Code words and dog whistle economics. In-depth analysis on Credit Writedowns Pro. You are here: Political Economy » Code words and dog whistle economics Note: Originally, this was a quick and dirty post. But I have reworked it, adding a number of explanatory paragraphs due to useful suggestions from readers I will update this list over time as I think of more words. So refer back to it here at Credit Writedowns. Since economics has become a hot topic with the financial crisis, a lot of people who aren’t economic gurus have a great interest in the topic. The intent of this post is to make more plain what is meant by these hidden codes so that anyone can understand why the code is being used instead of the true message. The code word acts like an emotional marker only for those attuned to the underlying ‘moral’ issues implied by the code.
As for the dog whistle, it is supposed to have one meaning that some can hear but that others can not hear at all or more faintly. P.S. – I try to avoid these words. About Edward Harrison. The 3 big crises of 2012 - 1 - How to invest. By Jim Jubak To the eurozone mess -- which will spread -- add Russian unrest and a budget crunch in India. By midyear, we should know how it will all play out. Ready for the next crises? Yep. That's "crises. " Plural. Because 2012 promises to be even more exciting than 2011. First off, the euro debt crisis isn't going away.
As Europe sinks into a self-induced recession created by all that tough talk about the need for austerity and budget cuts, we'll get treated to the spectacle of chickens coming home to roost as politicians have to explain to suffering voters why they need to tighten their belts even more to balance budgets thrown out of whack by no-growth economies. But I do think that in 2012, we'll add exciting new crisis venues such as Russia and India. Jim Jubak And this could be -- don't get too excited -- just a run-up to 2013, when the United States and China could get into the act.
Ready? Want to know why this crisis will launch a new season in 2012? Jared Bernstein for Democracy Journal: Rethinking Debt. Issue #23, Winter 2012 Jared Bernstein Our national fear and misunderstanding of debt, deficits, and borrowing is understandable, given their role in the etiology of the Great Recession that continues to choke our economy. But such confusion is also terribly destructive. It helped lead us into the recession, and it’s preventing us from recovering from it. Over the last decade, too many households, governments, firms, and banks borrowed recklessly, nudged by financial “innovations,” negligent underwriting, and pure disregard for their ability to meet the liabilities they were taking on.
And yet policy-makers seem frozen in place, unwilling to take the necessary actions for one basic reason: doing so would mean deficit spending. None of this was inevitable. In other words, there are very high opportunity costs to misunderstanding and misusing debt, both in booms and busts. We need to take a “debt sobriety pledge.” I cannot emphasize enough the stakes of getting this right, and quickly. The Social Media Revolution Proves US Deflation Is Unlikely | Business News. Back in 2009, some idiot wrote this (Video: Is Facebook Fading?) : Staking your fortunes on social networking? This bear market may prove Facebook, Twitter, et al. to be nothing more than a passing fad. As social mood continues to decay, many say that people will choose not to live their lives as an open book.
Actually, it was one of my good friends, Kevin Depew, who's gotten just about everything else about this period right. Here's a chart of Facebook's user base through the beginning of 2010, and since then it has doubled again to 800 million active users. And one of the growth of Twitter's average daily tweets, which as of October 2011 is up to 250 million tweets per day, a 1,000% increase from the time of Kevin's piece. I could show similar charts for LinkedIn, Tumblr, Pinterest, and many others. Why does this matter? My evolving view on what's happening is we're in a period of declining monetary velocity and an increase in social velocity as our values and priorities have shifted. How Long Will De-Leveraging Last In The U.S. And What Are The Implications.
I am a firm believer that household de-leveraging is what is causing the subpar economic performance in the U.S. Excess debt was built up in the 1990's and 2000's. Below is a graph from the New York Fed of the buildup of debt from 1999. (Click to enlarge) The present level of household debt is $11.6trln. As you can clearly see debt has been on an upward path since 1999 and was not at all affected by the recession in 2001-2. If I am correct and paying down debt is the headwind facing the U.S., growth will not return to its previous path until de-leveraging is complete. The U.S. looks to be starting along a path of slow reduction in its budget deficit. It therefore seems important to make some approximation of when household debt levels will stabilize. Below is a chart of household debt to disposable income and beside it a chart of disposable income, household debt and household worth (both from the New York Fed website).
Want more from this author? Follow Jeremy Robson (206 followers) New! Michael Hudson on why the core issue today is Debt (#OccupyWallStreet Teach-In) Excerpted from an interview of Michael Hudson by Alan Minsky: “Michael Hudson: The Occupy Wall Street movement has many similarities with what used to be called the Great Awakening periods in America. Such periods always begin by realizing how serious the problem is. So diagnosis is the most important tactic.
