Economics Links (9 June 2009)

Sorry for not posting this here last week.

Angry Bear:
Untitled post on the Unemployment Report

Current Recession vs the 1980-82 Recession


Econbrowser:
DeGlobalization: Transitory or Persistent?

Not a Robust Recovery

James Pethokoukis: "An Improving Job Market"

Output, Employment and Industrial Production in the "1980-82 Recession"

More on Bank Lending Data

High Anxiety (about Interest and Inflation Rates)


Economist's View:
Too Big to be Restructured (The theme of this essay ties in very well with my post on Mikhail Gorbachev's essay from the other day, "We Had Our Perestroika. It's High Time for Yours.".)

Contributions to the Change in Nonfarm Payroll Employment

Shiller: Home Prices May Keep Falling

Uneven Unemployment Rates

"VAT Time?"

Bank Mergers

"Reducing Inequality: Put the Brakes on Globalization?"


Financial Times:
The ‘part-timezation’ of America


Reuters:
China influence to grow faster than most expect: Soros


Real Property Alpha:
California Home Prices in Ounces of Gold


True/Slant:
NASCAR helped GM down its path of self-destruction ("Better equipped to compete? How ironic, given NASCAR’s role in helping the auto industry race down its path of self-destruction. Major auto companies used NASCAR for years to push cars and trucks with poor fuel economy numbers. The sport, in some ways, came to symbolize America’s embrace of consumption.")


VoxEU:
Why is Japan so heavily affected by the global economic crisis? An analysis based on the Asian international input-output tables

Does climate change affect economic growth?


Washington Post:
Book Review: The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

Want a Strong Economy? Vote for a Democrat!

Yesterday, I highlighted a post over at Angry Bear that showed that every Democratic president since World War II has left office with a lower unemployment rate than the one he inherited from his predecessor, whereas only one Republican president, Ronald Reagan, could make the same claim. The moral of that story: if you want a job, you should vote for a Democrat.

Today, the folks at Angry Bear have ranked the last fourteen presidents (since Herbert Hoover) as to how the American economy did in real terms (i.e., adjusted for inflation) during each administration. Interestingly enough, five of the top seven presidents were Democrats, and only one Democratic president (Truman) was in the bottom seven. Below is the listing of presidents and the last two paragraphs of the essay; you can read the entire post here.

1. FDR
2. LBJ
3. JFK
4. Clinton
5. Reagan
6. Carter
7. Nixon
8. Ike
10. GW (that's 10 so far – don't be surprised if he sinks further into the mire)
11. Ford
12. Bush Sr.
13. Truman
14. Hoover

What the list shows us, is that, the top half of the spots are dominated by Democrats. Two Republicans, Reagan and Nixon, make it in (5th and 7th, respectively). It also shows us that the bottom half of the list is populated almost exclusively with Republicans. The one Democrat in the bottom half of the list, not incidentally, is the Democrat most beloved of Republicans today: Harry Truman. George Bush has compared himself to Truman, and a few weeks, Sarah Palin told us how she too was comparable to Truman. What are the odds that prominent Republicans would compare themselves with FDR or LBJ? (Snarky answer – probably about the same as the odds a Republican administration would produce a growth rate comparable to FDR or LBJ.)

Now, after 70 years of data, after observing what we've observed over all sorts of conditions, it is hard to conclude anything but this: one party advocates policies that produce rapid economic growth, and one part dismisses those policies with epithets like "socialism" and advocates instead policies that produce dismal economic growth. And dismal economic growth has consequences. Poor economic growth makes people worse off, and hits them in their pocketbook. And when people are hurting financially, their health suffers, the rate of divorce goes up, suicides increase, and the abortion rate increases. So those who advocate the policies that bring us lower incomes, poorer health, break up families, increase suicides, and increase the rate of abortions are doing us all a lot of harm. More, in fact, than Osama or Saddam could possibly have done. And yet, the folks who advocates those policies question the patriotism of the rest of us. It's very, very strange.

The Economic Version of "Final Destination 3"

There is someone, walking behind you
Turn around, look at me
There is someone, watching your footsteps
Turn around, look at me
One more post on economics (for now), this time an unusual look at housing prices. The New York Times produced a graph of Robert Shiller's American housing price index, which shows what prices have been like from 1890 through 2006. For example, if a standard house cost $100,000 in 1890 (in 2006 dollars), a similar home would have sold for $199,000 in 2006. What's interesting, though, is that someone has taken Shiller's data and transformed it into a roller-coaster ride using Atari's RollerCoaster Tycoon (R)3 software. (Be sure to look at the bottom right corner to view the year.)



The problem with this video, though, is that it stops short of what's happened in the past two years. Back in late May, The Economist, which I do read (apparently this is a political joke now), produced a graph that shows this past year's plunge. To give an idea of what the end of the roller-coaster ride should look like, one wit at Angry Bear suggested the following video:



HT: Angry Bear

Want a Job? Vote for a Democrat!

A couple of interesting posts on unemployment today, the first being from Spencer at Angry Bear:

So much for Sarah Palin's claim that Republican tax cuts create jobs. In the post WW II era every Democratic President has left office with a lower unemployment rate than they inherited from their predecessor while only one Republican president left office with a lower unemployment rate than they inherited. That was Ronald Reagan, but his first term still holds the record for the highest average unemployment rate of any post - WW II four year Presidential term.

George Bush inherited a 3.9% unemployment rate and the results of all his tax cuts has been a rise in the unemployment rate to 6.1%, so far. By contrast Bill Clinton inherited a 7.4% unemployment rate and with his prudent fiscal policy left Bush a 3.9% unemployment rate.

Leave it to Team Bush to be the only American President to throw a war that failed to stimulate the economy.

Another scary graph comes from Economist's View:

A grim morning: Double plus ungood news on multiple fronts this morning. The credit crunch is getting worse: LIBOR jumped again, the TED spread is at a new record. Bad news on employment: payrolls down 159,000, average work week down, official unemployment rate flat at 6.1 percent but broad measure (U6) up from 10.7 to 11.

We are going over the edge.

The track record: This chart shows U6, the broadest measure of unemployment and underemployment from the Bureau of Labor Statistics. (No data available before 1994.)