Nicholas Gage uses a NYT column to tell us that Greece is on the path to recovery and that the main risk to its prosperity is the rise of the left-wing political party Syriza. Both claims are dubious.
In terms of the recovery, Gage points to the country’s strong third quarter growth, increased tourism, an improved budget situation and a decline in the unemployment rate. While the lower deficits would be good news, if the European Union was prepared to allow Greece to have a substantial stimulus, this does not seem likely anywhere in the foreseeable future. Therefore it is simply a bookkeeping entry from the standpoint of the economy. The third quarter growth, spurred in part by tourism, is a positive, but quarterly data are erratic so it will be necessary to see several more quarters before the trend is clear.
Gage touts the drop in the unemployment rate to 25.9 percent from 28.0 percent last year. However, most of this drop is due to people leaving the labor force. The employment rate, the percentage of people employed, is up by just 0.6 percentage points from its low. It is still down by 12.2 percentage points from its peak in 2008. This would be equivalent to 30 million people losing employment in the United States.
According to the most recent projections from the I.M.F, even in 2019 (the last year in the projection period) Greece’s GDP will still be almost 10 percent less than its 2007 level. This is far worse than the Great Depression in the United States. And, the I.M.F.’s projections for Greece have consistently proven to be overly optimistic.
By contrast, Gage warns of the bad scenario for Greece’s future:
“While the €23 billion shortfall in that year was covered by the E.C.B., today a much weaker eurozone would hardly be in a position to transfer over €100 billion to Greece if another huge run were to occur.
“In this scenario, the vacuum of currency would bring Greece to technical bankruptcy. The hard-won gains of the past two years would vanish. Access to loans would disappear. The faltering economy would come to a standstill, and the only recourse for Greece would be to return to the drachma, a disastrous move for a country that imports much of the goods it consumes.”
Almost every part of this is wrong. First, the European Central Bank (ECB) has no shortage of euros. It can make as many of them it wants. (Is Gage worried about inflation?) If a flight of capital means that Greece needs 100 billion euros, the ECB would have no problem providing them.
Gage is also wrong with the bad story about Greece leaving the euro. The drop in the value of its currency would instantly make its goods and services more competitive in the euro zone and elsewhere. The country already has a current account surplus. If Greece renegotiated its debts and increased its exports with a lower valued currency, it should have no problem at all paying for its imports.
The basic facts of the situation show that any plausible stay the course route for Greece implies a level of pain that exceeds that experienced by the U.S. in the Great Depression long into the future. The alternative path of leaving the euro holds out the possibility of a much quicker return to normal growth and potential GDP.
Nicholas Gage uses a NYT column to tell us that Greece is on the path to recovery and that the main risk to its prosperity is the rise of the left-wing political party Syriza. Both claims are dubious.
In terms of the recovery, Gage points to the country’s strong third quarter growth, increased tourism, an improved budget situation and a decline in the unemployment rate. While the lower deficits would be good news, if the European Union was prepared to allow Greece to have a substantial stimulus, this does not seem likely anywhere in the foreseeable future. Therefore it is simply a bookkeeping entry from the standpoint of the economy. The third quarter growth, spurred in part by tourism, is a positive, but quarterly data are erratic so it will be necessary to see several more quarters before the trend is clear.
Gage touts the drop in the unemployment rate to 25.9 percent from 28.0 percent last year. However, most of this drop is due to people leaving the labor force. The employment rate, the percentage of people employed, is up by just 0.6 percentage points from its low. It is still down by 12.2 percentage points from its peak in 2008. This would be equivalent to 30 million people losing employment in the United States.
According to the most recent projections from the I.M.F, even in 2019 (the last year in the projection period) Greece’s GDP will still be almost 10 percent less than its 2007 level. This is far worse than the Great Depression in the United States. And, the I.M.F.’s projections for Greece have consistently proven to be overly optimistic.
By contrast, Gage warns of the bad scenario for Greece’s future:
“While the €23 billion shortfall in that year was covered by the E.C.B., today a much weaker eurozone would hardly be in a position to transfer over €100 billion to Greece if another huge run were to occur.
“In this scenario, the vacuum of currency would bring Greece to technical bankruptcy. The hard-won gains of the past two years would vanish. Access to loans would disappear. The faltering economy would come to a standstill, and the only recourse for Greece would be to return to the drachma, a disastrous move for a country that imports much of the goods it consumes.”
Almost every part of this is wrong. First, the European Central Bank (ECB) has no shortage of euros. It can make as many of them it wants. (Is Gage worried about inflation?) If a flight of capital means that Greece needs 100 billion euros, the ECB would have no problem providing them.
