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  • Krugman Is Wrong On Inequality  [View article]
    My simple points are: 1. that average productivity gains don't (and shouldn't necessarily) translate into a movement in median income because the average gains could come from a small number of people or (as greenriver points out below) from capital. 2. I can't think of any macro event that would have caused the sudden and sustained change in the historic relationship shown in your first chart.

    You also overstate your case saying that most people haven't shared in the spoils of productivity growth. In fact, they have, because prices of many consumer goods have fallen over time and/or the quality is vastly improved. Income isn't the only transmission mechanism for productivity gains. It may not even be the main one.

    I'm not challenging that income inequality has widened.
    Feb 6, 2013. 08:53 AM | 1 Like Like |Link to Comment
  • Krugman Is Wrong On Inequality  [View article]
    Well aren't you measuring productivity in the average also? Are you comparing average productivity to median income? If the productivity growth was not broad based then you are comparing apples and oranges. Let's say the premium to high skilled knowledge workers grew very fast, raising average productivity - why would we expect that to affect the 'median' worker wage? OR if the new productivity came because of higher capital productivity or more capital inputs, then should we expect wages to have kept pace? Does your graph keep capital and other factor inputs constant?

    There have also been large additions to US labor supply during that period, which intensified competition. Those would have suppressed wage growth.

    The benefits point was not my claim, it was Martin Feldstein's. And it may not explain the whole gap. But he's a credible economist and he points out a flaw in the EPI methodology. (Someone more cynical than I might assume they had a conclusion in mind before they ran the data.) The sudden and sharp kink in the topmost graph still looks fishy to me. I would check the data before drawing any conclusions.
    Feb 5, 2013. 10:35 PM | Likes Like |Link to Comment
  • Krugman Is Wrong On Inequality  [View article]
    Let's start by using the right facts, shall we? The first graph shows a dramatic kink beginning in 1970-72. Was there anything that happened that could change the relationship between incomes and profits that dramatically that hadn't happened before or after? The graph is suspect. One small example: benefits are a much greater share today than they were before. When those costs are factored in, as suggested by Martin Feldstein, the gap disappears and so does the mysterious kink. See Feldstein/BLS data:

    The timing of that kink isn't confirmed by anything going on in EITHER of the other two graphs presented. My conclusion is the first chart, used by liberal thinktank EPI, to shock people, is not trustworthy.

    There is widening inequality in EVERY OECD country over the past 20 years. The second-largest widening happened in Sweden. Go figure.
    Feb 5, 2013. 04:23 PM | 2 Likes Like |Link to Comment
  • Job Creation Under President Obama  [View article]
    If presidents were able to legislate recovery, we'd never have a recession. Tying cycles to presidents is downright silly. Clinton inherited his recovery and isn't to blame for the tech crash. Bush didn't create the financial crisis nor the job gains that preceded it, Obama didn't create the recovery. People obsessed by politics are trying to make these guys more important than they really are.
    Feb 2, 2013. 12:55 PM | Likes Like |Link to Comment
  • Chesapeake's (CHK +6.4%) Archie Dunham says "the company is not for sale," but getting McClendon out removes a big obstacle in the way of a hostile takeover. CHK would make a juicy target for Asian state-controlled oil firms, Bernstein's Neil Beveridge writes; E&Ps with shale acreage or deepwater discoveries but lacking capital to develop the assets are exactly what they're looking for, given their access to low cost financing.  [View news story]
    Under 35'ers will be fine if they can produce and compete with anyone else in the world. And, yes, education is too expensive. I hope the online education phenomenon brings more education to more people at lower cost.

