Week links (3)
An overview of the best of the rest in the economic blogosphere and beyond (and some news as well).
1. The US unemployment rate is down to 6.6% (BLS)
"Total nonfarm payroll employment rose by 113,000 in January, and the unemployment rate was little changed at 6.6 percent ...
After accounting for the annual adjustment to the population controls, the civilian labor force rose by 499,000 in January, and the labor force participation rate edged up to 63.0 percent. Total employment, as measured by the household survey, increased by 616,000 over the month, and the employment-population ratio increased by 0.2 percentage point to 58.8 percent...."
Yet the E-P ratio is still where it was in 2009 (even though some of the people who lost jobs in the crash got them back, others (e.g. new entries) are still reluctant to entering the market. There is also a matter of many elderly workers choosing early retirement, in addition to many old inefficient jobs being lost, while the process of rediscovering new skills and specialization patterns is rather slow). It is obvious by now, the US in on a new output path and a new E-P ratio.
2. Paul Krugman featured on the Colbert report last week. The topic was Obamacare as a job killer (following the findings of the CBO report). Here's the video if you've missed it (it was very funny, as usual):
Here is the link if the video doesn't work.
3. Michael Boehm, "Job polarization and the decline of middle-class workers' wages", VoxEU
A sign of weakening creative destruction perhaps?
4. Noah Smith, "Does cutting the government make it more efficient?" Noahopinion blog - discussing the logical incoherence that cutting inefficient governments makes them more efficient. Basically he's saying that governments usually don't make hiring decisions based on a monetary marginal cost/marginal benefit calculation, so forcing the government to downsize actually makes it even less efficient as in the process it may lay off some of its most productive workers. A very interesting line of reasoning.
5. Arnold Kling, "What should Austrian macroeconomics resemble?" askblog - continuing his previous Austro-Keynesian ideas and trumping New Classical economics:
"Maybe the worst-measured variable of all is productivity. How many workers in the U.S. are in large organizations where they spend time reading email, producing reports, and going to meetings? I am going to go out on a limb here and say that these are, on average, productive activities. They produce some sort of organizational capital. But they do not produce output in the here and now. So if you divide this month’s output by this month’s hours spent on the job, that is inaccurate, because a lot of this month’s work is about output in later periods."
"The bottom line: Austrian economics ought to resemble PSST, not New Classical."6. The Economist published its traditional Big Mac Index.