Gage is also wrong with the bad story about Greece leaving the euro. The drop in the value of its currency would instantly make its goods and services more competitive in the euro zone and elsewhere. The country already has a current account surplus. If Greece renegotiated its debts and increased its exports with a lower valued currency, it should have no problem at all paying for its imports.
The basic facts of the situation show that any plausible stay the course route for Greece implies a level of pain that exceeds that experienced by the U.S. in the Great Depression long into the future. The alternative path of leaving the euro holds out the possibility of a much quicker return to normal growth and potential GDP.
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Much of the public remains badly confused about the Affordable Care Act (ACA). This shouldn’t be a surprise. It is a complicated bill. Also, there has been much effort to deliberately create confusion. For example, Republicans invented stories of ACA death panels and massive job loss. Major media outlets, in their commitment to neutral reporting, treated such claims seriously, along with the assertion that the earth is flat.
While the public’s confusion is understandable, if regrettable, the confusion among elite types is far more disturbing. Earlier in the week, New York Senator Charles Schumer, the third ranking Democrat in the Senate, admonished his party for pursuing Obamacare rather than promoting stronger measures for the economy. Schumer didn’t explain why he thinks not pursuing health care reform would have increased support for bigger budget deficits or a lower valued dollar to reduce the trade deficit, the necessary steps for fixing the economy.
But the really striking part of Schumer’s comments was his confusion about the status of the uninsured. He asserted that they were a small part of the electorate and most don’t even vote. Washington Post columnist Charles Lane chimes in today, largely agreeing with Schumer on this point.
Contrary to what Senator Schumer and Mr. Lane seem to believe, being uninsured is not a permanent state. People move in and out of jobs and marriages, and their insurance moves with them. (More than 4.5 million people lose or leave their jobs every month.) The number of people who are uninsured at some point in a year is more than 50 percent larger than the number who are uninsured at a point in time.
This means that if 50 million people are uninsured on any given day, it is likely that more than 75 million people will be uninsured at some point over a year. This would likely increase to 100 million over the course of two years. If we add in the close friends and immediate family of these uninsured individuals, it would almost certainly be a substantial majority of the voting age population.
It is reasonable to believe that these people who face and fear periods without insurance would value the security provided by the ACA, since it means that they can still get insurance during these periods. However this security will not affect the popularity of the bill if people are not aware of it. Since Senator Schumer and Charles Lane apparently do not understand this essential aspect of the ACA, it is likely that the tens of millions of people who have day jobs (unlike Schumer and Lane) also don’t understand the security provided to them under the law.
The ignorance of this and other aspects of the law likely helps explain much of the law’s unpopularity. Opinion polls consistently show overwhelming public support for most of the key features of the bill when asked separately.
It is also worth calling attention to a bizarre assertion in Lane’s piece. Schumer notes that the economy has been very weak leading to stagnant incomes for most of the population. He then comments:
“In theory, at least, this should be a time of electoral triumph for the party of government.”
This is bizarre because both parties are the party of government, the question is what the government is used for. The Democrats have not distinguished themselves in a big way from Republicans in this area. The top leaders of the party all supported the bailout measures that largely kept Wall Street intact by shoveling the big banks trillions of dollars of below market interest rate loans and guarantees at a time when liquidity carried an enormous premium. The Obama administration has also gone to bat for them by blocking a European tax on the financial transactions of their European subsidiaries.
The Democrats have also used the power of government to make the patent monopolies of the drug companies stronger and longer and spreading them around the globe in trade agreements. In the latter case the profits for the drug companies come at the expense of other exports. The same story applies with stronger and longer copyright protection for the entertainment industry.
They have also constructed trade agreements that are explicitly designed to put U.S. manufacturing workers in direct competition with low paid workers in the developing world. At the same time the Democrats use the power of government to protect the most highly paid professionals (e.g. doctors, lawyers, and dentists) from the same competition.
In short, most of the public sees the Democrats as one of the parties of government that uses the power of the government against most of the public, because it happens to be true.
Much of the public remains badly confused about the Affordable Care Act (ACA). This shouldn’t be a surprise. It is a complicated bill. Also, there has been much effort to deliberately create confusion. For example, Republicans invented stories of ACA death panels and massive job loss. Major media outlets, in their commitment to neutral reporting, treated such claims seriously, along with the assertion that the earth is flat.
While the public’s confusion is understandable, if regrettable, the confusion among elite types is far more disturbing. Earlier in the week, New York Senator Charles Schumer, the third ranking Democrat in the Senate, admonished his party for pursuing Obamacare rather than promoting stronger measures for the economy. Schumer didn’t explain why he thinks not pursuing health care reform would have increased support for bigger budget deficits or a lower valued dollar to reduce the trade deficit, the necessary steps for fixing the economy.
