have dramatically slowed federal borrowing. On Wednesday, the White House budget office announced that the government recorded a $680 billion deficit in the fiscal year that ended in September, less than half the size of the shortfall President Obama inherited in 2009 when measured as a percentage of the economy.”
Actually, the sharp drop in the deficit cannot be explained by economic growth over the last three years. In January of 2011, the Congressional Budget Office projected year over year growth for 2011, 2012, and 2013 of 2.7 percent, 3.1 percent, and 3.1 percent, respectively. In fact growth was 1.8 percent in 2011, and 2.8 percent in 2012. We don’t yet have full year data for 2013, but GDP growth is virtually certain to be under 2.0 percent.
Since the economy has grown considerably slower than was predicted, growth cannot explain the lower than projected deficits. The explanation instead is the cuts made to the budget, as well as the ending of the Bush tax cuts for high income households. The upward redistribution of income, along with the sharp rise in the stock market, has also increased revenue.
This impact shows up not just as additional capital gains taxes, but also as a result of capital gains income being recorded as normal income. This happens every time there is a sharp increase in asset values. Growth in national income has exceeded growth in output by almost 1.5 percentage points since 2010, which is the sort of gap that would be expected given the sharp rise in the stock market over this period.
In an article about congressional negotiations aimed at reducing the deficit and eliminating jobs, the Washington Post explained that there had been a sharp drop in the size of the deficit since the Republicans took over Congress in 2011:
“Since then [January, 2011], a series of budget deals — and an improving economy — have dramatically slowed federal borrowing. On Wednesday, the White House budget office announced that the government recorded a $680 billion deficit in the fiscal year that ended in September, less than half the size of the shortfall President Obama inherited in 2009 when measured as a percentage of the economy.”
Actually, the sharp drop in the deficit cannot be explained by economic growth over the last three years. In January of 2011, the Congressional Budget Office projected year over year growth for 2011, 2012, and 2013 of 2.7 percent, 3.1 percent, and 3.1 percent, respectively. In fact growth was 1.8 percent in 2011, and 2.8 percent in 2012. We don’t yet have full year data for 2013, but GDP growth is virtually certain to be under 2.0 percent.
Since the economy has grown considerably slower than was predicted, growth cannot explain the lower than projected deficits. The explanation instead is the cuts made to the budget, as well as the ending of the Bush tax cuts for high income households. The upward redistribution of income, along with the sharp rise in the stock market, has also increased revenue.
This impact shows up not just as additional capital gains taxes, but also as a result of capital gains income being recorded as normal income. This happens every time there is a sharp increase in asset values. Growth in national income has exceeded growth in output by almost 1.5 percentage points since 2010, which is the sort of gap that would be expected given the sharp rise in the stock market over this period.
Read More Leer más Join the discussion Participa en la discusión
It’s always fun to follow the Washington Post columnist on his expedition in economic confusion as he mangles one topic after another. Today we go with Samuelson to visit the claim that the Affordable Care Act (ACA) is a job killer.
Samuelson notes the evidence produced by the White House showing that there has been no rise in part-time employment as a result of the ACA. (CEPR produced a study confirming this claim. The share of workers putting in less than 30 hours a week was lower in the first half of 2013 than in 2012.) However he then turns to a study from the San Francisco Federal Reserve bank, which he says “fortifies my convictions:”
“It’s usually cited in the ACA’s favor, concluding that the law won’t erode full-time work much. The increase in part-time jobs “is likely to be small, on the order of a 1 to 2 percentage [points] or less.” But that few percentage points amounts to between 1.4 million and 2.8 million more part-time jobs. Not trivial.”
In fact, the study does not conclude that the ACA will increase part-time employment, rather it refers to another study that found this impact. That sudy examined the impact of an employer mandate in Hawaii. It found zero impact after the law had been in effect for more than a decade. The 1-2 percentage point increase in part-time employment was only evident more than 20 years after the employer mandate went into effect.