Diagnosing the problem mobilizes power for a solution. Otherwise, solutions will seem to come out of thin air and people won’t understand why they are needed, or even the problems that solutions are intended to cure. The basic problem today is that nearly everyone is in debt. When debts reach today’s proportions, a basic economic principle is at work: Debts that can’t be paid; won’t be. Half a century ago most economists imagined that the problem would be people saving too much as they got richer. Many people thought that the way to get rich faster was to borrow money to buy homes and stocks they expected to rise in price. Review Of David Graeber's 5,000 Years of Debt (part 1) REVIEW: DAVID GRAEBER, DEBT: THE FIRST 5,000 YEARS, MELVILLE HOUSE PUBLISHING, NEW YORK, MAY 2011, 534 pages. Part One: David Graeber is an author given to different tones. There are his personal views on current events and his academic views while making his case and rubbishing others.
He challenged me to read his book first before daring to criticise his reported views, as expressed, incredibly, in what he wrote himself and put into the public domain on the internet. This is an aggressive polemical style. Who can protest that when David Graeber says something about ideas with which a reader is familiar, side-swipes with put-downs, implying that what he says in one forum is beyond criticism unless a critic first reads his 534 page volume, “Debt: the first 5,000 years” (if nothing else, an arresting title)? So, I waited until his book arrived from my bookseller. David, in earlier exchanges on the web, objected to my using his first name as if it is a hallowed or patronising privilege. Johnston: Income Inequality Increases as Bank Regulation, Prosecutions Decrease. Via Taxprofblog comes David Cay Johnston’s Income Inequality Increases as Bank Regulation, Prosecutions Decrease through Reuters, The Taxpayers’ Burden, by David Cay Johnston: The accompanying graphic shows a fascinating correlation.
In the years before New Deal regulation of banks and after the easing of regulations began in 1980, bank failures were quite high. So was income inequality. But from about 1933, when the federal regulation of banks was put in place, to 1980, when Chicago School theories began to shape policy, bank failures were rare. During those years incomes were much more equal, with a prosperous middle class. Tags: bank regulations, income inequality.
James Turk « Chris Martenson and James Turk talk about Europe and the global economy « Videos. Subscribe to our newsletter at In this video Chris Martenson – economic analyst at chrismartenson.com and author of The Crash Course and James Turk, Director of the GoldMoney Foundation talk about the problems facing the eurozone as well as the global economy. Chris Martenson points out that the whole world simply has too much debt. This is why he believes that there won’t be a real solution to the euro crisis. The big question will rather be who will take losses on the debt, which can’t possibly be repaid. The lack of political leadership and unwillingness to accept reality is contributing to this crisis. Additionally, the monetary tools central banks have traditionally used to revive economies are starting to show less and less effect.
. : James Turk is a specialist in international banking, finance and investments. Mr. GoldMoney Network Limited is based in Jersey, one of the British Channel Islands. Industrial ecology and big data. On Wednesday, the Financial Times sponsored a very timely conference in New York with a focus on sustainable investments. In the face of uncertainty surrounding climate legislation, long term viability of certain alternative energy sectors, and risk averse investors, there were many relevant topics to be discussed.
The primary theme of the conference centered around tools and themes relating to investments in the environmental infrastructure of the next 10-50 years. Like any conference with a green theme, the typical high-level topics were covered. Discussions were woven around ESG reporting requirements, market outlooks for renewable credits, equity driven recommendations around who is/is not taking the lead, and long term sustainable investment themes. Despite all of the positive discussions, I felt somewhat empty after leaving the final session of the day. The problem was that there was not much new to discuss in what can be a viewed as a great market opportunity.
The ecology of risk. “Nothing in biology makes sense except in the light of evolution.” This statement, the title of an essay by evolutionary biologist T.G. Dobzhansky, was published in “American Biology Teacher” in 1973. It properly asserts that evolution is the cornerstone of any meaningful dialogue in the biological sciences, stressing the importance of ecological theory in understanding biological system behavior. We can extend this ecological theme of interconnectedness to modern financial and commercial activity, where we can just as easily state: “Nothing in economics makes sense, except in the light of ecology.”
With each passing decade, as new manufacturing and production origins have come online, the barriers to entry that for many years had prevented the functioning of a true global economy have slowly been dissolving. So while we continue to enjoy the aforementioned benefits of a connected economy, we need to recognize and appreciate the potential magnitude of the underlying risks. Related: World in 2012 contents. World Economies in 2012. The Economist magazine has released their World in 2012 special issue. GDP and PPP by Country GDP trillion PPP GDP per head PPP per head United States 15.6 15.6 $49340 $49340 China 8.13 12.3 $6120 $9280 Japan 6.41 4.5 $50830 $36000 Germany 3.49 3.2 $43740 $40280 France 2.73 2.3 $42930 $36220 UK 2.51 2.3 $39770 $36310 Brazil 2.50 2.4 $12850 $12500 India 2.37 5.1 $1940 $4170 Italy 2.20 2.0 $36100 $32700 Russia 1.93 2.5 $13650 $17750 Canada 1.79 1.5 $51530 $41860 Spain 1.54 1.5 $33180 $32140 Australia 1.40 1.0 $61040 $42130 South Korea 1.25 1.6 $25010 $31770 Mexico 1.10 2.0 $9570 $17700 Indonesia 0.99 1.2 $3990 $4900 Wikipedia has IMF estimates for 2012 through 2016 In 2012, China's economy on a nominal GDP basis will be over half the size of the US economy.
