Wrap Up for January '16

Probably the best that can be said about January 2016, is that a lot of us are looking forward to a better February! As it turned out, stock market declines in the U.S. were close to 5.5 percent for the Dow and almost 8 percent for Nasdaq. From one internet meme,

decided my 2016 starts again on February 1st...this was a trial month

Scott Sumner provides excerpts in an Econlog post, from Robert Hetzel's 2009 Fed paper. Robert Hetzel was a Fed insider who understood that tight money - not financial distress - was the cause of the Great Recession. http://econlog.econlib.org/archives/2016/01/robert_hetzel_e.html

Which states are the most reliant on Federal aid?
http://taxfoundation.org/blog/which-states-rely-most-federal-aid-0

Some alternative policy suggestions for education on the part of these Vox authors: http://www.voxeu.org/article/re-thinking-education-alternative-policy-lessons
However, in order for "more education" to make a difference economically (and otherwise), organizational patterns already need to be in place which don't force people to stand in line for the knowledge work they seek. Time arbitrage would allow people to utilize skills, without the constant need to categorize their value in exclusive terms.

And considering the things that can go wrong with one's car, especially after it ages, $500 is certainly not a high repair bill to begin with...http://blogs.wsj.com/economics/2016/01/06/a-500-car-repair-bill-would-send-most-americans-scrambling/?mod=WSJBlog

Like time based services, investments also need more options, for small investors whose time value is directly involved in the process. http://time.com/money/4168633/retirement-huge-threat-security/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

Scott Sumner makes a good point in this post that the possible (and undesirable) adoption of growth rate targeting would be too convenient of a Fed excuse, such as the ones they use now:

Under growth rate targeting they can always point to temporary shocks, unexpected events. "It's not our fault."

Kevin Dowd is concerned about the potential abolition of cash.
http://www.cobdenpartners.co.uk/pdf/HaldaneCashesOutonCashOct102015.pdf
I am concerned what would happen to anyone with a small income, who regularly loses consumption options from the finance charges that already exist. What would those charges become if this were the only way to access money?

Marcus Nunes highlights some important trend lines in this post: https://thefaintofheart.wordpress.com/2016/01/17/the-plunging-economy/

44 percent of recent college graduates occupy jobs which do not require a college degree. Even so, this is not a subject which lends itself to easy explanations or responses.
http://www.economics21.org/commentary/free-college-sanders-obama-preston-cooper-01-21-2016

Clark Johnson reviews Scott Sumner's new book:
https://marketmonetarist.files.wordpress.com/2016/01/midas-review-clark-johnson.pdf

David Beckworth and Ramesh Ponnuru for the New York Times
http://www.nytimes.com/2016/01/27/opinion/subprime-reasoning-on-housing.html?smid=tw-share&_r=1

If only I shared the optimism which the Economist continues to hold for the U.S.! But they are right about the reality show that has become American politics.
http://www.economist.com/news/leaders/21689543-marvel-jaw-dropping-spectacle-then-worry-american-politics-has-taken-dangerous?fsrc=scn/fb/te/pe/ed/thebrawlbegins