Author: Asymptosis
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Eighty percent of current jobs may be replaced by automation in the next several decades.
That’s the conclusion of Stuart W. Elliott in his recent paper, “Anticipating a Luddite Revival.” (Hat tip: RobotEconomics.) We’ve seen that scale of transformation before. But this one promises to be roughly four times as fast, dwarfing Luddite-era concerns: …the portion of the workforce employed in agriculture shifted from roughly 80% to just a few…
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The Lump-of-Capital Fallacy
Dean Baker gives me the courage, in his recent post on Pikkety, to reiterate a statement I’ve made some few times in the past: Economists have no coherent or consistent idea of what they’re talking about when they use the word “capital.” They lump together real capital — fixed, human, organizational, whatever — with “financial capital,”…
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Lane Kenworthy, Prosperity, and the Infinite Forms of “Redistribution”
I haven’t beaten the drum lately for Lane Kenworthy — perhaps the best researcher out there on the economic effects of income and wealth distribution. His years of careful, diligent (and voluminous) statistical and analytic work, tapping the best data sets available, and his cogent, coherent explanations of his findings, should get a lot more attention…
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Repeat After Me: The American Tax System is Hardly Progressive at All
The latest numbers on 2014 taxes as share of income are out, and they’re saying pretty much the same thing as last year: Above about $80K a year in income, the American tax system is not really progressive. Like, at all: The people making $100K a year pay about the same share of income as people making…
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The Global “Capital” Glut
No, I’m not talking about Piketty hitting the Times bestseller list. And it’s not just wild-eyed lefty Frenchman who are expressing concern about the state of world capital these days. Mitt Romney’s shop was beating this drum loudly more than a year ago. One of the central takeaways from Piketty’s Capital in the 21st Century is the U-shaped…
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ALEC: Destroying the American Economy, One State at a Time
The American Legislative Exchange Council — which authors ultra-conservative legislation and promulgates it to state legislatures nationwide — has a little index measure of states’ “competitiveness,” which supposedly results in greater prosperity for those states that rank highly. Does it? Let’s let the numbers speak for themselves: Source (PDF). Cross-posted at Angry Bear. Related posts:…
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Thinking About Piketty’s “Capital”
The quotes in this post’s subject line are very much intended as a double entendre. I’m of course referring to the title of Piketty’s book (which I’ve read about 80% of, jumping around). But even more, I’m talking about his definition of “capital.” I’ve ranted frequently about economists’ failure to define this term or agree on…
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The Incredible Vanishing Takeaway from the CBO Report on Minimum Wage
I’m surprised that nobody highlights what for me is the key takeaway from that report. They predict, with a $10.10/indexed increase: Low-end incomes increase $19 billion. High-end incomes decline $17 billion. For a net GDI increase of $2 billion. Table 1, page 2: Pie gets bigger, all that rot. The increase is presumably explained by…
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Why the Fed Hates Inflation: 1.2 Trillion Dollars of Why
Upate: Those who have qualms about the methodology and underlying assumptions here would do well to consider Thomas Piketty’s thinking on page 210 of Capital in the 21st Century. He distinguishes between “real” and “nominal” assets, pointing out that real asset values climb along with inflation and growth, while nominal asset values don’t. A simple rule of…
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Dean Baker on Piketty’s Capital: Or, How FDR Proved Marx Wrong
Thomas Piketty’s important new book, Capital in the Twenty-First Century, predicts a bleak future of increasing concentrations of financial assets in few hands, stagnant wages and labor share of income, and declining returns to capital — secular stagnation. He enunciates and demonstrates the part of Marx that Marx got exactly right. But Dean Baker points out where…
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Jared Bernstein Gives Us The Best Graph on the Employment Effects of Minimum Wage Increases
They say sample size matters. A handful of sample points in a study doesn’t tell you much, because they could just be showing random variation. This is also true not when you’re looking at many studies. You need to look at lots of research that uses different methodologies and data sets to get a confident feel…
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The Conservative Case for a Minimum Wage Hike
Most conservatives disparage minimum-wage laws with straightforward economic reasoning, based on Econ 101 textbook theory: demand curves slope down. If you institute a price floor, raising the price of labor, you’ll get less labor demanded — less jobs. This hurts poor people, especially entry-level folks like teenagers. At first blush, the argument’s got legs. And…
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My Head Talking on the Thom Hartmann Show
Doing my part with Patriotic Millionaires and Smart Capitalists for American Prosperity to promote increasing the minimum wage and indexing it to inflation. Refresh or click the link above if you don’t see the embedded video below. Start around 45:13. Cross-posted at Angry Bear. Related posts: Letter: Smart Capitalists and Patriotic Millionaires Say Hike the Minimum…
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The Global Labor Glut
Ryan Avent’s excellent post at The Economist finally provides me the impetus to respond to Josh Mason’s comments on my recent post. I suggested: What we have instead of a Global Savings Glut is: 1. A Global Labor Glut: more human effort and ability available than is needed to provide goods that provide high aggregate…
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John Cochrane: I Would Never Dream of Suggesting that this Correlation Implies Causation!
Let’s say you come across this on the interwebs: Then the person who posted it says this: I purposely did not make any argument, draw any conclusions or anything else. And the person who posted it is a prominent, high-profile right-wing economist. What conclusions do you draw about that economist? About the economic effect of…
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Letter: Smart Capitalists and Patriotic Millionaires Say Hike the Minimum Wage
The Agenda Project (which is behind Patriotic Millionaires, Top Wonks, and other progressive initiatives) is preparing an open letter supporting an increase in the minimum wage. They’re looking for more signatories. SMART CAPITALISTS FOR AMERICAN PROSPERITY Dear Mr. President and Honorable Members of the U.S. Senate and House of Representatives, We are writing to ask you…
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Does Upward Redistribution Cause Secular Stagnation?
A while back I built a model to look at the long-term economic effects of upward and downward redistribution. Posts here and here. Commenter JGF pointed out an error in the model. I’ve revised and corrected it. The spreadsheet’s here. The model is based on marginal propensities to spend out of wealth and income. Poor people…
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No: Saving Does Not Increase Savings
The misconceptions embodied in this post’s headline sow more confusion in economic discussions than any others. “Saving” and “Savings” seem like simple concepts, but they’re not. They have many different meanings, and their different usages (often implicit or unconscious) make coherent understanding and discussion impossible — even, often, in writings by those who have otherwise…
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The “Decent Life” Argument
I was having a discussion with a conservative friend recently, and challenged him to write up a budget for a decent life for a responsible, hard-working American: Living in Shoreline, a relatively inexpensive area north of Seattle. Divorced, two kids. Not very smart or capable, but has worked hard their whole adult life. He has…
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Bleg: Accounting for the Real Sector
I’m hoping my gentle accounting-dweeby readers can help me. I’m very interested in looking at economic measures (i.e. debt/lending/borrowing) for the U.S. “real” sector: households plus nonfinancial business. My problem: with some exceptions, various national accounts (NIPA, FOFA, IMA) don’t provide tables for this “sector.” I don’t think I can simply sum up household and…
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The Economy Is a Ponzi Scheme
I don’t think there’s anything eye-popping or revolutionary this post, but it’s thinking that I’ve been finding useful. Long before Larry Summers bruited his recent ideas about secular stagnation and the need for bubbles, I came up against this great line from Nick Rowe (April 2011): The economy wants a Ponzi scheme. I’ve been pondering…