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Balloon Juice

Come for the politics, stay for the snark.

“Everybody’s entitled to be an idiot.”

You’re just a puppy masquerading as an old coot.

Never forget that he train is barreling down on Trump, even as he dances on the tracks.

Come on, media. you have one job. start doing it.

Pelosi: “He either is stupid, or he thinks the rest of us are.” Why not both?

Republican speaker of the house Mike Johnson is the bland and smiling face of evil.

Putin must be throwing ketchup at the walls.

A thin legal pretext to veneer over their personal religious and political desires.

Perhaps you mistook them for somebody who gives a damn.

So many bastards, so little time.

We still have time to mess this up!

Wow, I can’t imagine what it was like to comment in morse code.

It’s easier to kill a dangerous animal than a man who just happens to have different thoughts/values than one’s own.

Even though I know this is a bad idea, I’m off to do it anyway!

Everyone is in a bubble, but some bubbles model reality far better than others!

Bark louder, little dog.

Democrats have delivered the Square Deal, the New Deal, the Fair Deal, and now… the Big Joe Biden Deal.

Be a traveling stable for those who can’t find room at the inn.

Let us savor the impending downfall of lawless scoundrels who richly deserve the trouble barreling their way.

We need to vote them all out and restore sane Democratic government.

I see no possible difficulties whatsoever with this fool-proof plan.

Accused of treason; bitches about the ratings. I am in awe.

Shallow, uninformed, and lacking identity

The media handbook says “controversial” is the most negative description that can be used for a Republican.

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You are here: Home / Music / Knock, knock,knocking on Nairu’s door

Knock, knock,knocking on Nairu’s door

by David Anderson|  March 18, 20152:37 pm| 100 Comments

This post is in: Music, Open Threads

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The Fed’s action in Tweets:

Yellen: “Room for further improvement in the labor market continues” That’s dovish.

— David Wessel (@davidmwessel) March 18, 2015

FOMC marks down NAIRU to 5.0% to 5.2% Had been 5.2% to 5.5% http://t.co/zT3W0RZFBQ

— David Wessel (@davidmwessel) March 18, 2015

Precisely… (more in next tweet) “@delong: .@DanielAlpert So the Fed removed the word “patient”, but they became more patient…”

— Dan Alpert (@DanielAlpert) March 18, 2015

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Previous Post: « Misspeaking On Race? That’s So Raven!
Next Post: Wednesday Evening Open Thread »

Reader Interactions

100Comments

  1. 1.

    Kylroy

    March 18, 2015 at 2:43 pm

    Seeing a lot of raw HTML in there right now.

  2. 2.

    Peale

    March 18, 2015 at 2:44 pm

    Sure. Elon finally performs a single post, and now you give me a post that contains a secret code. What is Ulf=6? Is that some kind of code indicating that the revolution begins at midnight?

  3. 3.

    Belafon

    March 18, 2015 at 2:44 pm

    @Kylroy: It’s all very technical and numbery and we’re not really meant to understand it.

  4. 4.

    dmsilev

    March 18, 2015 at 2:45 pm

    @Kylroy: That’s the Fed’s new way of opaquifying their statements. Just be thankful it’s not the 90s anymore; we all remember Greenspan giving reports in Perl, and nobody wants to see that again.

  5. 5.

    elm

    March 18, 2015 at 2:45 pm

    I’m used to Richard posting technical material, but this is too far.

  6. 6.

    cmorenc

    March 18, 2015 at 2:46 pm

    So the big Fed announcement was that they’re going to control monetary supply via HTML coding? Or else have you decided Richard to communicate from now on exclusively in obscure HTML coded language? What am I to make of a post filled with gems like:

    script async src=”//platform.twitter.com/widgets.js” charset=”utf-8″></script

    ???

  7. 7.

    Richard Mayhew

    March 18, 2015 at 2:50 pm

    Love you guys :)

  8. 8.

    Dexter

    March 18, 2015 at 3:03 pm

    What is NAIRU, a new name for Nairobi?

  9. 9.

    Mary G

    March 18, 2015 at 3:03 pm

    I thought if I looked up NAIRU, I might understand better:

    NAIRU is an acronym for non-accelerating inflation rate of unemployment, and refers to a level of unemployment below which inflation rises

    …but I was wrong, and I spent 20+ years working at a car insurance company and have even met a couple of actuaries in person. You are going to have to explain better what this means to us regular people.

  10. 10.

    piratedan

    March 18, 2015 at 3:03 pm

    all I know is that the guys who make money in the stock market are pleased as the numbers went from like 100 down for the day to back on the positive side. Unsure if this means good things for you and me, but my extremely modest stock portfolio is making modest gains today.

