Arguments Against Raising Minimum Wage Don’t Hold Up

By: Wednesday August 27, 2014 2:25 pm

The way you functionally subsidize companies paying low-wages to workers– ponying up the difference between what McDonald’s and others pay and what those workers need to live via taxpayer-paid SNAP (food stamps) and other benefits– is a hidden cost in plain sight. You’re already paying higher prices via higher taxes; you just may not know it.

 

FDL Movie Night: Money for Nothing: Inside the Federal Reserve

By: Monday September 23, 2013 4:59 pm

The Federal Reserve is a hundred years old this year. There’s not a whole lot to celebrate in its century long history–the intention might have been good, but the execution has kind of been disastrous. In tonight’s film, Money for Nothing: Inside the Federal Reserve, our guest filmmaker Jim Bruce takes us through the history of the Federal Reserve System and into the current mess.

How Japanese and Americans Save Differently

By: Friday May 24, 2013 6:00 pm

In America a dollar today is worth much less than a dollar in 1980. Americans marvel at how much cheaper things used to be in the past, when Coca-Cola and movies only cost five cents.

In Japan the story is quite different. For long periods in the past two decades, nominal prices have in fact declined.

The Small Ball Trillion Dollar Coin Seigniorage Exception

By: Tuesday January 8, 2013 5:38 pm

The exception to the general pattern focusing on the Trillion Dollar Coin (TDC) as the solution to the debt ceiling problem I outlined and critiqued in my last post, is in Joe Wiesenthal ‘s posts here and here. Wiesenthal alone criticizes, rather than ignores, other options than the TDC, namely the $16 T and $100 T options, on grounds that they are no more effective at meeting the debt ceiling crisis than the TDC. He says that the issue is not a lack money but the debt ceiling law, and also that if a coin that large were minted and used to pay back the debt, then the result would be inflation or hyperinflation because of the flow of the large quantity of reserves into the economy, and the ensuing great expansion in the money supply.

I think that Joe Wiesenthal is both showing his bias towards solving the smaller, more immediate (debt ceiling), rather than the larger (austerity) problem, and also that he’s dead wrong about the impact of a $100 T coin on inflation. On his bias: I can only say, that I don’t agree that “we” are talking about a legal problem rather than a money problem.

FDL Book Salon Welcomes L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems

By: Saturday January 5, 2013 1:59 pm

I am hosting the Firedoglake discussion of my colleague Randy Wray’s new “Primer” on macroeconomics. Macroeconomics is the study of the overall economy – economic growth, recessions, depressions, inflation, unemployment, and employment are big issues that macroeconomics studies. The key policies it addresses are usually divided into fiscal (tax and spending) and monetary policies (the growth of the money supply and setting interest rates).

The concept of monetary tools has broadened as we have seen the Federal Reserve change what had been a severely constrained “lender of last resort” function of the central bank into the most massive bailout program in history. Similarly, the central bank’s interest rate setting function that was long focused on short-term rates has expanded into large experiments that attempt to lower long-term interest rates (“quantitative easing”).

Though Liberals Carp at Chained CPI, Pelosi Says She Could Live With It

By: Tuesday December 18, 2012 3:10 pm

You will hear virtually nobody claim that chained CPI represents a more accurate way of determining the cost of living for senior citizens on Social Security, because if they were honest about it, they would tailor an inflation index to the real costs of seniors. The only benefit to chained CPI is that it saves the government money at the expense of senior citizens. That’s it. It’s a back-door way of lowering the benefit.

When it Comes to the Fed and Jobs, Robert Samuelson Is Worried About Inflation and Martians

By: Monday December 17, 2012 2:10 pm

Samuelson warned that the last time the Fed tried to target both inflation and unemployment was in the 1970s and complains that this ended disastrously. Both parts of Samuelson’s claim are wrong.

We Don’t Have a Deficit Problem, Cont’d

By: Monday December 17, 2012 12:45 pm

To say that “we have a budget deficit” is no different than saying “we’re in the middle of a recession.” The correlation between deficits and economic growth is very tight. A large part of deficits are composed of reduced tax receipts from less people working, and increase in utilization of automatic stabilizers like unemployment benefits, Medicaid and food stamps, which recedes in better economic times.

Janet Yellen’s Game-Changing Speech for Monetary Policy

By: Wednesday November 14, 2012 6:10 pm

The President opened his press conference by designating the top two priorities as jobs and growth, and then spent the next 60 minutes answering questions about David Petraeus and Susan Rice and tax rates and Benghazi and deficit reduction. And Obama didn’t seek to break out of that constraint and suggest actual near-term job creation strategies. So it’s pretty clear that jobs are a dead end as far as the legislative process is concerned.

On monetary policy, however, things have suddenly become a bit more promising. Janet Yellen, the Vice-Chair of the Federal Reserve, delivered a speech yesterday that strongly endorsed the idea of “forward guidance” in the economy, tying monetary policy actions to a specific employment target. The idea was first brooched by Charles Evans, the President of the Chicago Federal Reserve, who because of the rotation of regional Fed Presidents on the Federal Open Market Committee, will actually get a policymaking slot in 2013.

Talk Rises About Sovereign Debt Cancellation

By: Monday October 22, 2012 9:40 am

It’s an intriguing question: why can’t central banks around the world, practically all of whom have bought up sovereign debt, just cancel it?

Countries would get more headroom on their debts, inflation would rise but not necessarily at an unmanageable rate. It would have the effect of hitting the reset button.

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