Tag: Economics

Contributor Post Created with Sketch. Wealth As a Means to an End—Amity Shlaes

 

These days, even conservatives think class warfare works. That’s the takeaway from a spate of conferences on the topic of wealth distribution that have been taking place across the country lately. It’s also the takeaway from Mary Kissel’s excellent recent video interview with Charles Murray for the Wall Street Journal. In the video, Murray cautions that class warriors succeeded in part because the American “upper class has given them a wide open target.” Murray continues with a warning about display of wealth: “it’s an American tradition that you don’t get too big for your britches once you get rich.”

Sort of. Conspicuous modesty is not an American tradition. It’s a Protestant tradition. That wealthy Americans tend to become Protestant once they are wealthy is a second tradition. Here Murray is remembering history selectively.

More

Contributor Post Created with Sketch. How to Respond to Thomas Piketty’s Inequality Alarmism — James Pethokoukis

 

030514inequality1-600x451As with physicist Stephen Hawking’s A Brief History of Time, economist Thomas Piketty’s 700-page Capital in the Twenty-First Century is a bestseller destined to have a steep purchased-to-read ratio. For many on the left, it will be enough to simply know that Piketty’s grand theory of capitalism affirms their preexisting worldview: capitalism drives inequality ever-higher, superrich CEOs don’t deserve their fat paychecks, massive taxes on income and wealth are necessary to avoid an inegalitarian death spiral. For many on the right, it will be enough to simply know that Piketty is a French inequality researcher who teaches at the Paris School of Economics. Let the eye-rolling commence.

But Piketty is a first-rate scholar whose magnum opus is well worth reading, whatever your ideological inclination. His thesis is straightforward. At its center are observations and forecasts about the return on capital, economic growth, and the relationship between the two. Some economists, such as Paul Krugman and Martin Wolf, think Piketty’s probably got the story right. Others, including AEI’s Kevin Hassett, Tyler Cowen, and Joshua Hendrickson, take the other side of the trade.

More

Member Post

 

Apparently, the “working poor” is exemplified by a 36-year-old white male with a bachelors in economics and a masters in education … who can afford to vacation in Paris, apparently: So, why can’t this guy “make ends meet”? Take a wild guess who he blames: More

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Get your first month free.

Member Post

 

Over the weekend, lefties on my Twitter feed offered smirking links to a report that Canada’s middle class has surpassed that in the U.S. I was genuinely confused. What point did they think they were making? What polemical advantage did they think the news gave them? I know, I know: they feel vindicated because this […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Get your first month free.

Contributor Post Created with Sketch. New Yorkers Fail Economics — Rob Long

 

It sometimes seems like the New York Times does a piece about rising real estate prices hourly. The components are almost always the same: rising prices, high demand, tight availability. (The NYT tends to see these things as distinct from each other, rather than interconnected.)

Usually, they’ll pick a “typical” New Yorker — read: a friend of a friend of the reporter — as a peg on which to hook the piece. 

More

Contributor Post Created with Sketch. A Response to Charles Murray —Majestyk

 

I want to start this post out by trying to establish my bona fides regarding the subject that I am about to talk about. I have seen a reasonably broad swath of socioeconomic status in my life. My parents started out as fairly typical, middle-class people. My mother’s family (from rural Green Bay, Wisconsin) were almost uniformly blue-collar (my grandfather failed to finish high school) while my father’s family (mostly college-educated) were landowners and timber barons in Idaho … but they ultimately lost it all.

Thus I certainly didn’t come from money, despite the fact that improvements in my father’s employment allowed him to purchase many nicer things for my younger sister than I had when I was her age. This is the nature of things. There was a little bit of Fishtown and a little bit of Belmont in my upbringing. But there was never a hint of the negative stereotypes of Fishtown.

More

Contributor Post Created with Sketch. Why 2 Percent Inflation? Why Not Zero? — King Banaian

 

As Jim notes, inflation figures have come out and, depending on which data you use, you might say inflation was 1.5%, 1.7% or something in between. We are told that this is below the Fed’s target of 2%.