    One of those weird things, I was laid off at the end of 2008, had to reinvest my 401k money and had a small amount of money leftover that I could invest and make it part of my retirement portfolio… this was roughly April of 2009. I selected some stocks and bought like 20 shares of 6 companies and have sat back and watched the economy sluggishly recover. That roughly 2300 is now supposedly worth north of 9k now. So yeah, while the rest of us aren’t seeing exponential growth, the stock market, the barometer of business commerce, is still kicking ass. Granted we’re due for a correction, but while the Feds maintain a business friendly position and interest rates are low coupled with negligible inflation, if you have money, it’s quite literally working for you.

  11. 11.

    Richard Mayhew

    March 18, 2015 at 3:05 pm

    @Mary G: The TLDR takeaway is the Feds changed their model to assume much more labor slack (why wages are barely moving despite a good year in job gains), and interest rates will stay low for a while longer.

  12. 12.

    jl

    March 18, 2015 at 3:06 pm

    @Mary G: Any language people out there know what kind of definition that is, for NAIRU? Decades ago, I think it was supposed to be a more or less fixed number. That is very debatable now.

    And now that RM has the HTML solved, he can work on this one:

    Is the Walrasian Auctioneer microfounded?
    http://economistsview.typepad.com/economistsview/2015/03/is-the-walrasian-auctioneer-microfounded.html

  13. 13.

    Richard Mayhew

    March 18, 2015 at 3:06 pm

    Takeaway #2 is my Twitter feed of economists and policy wonks had not gone for the obvious Dylan or GNR reference and there was a massive need for that….

  14. 14.

    Mary G

    March 18, 2015 at 3:07 pm

    @Richard Mayhew: Thank you. So the rich people can keep raking it in borrowing money basically for free until the poors get a raise? Why would they ever let that change?

  15. 15.

    Turgidson

    March 18, 2015 at 3:08 pm

    Glad Yellen is in the big chair. Hopefully she can hold the line a while longer and keep the premature inflation hysterics at bay. I’m with Krugman that inflation rising slightly above target due to Fed inaction is far less-bad than the Fed hitting the brakes too soon and stalling the labor market’s recovery, which as observers rightly point out, still isn’t strong enough to push wages up perceptibly.

  16. 16.

    boatboy_srq

    March 18, 2015 at 3:09 pm

    @Richard Mayhew: And the post-edit version is proof that you can take any economic gibberish and turn it into pretty pictures; all it takes is the right twist on the image.

  17. 17.

    Villago Delenda Est

    March 18, 2015 at 3:11 pm

    Look, I can jargon like mad in militarese and drive you all bonkers, but I just won’t do it.

  18. 18.

    Rob in CT

    March 18, 2015 at 3:14 pm

    @Mary G:

    This is good, meaning the Fed isn’t going to slam on the brakes.

    It’s not great, in that the Fed has zero control over fiscal policy (whereas the jackals in the GOP do). Since there is roughly zero hope of stimulative fiscal policy, loose fed rates are better than nothing.

    They correctly recognized that there is still lots of slack in the labor market and refused to raise rates, despite the baying of the hard money types.

  19. 19.

    Roger Moore

    March 18, 2015 at 3:15 pm

    @dmsilev:

    we all remember Greenspan giving reports in Perl, and nobody wants to see that again.

    What’s wrong with Perl? It’s perfectly possible to write readable Perl if you follow a sensible coding style. The problem is that Greenspan was using obfuscated Perl, which makes obfuscated C seem simple and comprehensible.

  20. 20.

    Trollhattan

    March 18, 2015 at 3:16 pm

    My first thought was ’60s fashion reference.

  21. 21.

    schrodinger's cat

    March 18, 2015 at 3:18 pm

    NAIRU: non-accelerating inflation rate of unemployment

  22. 22.

    dmsilev

    March 18, 2015 at 3:19 pm

    @Roger Moore: Someone once sent me a file which was obfuscated TeX code. Not LaTeX even, raw Knuthian TeX. Looked like line noise, but compiled just fine and outputted the complete set of verses of “The Twelves Days of Christmas”.

    Edit: Thank you Google: http://sdh33b.blogspot.com/2006/10/obfuscated-tex.html

  23. 23.

    dmsilev

    March 18, 2015 at 3:20 pm

    @schrodinger’s cat: ‘Non-accelerating inflation’ sounds like something a cosmologist would be studying.

  24. 24.

    Roger Moore

    March 18, 2015 at 3:21 pm

    @Mary G:

    You are going to have to explain better what this means to us regular people.

