Financial News

[StrangeSox]

Not really, but ok.

[southsider2k5]

Not really, but ok.

 

You also realize that the participation rate crash didn't start March 1?

[StrangeSox]

Yup.

 

edit: that doesn't change the fact that we've still been cutting tens of thousands of government jobs over the past few years and that reduced federal spending has been a drag on the economy

Edited April 6, 2013 by StrangeSox

[southsider2k5]

Yup.

 

edit: that doesn't change the fact that we've still been cutting tens of thousands of government jobs over the past few years and that reduced federal spending has been a drag on the economy

 

During the last period we lost a total of 7000 government jobs. Try again.

[StrangeSox]

What period are you referring to? I'm referring to the pattern for over more than two years now.

 

 

 

[southsider2k5]

What period are you referring to? I'm referring to the pattern for over more than two years now.

 

 

\Even when government employment was skyrocketing, workforce participation was dropping.

[southsider2k5]

\Even when government employment was skyrocketing, workforce participation was dropping.

 

 

It is also worth pointing out that just because you lose your job, doesn't move you from the workforce participation number. It just makes you unemployed. Really your government layoffs scenario has no bearing on this number.

[Balta1701]

\Even when government employment was skyrocketing, workforce participation was dropping.

Well yeah, a drop in workforce participation starting in the mid-late 2000's was predicted in what, the 1960's?

[StrangeSox]

It is also worth pointing out that just because you lose your job, doesn't move you from the workforce participation number. It just makes you unemployed. Really your government layoffs scenario has no bearing on this number.

I think we are talking about different things. I was responding to bmags/cknolls/lostfan and the broader idea of austerity vs. stimulus, not saying that the government job cuts explain the work force participation numbers. To some extent, the drag all of these cuts has had on the economy is related, but i wasn't making that point.

[StrangeSox]

Well yeah, a drop in workforce participation starting in the mid-late 2000's was predicted in what, the 1960's?

This is also true of the increased disability claims. We are not to far off of the predictions made in the 90's, about 10% high thanks to this prolonged slump

[bmags]

No. We need more Obamanomics. Clearly it's working. More of the same.

 

Please explain to me what you interpret Obamanomics to be.

[lostfan]

Please explain to me what you interpret Obamanomics to be.

Trying to outmaneuver hostage-takers every 3-6 months over a fake crisis while the hostage-takers tell everyone it's you who escalated the situation by getting captured

[mr_genius]

Trying to outmaneuver hostage-takers every 3-6 months over a fake crisis

 

Hey, I don't agree with the tactics used by overpaid, corrupt, government workers but calling them hostage takers is a bit harsh.

[StrangeSox]

The IMF has suggested that George Osborne should relax his austerity plans in the light of Britain's poor growth. As the Press Association reports, the IMF cut its growth forecasts for the UK in a report issued at lunchtime. It cut this year's forecast growth from 1% to 0.7% and 2014's projection from 1.9% to 1.5% as it noted the recovery was "progressing slowly".

 

http://www.guardian.co.uk/politics/blog/20...4b00f501f7c4385

[StrangeSox]

The oft-cited Reinhart & Rogoff paper from 2010 on national debt levels and economic growth, which stated that debt levels about 90% GDP dragged on the economy, appears to have several fatal flaws:

 

http://www.nextnewdeal.net/rortybomb/resea...rDQo2L4.twitter

 

As Herndon-Ash-Pollin puts it: "A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49...This spreadsheet error...is responsible for a -0.3 percentage-point error in RR's published average real GDP growth in the highest public debt/GDP category." Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above).

 

This error is needed to get the results they published, and it would go a long way to explaining why it has been impossible for others to replicate these results. If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.

 

So what do Herndon-Ash-Pollin conclude? They find "the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim]." [uPDATE: To clarify, they find 2.2 percent if they include all the years, weigh by number of years, and avoid the Excel error.] Going further into the data, they are unable to find a breakpoint where growth falls quickly and significantly.

Edited April 16, 2013 by StrangeSox

[Jake]

The long-term unemployed are unemployable, research finds

[Jenksismyhero]

The long-term unemployed are unemployable, research finds

 

Very depressing.

[bmags]

The oft-cited Reinhart & Rogoff paper from 2010 on national debt levels and economic growth, which stated that debt levels about 90% GDP dragged on the economy, appears to have several fatal flaws:

 

http://www.nextnewdeal.net/rortybomb/resea...rDQo2L4.twitter

 

While important that someone finally figured out why their model predicted what it did, ultimately austerity has been put in place for reasons other than empirical research.

[StrangeSox]

Yeah but now we can say there's zero theoretical basis for the Ryan budget since their 2010 is the only thing he bothers to cite.

[bmags]

Yeah but now we can say there's zero theoretical basis for the Ryan budget since their 2010 is the only thing he bothers to cite.

 

Good luck with that.

[StrangeSox]

I'm sadly aware that facts don't matter.

[Jake]

The fact is when your family makes a budget, they are not allowed to run a deficit!!!! Personal sacrifice!!!! The federal budget is just like a household budget!!!! You're all moochers!!!!

[StrangeSox]

Every person buys everything in cash. The mortgage industry disappeared somewhere around 1988.

 

Which was one of the major theoretical problems with R&R's conclusions: if you followed them through and the US sold off some of its trillions-of-dollars-of-assets to lower the ratio to, say, 30%, we should expect substantially improved growth in the very near future.

 

The whole thing was just an exercise in correlations, not a development of an actual explanatory model. And they likely got the causation wrong, anyway (slow growth leads to higher debt, not the other way around).

[Balta1701]

By the way, the Congress passed and the President yesterday signed a bill significantly weakening the "STOCK" act, the already watered down act that took a few steps to try to limit insider trading by members of Congress.

[StrangeSox]

That was a brilliant display of bipartisanship.