I am at http://www.forbes.com/sites/richardgreen/2013/03/13/california-has-a-shortage-of-rental-housing/.
Why not worry about the deficit right now?
Because if I did my math right, Federal Government interest payments are at a long-term low relative to GDP. [Update, after looking more closely, I see that the source of the data--the US Treasury--includes state and local interest payments as well]. Consider the chart below:
Federal Government Interest Expense on Debt Outstanding Relative to GDP
The numerator is annualFederal Government interest payments, which come from here. I am pretty sure these numbers are in nominal dollars. The denominator comes from the BEA, and is in nominal dollars. Years are fiscal years.
Note that interest rates would have to double for us to be in the situation we were in the late 1980s, the end of the (ahem) Reagan Administration. Do we ultimately need a steady state in which debt to GDP doesn't rise? Absolutely. Just not tomorrow.
The numerator is annual
Note that interest rates would have to double for us to be in the situation we were in the late 1980s, the end of the (ahem) Reagan Administration. Do we ultimately need a steady state in which debt to GDP doesn't rise? Absolutely. Just not tomorrow.
The American People agree with George Orwell
This video presents what the American people consider to be the ideal wealth distribution. At 2:47, the narrator notes that under this ideal distribution, "the wealthiest folks are about 10 to 20 times better off than the poorest Americans."
George Orwell in Why I Write:
George Orwell in Why I Write:
2. Incomes. Limitation of incomes implies the fixing of a minimum wage, which implies a managed internal currency based simply on the amount of consumption goods available. And this again implies a stricter rationing scheme than is now in operation. It is no use at this stage of the world's history to suggest that all human beings should have exactly equal incomes. It has been shown over and over again that without some kind of money reward there is no incentive to undertake certain jobs. On the other hand the money reward need not be very large. In practice it is impossible that earnings should be limited quite as rigidly as I have suggested. There will always be anomalies and evasions. But there is no reason why ten to one should not be the maximum normal variation. And within those limits some sense of equality is possible. A man with Ј3 a week and a man with £1,500 a year can feel themselves fellow creatures, which the Duke of Westminster and the sleepers on the Embankment benches cannot.
Why is the luxury housing market recovering so well?
The fashionable thing to say is because of foreign money. I suspect the actual reason is that the one percent have gotten 122 percent of the recovery (h/t/ Tim Noah).
The demand curve for housing among the rich has shifted out.
The demand curve for housing among the rich has shifted out.
The future of efficient transportation
Might look like this:
I heard a lecture from Alain Bertaud on how networked, scheduled transportation is not a good solution for many people--even in poor parts of the world. And I can testify that auto rickshaws are often the best way to get around cities in India--they are quick, cheap, and when fueled by natural gas, environmentally not too bad (those with two stroke engines are a whole other matter).
One of the most provocative things I learned from Alain is that buses are often less fuel efficient than cars--for a bus system to work, they have to run at periods where demand is fairly low. As it happens, while sitting at dinner in downtown Los Angeles last night, we watched bus after bus on 6th Street go by nearly empty.
I heard a lecture from Alain Bertaud on how networked, scheduled transportation is not a good solution for many people--even in poor parts of the world. And I can testify that auto rickshaws are often the best way to get around cities in India--they are quick, cheap, and when fueled by natural gas, environmentally not too bad (those with two stroke engines are a whole other matter).
One of the most provocative things I learned from Alain is that buses are often less fuel efficient than cars--for a bus system to work, they have to run at periods where demand is fairly low. As it happens, while sitting at dinner in downtown Los Angeles last night, we watched bus after bus on 6th Street go by nearly empty.
Where's the monopsony?
President Obama, Paul Krugman and Robert Reich have all been pushing for an increase in the minimum wage. I want to agree with them, and Krugman is certainly correct that the preponderance of empirical evidence shows that the minimum wage's impact on total employment is negligible.
But the question is, why? Krugman's statement that human beings are not Manhattan apartments is true, and allows him to support the minimum wage while being appropriately skeptical of rent control, but it doesn't give a satisfactory answer as to why putting a floor on the price of labor would not create excess supply of labor.
There is in economic theory a set of circumstances, however, under which an increase in the minimum wage might raise employment. If an employer has a market largely to itself--if it has monopsony power--then it will both pay its workers less than their productivity warrants and not hire enough workers to be at the most efficient level of employment. Raising the minimum wage would then both increase pay and induce more workers into the labor market, hence increasing employment. If government could nail the minimum wage to the marginal revenue product of the least productive workers, the minimum wage could produce a first-best outcome--one where pay and employment levels were efficient.
For the argument to work, the demand for labor needn't be perfectly monopsonistic, but rather less than perfectly competitive. The fact that wages and labor productivity seem to have less and less to do with each other is evidence that the demand for labor is not competitive, but it would be nice to have further, detailed evidence of the industrial organization of labor demand.
But the question is, why? Krugman's statement that human beings are not Manhattan apartments is true, and allows him to support the minimum wage while being appropriately skeptical of rent control, but it doesn't give a satisfactory answer as to why putting a floor on the price of labor would not create excess supply of labor.
There is in economic theory a set of circumstances, however, under which an increase in the minimum wage might raise employment. If an employer has a market largely to itself--if it has monopsony power--then it will both pay its workers less than their productivity warrants and not hire enough workers to be at the most efficient level of employment. Raising the minimum wage would then both increase pay and induce more workers into the labor market, hence increasing employment. If government could nail the minimum wage to the marginal revenue product of the least productive workers, the minimum wage could produce a first-best outcome--one where pay and employment levels were efficient.
For the argument to work, the demand for labor needn't be perfectly monopsonistic, but rather less than perfectly competitive. The fact that wages and labor productivity seem to have less and less to do with each other is evidence that the demand for labor is not competitive, but it would be nice to have further, detailed evidence of the industrial organization of labor demand.
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