    Very roughly, NAIRU is the “natural” level of unemployment. If unemployment is above NAIRU, inflation is expected to stay at or below the Fed’s inflation target. It’s only when unemployment goes below NAIRU that we’re supposed to have to worry about inflation. Nobody knows for certain what NAIRU really is, but there are various estimates. By lowering their estimate of NAIRU, the Fed is saying that they think they can push unemployment lower before they have to start raising interest rates to keep inflation under control.

  25. 25.

    schrodinger's cat

    March 18, 2015 at 3:24 pm

    @Roger Moore: That’s a good summary. Of course, like most other econ theories it is a bit of a con brought to you by the good folks at UChicago.

  26. 26.

    Trollhattan

    March 18, 2015 at 3:24 pm

    @Mary G:
    I’d love to be able to walk up to the Discount Window and borrow a couple hundred large at these (today’s) rates.
    Primary Credit 0.75%
    Secondary Credit 1.25%
    Seasonal Credit 0.15%
    Fed Funds Target 0 – 0.25%

    That, and I’d have a nice time in the SF Market Street District, since I was already there.

    Compare and contrast with the usurious rates at payday lenders (now, conveniently located next to a vape lounge at a strip mall near you). Money that’s almost infinitely more expensive. Legalized crime.

  27. 27.

    jl

    March 18, 2015 at 3:25 pm

    @Villago Delenda Est: Sounds like you are in the mood for some bond market jargon.

    The Worldwide Deficit of High-Quality Debt
    Barry Ritholtz

    ‘… the usual big stimulus projects were mostly absent in this cycle. Add to that the winding down of the wars in Iraq and Afghanistan and the reduction in military spending. President Barack Obama, stymied by Congress, was never able to match the government spending increases of his predecessors to help the economy recover from recession.

    Had this economic cycle been similar to 2001, unemployment might already be lower than 5 percent and gross domestic product growth could be a half-percentage point higher — and there would be a lot more U.S. debt issued. ‘

    http://www.bloombergview.com/articles/2015-03-17/world-has-a-deficit-of-high-quality-debt

    I think the very sub par macroeconomic policy of Obama/Geithner, which was followed by terrible macroeconomic policy forced on US by Congress is part of explanation for the disastrous midterms. The job market sucked for most people and they blamed the president, or just cursed both houses and stayed home. Eurozone weakness may be next big import into US economy, which should keep Fed policy vary ‘dovish’ for some time to come.

    What we see now is consequences of zombie neoclassical macroeconomics, a failed theory from start to… I was going to say finish, but there seems to be no finish to it.

  28. 28.

    raven

    March 18, 2015 at 3:31 pm

    Cool we just got a 10% increase in our long-term health care policy!

  29. 29.

    Doug r

    March 18, 2015 at 3:32 pm

    @Turgidson: yeah well with the Insane housing prices around here I’d rather see a little bit of interest rate rise. Maybe my savings bonds would actually keep up with inflation.

  30. 30.

    schrodinger's cat

    March 18, 2015 at 3:40 pm

    According to the proponents of NAIRU, if you try to lower the unemployment below NAIRU, that will result into higher rates of inflation.

    (NAIRU for the United States is deemed to be around 5%)

  31. 31.

    schrodinger's cat

    March 18, 2015 at 3:41 pm

    I prefer Bob Dylan’s version.

  32. 32.

    jl

    March 18, 2015 at 3:42 pm

    Just visited the handy-dandy Bureau of Labor Statistics site.
    Prime age (25 to 54) employment to population wage ratio is 77 percent, which is still 3 points down from late 2007, and 5 points down from 2000. So that is 4 to 6 million people who may still want and/or need a job, but do not have one because of crap macroeconomic policy (jointly produced by Obama and Congress, thought to be fair, Obama would like to make amends for missteps early in administration, Congress would like to make it worse)

    The supposedly usually tight link between unemployment rate, interest rates and inflation is far from sight.

  33. 33.

    schrodinger's cat

    March 18, 2015 at 3:47 pm

    @jl: Do you know what’s happening to Greece?

  34. 34.

    jl

    March 18, 2015 at 3:47 pm

    @schrodinger’s cat: I’m suspicious of that 5 percent estimate. You go back to old textbooks and you see that 5 percent as a nice round number for a policy goal before NAIRU was born in theorists’ minds. I don’t think anyone has had a good fix on what the NAIRU is.

    As I said before, originally the NAIRU was supposed to be some kind of economic constant that didn’t change much. Now, it is more honest to say that it is whatever the last unemployment rate was the last time inflation started going up, for whatever obscure reason.

    I don’t think anyone knows what the NAIRU is.

    One, think Greenspan did get right was to disregard theoretical and statistical fantasies about the NAIRU might be as a guide to Fed policy. I have no idea whether he had any half way sensible reason for doing so, but that is what he did.