But the really striking part of Schumer’s comments was his confusion about the status of the uninsured. He asserted that they were a small part of the electorate and most don’t even vote. Washington Post columnist Charles Lane chimes in today, largely agreeing with Schumer on this point.
Contrary to what Senator Schumer and Mr. Lane seem to believe, being uninsured is not a permanent state. People move in and out of jobs and marriages, and their insurance moves with them. (More than 4.5 million people lose or leave their jobs every month.) The number of people who are uninsured at some point in a year is more than 50 percent larger than the number who are uninsured at a point in time.
This means that if 50 million people are uninsured on any given day, it is likely that more than 75 million people will be uninsured at some point over a year. This would likely increase to 100 million over the course of two years. If we add in the close friends and immediate family of these uninsured individuals, it would almost certainly be a substantial majority of the voting age population.
It is reasonable to believe that these people who face and fear periods without insurance would value the security provided by the ACA, since it means that they can still get insurance during these periods. However this security will not affect the popularity of the bill if people are not aware of it. Since Senator Schumer and Charles Lane apparently do not understand this essential aspect of the ACA, it is likely that the tens of millions of people who have day jobs (unlike Schumer and Lane) also don’t understand the security provided to them under the law.
The ignorance of this and other aspects of the law likely helps explain much of the law’s unpopularity. Opinion polls consistently show overwhelming public support for most of the key features of the bill when asked separately.
It is also worth calling attention to a bizarre assertion in Lane’s piece. Schumer notes that the economy has been very weak leading to stagnant incomes for most of the population. He then comments:
“In theory, at least, this should be a time of electoral triumph for the party of government.”
This is bizarre because both parties are the party of government, the question is what the government is used for. The Democrats have not distinguished themselves in a big way from Republicans in this area. The top leaders of the party all supported the bailout measures that largely kept Wall Street intact by shoveling the big banks trillions of dollars of below market interest rate loans and guarantees at a time when liquidity carried an enormous premium. The Obama administration has also gone to bat for them by blocking a European tax on the financial transactions of their European subsidiaries.
The Democrats have also used the power of government to make the patent monopolies of the drug companies stronger and longer and spreading them around the globe in trade agreements. In the latter case the profits for the drug companies come at the expense of other exports. The same story applies with stronger and longer copyright protection for the entertainment industry.
They have also constructed trade agreements that are explicitly designed to put U.S. manufacturing workers in direct competition with low paid workers in the developing world. At the same time the Democrats use the power of government to protect the most highly paid professionals (e.g. doctors, lawyers, and dentists) from the same competition.
In short, most of the public sees the Democrats as one of the parties of government that uses the power of the government against most of the public, because it happens to be true.
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Of course it had no evidence, but hey, if you don’t like the 35-hour work week, who needs evidence. The comment came in an article discussing the debate over changing the 35-hour work week, which requires that employers pay an overtime premium for additional hours.
The piece told readers:
“The law has not improved an unemployment rate that, at 10.2 percent, hovers near a high.”
It would be fascinating to know how the NYT reached this conclusion. If people worked more hours, and the unemployment rate remained the same, the implication is that considerably more goods and services would be produced. (If the average workweek increased by just one hour, and there was no decline in productivity, it would imply a 2.9 percent increase in output.)
Incredibly, this piece only presents assertions from experts who claim that France is suffering from the short workweek, although it did make a passengers’ assistant at Orly airport, into an expert, telling readers:
“For wage earners like Ms. Ahlem, political resistance to change seems out of touch with economic reality.” It then quotes her as saying that the laws should be encouraging people to work, which of course ignores the fact that France is suffering from a lack of demand, not a lack of people who want to work. (See, unemployment means people want to work but can’t find jobs.) It’s not clear that Ms. Ahlem is typical of most wage earners in thinking that people don’t want to work — even if the NYT assures us that she is.
The piece also includes the bizarre complaint that the short work week has made France too productive:
“But in reality, France’s 35-hour week has become largely symbolic, as employees across the country pull longer hours and work more intensely, with productivity per hour about 13 percent higher than the eurozone average.”
Economists attach enormous importance to productivity. If the short workweek has helped to make the productivity of French workers 13 percent higher than the euro zone average this would be a strong argument in its favor.
In short, this is a very confused article. The NYT obviously doesn’t like to see workers putting in short workweeks. But if it wants to maintain its status as a serious newspaper it should get its argument straight and move it to the opinion page.
Of course it had no evidence, but hey, if you don’t like the 35-hour work week, who needs evidence. The comment came in an article discussing the debate over changing the 35-hour work week, which requires that employers pay an overtime premium for additional hours.
