Archive

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

The New Keynesian Dynamic Stochastic General Equilibrium (DSGE) is a straightjacket for macroeconomics

The Political Movement That Dared Not Speak its Own Name: The Neoliberal Thought Collective Under Erasure Philip Mirowski [Institute for New Economic Thinking, August 2014] ….consider the question: how should we approach the construction of a reliable history of a group of intellectuals who have managed to turn their meditations into a political movement on a global scale? Of course this raises timeworn problems of the relationship between theory and practice; but the Neoliberal case sports a further thorny complication: while we can fairly comprehensively identify the roster of whom should be acknowledged as a part of the movement, at least from its beginnings in the 1930s until the recent past, we are confronted with the fact that, in public, they themselves roundly deny the existence of any such well-defined thought collective, and stridently denounce the label of Neoliberalism. Not only do they wash their hands of most of the documented activities of the Neoliberal Thought Collective – think of Hayek and Friedman and their denials concerning the Pinochet interlude in Chile— but their plaint is that their opponents the socialists have always gotten the better of them, and thus their political project has never enjoyed any real successes, ever, anywhere, contrary to all evidence brought to the table. They are forever the bridesmaid of conservative parties, never the bride, to hear them tell it. Given the sheer numbers of people involved, and the really astronomical sums of money, and the cultural dominance of the airwaves, this sad sack victimhood is really quite remarkable, and itself calls for serious examination. Perhaps it has something to do with the fact that a political movement that dare not speak its own name has intellectual contradictions that it dare not air openly.

“With all of that said, The Institute for New Economic Thinking (INET) recently published a study casting doubt about the methodology BLS uses to tabulate its unemployment data, especially when it comes to Black people. INET suggested that BLS’ data is inaccurate and downplays Black unemployment. On average, Black men’s unemployment rate is 2.8 percentage points higher than BLS data shows,” according to INET’s study, entitled, “Masking Real Unemployment: The Overall and Racial Impact of Survey Non-Response on Measured Labor Market Outcomes.” The same was true for BLS’ unemployment rate for Black women, which INET found was, on average, about 2.4 percentage points lower than its actual rate. The differences grow for younger Black males from 16 to 34 years old. INET’s findings lend some credence to a tweet from the Center for American Progress after January’s jobs report was published that said Black women, in particular, “are still being left behind by the recovery.” — Bruce C.T. Wright, News One

“Making matters worse, the Black unemployment rate might be much higher, according to a new analysis by the Institute for New Economic Thinking. The unemployment rate is calculated using data from the Current Population Survey. But that survey has a much lower response rate from Blacks than from white Americans, leading to more misclassifications in the official unemployment rate. For Blacks, the response rate is 72%, while the response rate is 90% for whites. Factoring that in, the unemployment rate for Black workers could be at least 2.6 percentage points higher than the monthly rate by the BLS, leaving it at 12.5% in February, the analysis found. For whites, the increase is much smaller at 0.7 percentage point. “The Current Population Survey has been missing a larger share of the population over time, particularly among Blacks,” said Baker, who is also an author of the analysis. “You have to ask what’s the situation for the people they’re not talking to.” — Denitsa Tsekova, Yahoo Money

Wealthy predators are playing stock market games with companies needed to develop and produce clean technology

“The piece gives a series of case studies. Parramore summarized the problem: “Players on Wall Street have been torpedoing our chances of averting environmental catastrophe for years. A group of billionaire financiers has made sure the companies the government must partner with to fight climate change are focused on one thing only – making these men (they all seem to be men) even richer. Instead of leading the world in climate change technology, firms like Apple, GE, and Intel have been pressured to become the personal piggy banks of powerful moneymen — known as hedge fund activists — who can’t see beyond the next quarterly report.” — Institute for Public Accuracy

Like Republicans with political polls, unemployed Black workers are underrepresented in federal employment data because of non-response.

“Pressley’s resolution builds upon the academic intellectual framework developed by advocates like Dantas and Wray, as well as the ongoing civil rights demand for federally guaranteed jobs, which can be seen in the 1963 March on Washington for Jobs and Freedom (where the Rev. Dr. Martin Luther King, Jr. gave his “I have a dream” speech) and indeed long before that. It also draws on the work of Sadie Alexander, recognized as the nation’s first Black woman economist. Speaking at Florida Agricultural and Mechanical College in 1945 (as noted by Professor Nina Banks, blogging at the Institute for New Economic Thinking), Alexander described full employment as a way to address the nation’s economic and racial imperatives.” — Marin Levine, Nonprofit Quarterly

A large and growing percentage of households are missed in the monthly Current Population Survey (CPS).

The $1.9 trillion stimulus should be large because the need is large

Rob Johnson appeared on the Background Briefing with Ian Masters to discuss working with Trumpsters, the source of their anguish, and important pathways to healing

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”

Conservative legal theory is based on a shoddy definition of what constitutes “efficiency”

Two separate INET funded research articles are cited; first from Schularick, Jordà, & Taylor on leveraged bubbles followed by Bao, Hommes, & Makarewicz on bubble formation. “Since their inception, financial markets, and to a lesser extent some real markets, have been subject to bubbles. … More recently, stock prices, but also credit, real estate, commodities, bond markets, and famously, bitcoin, are all assets that have experienced bubble episodes. Regarding cryptocurrencies, many economists also defend a permanent bubble, their fundamental value being theoretically non-existent.” …. In fact, the presence of bubbles in the markets (financial and real) seems to stem from the persistent behavior of economic agents. Experimental studies, controlling exactly the actual value, showed that participants tended to set up a bubble-like operation, with price surges and collapses very similar to real economy situations, and in no way related to a change in the market.