    But this has nothing to do with Cheasapeake Energy...
    Jan 30, 2013. 11:56 AM | Likes Like |Link to Comment
  • How Have Analysts Performed?  [View article]
    @newalker, No, sometimes the market just rewards poorer quality stocks. "Risk-on" behavior. The stock of a nearly defunct, over-levered company who somehow gets a covenant waiver will rally, sometimes quite a lot.
    Dec 7, 2012. 01:05 PM | Likes Like |Link to Comment
  • Has Paul Krugman Gone Too Far This Time?  [View article]
    Yes, massive assault... that's why we have the highest share of government spending (% of GDP) that we've ever had. (sarcasm) And, no, it isn't defense.
    Nov 15, 2012. 08:51 AM | 3 Likes Like |Link to Comment
  • Has Paul Krugman Gone Too Far This Time?  [View article]
    Factually incorrect. The top 10% pay the highest share of total tax they've ever paid after Bush dropped many middle class people from the tax rolls. I think you're trying to make an argument based on marginal tax rates - but check at what income levels they kicked in and what deductions were allowed back then. Total tax revenue is just a wee bit higher (% of GDP) back then than it is now and that's due to the recession. Yet the top x% pay a much higher share.
    Nov 15, 2012. 08:48 AM | 5 Likes Like |Link to Comment
  • Has Paul Krugman Gone Too Far This Time?  [View article]
    Really? I thought the collapse of the Soviet Union, the impoverishment of previously middle class Cuba, the mass starvation in China, North Korea and the Soviet Union were the greatest economic collapses.

    PS, there is not one socialist country in your list. They are all capitalist economies that support larger welfare states.
    Nov 15, 2012. 08:42 AM | 3 Likes Like |Link to Comment
  • Has Paul Krugman Gone Too Far This Time?  [View article]
    Nor the Democrats who refuse to recognize that spending leapt from the mid $2 trillion level to the mid $3 trillion level in the space of 2 years. Why talk tax at all until that artificial spending bubble is popped? There's nearly a trillion right there (even accounting for some inflation).

    We shouldn't ask anyone to pay any more until the government gets its house in order. Does anything think that every dollar of that $3.6 trillion is necessary and being spent efficiently??
    Nov 14, 2012. 06:04 PM | 2 Likes Like |Link to Comment
  • Effects Of Obamacare On Employment  [View article]
    Better? False. Look at this paper. Especially Myth #4.

    I'm sure that if you were to survey economic systems with the greatest government controls, you'd find the lowest conditions of common good. This debate has been had, the systems were tested for nearly a century and the conclusions are obvious except to those who will not see.
    Nov 13, 2012. 01:11 PM | 1 Like Like |Link to Comment
  • Effects Of Obamacare On Employment  [View article]
    Or we could just take all passports and not allow anyone to leave. Then you could force everyone to work. And set the wages, too. Problem solved, right?
    Nov 13, 2012. 11:37 AM | 2 Likes Like |Link to Comment
  • Effects Of Obamacare On Employment  [View article]
    Wasn't this the socialist argument for nationalizing everything? Eliminate all competition and the single remaining company will be free to be much more efficient. It has been tried this century all across Eastern Europe, Asia and parts of Latin America and Africa. It doesn't work.

    My answer to cross: if they are parasites, then don't buy insurance. You want their product, you just don't want to pay for it. Why is it any of the government's business how private companies price their products?
    Nov 11, 2012. 10:53 PM | 4 Likes Like |Link to Comment
  • The Electoral Politics Of The Jobs Report  [View article]
    It is a little sad to see that the timing of recessions is so easily exploited in presidential politics. As you mention, how many of those jobs were the result of policies, we'll never know, but it is probably close to zero. Obama wants to take credit only from the bottom of employment and attribute all the losses to his predecessor. By that same standard, all of Clinton's jobs are a credit to George HW Bush, since the recovery started before Clinton took office. And GWB was handed a recession when the tech bubble popped, too. Should those losses go to Clinton? Let's not be too cute about this stuff. It cheapens the discussion. (What is telling, to me, is that some people are cheering that $800bn stimulus created 5mn jobs - a cost of $160K/job. Even if you think the stimulus was the ONLY thing that created a job, clearly not true, it's immensely wasteful.)
    Oct 8, 2012. 09:45 AM | 3 Likes Like |Link to Comment
  • Monday Market Madness: What's This Greece Thing?  [View article]
    I believe Obama started work in 2009, not in late 2010. The chart is wrong.
    Sep 6, 2012. 08:17 PM | Likes Like |Link to Comment