The piece told readers:
“The law has not improved an unemployment rate that, at 10.2 percent, hovers near a high.”
It would be fascinating to know how the NYT reached this conclusion. If people worked more hours, and the unemployment rate remained the same, the implication is that considerably more goods and services would be produced. (If the average workweek increased by just one hour, and there was no decline in productivity, it would imply a 2.9 percent increase in output.)
Incredibly, this piece only presents assertions from experts who claim that France is suffering from the short workweek, although it did make a passengers’ assistant at Orly airport, into an expert, telling readers:
“For wage earners like Ms. Ahlem, political resistance to change seems out of touch with economic reality.” It then quotes her as saying that the laws should be encouraging people to work, which of course ignores the fact that France is suffering from a lack of demand, not a lack of people who want to work. (See, unemployment means people want to work but can’t find jobs.) It’s not clear that Ms. Ahlem is typical of most wage earners in thinking that people don’t want to work — even if the NYT assures us that she is.
The piece also includes the bizarre complaint that the short work week has made France too productive:
“But in reality, France’s 35-hour week has become largely symbolic, as employees across the country pull longer hours and work more intensely, with productivity per hour about 13 percent higher than the eurozone average.”
Economists attach enormous importance to productivity. If the short workweek has helped to make the productivity of French workers 13 percent higher than the euro zone average this would be a strong argument in its favor.
In short, this is a very confused article. The NYT obviously doesn’t like to see workers putting in short workweeks. But if it wants to maintain its status as a serious newspaper it should get its argument straight and move it to the opinion page.
Read More Leer más Join the discussion Participa en la discusión
Paul Krugman tells us that “Keynes is Slowly Winning.” The immediate cause for celebration is Catherine Mann, the new chief economist at the OECD, calls for stimulus. By contrast, her predecessors in 2011 were calling for rapid increases in interest rates to normalize the economic situation.
This is indeed good news, but as a practical matter the flat-earth crowd is still calling the shots outside of Japan. There is little hope for real stimulus any time soon. The Austerians in power in the EU and to a lesser extent the U.S. are inflicting the sort of damage that our enemies could only dream about. Keynes might be winning slowly, but it is “very slowly.”
Paul Krugman tells us that “Keynes is Slowly Winning.” The immediate cause for celebration is Catherine Mann, the new chief economist at the OECD, calls for stimulus. By contrast, her predecessors in 2011 were calling for rapid increases in interest rates to normalize the economic situation.
This is indeed good news, but as a practical matter the flat-earth crowd is still calling the shots outside of Japan. There is little hope for real stimulus any time soon. The Austerians in power in the EU and to a lesser extent the U.S. are inflicting the sort of damage that our enemies could only dream about. Keynes might be winning slowly, but it is “very slowly.”
Read More Leer más Join the discussion Participa en la discusión
Much of the public remains badly confused about the Affordable Care Act (ACA). This shouldn’t be a surprise. It is a complicated bill. Also, there has been much effort to deliberately create confusion. For example, Republicans invented stories of ACA death panels and massive job loss. Major media outlets, in their commitment to neutral reporting, treated such claims seriously, along with the assertion that the earth is flat.
While the public’s confusion is understandable, if regrettable, the confusion among elite types is far more disturbing. Earlier in the week, New York Senator Charles Schumer, the third ranking Democrat in the Senate, admonished his party for pursuing Obamacare rather than promoting stronger measures for the economy. Schumer didn’t explain why he thinks not pursuing health care reform would have increased support for bigger budget deficits or a lower valued dollar to reduce the trade deficit, the necessary steps for fixing the economy.
But the really striking part of Schumer’s comments was his confusion about the status of the uninsured. He asserted that they were a small part of the electorate and most don’t even vote. Washington Post columnist Charles Lane chimes in today, largely agreeing with Schumer on this point.
Contrary to what Senator Schumer and Mr. Lane seem to believe, being uninsured is not a permanent state. People move in and out of jobs and marriages, and their insurance moves with them. (More than 4.5 million people lose or leave their jobs every month.) The number of people who are uninsured at some point in a year is more than 50 percent larger than the number who are uninsured at a point in time.
This means that if 50 million people are uninsured on any given day, it is likely that more than 75 million people will be uninsured at some point over a year. This would likely increase to 100 million over the course of two years. If we add in the close friends and immediate family of these uninsured individuals, it would almost certainly be a substantial majority of the voting age population.
It is reasonable to believe that these people who face and fear periods without insurance would value the security provided by the ACA, since it means that they can still get insurance during these periods. However this security will not affect the popularity of the bill if people are not aware of it. Since Senator Schumer and Charles Lane apparently do not understand this essential aspect of the ACA, it is likely that the tens of millions of people who have day jobs (unlike Schumer and Lane) also don’t understand the security provided to them under the law.