The last time that happened was 1987 to 1997 when Japan was over half of the size of the US economy. In 1993, Japan got as close as 65% of the size of the US economy. The Death of Middle-Class Neighborhoods. The New York Times has a preview today of a new report showing that a declining number of people live in middle-income neighborhoods. Partly this is because the ranks of the middle class have declined, but it's also because of self-sorting: The study also found that there is more residential sorting by income, with the rich flocking together in new exurbs and gentrifying pockets where lower- and middle-income families cannot afford to live. Andrew Sprung relates this to his wife's suburban neighborhood when she was growing up in the '60s: Mr. Grimm was a bricklayer. Were the Stones. It was similar in my neighborhood. You don't see that kind of thing as much anymore.
Sean F. This isn't a new observation. How Deleveraging in Europe Might Doom the U.S. Both Paul Krugman and Tyler Cowen recommend a new paper from Hyun Song Shin called "Global Banking Glut and Loan Risk Premium. " If both of those guys say a paper is important, then it's probably pretty important. So I took a look. I'll confess up front that I had a hard time plowing through it, which means my summary might be off base a bit here and there, but here we go anyway. Roughly speaking, Shin says the following things: Credit expands when banks lever up their balance sheets by piling up lots of debt. European banking sector provides about as much credit to the U.S. as the American banking sector does. Translated, this means that as sovereign debt woes get worse, bank woes get worse too. Tyler's comment: "If true we are doomed. " The introduction of the euro meant that “money” (i.e. bank liabilities) was free-flowing across borders in the eurozone, but the asset side remained stubbornly local and immobile.
How Keynesian Policy Led Economic Growth In the New Deal Era: Three Simple Graphs. By Mike Kimel In this post, I will show that during the New Deal era, changes in the real economic growth rate can be explained almost entirely by the earlier changes in federal government’s non-defense spending. There are going to be a lot of words at first – but if you’re the impatient type, feel free to jump ahead to the graphs. There are three of them. The story I’m going to tell is a very Keynesian story. In broad strokes, when the Great Depression began in 1929, aggregate demand dropped a lot. This increased spending by the Federal government typically came in the form of roads and dams, the CCC and the WPA and the Tennessee Valley Authority, in the Bureau of Economic Analysis’ National Income and Product Accounts (NIPA) tables it falls under the category of nondefense federal spending.
Now, in a time and place like the US in the early 1930s, it could take a while for such nondefense spending by the federal government to work its way through the economy. The New Price Era of Oil and Gold. The Anatomy of Global Economic Uncertainty - Mohamed A. El-Erian. Beyond divergence. The Neuroeconomics Revolution - Robert J. Shiller. Job Polarization in the United States: A Widening Gap<br />and Shrinking Middle. Economic theory and the Real Great Contraction. What Percentage Lives in Poverty? Should economists be “imagineers” of our future? How to Really Save the Economy. Business Investment as a Key to Recovery. The Great Bank Robbery - Nassim Nicholas Taleb and Mark Spitznagel.
Retirement-crisis-closes-baby-boomers-reuters: Personal Finance News from Yahoo! Finance. Get Ready For A Bigger 'Global Savings Glut' How Much of the Economy is Friction? Toy models of inequality, negative interest rates, revolutions, and trade deficits. Finance Addict. It's Official: Wall Street Firms May Legally Steal From Their Customers - Rationalizations to Follow. General Gluts, Secular Stagnation and the World Economy. The Debt-Money-Asset System Macroeconomic Quantum Collapse: The Wilshire's 8 August 2011 3/7/5 of 6/4 Weeks :: x/2.5x/2x/1.6x Collapse. As Ford Motor Company goes, so goes the Global Macroeconomic debt-money-asset system. - The Economic Fractalist - Seeki. Our Fragile "Hothouse" Economy.
Foreign exchange: A brief post on competitive devaluation. The Debt-Money-Asset System Macroeconomic Quantum Collapse: The Wilshire's August 2011 3/7/4 of 6/4-5 Weeks :: x/2.5x/2x/1.5-.6x or 3/7/4 of 8 Weeks :: y/2.5y/2.5y Collapse. - The Economic Fractalist. Thailand Flooding Supply Chain Breakdown. The Natural Chaos of Markets.