  35. 35.

    jl

    March 18, 2015 at 3:49 pm

    @schrodinger’s cat: Only what I read in economics blogs. Krugman says the agreement was strategically mushy to allow current policy to continue without disrupting much, and giving some time for the two sides to feel out bargaining room and hardness of respective demands.

  36. 36.

    Violet

    March 18, 2015 at 3:51 pm

    Needs moar jacket.

  37. 37.

    schrodinger's cat

    March 18, 2015 at 3:54 pm

    @jl: I agree, its seems like something Lucas and company pulled out of their collective asses.

  38. 38.

    Cacti

    March 18, 2015 at 3:54 pm

    OT but…

    Mass shooting at/near a Mesa, AZ high school. At least 1 killed, 5 wounded.

    Suspect is described as a middle aged white male, dressed in black, with a shaved head and face/neck tattoos.

    The high school in question is called EVIT (East Valley Institute of Technology). My sister in law used to go to it.

    Holy hell.

  39. 39.

    schrodinger's cat

    March 18, 2015 at 3:56 pm

    @Violet: The “h” in Nehru is not silent.

  40. 40.

    Trollhattan

    March 18, 2015 at 3:59 pm

    @schrodinger’s cat:
    My favorite cover.

  41. 41.

    catclub

    March 18, 2015 at 4:00 pm

    @Mary G:

    So the rich people can keep raking it in borrowing money basically for free

    Only if they can find more profitable places to invest that borrowed money.

  42. 42.

    schrodinger's cat

    March 18, 2015 at 4:00 pm

    @Trollhattan: I also like Avril Lavigne’s cover.

  43. 43.

    Violet

    March 18, 2015 at 4:03 pm

    @schrodinger’s cat: The “e” is also not pronounced like “ai.” It was just a dumb play on words.

  44. 44.

    Doug r

    March 18, 2015 at 4:03 pm

    Sounds like it’s not strictly a number but more of a range. Seems like immigration policy would affect it as well.

  45. 45.

    catclub

    March 18, 2015 at 4:05 pm

    @jl: Usually, growth out of a recession is much faster and leads quickly to another boom and bust. This time, growth is very, very slow, and and as long as there is no boom – which I don’t see, but others may in the stock market – there will not be a bust. A long period of very slow growth looks like what we are in for. How long? Who knows?
    But I think this could go on a few more years, with U6 only very slowly grinding down.

  46. 46.

    Amir Khalid

    March 18, 2015 at 4:06 pm

    @Trollhattan:
    As I understand it, them’s wholesale prices for money, which are charged to banks and other moneylenders who borrow at the Discount Window. The interest rates that charged to you and me are the retail prices.

  47. 47.

    jl

    March 18, 2015 at 4:09 pm

    @schrodinger’s cat: the basic idea of NAIRU goes way back long before Lucas. The current ideas about policy implications of NAIRU go back to Milton Friedman and Edmund Phelps. I think it was part of Friedman’s ideas on old fashioned quantity and velocity of money style macro, the one big macro idea he had that did not last long (remember that Friedman’s macroeconomics is considered kommunist Keynesian by today’s GOP and their economic policy entrepreneurs).

    And I want to revise a previous comment:
    The supposedly usually tight link between unemployment rate, interest rates and inflation is far from sight, in the direction of lower interest rates and unemployment.

    In the direction of higher interest rates and unemployment the link will be very tight indeed, and disastrous.

  48. 48.

    schrodinger's cat

    March 18, 2015 at 4:09 pm

    @Amir Khalid: BJers should start TunchBank.

  49. 49.

    David Koch

    March 18, 2015 at 4:10 pm

    slow news day.

    Everyone must be busy filling out their brackets

  50. 50.

    Mike J

    March 18, 2015 at 4:12 pm

    @piratedan:

    all I know is that the guys who make money in the stock market are pleased as the numbers went from like 100 down for the day to back on the positive side.

    When interest rates are low, putting your money in stocks makes you more money than putting your money in bonds. That sounds great unless you’re a megabank/insurance company that has boatloads of cash laying around. They want the safety of buying bonds. They’ve been pissed off for years that they’re getting no return for their money, even paying negative interest for a while.

  51. 51.

    Trollhattan

    March 18, 2015 at 4:15 pm

    @Amir Khalid:
    You are correct, sir. We, the people, may not walk up for takeout, with or without fries. Our banksters are doing REALLY well on the spread. One need only look at credit card rates versus what savings accounts, interest-bearing checking and certificates of deposit are paying to see that the historical role of banks in the community has eroded to nil.

    I blame ObamaPhil Gramm.

    Payday lenders I referenced earlier are bank substitutes that serve as legal loan sharks, charging interest on short-term loans at interest rates that can exceed a thousand percent. They skate past state usury laws by being granted exemptions.

