The Martin Hutchinson Place
Fourth quarter U.S. labor productivity growth surprised markets last week by coming in at minus 1.8%. Over the past four years, annual productivity growth has averaged only 0.7% per annum. That’s far below the historical average of around 2% annually. The productivity growth shortfall has highly negative implications for U.S. living standards. Contrary to the […]
President Obama’s budget, global post-2008 monetary policy and Greece’s election of the leftist Syriza government all reflect the same impulse: the desire to remove constraints that had previously been thought mandatory. Just as in our social existence we are seeing the merits of some of the constraints the baby boomers so enthusiastically discarded in the […]
“We are not worried. Our team is strong. We have Icarus in the wings” chortled Greek leftist Alexis Tsipras after his election victory. You’d think a Greek would remember that Icarus fell to a watery grave when his wings melted – the country’s education system is clearly not what it was. All the same, apart […]
Ben Bernanke spent his entire Fed career wittering about deflation, from his initial “helicopters” speech of 2002 on. Yet we never got it, or even close to it. Ironically, a year after Bernanke’s replacement by a like-minded successor, we finally appear close to genuine deflation. The balance of probabilities must still be against it, but […]
In an inevitable development, the proponents of greater government spending have developed a new theory to encourage it. With Senator Bernie Sanders (I.-VT)’s appointment of its proponent University of Missouri-Kansas City professor Stephanie Kelton as minority chief economist to the Senate Budget Committee, the new Modern Monetary Theory is about to get a serious airing. […]
Last week’s Economist magazine had a leading article and lengthy feature “The future of work” looking at the Silicon Valley companies such as Uber and Airbnb that, by creating the “on-demand economy,” have turned employees into freelancers. Their emergence has like most innovations been opposed by entrenched interests, with both Uber and Airbnb facing legal […]
The Greek government’s failure to elect a President has caused a snap election on January 25, at which the left-populist party Syriza seems likely to win a majority. Similar parties in Spain (Podemos) and to an extent Italy (the Five Star movement) are also a threat to established political norms. On the other political side, […]
While oil prices have been volatile in 2014, stock prices haven’t. The U.S. stock market has continued the gradual upward move it began in 2009, while the VIX volatility index peaked very briefly in October at 31, far below the level of almost 90 touched in 2008. Politics has been turbulent, and the oil price […]
In 2012, Robert Gordon postulated the thesis that innovation was slowing to a halt, so that we should not expect to continue getting the productivity gains we had enjoyed in the 19th and 20th centuries. He propounded four “headwinds” that were causing this: demographics, education, debt and inequality. At the time he wrote, this column […]
The market rejoiced on December 5 when the Bureau of Labor Statistics reported that 300,000 new U.S. jobs had been created. The general consensus is that the 3.9% third quarter U.S. GDP growth is the harbinger of a brighter trend – the Economist’s team of forecasters has U.S. growth at 3% in 2015, up from […]