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Category Archives: UncategorizedImage
I’m sure we’ll see the usual TON of olympic graphics in the next few weeks, but I thought this one showing the growth of sports included in the Winter Games was interesting:
Winter Olympic Sports
Fri, 07 Feb 2014 02:50:33 GMT
One signal for whether the U.S. economy is ready for a more robust recovery is the extent to which the financial position of households has rebounded. Here are some illustrative figures, taken from the January 2014 issue of Economic Trends from the Cleveland Fed.
O.Emre Ergungor and Daniel Kolliner write about “Household Economic Conditions.” Here’s a figure showing the movements in household wealth since 2000. Household assets and net worth have now rebounded and surpassed their pre-recession highs.
Part of what’s happening here is that households have trimmed back on many of their debts. This figure show the change in outstanding debt in various categories over the previous four quarters. During the housing bubble, for example, mortgage debt was growing at more than 10% per year. But household mortgage debt has been contracting (that is, negative growth) since about 2008. The authors write: “Revolving consumer credit balances plummeted in 2008 and are currently barely higher than their level in the third quarter of 2012. Outstanding home mortgage debt is still contracting due to record write-off s and reduced demand for homes in previous years. Nonrevolving consumer credit, which consists of secured and unsecured credit for student loans, automobiles, durable goods, and other purposes, is the only credit category that shows some sign of life. It is currently 8.5 percent above year-ago levels. Note, however, that the student loan component is entirely driven by federal government loans to students and does not reflect private market activity.”
The combination of lower household debts and sustained low interest rates means that households are spending less on debt service. They write: “The financial obligation ratio, which expresses household liabilities, such as credit card payments, mortgage payments, home property taxes, and rent payments, as a percentage of disposable income, is at its lowest level since the third quarter of 1981.”
A result of these changes is that retail sales and consumption overall, if not yet back to healthy growth rates, are at least solidly back in positive growth after their nosedive during the Great Recession.
Of course, the unemployment rate remains high, as do the number of long-term unemployed and concerns over whether some workers are not being counted as unemployed because they have become too discouraged to look for work. But noting that the economy is improving is not to make the claim that it’s already a bright sunshiny day. One final pattern caught my eye in an article on “Employee Compensation Costs during the Recovery,” by Joel Elvery. He points out that the patterns of wages and of benefits have been diverging in recent years.
This figure needs to be interpreted with care, because hourly compensation costs are affected by which workers have jobs. Thus, the rise in wages and salary around 2008 is not because lots of workers saw a big raise, but instead because lower-paid workers were more likely to become unemployed, and so the average wage and salary for those with jobs was higher as a result. But the overall pattern here is clear enough. Over the last decade, wages and salaries have been pretty flat, but the costs to employers of benefits like retirement and savings accounts, as well as health insurance, have been rising. As I’ve written before on this blog, health care costs (along with other benefits) have been eating your pay raise.
U.S. Household Finances Rebound
Fri, 24 Jan 2014 12:00:00 GMT
The one issue I haven’t seen highlighted is that declining participation may be driven in part by fewer people saying they are looking to keep unemployment benefits. This would be because many knew they were no longer eligible or soon would be due to the failure to extend benefits in the budget compromise.
This article originally appeared in the Newton blog on RealClearScience. You can read the original here. ON THE MORNING of May 21, 2010, Cherry Woods was taking a walk around her suburban Houston neighborhood, when she witnessed an ominous sight. Two, large dogs were barreling towards her from …
Cats Are Just as Loving as Dogs. Maybe More So
Sun, 15 Dec 2013 17:00:00 GMT
Check out this post and my response below.
I accept that there are things that only the state can do. I think especially, keeping the peace broadly speaking; and second providing for the those who can’t do so. I think that tea parties ignore the latter especially, thinking that small government leads to prosperity, that lead to all boats rising, even for the poorest.
In fact, I think prosperity means change and that often leaves many behind: the older; the less educated; the geographically immobile; those who just can’t adapt for a lot of reasons. Joseph Schumpeter called this creative destruction, and it is certainly a product of capitalism in the past and now. Free enterprise and free exchange and commercial activity is the best path to a wealthy and growing economy; but I also believe it is unable without a state provided safety net to provide for the victim of creative destruction that society as a whole benefits from.
I find it odd that it is often acknowledged that democracy is just the best of the flawed forms of human governance – it isn’t perfect. Few who advocate free enterprise have the equivalent humility to acknowledge that while it is the best way manage resources of the alternative available – but it isn’t perfect. I acknowledge both that market economies are the best way to build a society in the face of scarcity, but both are far from perfect. So I suppose I believe in the strong stem you suggest to provide a softer landing for those left by hand by the progress of capitalism.
That said, I also like constant attempts to move the state out of functions that can be privatized, and I prefer less growth in the stem than more other things equal. I think that at least in more instances education; road; utilities and other functions that have long been left to the public sector could be moved into the private sector to the benefit of most or all. Liberals have in fact promoted airline deregulation and efforts along these lines, but the belief in your strong (and perhaps steadily growing) stem makes that hard at times I think. Finally growth in the stem is inevitably going to concentrate power in that stem, and the history suggests that is risky, the leaders of any state are just human and not always to be trusted. The founders of this nation understood that, and we shouldn’t forget it in evaluating the size of the stem.
Ideas: Libertarian Arguments for Income Redistribution
Mon, 09 Dec 2013 14:02:16 GMT
The War on Christmas isn’t in fact a war on the holiday, but it is the secularization of what to many of us is a religious holiday. For better or worse that is a real thing, but Christians brought this on themselves.
The theocratic conservatives who complain of the war on Christmas had no compunction about using the holiday as a way to juice their bottom lines by encouraging the purchase of present and gifts by one and all, including the non-believers. Now the fruits of these efforts have come home to roost as non-believer participate and the holiday becomes inevitably less religious in tone. If you don’t want a secularized Christmas, then don’t use your sacred holiday to hock merchandise.
The whole war on Christmas outcry would have some weight if Christian merchants were to plead with the non-believers to not patronize their shops to purchase presents as part of a secular holiday. I’m not holding my breath for this to happen however.
Don’t invite non-believers into your holiday, and then condemn them for being there.
Debt Ceiling Watch
Sat, 28 Sep 2013 02:35:55 GMT
Lawrence Summers’s prospects of becoming chairman of the Federal Reserve next year were dealt another blow.
Sen. Tester Signals He’d Oppose Larry Summers as Fed Chief
Fri, 13 Sep 2013 21:54:42 GMT