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Austerity Holding Back US Recovery as GDP Growth Revised Downwards to 1.8%

(Analysis) The US BEA revised downwards the rate of growth (annualized) during the first quarter of 2013 by 0.6% to 1.8%. This is a relatively large revision for a third and final revision to real GDP, so it is safe to assume that this new estimate is a surprise to many observers. The BEA identifies … Continue reading

Is Our Economy’s “Openness” Harming American Labor Productivity? [Wonky]

(Analysis) American labor productivity slowed noticeably in the 1970s. When it began to pick up in the ’90s, many observers concluded that the slowdown was a temporary incident due to inflation or supply shocks. Unfortunately, labor productivity again slowed in the early 2000s. This is puzzling to many, and the analysis here is offered as … Continue reading

Why Many Say the “Real” Economy is Still in Recession

(Analysis) The keepers of recession dates, the NBER, declared the second quarter of 2009 to be the final period of recession following the financial crisis of 2007-8. Every quarter since, observers try to interpret lackluster economic performance in order to show how our economy is improving. If you are reading this from home while trying … Continue reading

Concerns over Succession at Fed Likely Trumping Desire for Simple Transparency

(Analysis) Chairman Bernanke gave forward-looking guidance of Fed policy last week that left markets in some degree of chaos. By stating that continued quantitative easing (QE) would be contingent on an unemployment rate of 7+%, and revealing optimistic forecasts by the Fed of the unemployment rate, Bernanke was interpreted by markets to mean that “tapering” … Continue reading

Average Weekly Earnings Fall in May, Below 2007 When Adjusted for Inflation

(WNY) Data from the US Bureau of Labor Statistics show that average weekly earnings of private-sector employees in the Buffalo-Niagara Falls, NY metro area fell by more than eight dollars to $702.47 over the year in May.1 When adjusted for inflation, average weekly private-sector earnings in May 2013 are below May 2007 by over 5%. … Continue reading

Snowden Affair Reveals Dangers from Privatizing Government Services

(Analysis) Edward Snowden, an employee of Booz Allen Hamilton doing contract work for the US intelligence agency NSA, recently fled to Hong Kong with sensitive and classified data. He is reported to be destined for Ecuador, where he will presumably receive political asylum. Snowden has revealed information to the media – and potentially to foreign … Continue reading

A Challenge to any Well-meaning Policymaker Left in our Democracy

(Editorial) This content might be read as an open letter to our policymakers, who are the victims of receiving only self-serving advice from lobbyists and so-called independent policy experts. Whereas advice from policy research institutes and other ostensibly non-lobbying sources should serve as a guide for policymakers when judging policies lobbied for by big-pocketed special … Continue reading

Hysteresis and the Self-fulfilling Prophecy of Limiting Horizons

(Analysis) There is a danger that when markets cannot employ labor and capital fully, that these factors of production will deteriorate through disuse. Economists have studied this phenomenon as “hysteresis”, and it leads to a permanent limiting of potential for an economy that is positively related to the time factors of production lie fallow. Thinking … Continue reading