Back in July I wrote about a “great divergence” that has been occurring between the stock market and the real economy. Yet today one might consider that recent developments put the lie to my claim. After all, while stock prices soar, the unemployment rate continues to fall. The November number was 6.7 percent, down from 6.9 percent in October. With imminent release of a new Covid-19 vaccine expected, all the major equity indices appear – almost irrationally – to have …
The Logistics, Ethics, and Political Economy of a Covid-19 Vaccine
November 29, 2020Recent news about Pfizer’s and Moderna’s progress synthesizing a Covid-19 vaccine has been met by an understandably ebullient global reaction. According to the CDC, the first batch will be available to Americans before the end of 2020. Analysts believe that positive news about the vaccine – and really, how could the news be better? – explains much of the most recent surge in stock prices. More substantively, if the optimism were well founded it would not be unreasonable to expect …
Inflation? Really?
November 25, 2020Last week my interest was aroused by an article written by Martin Wolf in the Financial Times (November 18th) in which he discusses a recent book by Charles Goodhart and Manoj Pradhan. In the article he provides a number of reasons why we might expect higher – possibly much higher – inflation in the coming years. And an article in today’s Wall Street Journal by David Harrison similarly suggests that, following successful introduction of a Covid-19 vaccine, widespread and pent-up …
Debt, More Debt, and Yes, Even More Debt
November 22, 2020In August of this year, Nobel laureate Joseph Stiglitz and Hamid Rashid warned that a global debt crisis was looming. And just last week, Zambia became the sixth country this year – after Argentina, Belize, Ecuador, Lebanon, and Suriname – to default on its sovereign debt when President Edgar Lungu’s government failed to make a $42.5 million interest payment that was due. Under normal circumstances one sovereign default is newsworthy; the latest announcement merely underscores what a strange year it has …
Lesser-Evilism and the Vote of the Century
October 18, 2020Ok, perhaps calling it the vote of the century is overstating things, but there is no question that November 3rd looms as a historic moment, whatever the outcome. Let me begin by stating the obvious: President Donald Trump is a repugnant, despicable, pathetic, vainglorious, and shameless human being. That someone like this could be elected president is a travesty and an unspeakable embarrassment. That such an eminently impeachable clown could survive his first term in office speaks for the insufferable …
In Defense of Idleness
September 11, 2020Modern society’s belief in the virtue of industry, productivity, or plain hard work is well ingrained in our psyche, and far predates capitalism. According to an old Arabian proverb, “the devil tempts all men, but idle men tempt the devil.” Ouch! If in any way representative of our opinion of human inactivity, it should hardly surprise that no sooner than Covid-19 forced idleness upon us all, we heard a chorus of voices keen to return to the status quo. But from …
On Getting “Back to Normal”
August 13, 2020It is quite understandable that after five months of one unprecedented event after another people in the United States are experiencing Covid fatigue and yearning for a return to normal. But what exactly is “normal?” And should we be wishing for a return to it? The question reminds me of a comedian I saw almost exactly four years ago who was discussing the 2016 contest between Hillary Clinton and Donald Trump. “Clinton or Trump,” he mused, “it’s a little like …
Economic Depression and the Liquidity Trap
July 3, 2020I never quite got the liquidity trap when I was in college. Not having grown up during a major war or an economic depression, the concept always seemed kind of abstract. I understood it a bit better when I was in graduate school, probably because by then I had greater general curiosity about economics. But even then, it was not easy to fathom without direct observation or experience. Things change. The past 10-12 years are, arguably, Exhibit A. According to …
What the Unemployment Rate Conceals
June 19, 2020A couple of weeks ago the Bureau of Labor Statistics (BLS) reported the May unemployment rate at 13.3 percent. In normal times, such a number would be considered alarmingly high. But we are not in normal times. And compared the 14.7 percent rate for the preceding month, many – not the least President Trump – took the announcement as good news. Unfortunately, there are a number of factors underneath this single statistic that should give us pause. First, there are …
Why Economic Generalist?
June 12, 2020Welcome to my blog! I am an academic economist, but professional writing for a specialized audience gets old given enough years. Academic writing has always run against my generalist tendencies because I am interested in too many different subjects. I have recently grown interested in writing about economics for a broad audience, instead of trying to communicate exclusively with economists. I disagree with many of them on most things anyway. A “generalist” approach to economics will, I hope, help me …