Showing posts from May, 2017

Internet and public investment in infrastructure

I've seen this graph in an interesting book by Jonathan Taplin (Move Fast and Break Things; highly recommend, btw) on how the big internet firms Google and Facebook essentially (but also Amazon) have become the new monopolies of our gilded age. He discusses mostly the effects on the entertainment business, but the implications are far-reaching of course. Below the share of fiber optics connections as a share of total broadband connections in OECD countries (Taplin uses this graph in the book).
Note that the US lags behind (I'm assuming things didn't change much since Dec. 2015). So here there would be a huge benefit from public investment in infrastructure. Not that I think this would happen any time soon.

Trump and the Neocons: Doing the Unilateralist Waltz

By Thomas I. Palley

Donald Trump’s first one hundred days have revealed his inclination for unilateralism in international relations. That inclination reflects his opportunistic and bullying disposition, and it also fits well with his anti-globalization pose.

Trump’s unilateralism has also spawned a dangerous waltz with Washington’s neocon establishment. The opportunistic Trump looks to gain establishment support, while the neocon establishment looks to the opportunist-in-chief to implement its own unilateralist view of the world.
Read rest here.

On Robotization and Unemployment at the Rick Smith Show

Dr. Strangelove or: How I Learned to Stop Worrying and Love the Robots. The gist is that technological change is not the problem. Employment is pro-cyclical and pro-structural, for lack of a better word, it goes with the cycle and with the trend. The issue is the weakness of the working class bargaining power. We need regulation of corporate oligopolies, stronger unions, and a political system willing to require and fund social welfare. In that world, robots are not the cause of a dystopia.

Technological progress is NOT the cause of unemployment and inequality

Or that is what the recent Economic Policy Institute (EPI) Report by Lawrence Mishel and Josh Bivens says. Their study is essentially a critique of a recent study by Acemoglu and a co-author that suggests that robotization would have a large effect on employment generation. Note that this is not a requirement in mainstream neoclassical (marginalist) theory. Actually, technological progress should generate higher real wages and higher employment in the conventional model of the labor market (which is fraught with logical problems; yep capital debates apply here).

The reason, I mean the probable underlying ideological reason, for the narrative about robotization is that one cannot blame unemployment and inequality (wage stagnation) on policy decision made by conservative (neoliberal)   policy makers. It's the result of the inevitable changes in technology that are dictated by competition. The argument is not very different from the idea that it was not trade, but skill biased techn…

On Priming the Pump and Trumponomics at the Rick Smith Show

My interview with Rick this week. I should say that I'm quite skeptical that impeachment will actually take place. In part, because Trump is not a real populist, and will not deliver for the working class people in the Rust Belt that voted for him. But he will, probably, pass several things that Republicans want, and that might provide the support that would shield him from political disaster.

Brazil and the entry of China in the WTO

I have discussed here the role of Chinese growth in the decrease of US manufacturing jobs (note that I was, and still am somewhat critical about simplistic stories of deindustrialization). At any rate, for other reasons I was looking at the IMF Direction of Trade Statistics (DOTS) and ended up with the two graphs below.
After the Chinese entry in the WTO in 2001 the rise in Brazilian imports is astounding. Now Chinese imports of manufacturing goods are about the same share as imports from the US and the European Union.

Brazilian exports to  China, on the other hand, only take off after the Global Crisis in 2008, even though an increase after 2001 is also visible. This suggests that, in spite of the slowdown in China, their relatively rapid growth has sustained the external markets for Brazilian commodities (iron ore and soybeans mostly). There is a lot to be said about the patterns of specialization that this South-South integration has shaped, and the problems that it entails for Br…

Back of the envelope calculation: BNDES lending and the Marshall Plan

So, a few days ago, someone (my bad, can't remember who did it) posted on FB a piece (in Portuguese and behind a wall; but this post is mostly about the role of historical comparisons really, so you can skip the piece altogether) on the Brazilian National Development Bank (Portuguese acronym is BNDES, btw) and how it lend more than the US government with the Marshall Plan. The guy did a back of the envelope calculation (I did check and bringing the US$ 13 billion to present value, with the GDP deflator would be about 106 billion, roughly what he calculated) and concluded that the BNDES lending, which was higher, was very ineffective. Hm. Where to start?

