It seems that everyone wants to know the future course of interest rates. For a variety of reasons, it is less predictable than in “normal” times. But a quick look at a few numbers places the recent history of Fed policies in stark relief, possibly presaging what is to come. Consider the following quantitative measure that we call the Fed Accommodation Index. In our view, it approximates the degree to which the Fed’s monetary policy has been “accommodative” over the …
On Progress and Anti-Elitism
May 31, 2021“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” (George Bernard Shaw) U.S. middle class living standards have been more or less stagnant over recent decades, and the same is true in most of the developed world. Inequality has both been a cause and consequence, as whatever economic growth experienced has disproportionately accrued to the social elite. But who exactly are …
The Urgency for an Enlightenment 2.0
April 30, 2021When you automate an industry you modernize it; when you automate a life you primitivize it. (Eric Hoffer) It is well known that rationality and science emerged during the Age of Enlightenment. Many indeed attribute human progress over the past few centuries to reason and discovery. Despite a Romantic reaction against some of the worst excesses of the Industrial Revolution, there is little doubt that human reason, empiricism, and science ultimately became the dominant world view. The “defeat” of Romanticism …
A Millennial-Z Moment
April 27, 2021Perusing the Financial Times this morning, I came across three important articles that seemed unrelated. On further reflection, however, I discovered a common thread. All three address future prospects for the Millennial and Z generations, even if two only indirectly. Jointly they suggest, in my analysis, that a Millennial-Z moment may be approaching. Sarah O’Connor’s piece focuses on the economic insecurity faced by many in either the Millennial or Gen-Z cohorts. By itself there is nothing remarkable here, nor even …
A Debt Jubilee Is Unavoidable
April 11, 2021I am truly sorry not to be teaching my macroeconomics principles class this semester. Debt is invariably an under-remarked topic in such classes, never mind a debt jubilee (or debt forgiveness). Yet everything recently happening both in the markets and politics offers a “real-time” tutorial. So, here I will try to explain why, in my view, a debt jubilee is unavoidable – sooner or later. “Debt” may be an abstract and confusing concept to many. Largely it is because we …
Biden Can Make a Difference
April 3, 2021As I’ve conceded elsewhere, I am not one to exaggerate whatever differences there might be between the U.S. Democratic and Republican parties. I have always viewed the Democrats as “Republican-lite,” since both parties have been beholden to corporate America for many decades. Even the thought of voting for the “lesser evil” last November disgusted me, as I noted in an earlier piece. Yet now I believe that Biden can make a difference. The unprecedented challenges that we face, along with the …
Continued Growth Is Not Good for the Environment
March 31, 2021“Earth provides enough to satisfy every man’s needs, but not every man’s greed.” (Mahatma Gandhi) You might be thinking that this one is a complete no-brainer. How could growth be good for the environment? The larger the economy is, the more material waste and pollution is produced, right? True, but as we will see, it is not the whole story. Other factors intervene that many believe make the argument plausible. In arguing that continued growth is not good for the …
The Social Costs of Social Media
March 28, 2021In economics, “social cost” is really a euphemism for the destructive consequences of capitalism. Milton Friedman famously referred to them as “neighborhood effects,” and today it is more common to call them “market failures” or “externalities.” Regardless of what we label them, they are the secondary or indirect effects of some market transaction or transactions. And because I am convinced of their urgency, today I want to call attention to the social costs of social media and the internet in …
Bidenomics: The Broader Context
March 14, 2021This past Thursday President Biden signed into law his coronavirus relief package, which amounts to $1.9 trillion of new outlays. Even the most hardened cynic would be hard pressed to find much here that smells rotten. The new policy is indeed far removed from anything advanced by Trump and his manipulators over the past four years. It alone provides reason for hope, perhaps even for a new era of “Bidenomics.” The package contains money for a variety of purposes. Notably …
Are We Approaching a Tipping Point?
March 8, 2021Texas has been on my mind lately. No, I’m not a Republican, and I’m not crazy about hot weather. That is, in fact, the problem. Texas has been in the recent news, but not because of its heat. Quite the contrary. An unexpected winter storm last month stressed the electric grid in Texas and almost brought it down. Bill Magness, president and chief executive of the Electric Reliability Council of Texas (ERCOT), said Texas was “seconds and minutes” from complete …