  52. 52.

    Amir Khalid

    March 18, 2015 at 4:18 pm

    @schrodinger’s cat:
    What shall we call it? Bank of Tunch? TunchSBC? Tunch Manhattan Bank? Tunch Fargo Bank? Manufacturers Tunch?

  53. 53.

    raven

    March 18, 2015 at 4:18 pm

    @David Koch: We have a calcutta tonight, way more fun that the standard brackets except that I have been priced out of anything about an 8 seed.

  54. 54.

    sharl

    March 18, 2015 at 4:25 pm

    OT – via Quinn Norton:

    Pearson admits to monitoring students’ social media use during its online tests

    Pearson, the world’s largest maker of textbooks and academic materials, has admitted “monitoring” the social media use of students using its tests.

    In a letter obtained and published by the blog Bob Braun’s Ledger, Elizabeth Jewett, the regional high school district superintendent for Watchung Hills, New Jersey, told colleagues she had been made aware through the New Jersey department of education that a student had tweeted about an upcoming exam.

    “The student deleted the tweet, and we spoke with the parent – who was obviously highly concerned as to her child’s tweets being monitored by the DOE,” Jewett said, adding that the department of education had informed her that Pearson was “monitoring all social media” during the testing period and had demanded the student be disciplined.

    “I have to say I find it a bit disturbing,” Jewett’s letter said.

    Bob Braun’s Ledger said that Jewett told them of two other incidents where Pearson had identified alleged cheating on social media through its monitoring, which is done through a third-party company named Caveon.

  55. 55.

    Amir Khalid

    March 18, 2015 at 4:25 pm

    Off-topic: Is this meaningful news, or is it just Glenn Beck being his usual not-well-hinged self?

  56. 56.

    schrodinger's cat

    March 18, 2015 at 4:30 pm

    @Amir Khalid: I vote for Tunch Bank or Bank of Tunch.

  57. 57.

    PurpleGirl

    March 18, 2015 at 4:31 pm

    @dmsilev: Back in the mists of time I did mathematical typing — not fiscal numbers but those things known as PDE, ODE, and PsuedoPDE, etc. I could spell stochastic and asymptotic in my sleep (as compared with one NYU professor who simply could not spell them correctly and he was using asymptotic expansions to model blood flow through the heart).

    Any way I was interested in the problem of how to print this stuff through a computer. Through my IBM friend I got connected with Knuth’s work in typeface formation and design. Somewhere on my bookshelves is Volume 1 and maybe even Volume 2. I stand in awe of Knuth’s work in typeface design.

  58. 58.

    Trollhattan

    March 18, 2015 at 4:31 pm

    @Amir Khalid:
    Will sum it up thus: Area man upset with lack of cameras aimed his way.

  59. 59.

    Another Holocene Human

    March 18, 2015 at 4:31 pm

    @Richard Mayhew: and fuck YEAH to that!

  60. 60.

    Mike J

    March 18, 2015 at 4:32 pm

    UKIP is getting what they want. Man City is going to make sure that England is completely out of Europe for this season anyway.

  61. 61.

    sharl

    March 18, 2015 at 4:34 pm

    @Amir Khalid: The latter. That must have been what set Weigel off this morning:

    daveweigel @daveweigel · 5h 5 hours ago

    Translation: I WANT ATTENTION. ME ME ME. MT @politico: Glenn Beck: “I’m out of the Republican Party.” http://politi.co/1MNxxmI

    The Glenn Beck news cycle. 1) say crazy shit. 2) Apologize — tearfully even. 3) Pronounce yourself beyond politics. 4) Repeat every 6 months

    Also, while Beck’s Fox show was sort of fascinating, his radio show’s a total snoozer.

    Beck’s bet is that sucker media reporters will cover his latest tantrum. And it’s a safe bet.

    Via @BetBrod, this is at least the third time Glenn Beck has “quit the GOP,” to much fanfare. http://www.bloomberg.com/politics/articles/2015-03-18/glenn-beck-just-can-t-quit-the-republican-party …

  62. 62.

    David Koch

    March 18, 2015 at 4:48 pm

    Jerry Jones signs convicted woman beater.Greg Hardy

    How Bout Dem Cowboys!

  63. 63.

    Trollhattan

    March 18, 2015 at 4:52 pm

    Just, wowzers.

    Tennessee Republican state Sen. Bo Watson warned on Tuesday that a plan to bring 200,000 jobs to his state was a “magnet for unionized labor, intentionally.”

    According to Chattanooga Times Free Press, Watson told the state Senate Commerce Committee that approving $165.8 million in tax incentives for Volkswagen was dangerous because unions could change the “culture” of Tennessee.

