I’m just asking for the sake of clarity. So, it appears to me that your position is that the evidence for crony capitalism lies in the low interest rate of the funds loaned to the banks by the fed. Is that correct?
If you’re pretty much “there” in Silicon Valley, I’m guessing you mean employers are offering more money, better working conditions and other perks to lure employees? Which means the real wages and salaries are going up.
It’d be good for the country, IMO, if the same kind of thing happened in the rest of the country.
When you say: Your cite does not support that interpretation.
Which interpretation are you talking about? If it’s
I admit that’s pure speculation on my part. Having said that, I suspect this is a statement you won’t see in Fed minutes: “A number of participants reported that some of their business contacts were experiencing higher profits, indicating a sustained upward pressure on inflation…”
Labor’s share of national income has been falling for decades, even as productivity has increased year after year.
Link.
Check chart #4 in particular.
The evidence for crony capitalism lies in the revolving door between Goldman et al and the Fed. The Greenspan Put was continued by Bernanke, and judging from Yellen’s latest move, the Yellen Put is now in effect.
The beneficiaries of Fed inflation(in its original sense) are the carry traders at Goldman specifically and the gamblers of Wall Street in general. They see asset prices surge and reap the rewards of such.
Also, Yellen gives out information on Fed policy ahead of time to people she meets with, then ducks subpoenas when she’s caught.
Maybe you wouldn’t, but there’s tons of people who would.
From talking to software people, my impression is that companies will hire people, and then train them on the job, if necessary, to get them up to speed.
From talking to a friend who’s a carpenter, he complains about the difficulty of finding and retaining good employees. But he never talks abut paying more to retain better people. You’d think the traditional rates of pay were carved in stone.
That might be one problem.
Another problem might be the cultural prejudice about “professional” jobs - despite the number of PhDs who can’t find jobs. I sometimes think the emphasis on “education” has resulted in a workforce that’s overeducated, and under-skilled.
In any case, your point is well-taken. It does take time to learn the skills necessary to become a carpenter, a lawyer, or a software engineer.
Incidentally, law school doesn’t teach people to be lawyers, they learn that on the job.
there is more to cost than only labor. in fact labor may be a small component of the cost. although I know your interesting “economic” theories so this is a sterile conversation.
there is not much point, I have followed past exchanges.
In any case my observation is that you make sweeping conclusions and assertions off of a narrow set of information and circumstances and also do not understand the actual monetary economics.
I doubt very much that the head of the american central bank is either corrupt like this or more incompetent in behaviour and communication than even the governor of the central bank of the nigeria. So I think this is something that exists in your head and in the head of extreme political ideologues inventing justifications for their views set in advance.
but perhaps we can be referred to the 19e political philosophes for the learning.
Yellen ducks subpoena:
I see from even this blog that the story is not that simple “But Ms. Yellen, who appeared to be reading from a prepared statement, reiterated Wednesday that the inspector general has advised the Fed not to turn over information related to the leak because it could interfere with the ongoing criminal investigation.”
so my doubts are confirmed, ideological distortions of more banal realities.
Look, you just haven’t made yourself knowledgeable on the history and politics of central banking in the United States. You are from another country, so it’s ok. I would just prefer you took the time to gain a passing understanding of the matter if you are going to follow me around to every post and slander me with Marxist smear terms like “ideologue”.
You are just naive. Plain and simple. I feel bad for you.
Very good, you can continue to point me, a financial economist to the proofs of the 19e century political philosophes to improve the condition.
I mean you aren’t even familiar with basic concepts in our constitution like checks and balances. Why do you speak on these matters? Congress has oversight, and Yellen refused to cooperate. This is opaque corruption.
My guess is you are near elderly and cling to a system that has benefitted you personally for many years, or worse, you paid a lot of money for an education in economics and instead learned mathematics. I could point to any number of 19th, 20th, and 21st century economists who would help you understand economics as opposed to statistics. With this particular topic, that has nothing to do with economics per se, you would be better off looking at a Contitution 101-type course on Khan Academy or similar.
There is no point to this hijack. It is sufficient to note the following, (1) from the articles it is clear that the question of communication or the facts is not cut and dried and the accusation of corruption by Yellen herself is from an ideological position, and (2) the same ideological position has a very strange aversion to the modern economics, calling it statistics… very strange, extreme and not something supported outside of what seems to be an american fringe ideology. Between these the understanding of the statements about the american central bank can be had and understood for their real value.
funny, the idea of being elderly…
Few fundamental changes have happened -
- Automation of many jobs.
- Awareness (via Internet etc) , competition - so the consumer can choose best product for him/her in best deals, every business knows about every other business. So the margins are going to be low.
- Low fertility rate - below replacement levels in many countries => aging population, low demand.
The above factors are putting deflationary pressures on economy and I believe the interest rates do not have much scope to increase.
Wages, at least for those in the industry, are going up, and unemployment is quite low and getting lower. We’ve been the top job creation center in the country. It would be great if this was true everywhere, but it isn’t.
What I was objecting to was the implication that if someone said some areas were seeing upward pressure on wages it meant the problem was over, and that the Fed considered rising wages to be a bad thing. Or raises rising at the level where they want inflation to be.
I’m certainly not going to argue about labors falling share of income - that is absolutely correct.
Not any more. Today software companies want to hire people who know the latest package, and not train someone who will move to someplace else. 20 years ago most large companies had extensive internal training departments, but that has mostly gone away. We do hire and train people, not formally, since our specialty is hardly taught at schools and is very much in demand.
But the problem isn’t really unwillingness, it is skills. That’s why the apprentice system is so useful. My grandfather was a plumber, so I respect the skills that go into that job.
That too. As Krugman has noted many times, if there was a real shortage of people for various jobs the pay would go up - which it mostly hasn’t. Actually in my company the pay for new hires has gone up far more than the pay for people there, which has been the case for easily 30 years. Far easier to complain that kids don’t care than to pay enough to get the kids who do.
Both. My son-in-law did lots of mock trials in law school, and felt reasonably prepared - but the real training was in practice. That’s true for engineering also.
Great, so let’s appoint Joe the Plummer. Problem solved. Meaning that if your analysis of a bad situation is botched, you open yourself up to ineffective fixes.
It wouldn’t be a bad idea to put a macro-labor economist with ties to Unions on the Fed board. There are a number of fine ones at the Economic Policy Institute. But honestly, it would just represent one vote.
Also I’d like to propose a debunking. Check out this copy of the Fed minutes: Bloomberg - Are you a robot?
I’ll quote: [INDENT]The available reports from District contacts in the retail and auto industries confirmed the recent solid gains in consumer spending. Contacts were generally optimistic… Contacts in a number of Districts were upbeat about prospects… The information on business spending from District contacts was mixed. …Optimism remained relatively high according to some District contacts, although… A number of participants reported that some of their business contacts were experiencing labor shortages in various occupations and geographic areas resulting in upward pressure on wages, with a few indicating that the pickup in wages had become more widespread. [/INDENT] These contacts aren’t occurring over golf. These contacts come from systematic data/information collection (possibly via telephone) from Federal Reserve economists. It sounds like they are culling this information from the District reports.
ETA: Or rather the Beige Book: http://www.federalreserve.gov/monetarypolicy/beigebook/