The ignorance of this and other aspects of the law likely helps explain much of the law’s unpopularity. Opinion polls consistently show overwhelming public support for most of the key features of the bill when asked separately.
It is also worth calling attention to a bizarre assertion in Lane’s piece. Schumer notes that the economy has been very weak leading to stagnant incomes for most of the population. He then comments:
“In theory, at least, this should be a time of electoral triumph for the party of government.”
This is bizarre because both parties are the party of government, the question is what the government is used for. The Democrats have not distinguished themselves in a big way from Republicans in this area. The top leaders of the party all supported the bailout measures that largely kept Wall Street intact by shoveling the big banks trillions of dollars of below market interest rate loans and guarantees at a time when liquidity carried an enormous premium. The Obama administration has also gone to bat for them by blocking a European tax on the financial transactions of their European subsidiaries.
The Democrats have also used the power of government to make the patent monopolies of the drug companies stronger and longer and spreading them around the globe in trade agreements. In the latter case the profits for the drug companies come at the expense of other exports. The same story applies with stronger and longer copyright protection for the entertainment industry.
They have also constructed trade agreements that are explicitly designed to put U.S. manufacturing workers in direct competition with low paid workers in the developing world. At the same time the Democrats use the power of government to protect the most highly paid professionals (e.g. doctors, lawyers, and dentists) from the same competition.
In short, most of the public sees the Democrats as one of the parties of government that uses the power of the government against most of the public, because it happens to be true.
Much of the public remains badly confused about the Affordable Care Act (ACA). This shouldn’t be a surprise. It is a complicated bill. Also, there has been much effort to deliberately create confusion. For example, Republicans invented stories of ACA death panels and massive job loss. Major media outlets, in their commitment to neutral reporting, treated such claims seriously, along with the assertion that the earth is flat.
While the public’s confusion is understandable, if regrettable, the confusion among elite types is far more disturbing. Earlier in the week, New York Senator Charles Schumer, the third ranking Democrat in the Senate, admonished his party for pursuing Obamacare rather than promoting stronger measures for the economy. Schumer didn’t explain why he thinks not pursuing health care reform would have increased support for bigger budget deficits or a lower valued dollar to reduce the trade deficit, the necessary steps for fixing the economy.
But the really striking part of Schumer’s comments was his confusion about the status of the uninsured. He asserted that they were a small part of the electorate and most don’t even vote. Washington Post columnist Charles Lane chimes in today, largely agreeing with Schumer on this point.
Contrary to what Senator Schumer and Mr. Lane seem to believe, being uninsured is not a permanent state. People move in and out of jobs and marriages, and their insurance moves with them. (More than 4.5 million people lose or leave their jobs every month.) The number of people who are uninsured at some point in a year is more than 50 percent larger than the number who are uninsured at a point in time.
This means that if 50 million people are uninsured on any given day, it is likely that more than 75 million people will be uninsured at some point over a year. This would likely increase to 100 million over the course of two years. If we add in the close friends and immediate family of these uninsured individuals, it would almost certainly be a substantial majority of the voting age population.
It is reasonable to believe that these people who face and fear periods without insurance would value the security provided by the ACA, since it means that they can still get insurance during these periods. However this security will not affect the popularity of the bill if people are not aware of it. Since Senator Schumer and Charles Lane apparently do not understand this essential aspect of the ACA, it is likely that the tens of millions of people who have day jobs (unlike Schumer and Lane) also don’t understand the security provided to them under the law.
The ignorance of this and other aspects of the law likely helps explain much of the law’s unpopularity. Opinion polls consistently show overwhelming public support for most of the key features of the bill when asked separately.
It is also worth calling attention to a bizarre assertion in Lane’s piece. Schumer notes that the economy has been very weak leading to stagnant incomes for most of the population. He then comments:
“In theory, at least, this should be a time of electoral triumph for the party of government.”
This is bizarre because both parties are the party of government, the question is what the government is used for. The Democrats have not distinguished themselves in a big way from Republicans in this area. The top leaders of the party all supported the bailout measures that largely kept Wall Street intact by shoveling the big banks trillions of dollars of below market interest rate loans and guarantees at a time when liquidity carried an enormous premium. The Obama administration has also gone to bat for them by blocking a European tax on the financial transactions of their European subsidiaries.
The Democrats have also used the power of government to make the patent monopolies of the drug companies stronger and longer and spreading them around the globe in trade agreements. In the latter case the profits for the drug companies come at the expense of other exports. The same story applies with stronger and longer copyright protection for the entertainment industry.
