Author Archives: Yves Smith

The Fed’s QE3: No Exit

The Fed’s launch of QE3 looks more than a tad desperate. If you believe the central premise of the Fed’s action, that propping up asset price gains would have enough effect on consumptions to lift the economy out of stall speed, it would seem logical to sit back a bit and let the recent stock market rally and the (supposed) housing market recovery do their trick. But the Fed has finally taken note of the worsening state of the job creation in an already lousy employment market and has decided it needed to Do Something More.

Automatic Weapons for Fun and Profit

Yves here. This may seem like a “now for something completely different” post, but this story about Blackwater and a much smaller miscreant is yet another window into our American two tier justice system. Plus you will learn something about gun laws.

Yanis Varoufakis: Europe’s Modern Titanomachy – How Europe’s Future is Being Shaped by Large Battles on Seemingly Small Matters

Yves here. I’m taking the liberty of starting with the second post of a three post series by Yanis Varoufakis. This is the starting point:

They sound technical and minor when projected against the great scheme of Europe’s extraordinarily rich history. Will there be conditionality attached to the ECB’s bond purchases? Will the bonds that it purchases be treated on a pari passu basis in relation to bonds held by private institutions? Will the ECB supervise all banks or just the ‘systemic’ ones? These are questions that ought to be of no genuine interest to anyone other than those with a morbid interest in public finance. And yet, these questions (and the manner in which they are answered) will probably prove as important for the future of Europe as the Treaties of Westphalia, of Versailles, of Rome even. For these are the issues that will determine whether Europe holds together or succumbs to the vicious centrifugal forces that were unleashed by the events of 2008.

Links 9/13/12

On Economic Methodology: An Interview with Sheila Dow

Sheila Dow is Emeritus Professor of Economics at the University of Stirling, Scotland, and Convener of the Scottish Centre for Economic Methodology. Her latest book ‘Foundations for New Economic Thinking’ is available from Amazon.com

Interview conducted by Philip Pilkington

Philip Pilkington: Your book is all about the importance of methodology in economics. Up until now methodology has largely been side-lined. I recall, for example, that Paul Samuelson made a comment to the tune of “Those who cannot do science do methodology”. That strikes me as being broadly the mainstream attitude to any discussions of methodology in economics. In the face of this why do you find methodology to be so important?

More Evidence of Failure of Obama’s Policies: Census Data Shows Median Incomes Fall, Income Disparity Rises

Matt Stoller pointed out that income disparity, which is associated strongly with negative social indicators (crime rates, poor health outcomes) as well as lower growth, rose faster under Obama than Bush.

Newly released Census data provides more evidence of the failure of Obama’s economic policies. A Bloomberg story summarizes how it shows that median incomes fell even as those at the top showed income gains.