Wrap Up for June 2016

In the most recent recovery, "just 20 counties have generated half the growth". By way of comparison, 125 counties generated half of new business establishment growth in the early 1990s recovery. Rural areas have of course been hardest hit. From the WP article, "A very bad sign for all but America's biggest cities."

"It's going to get much worse," said John Lettieri, a former Republican congressional aide who is a co-founder of the Economic Innovation Group. "As bleak as these numbers are now, these may be the good years."

This growing divergence of fortune between prosperous cities and other areas, has received too little attention. While there are class and cultural considerations, they are not necessarily fundamental to the underlying economic dynamics which continue to play out. Politicians need to become more cognizant of this fact, instead of exacerbating social differences as an "easy way out" (see Brexit...).

Logistically as well, it is somewhat difficult to reach out to smaller communities. There are so many, yet each must deal with the economic realities of Main Street on their own terms. How might prosperous cities help smaller communities in the near future, given the fact their circumstance are so different from the areas that are suffering? Yet this is the challenge. Highly educated urbanites may ultimately need to share - at least to some extent - their knowledge sets with small communities, to help them take part in the knowledge based economies of the 21st century.

Eduardo Porter knows that "A Universal Basic Income is a Poor Tool to Fight Poverty"

Alas, I can only contribute to macroeconomic discussions as a layperson. But that makes it no less important for me to try, given the present uncertain nature of macroeconomic dialogue. In particular, Olivier Blanchard wants greater emphasis on what is precisely non monetary. However, this emphasis tends to take populations out of the economic equation, at the very moment when governments most need the contributions of their citizens for 21st century challenges. To ignore the vital role of supply and demand in economic structure, would be to discount the real economy solutions that are possible. Nick Rowe was concerned about Blanchard's article, and so too, Scott Sumner.

Charles Murray created a stir recently, with this article:
http://www.wsj.com/articles/a-guaranteed-income-for-every-american-1464969586

National socialism is a confusing mix of policy recommendations and thought processes.
Alberto Mingardi responds to Anne Applebaum's article with a thoughtful post.

Have yet to get over the fact that Edmund Phelps wrote this Project Syndicate article in 2006 in support of low wage subsidies, yet apparently, no response from Washington. Had this approach been enacted, one has to wonder whether some rural area business losses might have been prevented, particularly since the Great Recession. Given the "one size fits all" regulatory patterns for business formation, it is not as easy for small town businesses to automate, to respond to higher minimum wage requirements as the sole responsibility of business owners.

Ambrose Evans-Pritchard writes an incisive article on Brexit and Dani Rodrik responds.

The Economist takes a look at teachers:
http://www.economist.com/news/briefing/21700385-great-teaching-has-long-been-seen-innate-skill-reformers-are-showing-best?curator=MediaREDEF

I'd like to have one of those t-shirts! from Narayana Kockerlakota http://www.bloomberg.com/view/articles/2016-06-15/the-fed-needs-more-than-one-direction

Shane Greenstein on Robert Gordon's book:

By the final chapter the ebullient economic historian disappears, replaced by a downbeat macroeconomic forecaster.

Scott Sumner takes a close look at NeoFisherism: http://www.themoneyillusion.com/?p=31807

Ryan Avent notes that James Bullard's conclusions are a little off: http://www.economist.com/blogs/freeexchange/2016/06/expect-worst?fsrc=rss

Regional patterns matter for employment: http://www.brookings.edu/blogs/the-avenue/posts/2016/06/21-nonworking-prime-age-men-berube

And the remainder for June goes to Brexit...

WSJ on Brexit http://www.wsj.com/articles/brexit-a-very-british-revolution-1466800383

Josh Hendrickson: Just because the public may think differently about negative externalities than economists do, does not necessarily mean they are "stupid" https://everydayecon.wordpress.com/2016/06/26/on-a-pascalian-theory-of-political-economy/

Economic policy uncertainty is higher this time...http://econbrowser.com/archives/2016/06/policy-uncertainty-in-america-in-the-wake-of-brexit

The role of immigrants, from Slate: http://www.slate.com/articles/news_and_politics/politics/2016/06/immigration_and_brexit_how_a_rising_tide_of_european_immigrants_fueled_the.html

Ouch! Everyone lost with this vote.