Comments for Math and Economics Are Hard! at http://www.cepr.net , comment 1 to 15 out of 15 comments http://www.cepr.net Wed, 19 Jun 2013 05:09:34 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6695 Time to Beat the Baker, I'm afraid. Blaming Obama's advisers for the fact that the US does not have a German-like employment system is a bit misleading. Obama's advisers are not bound to offer only policy recommendations they think are politically feasible, but that is probably what they do. Obama needs to tell them that he wants a wider range of policies from which to choose if he in fact does. It is reasonable to assume that Obama's advisors are doing what he has asked them to do, with the exception of Summers, who recommend his own preferred policies, regardless of marching orders. - kharris Tue, 01 Feb 2011 09:43:09 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6686 Since when did "business" become concerned with "the economy" in a macro sense? - yeszatso Mon, 31 Jan 2011 19:14:58 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6685 Some commenters here seem to be assuming that German workers retained their entire salary when work-sharing was introduced. This is not true. A more detailed description of what happened to worker pay, and how the split between government and employer payment was determined, in an earlier entry on this very blog on July 1, 2010 by Dean Baker himself. Titled "If Germany Is a Winner, It Is Partly Because It Has Work Sharing," the entry contains links that further explain the program: http://www.cepr.net/index.php/blogs/beat-the-press/if-germany-is-a-winner-it-is-partly-because-it-has-work-sharing - S.D. Jeffries Mon, 31 Jan 2011 16:11:37 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6683 So, why do you think you're not suffering from the LOLF? Because German workers did not take a cut in take-home pay when the work sharing plan kicked in. If take-home pay is reduced a proportionate amount to the hours reduced, the result will be less demand and no improvement in demand for labor. However, if productivity increases are used to reduce the number of hours worked while holding the annual compensation at the same level or higher (an increase in the hourly rate of pay for hours worked), demand for labor will increase. - NewsFromAnnArbor Mon, 31 Jan 2011 13:35:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6678 The "lump of labor" argument apparently assumes that compensation is reduced along with hours. What Dean advocates, and what Germany apparently implements, is maintaining total compensation with government subsidy as hours are reduced. This reduces supply while maintaining demand. This is a Keynesian solution which transcends the "lump of labor" argument (if I understand it correctly). This avoids the moral objection to giving money to people who are not actually working (because they have been fired in a recession). - skeptonomist Mon, 31 Jan 2011 09:42:46 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6673 How dare you question the talents of the president's advisers? They have degrees from the "right" schools and nice suits--isn't that all one could ask for? Look at Larry Summers: he helped bring about this crisis in the first place by pushing for deregulation, then did a terrible job of managing Harvard's endowments while making a fool of himself by trying to get women to stop studying math. But. . . he worked for presidents! He must know something! - Notorious P.A.T. Mon, 31 Jan 2011 06:30:20 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6672 "Lump of labor fallacy"! OK, I don't really believe this, but that's because I don't believe in the LOLF. But your description of the German program is a classic LOLF situation. Here's your description of the German situation: " One of the key mechanisms that Germany has used to keep its [b]unemployment rate down[/b] is work-sharing. This is a program where the government subsidizes firms for keeping workers on their payroll, but [b]working fewer hours than normal[/b]." And here's [url]https://secure.wikimedia.org/wikipedia/en/wiki/Lump_of_labour_fallacy[/url] the wikipedia description of the Lump of Labor fallacy: "Historically, the term "lump of labour" originated to rebut the idea that [b]reducing the number of hours employees are allowed to labour during the working day would lead to a reduction in unemployment[/b]." So, why do you think you're not suffering from the LOLF? - Dan the Man Mon, 31 Jan 2011 05:55:59 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6669 Spot-on. We come from opposite ends of the political spectrum but I too have highlighted long-term unemployment as by far the biggest cost of this recession. You can put the blame on Fed easy-money policies since 1995, which have produced a cascade of bubbles, each less productive than the last. Needless to say, we are currently in another such, and the "dip" from its bursting won't be pretty. Hopefully we can agree that removing Bernanke and "Volckerizing" the Fed is essential going forward, even though we will disagree about other parts of the diagnosis. - Martin Hutchinson Mon, 31 Jan 2011 05:28:37 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6668 I know this comment is only a response to a cast-off point in your piece and I apologize for that, but this is the first it has occurred to me. You said that everyone on the President's team missed the asset bubble. I know the powerful economic elite have repeated the phrase "no one saw this coming" so many times that the general public actually believes it, but those of us who are follow news about the crisis closely and have read some of the histories already written know that that is hogwash. A lot of people saw it coming. In fact, a handful of people got very rich seeing it coming and many of them were not particularly quiet about their trades. Others were policy people who didn't make any money but can now say "I told you so." Many non-profit leaders can say the same. Are you saying that the President hasn't hired ANYONE for who is economic team who was on the right side of the banking crisis before it was a crisis? That's remarkable. And disturbing. - BradyDale Mon, 31 Jan 2011 04:42:33 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6667 I admire your durable good manners, Dean, and your persistence on the matter of how prominent economists and financial advisors "missed" the housing bubble. But these are not unintelligent people, and even the man on the street knew it was a bubble. I don't really believe they missed. They profited from it, and some of them clearly engineering it. My friend SleepinJeezus, over at DagBlog, recently posted "The Failure Of A 30 Year Experiment In Reagonomics." He reminds us that: [quote]It's no longer the objective of economic policy to improve the living standards of all Americans.