• Weak Consumption and Shrinking Government Slow GDP in Second Quarter

    Consumption grew at just a 0.1 percent annual rate in the second quarter, while government spending shrank at a 1.1 percent rate, holding GDP growth to 1.3 percent in the quarter.  This report also revised down first-quarter GDP growth to just 0.4 percent from a previously reported 1.9 percent.  Together, these numbers indicate that the […]

  • The Risk of Dismissal for Union Organizing and the Need to Modify the Process

    Testimony before the National Labor Relations Board, 19 July 2011 I am here to briefly summarize the findings of two papers by my colleague Dr. John Schmitt, on the risk of dismissal in the course of a unionization drive.  Dr. Schmitt, together with Ben Zipperer, used data on reinstatements from the National Labor Relations Board […]

  • The Gang of Six Plan: Tax Cuts for the Wealthy, and Social Security Cuts for Ordinary Workers

    The budget plan produced by the Senate’s “Gang of Six” offers the promise of huge tax breaks for some of the wealthiest people in the country, while lowering Social Security benefits for retirees and the disabled.  Despite claiming that they will “reform” Social Security on a “separate track, isolated from deficit reduction,” the plan includes […]

  • Italy’s Crisis: The ECB Could Just Print the Money

    It would have been worth reminding readers that the debt crisis in Italy and other euro zone countries is first and foremost a political crisis.  The European Central Bank (ECB) can just print euros which can be used to address any potential default risk among its member countries.  There would be little obvious economic downside […]

  • On Using the Chained CPI for Social Security Cost of Living Adjustments

    There has been considerable discussion of basing the Social Security cost of living adjustment (COLA) on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) as a “painless” way of generating large budget savings.  This view reflects serious confusion about what the switch to the C-CPI-U involves.  (The switch would also lead to higher […]

  • Weak Job Growth Leads to Another Rise in Unemployment

    The Labor Department reported that the economy created just 18,000 jobs in June.  It also revised down the previous two months’ numbers, bringing the average rate of job growth over this period to 87,000 jobs a month.  The slow job growth led to another rise in the unemployment rate, which edged up to 9.2 percent. […]

  • What to Do about the Debt Ceiling Impasse: An Accounting Solution to an Accounting Problem

    Ron Paul’s Surprisingly Lucid Solution to the Debt Ceiling Impasse Representative Ron Paul has hit upon a remarkably creative way to deal with the impasse over the debt ceiling: have the Federal Reserve Board destroy the $1.6 trillion in government bonds it now holds.  While at first blush this idea may seem crazy, on more […]

  • Work Sharing: The Quick Route Back to Full Employment

    Excerpt: There are two basic ways to increase employment: increasing output and thereby increasing the demand for labor, or dividing up the existing work among more workers. . . .  Work sharing is not a new idea.  The idea of shortening work time to create more work has a long history. . . .  [I]n […]

  • Tell NPR: The Fed Has Many More Bullets

    In its top of the hour news segment NPR told listeners that there is little else that the Fed can do to boost the economy.  This is very seriously wrong. The Fed could do more quantitative easing, it could target a long-term interest rate, for example targeting a 2.5 percent 10-year government bond rate, or […]

  • Weak Job Growth Leads to Further Rise in Unemployment

    The unemployment rate edged up again in May, reaching 9.1 percent, as the rate of private-sector job growth slowed to just 83,000.  There were also downward revisions to the prior two months data, which lowered the average for the last three months to 160,000, approximately 70,000 more than what is needed to keep pace with […]

  • Plunging Bottom-Tier Prices Push Case-Shiller Index to New Post-Bubble Low

    The Case-Shiller 20-City index fell by 0.8 percent in March.  This represents somewhat of a slowing from the prior six months in which the rate of monthly decline averaged more than 1.0 percent.  Nonetheless, the drop pushed the index to a new post-bubble low.  In nominal terms, the March number is 0.8 percent below the […]

  • If the Oil Industry Said the Moon Was Made of Green Cheese, Would the New York Times Pass the Statement Along to Readers without Comment?

    The answer seems to be “yes.”  After all, the New York Times told readers that The companies estimate that the boom [from new shale oil drilling] will create more than two million new jobs, directly or indirectly, and bring tens of billions of dollars to the states where the fields are located, which include traditional […]

  • Federal Reserve Board Policy and the Price of Oil

    Testimony before the Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending, the Committee on Oversight and Government Reform, the U.S. House of Representatives, at the Hearing on “How Federal Reserve Policies Add To Hard Times At The Pump,” 25 May 2011 Thank you, Chairman Jordan, Ranking Member Kucinich, and other members of the Subcommittee, […]

  • Unemployment Insurance Claims Again Come in Over 400,000

    For the fifth week in a row new unemployment insurance (UI) claims came in over 400,000.  The number for last week was 434,000, bringing the 4-week moving average to 436,750, the highest it has been since November. Source: Department of Labor. This should be real news.  There were a lot of explanations for increases in the […]

  • Unemployment Edges Up to 9.0 Percent Despite Strong Job Growth

    The unemployment rate edged up to 9.0 percent in April even as the Labor Department reported that the economy created 244,400 new jobs.  This was the third consecutive month of job growth in excess of 200,000, with an average of 233,000 per month.  All the growth was in the private sector as the government sector […]

  • US Economy: Not Growing Fast Enough to Keep Unemployment Rate Constant

    Over the last year GDP has not even grown fast enough to keep the unemployment rate constant. GDP growth fell from 3.1 percent in the fourth quarter of 2010 to 1.8 percent in the first quarter as car sales advanced at a slower pace.  This slowed the rate of consumption growth from 4.0 to 2.7 […]

  • State and Municipal Debt: The Coming Crisis?

    Testimony to the House Oversight and Government Reform Subcommittee on TARP and Financial Resources, 15 March 2011 Thank you, Chairman McHenry and Ranking Member Quigley, for inviting me to testify before the subcommittee and to share my views on the debt problem facing state and local governments.  I will make three main points in my […]

  • Further House Price Declines in the United States

    The price decline since July has eliminated more than $1 trillion in housing wealth. The Case-Shiller 20-City index fell by 1.1 percent in February, the fifth consecutive month where it has fallen by at least 1.0 percent.  It is now down by 6.5 percent from its peak in July.  Eighteen of the twenty cities had […]

  • Unemployment for African Americans Rises, Despite Job Growth

    The economy added 216,000 jobs in March, pushing the overall unemployment rate down to 8.8 percent.  The growth was driven entirely by a 230,000 gain in the private sector, as the government sector lost jobs for the fifth consecutive month.  The employment-to-population ratio (EPOP) also edged up to 58.5 percent — the highest ratio since […]

  • House Price Decline Continues in January

    The Case-Shiller 20-City index fell by 1.0 percent in January, the fourth consecutive month where it has fallen by at least 1.0 percent.  It is now down by 5.4 percent from its peak in July.  Nineteen of the 20 cities had a drop in prices.  The exception was again Washington, D.C. where prices edged up […]