    “I hope the committee will take some time to fully vet this incentive offer,” Watson advised. “At the end of the day, we can have no buyer’s remorse.”

    “The incentive, no doubt, will create about 200,000 jobs directly, and countless more indirectly,” he admitted. “It will give southeast Tennessee a big foothold in the automotive industry, particularly in research and development. And it will allow the development of a new line of Volkswagen vehicles, particularly the SUV.”

    But Watson asserted that the threat of organized labor unions might not be worth the benefits that Volkswagen would bring to the state.

    “VW is a magnet for organized labor, intentionally,” he opined. “I believe this committee should know and understand what Volkswagen’s position is on this issue, both here and in Germany.”

    The Chattanooga Republican turned to several Volkswagen officials and demanded that they explain why the vice chairman of VW’s European and Global Group Works Council had pledged to spread the United Auto Workers “far beyond Tennessee.”

    Germans already think we’re kind of nuts and their continued dealings with Tennessee must have them thinking we’ve achieved third-world status. Yay, us.

  64. 64.

    geg6

    March 18, 2015 at 4:55 pm

    I have no idea what any of those tweets mean. I mean, more than I normally don’t understand tweets. This is why I don’t tweet.

  65. 65.

    geg6

    March 18, 2015 at 4:56 pm

    @schrodinger’s cat:

    Whatever that means.

    Does anyone here speak English?

  66. 66.

    Trollhattan

    March 18, 2015 at 5:00 pm

    An FYWP test: Volkswagen

    http://www.rawstory.com/rs/2015/03/tenn-goper-slams-volkswagen-creating-200000-jobs-is-intentionally-a-magnet-for-unionized-labor/

    Tennessee R krazy.

  67. 67.

    Trollhattan

    March 18, 2015 at 5:02 pm

    @David Koch:
    To be fair, Jerry has to continue being Jerry Jones while filling in for still-dead Al Davis.

  68. 68.

    schrodinger's cat

    March 18, 2015 at 5:03 pm

    @geg6: Its macroeconomic jargon for the “natural rate” of unemployment.

  69. 69.

    Rex Tremendae

    March 18, 2015 at 5:06 pm

    @geg6:

    The Fed kept saying we needed to be “patient’ about the economy, but removed that word today. This was taken as a sign that they would raise interest rates, but they actually lowered the unemployment level at which they are satisfied, which suggests we need more good employment news before they will actually lift rates.

  70. 70.

    Tommy

    March 18, 2015 at 5:25 pm

    @Trollhattan: Fuck that guy. I am a VW guy. I will sing the praises of my Passat 24/7. I think the estimate of 200,000 jobs might be way over-the-top, but they are still jobs. Building something in the US. How is that not a good thing?

  71. 71.

    Southern Goth

    March 18, 2015 at 5:28 pm

    @Mary G:

    I am not an economist, but as far as I can tell the NAIRU is a number pulled out of someone’s ass that says that:

    1. Unemployment below a certain rate means a scarcity of labor.

    2. If there’s a scarcity of labor, then job creators are reduced to competing against each other for workers by offering better wages and benefits. Also, workers become uppity and start placing unreasonable demands upon the job creators such as a living wage and other non-productive frivolities such as paid vacation.

    3. Inflation! Weimar Republic. Zimbabwe!

    4. Ron Paul becomes president.

    Now as to whether or not loose monetary policy is the best tool for reducing unemployment…

  72. 72.

    Trollhattan

    March 18, 2015 at 5:32 pm

    @Tommy:
    Am sure it’s related to the failed unionization effort in 2014. Here’s WSJ crowing about the loss.

    The United Auto Workers union suffered a crushing defeat Friday, falling short in an election in which it seemed to have a clear path to organizing workers at Volkswagen AG’s plant in Chattanooga, Tenn.

    The setback is a bitter defeat because the union had the cooperation of Volkswagen management and the aid of Germany’s powerful IG Metall union, yet it failed to win a majority among the plants 1,550 hourly workers.

    Volkswagen workers rejected the union by a vote of 712 to 626. The defeat raises questions about the future of a union that for years has suffered from declining membership and influence, and almost certainly leaves its president, Bob King, who had vowed to organize at least one foreign auto maker by the time he retires in June, with a tarnished legacy.

    “If the union can’t win [in Chattanooga], it can’t win anywhere,” said Steve Silvia, a economics and trade professor at American University who has studied labor unions.

    But unemployment is down and wages are slowly creeping up, so it’s never too soon to think about more union-crushing before workers get the notion of having a say in how their workplaces operate into their heads.

  73. 73.

    Roger Moore

    March 18, 2015 at 5:34 pm

    @Tommy:

    Building something in the US. How is that not a good thing?

