Visual from Greg Mankiw who obtained it from Mark Perry.
The federal government's fiscal position has been rapidly improving.
Angus at Kids Prefer Cheese got it from the Financial Times Alphaville. The macroeconomics dissertations have yet to be written.
If we had been better Keynesians in the past, we would have used the "boom and not the bust" for "austerity", and could have run an expansionary policy longer. But in the absence of a proven connection between fiscal stimulus and sustainable job growth (sorry Brad and Larry), and the presence of our high and still rising debt levels and the continual damaging political theatre around debt ceiling breaches, I am fine with this rate of deficit reduction.Also at Kids Prefer Cheese is a chart suggesting there are still plenty of discouraged workers.
What is not so great about the deficit reduction we are getting is that it doesn't address longer run budget issues, and the deficit is projected to start rising again in 2015 and get ugly shortly thereafter.
From Mahablog comes a Business Insider essay by Jeff Bezos suggesting corporations are holding onto cash rather than hiring workers. "[T]he profit maximization obsession of American corporations is actually starving the rest of the economy of revenue growth."
A longer time series of the employment ratio suggests "As a result of frantic firing in the name of "efficiency" and "return on capital," the U.S. employment-to-population ratio has collapsed."
To Mr Bezos, the downsizing and restructuring and outsourcing have not produced productivity gains.
In short, the obsession with "maximizing short-term profits" that has developed in America over the past 30 years has created a business culture in which executives dance to the tune of short-term traders and quarterly earnings reports, instead of balancing the value created for employees, customers, and long-term owners.It might take another thirty years for social science to come up with a plausible, replicable analysis of the failures, or not, of corporate restructuring, or of whether the current administration's fiscal and social policies are triggering a capital strike, or if a foundation is now being built for future prosperity.
That's not what has made America a great country. It is not what has made some excellent American corporations the envy of the world. It's also hurting the economy.