They have also constructed trade agreements that are explicitly designed to put U.S. manufacturing workers in direct competition with low paid workers in the developing world. At the same time the Democrats use the power of government to protect the most highly paid professionals (e.g. doctors, lawyers, and dentists) from the same competition.
In short, most of the public sees the Democrats as one of the parties of government that uses the power of the government against most of the public, because it happens to be true.
Read More Leer más Join the discussion Participa en la discusión
Of course it had no evidence, but hey, if you don’t like the 35-hour work week, who needs evidence. The comment came in an article discussing the debate over changing the 35-hour work week, which requires that employers pay an overtime premium for additional hours.
The piece told readers:
“The law has not improved an unemployment rate that, at 10.2 percent, hovers near a high.”
It would be fascinating to know how the NYT reached this conclusion. If people worked more hours, and the unemployment rate remained the same, the implication is that considerably more goods and services would be produced. (If the average workweek increased by just one hour, and there was no decline in productivity, it would imply a 2.9 percent increase in output.)
Incredibly, this piece only presents assertions from experts who claim that France is suffering from the short workweek, although it did make a passengers’ assistant at Orly airport, into an expert, telling readers:
“For wage earners like Ms. Ahlem, political resistance to change seems out of touch with economic reality.” It then quotes her as saying that the laws should be encouraging people to work, which of course ignores the fact that France is suffering from a lack of demand, not a lack of people who want to work. (See, unemployment means people want to work but can’t find jobs.) It’s not clear that Ms. Ahlem is typical of most wage earners in thinking that people don’t want to work — even if the NYT assures us that she is.
The piece also includes the bizarre complaint that the short work week has made France too productive:
“But in reality, France’s 35-hour week has become largely symbolic, as employees across the country pull longer hours and work more intensely, with productivity per hour about 13 percent higher than the eurozone average.”
Economists attach enormous importance to productivity. If the short workweek has helped to make the productivity of French workers 13 percent higher than the euro zone average this would be a strong argument in its favor.
In short, this is a very confused article. The NYT obviously doesn’t like to see workers putting in short workweeks. But if it wants to maintain its status as a serious newspaper it should get its argument straight and move it to the opinion page.
Of course it had no evidence, but hey, if you don’t like the 35-hour work week, who needs evidence. The comment came in an article discussing the debate over changing the 35-hour work week, which requires that employers pay an overtime premium for additional hours.
The piece told readers:
“The law has not improved an unemployment rate that, at 10.2 percent, hovers near a high.”
It would be fascinating to know how the NYT reached this conclusion. If people worked more hours, and the unemployment rate remained the same, the implication is that considerably more goods and services would be produced. (If the average workweek increased by just one hour, and there was no decline in productivity, it would imply a 2.9 percent increase in output.)
Incredibly, this piece only presents assertions from experts who claim that France is suffering from the short workweek, although it did make a passengers’ assistant at Orly airport, into an expert, telling readers:
“For wage earners like Ms. Ahlem, political resistance to change seems out of touch with economic reality.” It then quotes her as saying that the laws should be encouraging people to work, which of course ignores the fact that France is suffering from a lack of demand, not a lack of people who want to work. (See, unemployment means people want to work but can’t find jobs.) It’s not clear that Ms. Ahlem is typical of most wage earners in thinking that people don’t want to work — even if the NYT assures us that she is.
The piece also includes the bizarre complaint that the short work week has made France too productive:
“But in reality, France’s 35-hour week has become largely symbolic, as employees across the country pull longer hours and work more intensely, with productivity per hour about 13 percent higher than the eurozone average.”
Economists attach enormous importance to productivity. If the short workweek has helped to make the productivity of French workers 13 percent higher than the euro zone average this would be a strong argument in its favor.
In short, this is a very confused article. The NYT obviously doesn’t like to see workers putting in short workweeks. But if it wants to maintain its status as a serious newspaper it should get its argument straight and move it to the opinion page.
Read More Leer más Join the discussion Participa en la discusión
Paul Krugman tells us that “Keynes is Slowly Winning.” The immediate cause for celebration is Catherine Mann, the new chief economist at the OECD, calls for stimulus. By contrast, her predecessors in 2011 were calling for rapid increases in interest rates to normalize the economic situation.
This is indeed good news, but as a practical matter the flat-earth crowd is still calling the shots outside of Japan. There is little hope for real stimulus any time soon. The Austerians in power in the EU and to a lesser extent the U.S. are inflicting the sort of damage that our enemies could only dream about. Keynes might be winning slowly, but it is “very slowly.”