Question: Why is a central bank that is told to maintain price stability choosing 2% as its goal? Why wouldn’t price stability mean stable prices, or zero inflation?

More

Contributor Post Created with Sketch. How to Think About Inflation and Deflation — James Pethokoukis

 

041514inflation-600x400The March consumer inflation numbers showed prices rising faster than expected and up from last month. In the 12 months through March, consumer prices increased 1.5% versus 1.1% in February. The core CPI, which strips out the volatile energy and food bits, rose 1.7% versus 1.6% in February.

Analysis from IHS Global Insight:

More

Promoted from the Ricochet Member Feed by Editors Created with Sketch. The Millennial Predicament — Maura Pennington

 

Some may say our nation’s youth are entitled, but when it comes to millennials and state entitlement programs there’s another worry: what will happen when benefits can’t be paid out?

I spoke with Bloomberg analyst Neil Grossman about his recent study on Generation Y and the lopsided nature of Social Security, Medicare, and Medicaid. Here is part of our conversation for Forbes.com:

More

Contributor Post Created with Sketch. The Dangers of the “Equal Pay” Canard

 

In the newest installment of my weekly column for the Hoover Institution’s Defining Ideas, I take issue with the White House’s relentless insistence that there is a crisis in America of institutionalized employment discrimination against women, a claim that can’t stand up to even basic scrutiny:

Labor markets are intensely competitive, so the claim about systematic pay gaps has to assume both that women managers are hostile to women’s economic welfare, and that competitive markets are massively inefficient in matching people with positions. Competition for labor tends to lead to efficient outcomes. Indeed, by the standard account, price discrimination cannot survive in competitive markets, which means that the differentials in wages track differences in performance. Put simply, one danger of the Equal Pay Act is that it could mandate equal wages for unequal work, i.e. for two workers with different productivity.

More

Contributor Post Created with Sketch. Do Liberals Really Think An 80% Tax Rate Wouldn’t Hurt the U.S. Economy? — James Pethokoukis

 

Federal income taxes went up last year, a financial reality becoming ever clearer to many higher-earning Americans as tax day looms. But how much higher can Washington clip wealthier Americans before rising tax rates really weigh on US economic growth?

041414taxesQuite a bit, some would argue. Despite those tax hikes, the American economy actually grew faster in 2013 than in 2012. Real GDP — measured fourth quarter over fourth quarter — accelerated to 2.6% from 2.0%. Another point: while the current top tax rate of 39.6% is the highest since the 1990s, the economy has done just fine with top rates double that level. Real GDP grew by 3.6% annually in the 1950s even with a 91% top rate. Going forward, progressive economist and inequality researcher Thomas Piketty recommends a top rate of 80% in his new book Capital in the Twenty-First Century, a work much praised on the left. Clearly, then, tax rates could go a lot higher both to reduce income inequality and raise more dough for government spending programs, right?

More

Member Post

 

Alternate-Side Parking is a semi-regular, once or twice a week, podcast. Each episode lasts approximately as long as it takes for me to find a new alternate-side parking space in my neighborhood in Brooklyn, New York, plus however long I feel like sitting in the driver’s seat. In today’s special Sunday going-to-Pep-Boys-oops-it’s-closed-I-guess-I’ll-go-to-Autozone episode I talk […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Get your first month free.

Contributor Post Created with Sketch. How Much Do You Really Know About the “Paycheck Fairness Act”?

 

This week, the Senate has been considering legislation dubbed “The Paycheck Fairness Act.” Proponents argue that it will help women and advance equal pay, but few give any details about how it would accomplish this or explain what the bill actually does. That’s probably because the bill’s actual provisions have little to do with helping women, but much more to do with lining the pockets of lawyers. Indeed, women overall — and certainly those who own small businesses — would probably be more harmed than helped by this law.

Test your knowledge of what’s really in “The Paycheck Fairness Act” by taking this short quiz created by the Independent Women’s Forum. Encourage your friends to do the same. As is often the case, the rhetoric surrounding this bill is very different than its actual substance.

