I have read it!
Both articles by the same author.
I would take everything he says to heart.
Hope I don't waste anybody's time.
Maybe he has political motives?
Just a dumb redneck tickled by the sight of those Webvan trucks.
SP
====================================================
"In addition, a collapse of stock prices is likely to significantly reduce investment by high-tech firms that were relying on the stock market for financing. With this sort of fall-off in demand, it will be very difficult to avert a severe recession." (Double Bubble)
"The textbook theory holds that high stock prices should lead to more investment by effectively decreasing the cost to firms of borrowing on the stock market. But the stock market has not been a major source of capital for most corporations for decades. In fact, corporations have been net lend ers, not borrowers, on the stock exchange. In 1997 they actually bought $41.2 billion more in stock shares than they issued, even as price to earnings ratios were at record highs. Stock prices clearly have very little impact on firms' investment decisions." (Bull Market Keynesianism)
====================================================
"But there is no way for the trade deficit to come down to more sustainable levels without a significant decline in the value of the dollar. A lower dollar would make imports more expensive, causing people in the United States to buy fewer goods and services from other countries. It would also lower the price of U.S. goods for foreigners, leading them to buy more of our exports." (Double Bubble)
"The standard economic rationale began with the assumption that lower deficits would lead to lower interest rates. Lower interest rates would in turn lead to both more private domestic investment and more net exports, and therefore more foreign investment.
But it hasn't quite turned out that way. Setting aside the recent decline in interest rates attributable to the flight to the dollar (emphasis mine) resulting from financial meltdowns around the world, the real interest rate - the nominal rate minus inflation - at the peak of this business cycle was virtually the same as it was at the peak of the last cycle, back in the big-deficit era." (Bull Market Keynesianism)
====================================================
"Also, the growing trade deficit corresponds to a loss of jobs and production facilities. Insofar as factories in the United States lay off workers or close altogether, not because they are uncompetitive, but simply because of a temporary misalignment of currencies, this is an unnecessary loss for both the workers and the economy. The loss to the workers is apparent." (Double Bubble)
"In general, the drop in the overall unemployment rate from the old supposed NAIRU level of 6 percent to the 4.3?4.5 percent range of recent months has disproportionately benefited the least-well-off segment of the population. Those with the least education and experience have seen the greatest increase in their employment rates. In addition, the low unemployment rate (along with the increases in the minimum wage) is one of the factors that have finally caused wages to start rising for those at the bottom end of the income distribution. There is no politically plausible government program that could have provided benefits as large for the poor and near poor as this drop in the unemployment rate..."(Bull Market Keynesianism)
"It is also important to recognize the magnitude of the economic gains derived from lower unemployment relative to the potential gains from other types of economic policy. The standard estimate of the relationship between unemployment and GDP holds that a one percentage point fall in the unemployment rate is associated with a 2 percent increase in GDP. This implies that the U.S. economy has produced more than $500 billion in additional output over the last four and a half years because the unemployment rate was allowed to fall below the accepted measures of the NAIRU. By comparison, the Congressional Budget Office's estimates of the cumulative economic gains from moving to a balanced budget over this period are under $50 billion." (Bull Market Keynesianism)
====================================================
cepr.net
prospect.org |