Paul Krugman tells us that “Keynes is Slowly Winning.” The immediate cause for celebration is Catherine Mann, the new chief economist at the OECD, calls for stimulus. By contrast, her predecessors in 2011 were calling for rapid increases in interest rates to normalize the economic situation.
This is indeed good news, but as a practical matter the flat-earth crowd is still calling the shots outside of Japan. There is little hope for real stimulus any time soon. The Austerians in power in the EU and to a lesser extent the U.S. are inflicting the sort of damage that our enemies could only dream about. Keynes might be winning slowly, but it is “very slowly.”
Read More Leer más Join the discussion Participa en la discusión
The gods of national income accounting gave us some good news for Thanksgiving but it seems no one noticed. The data on corporate profits released in yesterday’s GDP report showed that the slight downward trend in shares in recent quarters is continuing. The profit share of net corporate income was 20.5 percent in the third quarter, down from a peak of 21.2 percent in the second quarter of 2013. Quarterly data are erratic but if we take a four quarter moving average we get the share was 20.2 percent in the four quarters ending with the third quarter, down from 21.0 percent in the four quarter average ending in the fourth quarter of 2013. That still up considerably from the 16.7 percent average since 1950, but clearly a step in the right direction. (Most of the drop is on the financial side, the profit share in the non-financial sector is still close to its peak.)
The shift away from profits could mean that workers will finally start to see some of the benefits of growth. However, there are two important cautions. First, most of the upward redistribution from 1980 to the present was not from wages to profits but rather from wages to high end workers. CEOs and hedge fund managers are getting labor income, or at least it is classified that way in the national income accounts.
The other point is that the economy is still not growing especially fast, in spite of what you read in the newspaper. GDP is up just 2.4 percent from the third quarter of last year. That is better than nothing, but with the labor force growing by close to 2.0 percent over this period, that doesn’t leave much room for wage growth even without upward redistribution.
The gods of national income accounting gave us some good news for Thanksgiving but it seems no one noticed. The data on corporate profits released in yesterday’s GDP report showed that the slight downward trend in shares in recent quarters is continuing. The profit share of net corporate income was 20.5 percent in the third quarter, down from a peak of 21.2 percent in the second quarter of 2013. Quarterly data are erratic but if we take a four quarter moving average we get the share was 20.2 percent in the four quarters ending with the third quarter, down from 21.0 percent in the four quarter average ending in the fourth quarter of 2013. That still up considerably from the 16.7 percent average since 1950, but clearly a step in the right direction. (Most of the drop is on the financial side, the profit share in the non-financial sector is still close to its peak.)
The shift away from profits could mean that workers will finally start to see some of the benefits of growth. However, there are two important cautions. First, most of the upward redistribution from 1980 to the present was not from wages to profits but rather from wages to high end workers. CEOs and hedge fund managers are getting labor income, or at least it is classified that way in the national income accounts.
The other point is that the economy is still not growing especially fast, in spite of what you read in the newspaper. GDP is up just 2.4 percent from the third quarter of last year. That is better than nothing, but with the labor force growing by close to 2.0 percent over this period, that doesn’t leave much room for wage growth even without upward redistribution.
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The Wall Street Journal applauded Senator Charles Schumer for saying that the Democrats made a mistake by pursuing health care reform rather than promoting economic recovery. This of course raises the obvious question, what policies exactly would Senator Schumer have put forward to promote economic recovery had the Democrats not pursued health care reform? Would there have been a much bigger stimulus with much larger deficits? Would we have had a more serious financial reform that broke up the large banks and thrown many of Schumer’s biggest campaign contributors in jail? Obviously the Democrats should have done more to promote a recovery, but it is difficult to see how anything connected with the Affordable Care Act (ACA) prevented it.
Perhaps the more serious problem with Schumer’s logic, as presented by the WSJ, is the claim that the politics on the ACA were inherently bad.
“Mr. Schumer put the problem to Democrats in terms crass enough for them to understand—’only a third of the uninsured are even registered to vote,’ he said, and only ‘about 5% of the electorate’ benefits from the entitlement. ‘To aim a huge change in mandate at such a small percentage of the electorate made no political sense.'”
While the uninsured at any point in time are a relatively small share of the electorate, tens of millions of people experience stretches of being uninsured over the course of a year and tens of millions more worry about this possibility. Of course many of them may not realize how they can benefit from the ACA and even many of those who do benefit (e.g. by getting insurance on the exchanges) may not know it is due to the ACA. In this respect, it is important to note that more than 4 million people leave or lose their job every month.
In a situation where one of the leading Democrats in the Senate apparently does not understand how the ACA affects a very large share of the currently insured population, it would not be surprising that the average voter does not understand either.