More

Contributor Post Created with Sketch. Wall Street Should Stop Complaining About New Bank Capital Rules

 

Wall Street is kvetching up a storm over modest toughening of megabank capital requirements by federal regulators. “This rule puts American financial institutions at a clear disadvantage against overseas competitors,” Tim Pawlenty, chief executive of The Financial Services Roundtable and former GOP presidential candidate, told Reuters.

The new rule increases the required leverage ratio – the amount of equity capital a bank holds as a share of assets — to 5% versus the 3% ratio in the international Basel III agreement. Under the new rule, megabanks could borrow only 95% of money they lend versus 97% under Basel. By 2018, they would have to rely more on selling stock or retained earnings.

More

Contributor Post Created with Sketch. Are You a Yummy?

 

Just when we thought it was safe, marketers have come up with another repellent target market. From the London Evening Standard:

Meet the new saviour of the global economy. He has made a ton of cash from the emerging markets and he is not ashamed to spend it… on himself. He spends an inordinate amount of time browsing Mr Porter and Matches.com on his iPad. He never leaves the house without being Instagram-ready in JW Anderson, McQ and Louboutin footwear. He keeps his eyebrows well plucked, his nails well polished and he is most likely on a juice cleanse.

More

Contributor Post Created with Sketch. The Fictitious Holiday Based on a Faux Statistic — Sabrina Schaeffer

 

PFA_graphicTuesday, April 8th, marks “Equal Pay Day,” the fictitious “holiday” liberal women’s groups have manufactured to expose the so-called “wage gap.”

No doubt you’ve heard that women only make 77 cents for every dollar a man makes. The faux statistic is repeated so often it may as well be part of the morning weather report. Of course, unlike the weather report, which is only sometimes wrong, the wage gap statistic is always wrong.

More

Promoted from the Ricochet Member Feed by Editors Created with Sketch. The Wisdom of Crowds (Intelligence Analysis Division)

 

This should impress everyone, and surprise no one:

The morning I met Elaine Rich, she was sitting at the kitchen table of her small town home in suburban Maryland trying to estimate refugee flows in Syria.

More

Contributor Post Created with Sketch. The March Jobs Report: Is the Great Recession Finally Over?

 

Is the US job market back, finally? One interesting data point in the March employment report: the US economy added 192,000 private-sector jobs last month, pushing private payrolls to 116.09 million. That level surpasses the former high of 115.98 million reached in January 2008.

Hardly an insignificant milestone, and one that shows how far the labor market recovery has come. Although the American economy has been growing since summer 2009, a return to prerecession private-job totals is also an important marker. Perhaps, one could say, we’ve even returned to normal.

More

Contributor Post Created with Sketch. The New Paul Ryan Budget Plan: A Brief Review

 

The annual House of Representatives budget resolution – you may know it as the “Ryan plan” or perhaps as the “Path to Prosperity” — has turned into a weird Washington phenomenon, one that combines analysis fiscal, political, and psychological. Do the numbers really add up? Will it hurt or help GOP election odds? Does it signal that Roman Catholic Paul Ryan or Randian Paul Ryan is the fellow running the budget committee? And, of course: does the budget suggest Ryan will run for president 2016?

Of those questions, I’m confident only in answering the first. (Alert: CNBC and MSNBC bookers. Ignore that last sentence. I am supremely confident in answering any and all possible questions about the Ryan budget, as well as the 2016 presidential race, the Russian annexation of Crimea, the Yellowstone earthquakes, and the new Captain America film. I also know a thing or two about nanotech.)

More

Contributor Post Created with Sketch. Globalization, Competition and My Wet Basement

 

In New England, a dehumidifier is pretty much a required appliance in spring and summer. That goes double in my neighborhood, which was built on swampland in the 1950s.

Last spring, I received a notice that my dehumidifier – U.S.-branded, but manufactured in China – was subject to a safety recall. Apparently there were some instances of similar units catching fire. By shipping back certain parts, I was entitled to a gift card and discount coupon towards a new one. Grumbling, I removed the parts, sent them back, and waited for my coupon. After it came, I shlepped out to the store, shopped for a new dehumidifier, and shlepped the new unit home.

More