It’s also worth noting that the vast majority of part-time workers are employed part-time voluntarily. Even now more than two-thirds of part-time workers only want part-time employment. In more normal times this figure is over 80 percent. It is entirely possible that any rise in part-time employment over the next two decades as a result of the ACA will be filled mostly by workers who want to work part-time. This is especially likely to be true if part-time workers are able to get health care insurance as a result of the ACA.
It’s always fun to follow the Washington Post columnist on his expedition in economic confusion as he mangles one topic after another. Today we go with Samuelson to visit the claim that the Affordable Care Act (ACA) is a job killer.
Samuelson notes the evidence produced by the White House showing that there has been no rise in part-time employment as a result of the ACA. (CEPR produced a study confirming this claim. The share of workers putting in less than 30 hours a week was lower in the first half of 2013 than in 2012.) However he then turns to a study from the San Francisco Federal Reserve bank, which he says “fortifies my convictions:”
“It’s usually cited in the ACA’s favor, concluding that the law won’t erode full-time work much. The increase in part-time jobs “is likely to be small, on the order of a 1 to 2 percentage [points] or less.” But that few percentage points amounts to between 1.4 million and 2.8 million more part-time jobs. Not trivial.”
In fact, the study does not conclude that the ACA will increase part-time employment, rather it refers to another study that found this impact. That sudy examined the impact of an employer mandate in Hawaii. It found zero impact after the law had been in effect for more than a decade. The 1-2 percentage point increase in part-time employment was only evident more than 20 years after the employer mandate went into effect.
It’s also worth noting that the vast majority of part-time workers are employed part-time voluntarily. Even now more than two-thirds of part-time workers only want part-time employment. In more normal times this figure is over 80 percent. It is entirely possible that any rise in part-time employment over the next two decades as a result of the ACA will be filled mostly by workers who want to work part-time. This is especially likely to be true if part-time workers are able to get health care insurance as a result of the ACA.
Read More Leer más Join the discussion Participa en la discusión
I try not to use BTP to carry on personal exchanges, but I can’t resist this one. I see that Nick Gwiazda takes issue with me in the International Business Times arguing that Alan Greenspan does not owe the United States and the world an apology for allowing the housing bubble to grow large enough that its collapse would destroy the economy.
Apparently, Mr. Gwiazda thinks that I am Monday morning quarterbacking on this one. That is 180 degrees at odds with reality. I was warning about the bubble from the summer of 2002 and yelling at the top of my lungs. I was also telling Alan Greenspan what he should do about it. Here’s a brief summary from a few weeks back.
The point here is that Greenspan had no excuse. It was easy to see the bubble for anyone with open eyes and easy to see that its inevitable collapse would be a disaster for the economy.
As an economist I think that we have to reward workers when they do their jobs well and sanction them when they perform poorly. Few workers have ever performed their job more poorly than Alan Greenspan. He indeed owes us a big apology and should stop wasting our time by trying to tell us that the dog ate his homework.
I try not to use BTP to carry on personal exchanges, but I can’t resist this one. I see that Nick Gwiazda takes issue with me in the International Business Times arguing that Alan Greenspan does not owe the United States and the world an apology for allowing the housing bubble to grow large enough that its collapse would destroy the economy.
Apparently, Mr. Gwiazda thinks that I am Monday morning quarterbacking on this one. That is 180 degrees at odds with reality. I was warning about the bubble from the summer of 2002 and yelling at the top of my lungs. I was also telling Alan Greenspan what he should do about it. Here’s a brief summary from a few weeks back.
The point here is that Greenspan had no excuse. It was easy to see the bubble for anyone with open eyes and easy to see that its inevitable collapse would be a disaster for the economy.
As an economist I think that we have to reward workers when they do their jobs well and sanction them when they perform poorly. Few workers have ever performed their job more poorly than Alan Greenspan. He indeed owes us a big apology and should stop wasting our time by trying to tell us that the dog ate his homework.
Read More Leer más Join the discussion Participa en la discusión
