“Working to break the stranglehold of orthodox economics on our policy, philosophy, and vision.”

ESSAYS

Oct / 2023

Where are Interest Rates Going?

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

How Attention to Fed Policy Distracts Us from the Real Problem

Can US financial markets remain robust even without ultra-low interest rates? While not often stated openly, many on Wall Street believe the answer is no. Some have been trying to persuade the Federal Reserve to stop raising interest rates, and even to begin lowering them. The recent collapses of Silicon Valley and Signature Banks, largely a consequence of rates rises, will probably only bolster their case. But why should any of this matter to ordinary Americans? Whether or not we like

On Progress and Anti-Elitism

“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

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Latest Research

Here is a sample of my recent academic writing. Look under Research for more.

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Explaining Stagnant Living Standards in a Generalized Asset Growth Context (2021) [with Robert Goldberg], Journal of Economic Issues

ABSTRACT
Aggregate U.S. assets have grown at an impressive rate over the past four decades, especially in recent years. Despite this, middle class living standards have remained relatively flat over the past four decades, and substantial debt has been required to maintain consumption at customary levels. We assemble the U.S. balance sheet for the past seventy years, showing how mounting debt has contributed to growth in financial assets, relative declines in net worth, and increases in assets in relation to GDP. We also calculate a financialization ratio based on our data, for which the trend line identifies a structural break circa 1980 after which the U.S. economy “financializes.” Our numbers, moreover, support the claim that the debt spiral intensified income inequality. Most remarkably, average national equity returns remained flat or even declined slightly post- 1980 despite much greater volatility and debt leverage, contrary to what basic financial theory would dictate.

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