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Washington Post Calls Jobs Report Better than Incompetent Economists Had ExpectedDean Baker / October 08, 2011
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Like Europe, Americans Waiting for "Democracy In the Streets" to Force Policy ChangeMark Weisbrot / October 08, 2011
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Is It Possible that the Jobs Numbers Would Not Provide Ammunition to Republicans?Dean Baker / October 08, 2011
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Labor Market Policy Research Reports, Sept. 26 – Oct. 7, 2011A roundup of the labor market research reports released this week and last week.
Center for American Progress
Redefining Teacher Pensions: Strategically Defined Benefits for New Teachers and Fiscal Sustainability for All
Raegen Miller
CLASP-CEPR
How Much Does Employee Turnover Really Cost Your Business?
Demos
The State Of Massachusetts' Middle Class
Tamara Draut
CEPR and / October 07, 2011
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Ecuador: Contributions to Real GDP GrowthRebecca Ray / October 07, 2011
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Latin America and the Caribbean
Ecuador: GDP Growth Accelerates, Led By ConstructionRebecca Ray / October 07, 2011
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Health Care Job Growth Notable in Otherwise Dismal ReportDean Baker / October 07, 2011
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Taxing Nothing: Make Owners of Vacant Property PayDean Baker
Al Jazeera English, October 7, 2011
Dean Baker / October 07, 2011
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Health Care Employment Drives Weak Job GrowthDean Baker / October 07, 2011
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Growth in Health Care as Percent of Total Job Growth, 2006-2011CEPR / October 07, 2011
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Inflation: How Do You Spell Debt Relief?In his column today, Paul Krugman picks up the suggestion from Richard Yeselson, that debt relief for working people would be a good demand for the Wall Street occupiers to pursue. While there is a good logic to this demand -- many people find themselves facing crushing mortgage, credit card or student loan debt -- there are also problems with going this route.
For example, suppose we go the route of making every underwater mortgage above water by writing off the extent to which the debt exceeds the value of the home. As of what date do we wipe out underwater debt, today, six months ago, six months from now? That it isn't a joke, home prices are still falling in many areas. So do we say that people who were smart enough to be underwater as of some prior debt benefit, but folks who waited to get underwater are screwed?
Do we have a limit on debt write-offs? There are a lot of people who were speculating in homes who took out zero-down mortgages on expensive properties in places like Las Vegas and Miami at the peak of the bubble. Say they borrowed $450k on a home that is worth $200k today. Is it important to ensure that these people have their mortgages brought above water.
There is also the question of the other side of these loans. Close to half would of the underwater mortgages would now be held by Fannie Mae or Freddie Mac, so the write off would be a loss of government money. We can argue over whether this is the best use of it. Some of the rest of the mortgages are held by banks, but most are in pools. The owners of these pools include some rich investors, but it also includes institutional investors like pension funds and individuals with 401(k) holdings.
This raises both a question of fairness and also dampens the economic impact -- which has been hugely overstated in any case. If we eliminate $900 billion in underwater mortgage debt (certainly a high estimate, since it implies that almost 10 cents of every mortgage dollar outstanding represents underwater debt), we should expect the additional wealth to generate around $54 billion of additional consumption a year (this assumes a 6 percent wealth effect)
CEPR / October 07, 2011
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Argentina's Problem Was an Over-Valued Dollar, Not InflationDean Baker / October 07, 2011
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Occupy Wall Street Gets What the ‘Very Serious People’ Have Missed for 30 YearsJohn Schmitt / October 06, 2011
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What Would Keynes Do? Get the Dollar DownDean Baker
The Nation, October 6, 2011
Dean Baker / October 06, 2011
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Steve Jobs and Alan GreenspanDean Baker
The Huffington Post, October 5, 2011
Dean Baker / October 06, 2011
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Dana Milbank Does What the Media Is Supposed to Do to Politicians Who Just Make Things UpDean Baker / October 06, 2011
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Is There Anyone Other than the NYT Who Wants to See a Lehman-Type Collapse In Europe?Dean Baker / October 06, 2011
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British Prime Minister David Cameron Doesn't Know Economics, Where Is the Ridicule?Dean Baker / October 05, 2011
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Supplemental Security Income for Disabled Kids: A Success Story Conservatives Don’t Want to TellShawn Fremstad / October 05, 2011
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Ken Rogoff Misses the Boat on Financial Speculation TaxesIn a profession that is controlled almost exclusively by people who completely overlooked the largest asset bubbles in the history of the world, Ken Rogoff earns at least a “B” for his early warnings of dangerous economic imbalances. However, his column criticizing financial speculation taxes (FST) is more on a par with the work of his hopelessly lost colleagues.
The column argues that an FST of the size being considered by the European Union (EU) would reduce the information content of prices, reduce liquidity, and have no appreciable impact on volatility. In the long-run they will raise the cost of capital and therefore slow growth, and not end up raising much revenue.
This is a serious list of charges against a tax of 0.1 percent on a stock trade (0.05 percent on each side) and 0.01 percent on derivative trades (0.005 percent on each side). The most obvious reason for skepticism about Rogoff’s attack is that the increase in transactions costs implied by the tax would just raise them back to the levels of early or even mid-90s.
Computerization and deregulation has led to a sharp decline in transactions costs over the last three decades. A tax of 0.1 percent on stock trades would just remove part of this decline. Trading costs would still be lower than they were in the 80s and much lower than they were in 50s or 60s when they were typically 1 percent of the share price or more.
CEPR / October 04, 2011