Politics Archive

Review of the recession and how to end it

[Skip to the end] The problem is suboptimal output and employment which is evidence of a lack of aggregate demand.   Less important what caused the drop in aggregate demand The end of the subprime expansion in 2006 reduced the demand for housing   The wind down of the one time Q2 ...Read More

Fed to lend to CBs in unlimited quantities (day 2)

[Skip to the end] I’m keeping an eye on crude prices rising a lot more than the USD is falling; so, I suspect the great Mike Masters inventory liquidation has run its course. Inventories are at record or near record lows. If there has been net demand destruction, it hasn’t yet showed ...Read More

Where do we go after these toxic assets problem?

[Skip to the end] Seems at this late hour the payroll tax adjustment is about all that can get the job done to immediately support demand. Yes, the banking model is to make loans to individuals and business that become illiquid assets and match that with liabilities that are not at risk ...Read More

Statement of Senator Obama on moving financial legislation forward

[Skip to the end] Statement of Senator Obama on Moving Financial Legislation Forward Yesterday, within the course of a few hours, the failure to pass the economic rescue plan in Washington led to the single largest decline of the stock market in two decades. Might have been worse if they had passed ...Read More

On the floor of the Senate today

[Skip to the end] From the last two paragraphs it looks like another fiscal package is on the way? Interesting how little damage to the real economy it takes to trigger a fiscal response – GDP last printed at 3.3% and the relatively modest job losses are not nearly enough to have ...Read More

Endorsements wanted

[Skip to the end] Click here to see the list. Loading… [top] ...Read More

Reuters: Nominal growth to support asset prices

[Skip to the end] Nominal growth continues and will continue to support asset prices over time. To the extent there is not a sufficient desire to spend income, the government has the options to either cut taxes to increase private spending and/or increase government spending with a bid for those idle resources. ...Read More

Comments to questions

[Skip to the end] Looks like Q4 was the bottom for the real economy, and government spending now kicking in strong for quite a while to keep things muddling through. Housing has been ‘subtracting’ from GDP with exports picking up the slack. From this point it won’t take much of an upturn ...Read More

Re: Resource allocation

[Skip to the end] >    >   On 8/3/08, Craig wrote: >    >   Ok. And the irony is as prices fall, demand increases again. >   Until consuming governments get their head around that fact >   and put some kind of floor under crude prices to incent >   substitution (which may be beyond their thinking and/or impossible >   politically), it ...Read More

Ron Paul statement

“The Fed needs to stop printing money to buy US government securities.”-Ron Paul Ron Paul on the monetary system, as he calls for a return to the gold standard. This is one of his numerous nonsensical, inapplicable rhetorical outbursts on the monetary system on national television. The lack of media criticism, by ...Read More