It’s no surprise to anyone in America that being middle class isn’t what it used to be. Even though we have more gadgets, middle class workers in the 1950s and 1960s could afford to have stay-at-home wives. For mort households, it takes more hours of paid labor, and more borrowing, to support a bourgeois lifestyle. […]
Read more...The New York Times has an odd story today, “Is a Lean Economy Turning Mean?” which discusses how conditions for workers have become dire. New jobs are scarce, and many of the ones out there don’t pay as well as what employees got in previous roles. Hello, downward mobility. What makes the piece peculiar is […]
Read more...Economist Thomas Palley has of late been discussing what he believes to be an insufficiently-acknowledged cause of our current financial woes, namely, a shift in government policy away from emphasizing wage growth as a key objective. Another shift was a lack of concern about trade deficits. Now one can argue that combatting trade deficits means […]
Read more...Harvard economics professor Edward Glaeser reviewed a new book, “Bad Samaritans” by Ha-Joon Chang in the New York Sun (hat tip Mark Thoma). Glaesar focuses on his objections to the book, but nevertheless concedes, Readers who believe in free trade will not find much in Mr. Chang that challenges that belief, but the book is […]
Read more...The proponents of a “living wage” in the US have argued that setting minimum wages at a level that leaves full time workers at below subsistence level is bad policy, both economically and socially. While opponents argue that increasing pay for the lowest earners will reduce the number of jobs, elasticity of demand isn’t all […]
Read more...As the housing market has deteriorated, some observers expected to see a slowdown in consumer spending, since mortgage equity withdrawals have provided a boost in a period of stagnant real wages for average workers (last year, an exception to a longstanding trend, saw a wee pickup). But defying this logic, consumer spending has continued to […]
Read more...Robert Reich tells us that despite the talk about moral hazard, the rich have plenty of safety nets: The real moral hazard in this saga started when Fed Chair Ben Bernanke cut the Fed’s discount rate (charged on direct federal loans to banks) and announced that the Fed would take whatever action was needed to […]
Read more...Apologies to be somewhat late to this item and more terse (and spare on links for some of the arguments) than I’d normally be (I’m at sea and the satellite connection is pricey). Monday, the Financial Times reported that a poll it commissioned jointly with Harris found widespread international opposition to globalization, as well as […]
Read more...Mind you, the headline above doesn’t mean that politicians curry favor of wealthy donors, but wealthy people in general. Mark Thoma provides this tidbit from Ezra Klein at the LA Times who in turn cites the abstract of a paper by Larry Bartels, Economic Inequality and Political Representation: I examine the differential responsiveness of U.S. […]
Read more...As we noted earlier, a minor casualty in Bear-Stearns-hedge-fund-meltdown-induced repricing of CMOs was a mid-sized, independent-contractor broker-dealer Brookstreet Securities, which blew a hole in its balance sheet when its clearing firm repriced the assets in many of its margin accounts and issued margin calls. Tanta at Calculated Risk found out (via the OC Register) why […]
Read more...In a firm, articulate op-ed piece in the Financial Times, “Protect workers from the private equiteers,” Jack Dromey, an officer of the trade union Unite, says, “Workers deserve better in private equity deals.” I’ve gotten so used to writers that are afraid to take on the orthodoxy of free markets that it’s refreshing to see […]
Read more...Louis Uchitelle, in “A False Sense of Security? You Must Own a Home,” revisits the subject of Americans’ propensity to break into the piggybank of the accumulated equity in their home. In a concerned, rather than alarmist article, he points out that the amount of net homeowners’ equity has fallen, even in a time (until […]
Read more...A bit of good news for the beleaguered American white collar worker: wages have gone up so much in India that “offshoring,” or moving functions overseas, looks like a losing proposition when all costs are factored in. From “Bangalore wages spur ‘reverse offshoring’” in the Financial Times: The rising cost of paying engineers in Bangalore […]
Read more...In Saturday’s New York Times, Gretchen Morgenson reported that House Committee on Oversight and Reform had issued a subpoena to Towers Perrin, an executive compensation consulting firm, because it had failed to comply with an information request regarding potential conflicts of interest in its pay consulting business. Now because this was a news story, rather […]
Read more...You might reasonably ask why we are discussing first quarter bankruptcy filings now that the second quarter has just started. It’s because the Administrative Office of the US Courts takes its sweet, and increasingly long, time in publishing the data. And it’s a doozy. The story didn’t get much play because the AO’s quarterly report […]
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