Archive

  • The Gas Price Conspiracy

    The Washington Post published the results of a poll today showing that almost 40 percent of those expressing an opinion believe that the recent fall in gas prices is attributable to political manipulation of the market. While I don�t consider this a credible proposition (of course I also didn�t believe that Enron could be actively manipulating California�s electricity market in 2001), it is striking how many people are willing to believe the worst about the Bush administration. --Dean Baker
  • Edmund Phelps and the Natural Rate of Unemployment

    The awarding of the non-Nobel prize (this prize was created by the Bank of Sweden in 1968, not Alfred Nobel) to Columbia University Professor Edmund Phelps, in part for his work on the theory of the natural rate of unemployment, provided the media with a good opportunity to talk about the current status of the natural rate theory. Unfortunately, they seem to have largely missed the opportunity. The great innovation that Phelps, along with Milton Friedman, brought to the theory of the natural rate of unemployment is that workers would develop expectations of inflation, so that they could not be systematically fooled about the true value of the real wage. This fooling process was important for at least some strains of Keynesian economics at the time, because they held that inflation could be used to reduce unemployment by fooling workers. According to this Keynesian view, because workers fail to recognize inflation, they can effectively be tricked into working for a lower real wage...
  • HAPPY COLUMBUS DAY.

    HAPPY COLUMBUS DAY. Tapped is off duty today, but will resume regular posting tomorrow (Tuesday). --The Editors
  • Benchmark Revisions and Productivity Growth

    Most of the news articles on yesterday's employment report noted that the Labor Department's benchmark revision will add 810,000 jobs to the numbers reported in the establishment survey, as of March of 2006. This is an extraordinarily large revision that implies that job growth was considerably more rapid between March of 2005 and March of 2006 than the unrevised data show. However, there is another important implication to this data. If job growth was faster, than productivity growth was slower. The unrevised data show productivity growth of 2.7 percent over the year from the first quarter of 2005 to 2006. If the additional job growth is evenly divided across sectors, productivity growth will be revised down to 2.1 percent for this period. This is a substantial slowing from the 3.4 percent growth rate over the prior 4 years. Of course, readers of CEPR's job bytes know this. -- Dean Baker
  • The Productivity Upturn: How Much Is Real?

    Most economists view productivity growth as being the key to rising living standards through time. The basic story of productivity in the post-war era is that growth was rapid in the years from 1947-1973, but then slowed sharply over the years from 1973-1995. Productivity growth then ticked up again in 1995 and has been relatively rapid since 1995. While rapid productivity was largely passed on in the form of wage growth, one of the disturbing features of the economy over the last six years is that there has been virtually no increase in the wage of the typical worker. To some extent this is the result of upward redistribution � from low wage workers to high wage workers and labor to capital � but some of it has also been attributable to technical issues that distinguish changes in measured from productivity from changes in potential consumption. After discussing this issue with my friend Jared Bernstein (co-author of the State of Working America ) I decided to check the numbers.
  • INTELLECTUALLY GROTESQUE INDEED!...

    INTELLECTUALLY GROTESQUE INDEED! Jonah Goldberg apparently cannot distinguish between arguments about suboptimal economic outcomes of private monopsonies and those dismissing cowardly opera house owners as something less than an existential threat to speech. Truly, it's a subtle distinction, and Jonah should not in any way feel bad about missing it. But really -- do read his post . It's a good example of the wild roundhouses these folks throw when you question the trumped up moral stands that supposedly give ethical weight to their Clash-of-Civilization fantasies. The Deutsche Oper's decision to pull Idomeneo was a cowardly one. There were no threats, there were no protests. It was preemptive cowardice. Apprised of the move's idiocy by the German political establishment (including the prime minister), the opera is being reinstated . Truly, free people everywhere should quake before this precedent. Yet, to hear Jonah tell it, this is as bad as the KKK, abortion protesters, and Wal-Mart...
  • I ONLY READ IT FOR THE BLOG RECOMMENDATIONS.

    I ONLY READ IT FOR THE BLOG RECOMMENDATIONS. Week in and week out here at Tapped , I've thought to myself, why isn't Playboy magazine giving us the props we deserve? At long last the injustice has come to an end, as the magazine counts us among their top ten political blogs : In all seriousness this was a surprise and an honor, considering the company ( TPMCafe , Andrew Sullivan , Pandagon , Glenn Greenwald , The American Scene , Hit and Run , etc.) See this PDF of the full list. (And note the copyright the Playboy editors asked to have included: � 2006 by Playboy. All rights reserved.) The proper progressive line on Playboy isn't something I've thought much about (not that there should be only one such line). Speaking personally, I too find Hef 's harem thing a bit creepy. But I like Daniel Radosh . --Sam Rosenfeld
  • ACTUAL JOEMENTUM.

    ACTUAL JOEMENTUM. Ah, folks? You folks in Connecticut?. This poll is really bad news for you. (And there's even worse news elsewhere .) It's not fatal -- not with Weepin' Joe Lieberman (I-Green Room) fastening that part of his hindquarters not glued to the Iraq War to the survival of that legislative titan, Dennis Hastert . This is going to be the Nobody-Knows-Nuthin' election of all time, at least until the one in 2008, which should have all the cool logic of those elections they used to hold in the Philippines. However, whatever Ned Lamont is doing in Connecticut is not working. He is losing to someone who appears to have the support of 69 percent of the people belonging to the party of Iraq, Katrina, and Mark Foley 's libido, all three of which it allowed to spiral hopelessly out of control. I'm no expert. but that's an issue that really ought to be cutting harder than it is. Consider the potential outcome of a Senator Weepin' Joe, empowered by a statewide endorsement of his brand...
  • THE ARMY AND IRAQ.

    THE ARMY AND IRAQ. Although it almost certainly comes too late and with too little material support to affect operations in Iraq, this New York Times article (which Blake flagged this morning) highlights the fact that the response of the Army to the conflict in Iraq has been radically different than its reaction to failure in Vietnam. As is detailed both in Andrew Krepinevich's The Army and Vietnam , John Nagl's Eating Soup with a Knife , and Stephen Rosen's Winning the Next War among others, the Army attempted to hold the lessons of counter-insurgency at arms length during the Vietnam conflict. The Army pursued doctrine that largely discounted the importance of securing the civilian population and concentrated on using firepower and mobility to destroy insurgent concentrations. These tactics failed, yet the failure produced little in the way of an organizational search for solutions or post-conflict assessment. In short, the Army tried not to learn anything about counter-insurgency...
  • PLUS, I DON'T...

    PLUS, I DON'T LIKE OPERA. I think Peter Beinart 's TRB this week deserves a response. The editorial focuses on the lack of (online) liberal outrage after the Deutsche Oper yanked the opera Idomeneo , which features Muhammad 's decapitated head, out of a desire to avoid controversy. The liberal blogs said nothing. Not so with the conservosphere, which erupted in outrage. Many liberals," Beinart writes, "seem unable to conceive of a struggle in which the Republican right is not an enemy but an ally. But there are such struggles, and, without today's activist liberals, they will be harder to win. Free speech is under threat, and Idomeneo should be the last straw." First of all, free speech is fine. German's politicians -- including its prime minister -- roundly criticized the decision. You can call the Deutsche Oper cowardly, or overcautious -- but speech is no less free because an opera house decides not to run a performance. Happens all the time, in fact. More importantly, the merry...

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