    These people don’t want “labor”; they want serfs. They genuinely would prefer to have a bigger slice of a smaller pie than a smaller slice of a bigger one, even if that means they personally have less.

  74. 74.

    Violet

    March 18, 2015 at 5:36 pm

    @Tommy: Because they’re union jobs. By definition those are jobs for lazy soshulist taker thugs. Not real jobs where people pull themselves up by their bootstraps.

  75. 75.

    gene108

    March 18, 2015 at 5:44 pm

    Former Florida Gov. Jeb Bush said Tuesday the federal government should not be involved in raising the minimum wage during a campaign stop in South Carolina.

    “We need to leave it to the private sector,” he said when asked whether raising the minimum wage is a good idea, according to video from the event.

    “I think state minimum wages are fine; the federal government shouldn’t be doing this.”
    Bush’s representatives did not return a request from The Hill to clarify whether Bush meant the federal government shouldn’t be raising the wage or setting a minimum wage altogether.

    http://thehill.com/blogs/ballot-box/235987-jeb-bush-signals-opposition-to-minimum-wage-increase

    I do wish Republicans would get pushed, if they oppose the minimum wage altogether (which I think they do) or just some crazy “states rights” arguments against a Federal minimum wage.

    They do some fine verbal gymnastics to avoid clearly coming out with a straight answer on the question.

  76. 76.

    Tommy

    March 18, 2015 at 5:45 pm

    @Violet: Many years ago there was a book I think which was titled the Millionaire Next Door. That was my mom’s dad. It seems him working almost 50 years for Snap-on after service in WWII and being frugal worked well. He was paid well. Got stock options. Had benefits. Union job!

  77. 77.

    a hip hop artist from Idaho (fka Bella Q)

    March 18, 2015 at 5:47 pm

    @David Koch:

    Everyone must be busy filling out their brackets

    Well, duh. Some of us didn’t get right on that and have to catch up.

    @raven: Calcuttas are a blast, except for the getting priced out part.

  78. 78.

    gene108

    March 18, 2015 at 5:50 pm

    @Southern Goth:

    3. Inflation! Weimar Republic. Zimbabwe!

    From my ECON 101 knowledge of the subject, it is not about hyper inflation. Rather there has been found to be a business cycle and relationship, where after a period of economic expansion wages (and inflation overall) start to rise, the economy slows down, and then you go into a recession.

    There’s an actual correlation between inflation -> wage growth -> recession, but our current economy is so out of whack with the ECON 101 model, we do not need to worry an inflation induced recession for some time.

  79. 79.

    Violet

    March 18, 2015 at 5:52 pm

    @Tommy: And? So? Republicans don’t want that to happen anymore. They want serfs working unpredictable hours who will do anything to keep a roof over their heads and food on the table. They do not want happy people being paid a good wage who can send their kids to college and retire with dignity.

    It’s a feature not a bug.

  80. 80.

    a hip hop artist from Idaho (fka Bella Q)

    March 18, 2015 at 5:53 pm

    @geg6: You and I and Amir Khalid, apparently. Along with raven, of course. Who’s made me envious with his calcutta.

  81. 81.

    Trollhattan

    March 18, 2015 at 5:53 pm

    @gene108:
    My first econ class was during “stagflation” and the professor had to keep reminding us what was occurring didn’t fit the models he was teaching us. The “dismal science” indeed. “But I want butter and guns!”

  82. 82.

    Belafon

    March 18, 2015 at 5:59 pm

    @Trollhattan: I am not an economist, but I have wondered if the reason the models couldn’t explain stagflation is that they didn’t properly account for OPECs influence on the US economy.

  83. 83.

    Tommy

    March 18, 2015 at 6:02 pm

    @Violet:

    It’s a feature not a bug.

    I totally agree. That grandfather I mentioned sent all his children to college. Two of them women. I am not sure what it was like in the 50s. But they went to college. Pretty sure that was because of a union job that could afford it.

    So I am pretty pro union.

  84. 84.

    BillinGlendaleCA

    March 18, 2015 at 6:03 pm

    @Roger Moore: It’s easier to read than APL.

    http://en.wikipedia.org/wiki/APL_(programming_language)

  85. 85.

    Southern Goth

    March 18, 2015 at 6:06 pm

    @gene108:

    Please pardon my hyperbole. It is clearly out of line here.

  86. 86.

    Roger Moore

    March 18, 2015 at 6:13 pm

    @gene108:

    They do some fine verbal gymnastics to avoid clearly coming out with a straight answer on the any question.

    FTFY.

  87. 87.

    Origuy

    March 18, 2015 at 6:17 pm

    I thought at first this was a climate change post, about the island nation of Nauru being engulfed by sea levels rising.

  88. 88.