Sure one can assume that the important thing is just to calculate how much money was lent in current values and one gets a reasonable picture of the impact. However, it should be clear that the US was lending dollars, and access to imports that were vital for the survival of Europe. Harder to put a dollar figure on that. But a bet…

Keen on financial crises ahead

I was listening to Steve on the radio yesterday. Here a short video of the Bloomberg Surveillance.

Slow Posting, Hyperventilation, and the Wrong Lesson for the Left

Still grading, so slow posting for a while. Just a brief note on the whole firing of Comey scandal that is still unfolding, and the incredible degree of anxiety on the left, which somehow thinks this means that there is a 'pee' tape and that Trump will be eventually impeached (here, for example; too many of these). This is at least the second event compared to Nixon's firing of the Attorney General, the infamous Saturday night massacre. The other being the firing the Acting Attorney General Sally Yates.

All of these is very unproductive and dangerous for progressives in my view. It emphasizes an interpretation of the election that is deeply flawed. That Hilary was a strong candidate, that she was progressive, that she would have won (yeah, I know she did win the popular vote; but that's not the way it works) if Comey didn't discuss the emails days before the election, or the Russians didn't hack her campaign, or if Wikileaks didn't expose them.

It exempts …

Economists Behaving Badly

That's the title of a paper on economists that publish in predatory journals, published by Wallace and Perry last year and available here. In the abstract they suggest that "A surprising number of authors who are in the RePEc top 5% also published in predatory journals in 2015." 39 journals of the more than 1600 in RePEc are considered predatory, by the way. I don't have the list, but acceptance rates seem pertinent for a discussion of predatory behavior. The authors say in that regard:
Acceptance rates are not available on the homepage for most of the journals in the data set. Just a third of the thirty-nine journals report acceptance rates, and these range from 5% to 62% for 2015. The six journals that report rates between 5% and 25% provide no supporting data. Six others show data on submissions and acceptances on their homepages allowing calculation of acceptance rates that range from 39% to 61%. The other journal reports a 62% rate but no other data are provide…

Monetary Policy and the Punch Bowl: The Case for Quantitative Policy and Wage Growth Targeting

By Thomas Palley

Federal Reserve Chairman William McChesney Martin famously declared that the Federal Reserve “is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.” This paper uses the punch bowl metaphor to analyze how the Federal Reserve can improve monetary policy so as to deliver shared prosperity with greater financial stability. The problem is the party starts earlier on Wall Street than Main Street, so the Fed may remove the punchbowl before the party reaches Main Street. Ensuring Main Street attends the party requires a new recipe for the punch, new serving rules, and a new punch master. Additionally, there is a deeper problem that current neoliberal growth model has the economy addicted to monetary punch. Resolving that requires a cure that goes beyond the punch bowl.
Read rest here.

International Confederation of Associations for Pluralism in Economics (ICAPE) Call for Papers

Call for Papers, Panels and Workshops Drexel University, Philadelphia, PA January 4, 2018
Pluralism and Economics 10 Years after the Crisis (and 200 Years after Marx’s Birth)
It has now been 10 years since the financial crisis, but there have been very few changes in mainstream economics. Meanwhile, pluralist economists have been developing sophisticated ideas aimed at addressing the major problems confronting contemporary society. It is also interesting that the 10 year anniversary of the financial crisis finds us at the 200th anniversary of Marx’s birth. Marx, of course, railed against the flaws of the mainstream economics of his day, and his work continues to inform the work of many heterodox economists as they seek to understand the dynamics of neoliberal capitalism.

This year’s ICAPE conference has multiple themes regarding what pluralist economists have to offer the economics profession and modern society in general in 2018. Specifically,

· What are the major problems confr…

Summer School at the Universidad de Valladolid

Organized by the Asociación de Economía Crítica, the organization that publishes the Revista de Economía Crítica (last issue online here; I'm on the board). I will teach on post-Keynesian views of the crisis, on the same day as Gérard Duménil , who will do a similar thing for Marxist approaches, I imagine. Program and registration form here.