Archive for August, 2009

While I am on the subject of Classical economics [see my post of the 'Two Economies'], I think it’s useful to dredge up the way in which those folks would have looked at our current situation. Prior to modern economics there was no concept of a ‘recession’ and a ‘recovery’. Instead observers back in the… »

Reality has a very nasty way of intruding into the fancies of life. Economics is no exception. There is a growing realization amongst the ‘experts’ that the hoopla being accorded our imminent exit from recession is actually no big deal to a huge swathe of America. It won’t matter. As a result we are being… »

The financial press is, as usual, desperate for any news that justifies an optimistic headline. So you will be reading tomorrow about how consumer sentiment and incomes have made progress in the last couple of months.
Be careful.
Yes progress has been made.
But we still have the training wheel firmly attached to this recovery. The entire edifice… »

The release today of the revised second quarter GDP figures was a bit of a dud. Most of the other recent data has been suggesting we would see a slight revision upward of the preliminary figures. Instead there was no change: the economy shrank at an annual rate of 1.0% between March and June. That’s… »

The sea of red ink is swelling at an awesome rate. One of the reasons that Obama pushed forward his announcement about Bernanke was to drive the various reports issued yesterday about the Federal Deficit off the front page. At least that’s my guess. If it was his plan he failed miserably: today’s Financial Times… »

I neglected to point you to the Case Schiller index yesterday: it rose for the second month in a row. The increase was very slight but general across the country. This suggests that the long decline in home prices may be approaching an end.
Just to put this in context: the index covers re-sale prices of… »

It is entirely inappropriate to continue blogging about the current set of issues that beset us without paying due deference to Ted Kennedy. In many of the debates that we are embroiled in from health care reform, to consumer protection in finance, and on to bank regulatory reform, Kennedy’s voice will be sorely missed. In… »