Wrap Up for February 2016

The decentralization which is needed, is not so much a matter of state versus national economic decision making processes, but of creating much needed economic complexity for rural areas. And cities aren't the only places with housing problems. From the Atlantic, regarding rural America's silent housing crisis:

Rural areas have been traditionally more dependent upon public subsidies and publicly-funded programs than their urban counterparts.

Some good points from the Economist regarding the measure of GDP.

It takes no account of who is doing the producing, meaning an economy could have a single worker or full employment. It ignores the underground economy to a large extent, guaranteeing that production always undershoots reality...America's recovery from the global financial crisis now looks less impressive.

Angela Rachidi of AEI makes an important observation with this post title, "For poverty, work is more important than wages, but only half of American adults work full-time."

From Marcus Nunes: "The best way to look at the unemployment rate is to analyze it from the perspective of its two constituents. The employment population ratio (EPR) and the labor force participation rate (LFPR)."

Hmm. From unbelievable facts. How many gold buggers know this and what might it signify, if anything? Indian housewives hold 11% of the world's gold. That is more than the reserves of USA, IMF, Switzerland and Germany put together. Perhaps a jewelry standard...

Scott Sumner notes the lessons of the Great Depression for today's economy, in a Fiscal Times article: http://www.thefiscaltimes.com/Columns/2016/02/04/Are-Congress-and-Fed-Repeating-Mistakes-Depression

In "What is the incidence of pet pantries" Tyler Cowen asks "How much better is it to have a wealthier owner?" As to the rationale that it is better for a dog to have a wealthier owner, I find this to be part of a slippery slope argument which basically devolves to reasoning that no form of responsibility is logical, for those without sufficient economic access. Where, exactly, does one draw the line?

The burden of elder caregivers is not yet a part of the national conversation. However this responsibility is often not a spontaneous choice, in the same sense as other forms of domestic home work. Should caregiver activity be measured as a part of GDP?  http://www.theatlantic.com/business/archive/2016/02/working-daughters-eldercare/459249/?utm_source=SFFB

Timothy Taylor compares a variety of different inflation indexes: http://conversableeconomist.blogspot.com/2016/02/breaking-down-us-inflation-rates-by.html

China's link to the dollar, from David Beckworth:

...China's currency has been tied to the dollar and through this link Fed policy gets transmitted to China. Fed policy via the dollar, therefore, is an important determinant of Chinese nominal demand and economic activity.

Bill Woolsey makes a good point about countries which decide to rely on "strong" leaders.

How many interest rates to cut? It matters...(Miles Kimball) http://blog.supplysideliberal.com/post/139340010517/if-a-central-bank-cuts-all-of-its-interest-rates

The "end of cash would give governments almost unlimited power to deny resources to those they consider undesirable." (Chris Bertram) http://crookedtimber.org/2016/02/16/cash-and-freedom/

"If it happens, it would be the ultimate demonstration of the power of finance over people." (Paul Mason) http://www.theguardian.com/commentisfree/2016/feb/15/crime-terrorism-and-tax-evasion-why-banks-are-waging-war-on-cash

It's not difficult to see where the trouble with government budgets is really headed, when one reads stories like this. The sooner that knowledge use systems can relieve fiscal policy burdens, the better.
http://www.independent.co.uk/news/uk/home-news/teenage-quadruple-amputee-told-to-prove-he-is-disabled-to-keep-benefits-a6880526.html

A Bloomberg interview with Larry Summers, considering a nominal target: http://www.bloomberg.com/news/videos/2016-02-18/summers-consider-if-fed-should-target-nominal-gdp

Again, budget problems. Hospitals in deficit, in England http://www.bbc.com/news/health-35608992

It may be a while before small communities are able to reorganize effectively for retail operations.
https://www.washingtonpost.com/news/wonk/wp/2016/02/05/what-happens-to-a-tiny-town-when-walmart-disappears/?hpid=hp_hp-top-table-main_walmart947pm%3Ahomepage%2Fstory

Who Plans?: Jane Jacobs' Hayekian critique of Urban Planning (Market Urbanism) "By allowing individuals to freely organize themselves in relation to one another, natural urban orders emerge without any central planning."

An interesting set of tweets from Clay Shirkey https://storify.com/cshirky/republican-and-democratic-parties-are-now-host-bod

With the help of posts from Ben Bernanke and James Hamilton, David Beckworth "was able to attribute 51% of decline in oil prices to weakening oil demand." http://macromarketmusings.blogspot.com/2016/02/connecting-dots-demand-side-to-oils.html

James Alexander: echoes of 2008? https://thefaintofheart.wordpress.com/2016/02/22/cpi-trending-higher-ngdp-growth-lower-monetary-policy-must-go-easy/

Luigi Zingales has his doubts about Donald Trump: http://www.nytimes.com/2016/02/23/opinion/campaign-stops/donald-trump-crony-capitalist.html

Even thinking about politics is enough to put one in a grumpy mood. Who really wants any of these presidential candidates in office for at least the next four years?  That's not much to smile about. On that note, here's something that made me smile... http://existentialcomics.com/comic/119