The Wall Street Journal applauded Senator Charles Schumer for saying that the Democrats made a mistake by pursuing health care reform rather than promoting economic recovery. This of course raises the obvious question, what policies exactly would Senator Schumer have put forward to promote economic recovery had the Democrats not pursued health care reform? Would there have been a much bigger stimulus with much larger deficits? Would we have had a more serious financial reform that broke up the large banks and thrown many of Schumer’s biggest campaign contributors in jail? Obviously the Democrats should have done more to promote a recovery, but it is difficult to see how anything connected with the Affordable Care Act (ACA) prevented it.
Perhaps the more serious problem with Schumer’s logic, as presented by the WSJ, is the claim that the politics on the ACA were inherently bad.
“Mr. Schumer put the problem to Democrats in terms crass enough for them to understand—’only a third of the uninsured are even registered to vote,’ he said, and only ‘about 5% of the electorate’ benefits from the entitlement. ‘To aim a huge change in mandate at such a small percentage of the electorate made no political sense.'”
While the uninsured at any point in time are a relatively small share of the electorate, tens of millions of people experience stretches of being uninsured over the course of a year and tens of millions more worry about this possibility. Of course many of them may not realize how they can benefit from the ACA and even many of those who do benefit (e.g. by getting insurance on the exchanges) may not know it is due to the ACA. In this respect, it is important to note that more than 4 million people leave or lose their job every month.
In a situation where one of the leading Democrats in the Senate apparently does not understand how the ACA affects a very large share of the currently insured population, it would not be surprising that the average voter does not understand either.
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The Wall Street Journal applauded Senator Charles Schumer for saying that the Democrats made a mistake by pursuing health care reform rather than promoting economic recovery. This of course raises the obvious question, what policies exactly would Senator Schumer have put forward to promote economic recovery had the Democrats not pursued health care reform? Would there have been a much bigger stimulus with much larger deficits? Would we have had a more serious financial reform that broke up the large banks and thrown many of Schumer’s biggest campaign contributors in jail? Obviously the Democrats should have done more to promote a recovery, but it is difficult to see how anything connected with the Affordable Care Act (ACA) prevented it.
Perhaps the more serious problem with Schumer’s logic, as presented by the WSJ, is the claim that the politics on the ACA were inherently bad.
“Mr. Schumer put the problem to Democrats in terms crass enough for them to understand—’only a third of the uninsured are even registered to vote,’ he said, and only ‘about 5% of the electorate’ benefits from the entitlement. ‘To aim a huge change in mandate at such a small percentage of the electorate made no political sense.'”
While the uninsured at any point in time are a relatively small share of the electorate, tens of millions of people experience stretches of being uninsured over the course of a year and tens of millions more worry about this possibility. Of course many of them may not realize how they can benefit from the ACA and even many of those who do benefit (e.g. by getting insurance on the exchanges) may not know it is due to the ACA. In this respect, it is important to note that more than 4 million people leave or lose their job every month.
In a situation where one of the leading Democrats in the Senate apparently does not understand how the ACA affects a very large share of the currently insured population, it would not be surprising that the average voter does not understand either.
The Wall Street Journal applauded Senator Charles Schumer for saying that the Democrats made a mistake by pursuing health care reform rather than promoting economic recovery. This of course raises the obvious question, what policies exactly would Senator Schumer have put forward to promote economic recovery had the Democrats not pursued health care reform? Would there have been a much bigger stimulus with much larger deficits? Would we have had a more serious financial reform that broke up the large banks and thrown many of Schumer’s biggest campaign contributors in jail? Obviously the Democrats should have done more to promote a recovery, but it is difficult to see how anything connected with the Affordable Care Act (ACA) prevented it.
Perhaps the more serious problem with Schumer’s logic, as presented by the WSJ, is the claim that the politics on the ACA were inherently bad.
“Mr. Schumer put the problem to Democrats in terms crass enough for them to understand—’only a third of the uninsured are even registered to vote,’ he said, and only ‘about 5% of the electorate’ benefits from the entitlement. ‘To aim a huge change in mandate at such a small percentage of the electorate made no political sense.'”
While the uninsured at any point in time are a relatively small share of the electorate, tens of millions of people experience stretches of being uninsured over the course of a year and tens of millions more worry about this possibility. Of course many of them may not realize how they can benefit from the ACA and even many of those who do benefit (e.g. by getting insurance on the exchanges) may not know it is due to the ACA. In this respect, it is important to note that more than 4 million people leave or lose their job every month.
In a situation where one of the leading Democrats in the Senate apparently does not understand how the ACA affects a very large share of the currently insured population, it would not be surprising that the average voter does not understand either.
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