Far too much worry is placed in the short-run ups and downs of the economy, but I am not worried about business where errors are ultimately punished. The real worry is that public policy will extend its embrace of short-run fixes, which are chimerical.
Medicaid and Medicare fraud is where the real money lies, costing taxpayers some $100 billion a year, or 10 percent of total costs. This is many times more than the highest estimate of fraud in all other assistance programs combined. Nearly all of this fraud is perpetrated by health care providers.
The new Keynesian model suggests that a government stimulus might work to temporarily boost consumption or investment just like the old Keynesian model does. But the new model requires businesses and households to adjust their buying because of fears of expected inflation.
Before we get down to evaluating economic development incentives, we ought to understand just what it means to “create a job” and how we can honestly evaluate tax incentive policies.
The Soviet, er … Russian, invasion of Ukraine offers a nice reminder of JFK’s old dictum that domestic policy can defeat us, but foreign policy can get us killed. As we pay higher gasoline prices, we ought to think about the world as it is and our options.
Late last month, a Congressional Budget Office study on a proposed minimum-wage hike concluded that raising the minimum wage 39 percent, from $7.25 to $10.10, would reduce employment by roughly 500,000 jobs.
After World War II, Americans began to marry later in life and with far fewer geographic restrictions. The “marriage market” shifted from small towns to colleges and workplaces. So, educational attainment, not race and religion, became a more important factor.
The plain fact is, of the households with earnings in the top fifth, only 0.0016 percent earn more than half their income from stock dividends. Simply put, most rich households work. It is also plainly true that someone else’s riches don’t come at the expense of the rest of us. There is not a finite amount of income.
America’s middle class was first built upon an unsustainable combination of low-productivity, high-wage jobs in large factories. The second half of the 20th century saw a different middle class emerge, with workers across many industries applying high-value-added human capital to the production of goods and increasingly services.
The big lesson on research and data about poverty is the limited effectiveness of public policy. For healthy people in long-term poverty, nearly all have made at least one of the big three mistakes: quitting high school, using drugs or having kids without a partner.
No economic facts are likely to steer the policy debate away from income inequality. This is mostly because today’s discussion is simply a convenient way to change the subject from other policy failures.
There are many causes to income inequality, most significantly that labor markets value different skills in different ways.
At the Philadelphia meeting of the American Economic Association, economist Charles Plosser argued that the continued quantitative easing should be quickly reduced.
The U.S. economy is not a system; it is a series of markets that by their very nature cannot be organized. The People’s Republic of Korea is the contemporary bastion of economic systems; North Korea is the most centrally planned state of modern times.
The Federal Reserve’s recent decision to ease efforts to stimulate the economy were widely expected. What was unexpected about the announcement was just how minimal the changes were.
Attractive regions will attract households with greater location choices. These households will inevitably be better educated and command a higher income. However, all things being equal, workers in these places will not require quite as high a wage to live in these places as they would to live in a less-desirable place.
Over the past few weeks, the research center in which I work published three studies evaluating the role of economic development programs in Indiana. The results held surprises and some not-so-surprising findings.
Over the next couple of weeks, I will be traveling to many of Indiana’s cities to explain my 2014 economic forecast. I will tell audiences that the national economy will perform poorly, and that we will not return to pre-recession employment numbers this year.
In 1940, vibrant cities had big factories, rail yards and lots of associated workers. In 2010, vibrant cities had lots of people in many occupations whose product is mostly consumed locally. This doesn’t mean there aren’t a few fantastic towns with factories, but it is the vibrant town that ultimately makes the difference.
I have written that the marriage amendment is a poor use of our legislators’ time, but I believe we should have an honest discussion about the matter.