    Pogonip

    March 18, 2015 at 6:18 pm

    @Villago Delenda Est: Go ahead. Give us a sitrep ASAP.

  89. 89.

    jl

    March 18, 2015 at 6:18 pm

    @Belafon: In retrospect, it was a simple thing for Keynesians to steepen the aggregate supply curve and shift it to the left.

    Problem is that in an empirical science you are supposed to predict. And similar oil price hikes have occurred since the 70s without similar effect on the economy. So, how good is the Keynesian explanation of the 70s stagflation?

    On the other hand, no real oil price shocks have as severe or as long since the mid-1970s. Or maybe the structure of the economy changed wrt to oil after the second price shock in the late 1970s.

    Unless you believe that the huge run-up in crude oil prices in 2005 to 2007 had something to do with triggering the 2007 recession, which triggered the financial panic (not the other way around as many believe was the causal sequence).

    Oh, well, so much for economics as an exact science like physics, or half-way exact like genetics. Too bad.
    But, from a Keynesian point of view, stagflation is easy to explain theoretically as a result of a supply shock. Whether the curve bending needed to explain the 70s has held up well empirically since then is another question. If you think oil prices had a role in 2007 recession, then it has. Otherwise, you don’t.

  90. 90.

    Pogonip

    March 18, 2015 at 6:20 pm

    @schrodinger’s cat: “Your Account Will Grow As Fat As Cole’s Pets!”

  91. 91.

    Pogonip

    March 18, 2015 at 6:21 pm

    @Amir Khalid: Whatever you call it, open an account now and get a free Furminator!

  92. 92.

    Pogonip

    March 18, 2015 at 6:24 pm

    @Trollhattan: They’re right, we have.

  93. 93.

    JPL

    March 18, 2015 at 6:31 pm

    @gene108: Most people on food stamps work. It would seem to me that if the repubs wanted to rid us of food stamps, they would push for a living wage.

  94. 94.

    raven

    March 18, 2015 at 6:33 pm

    @JPL: you so funny

  95. 95.

    Roger Moore

    March 18, 2015 at 6:37 pm

    @jl:

    Unless you believe that the huge run-up in crude oil prices in 2005 to 2007 had something to do with triggering the 2007 recession, which triggered the financial panic (not the other way around as many believe was the causal sequence).

    It’s fairly clear that the recession triggered the financial crisis, not the other way around. The recession officially started in December 2007, which was well before the financial panic struck. The financial panic obviously converted an ordinary recession into something much bigger, but there’s no plausible way of claiming that the panic created the recession.

    In any case, the run-up in oil prices in 2005-2007 looks a lot like a classic part of the business cycle. That’s what you expect when the economy is overheating; there’s too much money chasing too few goods, so prices go up. Plenty of other commodities, like construction materials, were going up at the same time. It’s a classic demand-driven price spiral. That’s very different from the 1973 and 1980 oil shocks, which were exogenous supply shocks.

  96. 96.

    Violet

    March 18, 2015 at 6:47 pm

    @JPL: What? Wouldn’t that be government interference? Much better that the government not interfere by forcing food stamp recipients to get drug tested.

  97. 97.

    jl

    March 18, 2015 at 6:47 pm

    @Roger Moore: Good point. Thanks. I forgot to say you have tease out demand driven price increases from supply driven increases. There were some spikes in oil prices that probably were supply driven and as large as in 70s due to instability and war in Middle East, but they were relatively brief.

    A lot of the recent price drop is demand driven too, except in other direction: price fall parly due to decreased growth in demand, in addition to investment cycle

  98. 98.

    Francis

    March 18, 2015 at 7:26 pm

    @Roger Moore: A couple of big Bear Sterns CMO funds went belly-up in August (?) 07. By early 07 everyone who could afford a mortgage and wanted one had one. In 07 the originators started issuing mortgages to people who ended up defaulting on their very first payment. As everyone in the system was leveraged to the hilt, it only took a tiny number of defaulting borrowers to create a huge crisis.

  99. 99.

    Matt McIrvin

    March 18, 2015 at 7:38 pm

    @Roger Moore: In Massachusetts, the real-estate bubble was in the process of bursting as early as the summer of 2006 (I know because I was selling my house at the time). The avalanche had already started, though the economy wasn’t in recession yet.

  100. 100.

    J R in WV

    March 18, 2015 at 8:41 pm

    @Trollhattan:

    Me too. My first class was to the Econ department head, who was a dynamic teacher. I kept after asking about 19% inflation and the economic theory that expansion could be infinite. He kept saying that it was just a model, not reality, and I said “But if the model doesn’t represent reality, how is it useful?”

    I got an A, so my questions didn’t upset him… it was interesting to take the Econ classes in a period when the economy didn’t match classic models very well, 1980-84.

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