[/quote] Maybe we should hang this quote on the bathroom mirror, and read it every morning while we're splashing cold water on our faces. - Red Planet Mon, 31 Jan 2011 04:24:57 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6665 Some quotes from: [url] http://www.ag.ny.gov/media_center/2010/apr/pdfs/QUADRANGLE AOD.pdf[/url] 39. In November and December 2004, Rattner and the former principal spoke with Morris about hiring him to market QCPII to a variety of pension funds, CRF included. Although at the time Quadrangle had understood from Monument Group it was likely to receive an investment of $20 to $50 million from CRF (with the most likely scenario being $25 million), Morris told Rattner he could increase the size of the investment and therefore Quadrangle should pay him on the upside. 40. In or around December 2004, Quadrangle, .., agreed in principle to a fee arrangement with Morris. ... was to be paid 1.1% of aggregate investments ... 44. At the end of January 2005, CRF recommende­d a $100 million investment in Quadrangle­. This was two weeks after Rattner notified Morris that Good Times would be distributi­ng “Chooch.” 68. In or around 2006, as Alan Hevesi was running for re-electio­n as Comptrolle­r, Morris called Rattner and expressed to him that he and Hevesi wanted Rattner to be helpful in his re-electio­n efforts. Morris added that others whose funds had received investment­s were also making contributi­ons. When Rattner explained he had a policy against making contributi­ons to officials with oversight over investment­s, Morris told him he should contribute money indirectly­, by getting a third party to make the contributi­on. 69. Thereafter­, Rattner asked a Democratic donor he knew to contribute to Hevesi. That person and his wife each subsequent­ly gave approximat­ely $25,000 to Hevesi for New York. 70. Shortly thereafter­, the CRF increased its investment in QCPII from $100 million to $150 million.” 71. Quadrangle has received approximately $5,000,000 in management fees from the CRF associated with the investments arranged by Morris. - AndrewDover Mon, 31 Jan 2011 03:54:56 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6663 Why the focus purely on jobs? The real story here is loss of income, and it's not only the laid off who are the victims. These past couple of years retirees living off the interest on their CDs have seen their incomes plummet just as steeply as those who went from paycheck to UE check. Some are now being forced to start gambling in the Wall Street casino, and we all know how that'll turn out. How many jobs has this low interest rate environment actually saved? Or has this little episode been about bankers setting themselves up for large bonuses all along? - dunkelblau Mon, 31 Jan 2011 03:36:23 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6662 “One of the key mechanisms that Germany has used to keep its unemployment rate down is work-sharing.” . Isn’t that statement just semantic trickery? Take an economy with one million full time workers and one million unemployed. If the one million unemployed are forced or induced to work half time to enable the unemployed to work half time, I’d say you have exactly the same amount of unemployment: two million people part time unemployed instead of one million full time unemployed. - Ralph Musgrave Mon, 31 Jan 2011 02:40:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6658 First, Obama really is a conundrum. He seems to be a hyper-intelligent man, yet his choices -- especially his economic choices -- do not square with his intellect. He signed-on to the Paulson plan for rescuing the banks and upped the ante by permitting huge payouts of bonuses to the bankers who had played such a central role in creating, or at least exacerbating, the economic crisis. I'll always believe he chose Summers and Geithner by asking and answering the question, "What would W do?" Second, the jobs issue doesn't appear to be on the Obama Administration's agenda. Where is daily/weekly/monthly appearance by the President supporting specific job creation events and mourning job loss events? Third, to the extent that productivity means GDP (or other output measure) per worker (or unit of labor), productivity is merely a measure of corporate efficiency at labor arbitrage. The more production we offshore and then import finished good to be sold at a profit, the greater the numerator of the productivity fraction. The fewer workers employed in the United States, the smaller the denominator. This is, I believe, an area in which current economic thought falls short. - Ron Alley Mon, 31 Jan 2011 01:52:25 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/math-and-economics-are-hard#comment-6657 [quote]Mr. Rattner's piece suggests one of the key causes of the administration's failure to generate jobs. Rattner highlights the more rapid productivity growth in the United States over the last decade than in other countries, in particular singling out Germany as country with slower growth.[/quote] Exactly. This is why Obama's new economic team has adopted a Tom Friedman - Jeffrey Immelt Strategy to make Americans even more productive so even more Americans can be unemployed. Even those with no math skills at all understand how competition works. - izzatzo Mon, 31 Jan 2011 01:49:48 +0100