EconoMonitor

Economics Blog Aggregator

    United States

  • Brad DeLong's Grasping Reality

    Links and Tweets

    Links: Charles Kenny: "Donald Trump is wrong: Immigration isn’t a problem—it’s the solution to a shrinking, aging U.S. population..." Must-Read: Jaume Ventura and Hans-Joachim Voth: Debt miracle: Why the country that borrowed the most industrialised first Must-Read: Michael Derby: Dallas Fed Struggles to Fill Fisher’s Big Shoes Must-Watch: Alan Krueger: Labor Force Participation: <(https://vimeo.com/134932856)> Janis Ian: Bill Cosby spread lesbian rumors about her as a teen, tried to blacklist her from TV Must-Read: Steven Greenhouse: Jeb Bush 'Should Be Embarrassed' by His Overtime Pay Claims Worth Attending If in Town: Bernie Sanders: Conference on the Greek Debt Crisis Links: I'd like to know my Uber rating Shrimp Saganaki Daniel Alpert Daniel Al...more

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  • Brad DeLong's Grasping Reality

    For the Weekend...

    From the Good Germany--the one that has more to offer the world than austerity and general depression. Bonus: the most expensive special effects for a music video ever: https://www.youtube.com/watch?v=sJ_rZzFfNGU ...more

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  • Calculated Risk

    Restaurant Performance Index declined in June

    Here is a minor indicator I follow from the National Restaurant Association: Dampened Outlook Causes Restaurant Performance Index Decline in JuneAs a result of a somewhat dampened outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) declined in June for the second consecutive month. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 102.0 in June, down 0.4 percent from May and its lowest level in nine months. Despite the decline, June represented the 28th consecutive month in which the RPI stood above 100, which signifies continued expansion in the index of key industry indicators.“Although same-store sales and customer traffic levels remain...more

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  • The Big Picture

    Succinct Summation of Week Events (7.31.15)

    Succinct summations of events for the week ending July 31, 2015 Positives: 1. Durable goods increased 3.4% in June, above the 2.6% expected. 2. Case-Shiller home price index rose 4.4% y/o/y. 3. Weekly jobless claims rose to 267k off historically low levels; still very positive number. 4. July Markit services PMI rose to 55.2 from 54.8, a rebound from the lowest read since January last month. The average year to date is now 56.3 and remains below the average seen last year of 57.1. 5. Chicago PMI rose to 54.7, the highest reading since July 6. Japanese labor force participation rate rose to 60%, the most since September ’10, the size of the labor force increased by 390k and the number of employed rose by 340k. Negatives: 1. Consumer confidence came in at 90.9, a ten-...more

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  • Brad DeLong's Grasping Reality

    Liveblogging World War II: July 26, 1945: Potsdam Declaration

    Comment of the Day: Charles Steinel: Runup to Hiroshima: "The [Potsdam Ultimatum] document makes a reference to the 'self-willed militaristic advisors'... ...and in the same sentence refers to Japan as an 'Empire.' Later on the demand is made for the elimination of the authority of 'those who have misled and deceived the people of Japan.' It's clearly directed at the people in power at that time, which could include the Emperor, but there's nothing here that demands the complete dismantling of the imperial institution. 'Unconditional surrender' is specifically directed to apply to the Japanese armed forces. Also, the term 'utter devastation' is a strong indication of what might be coming. ...more

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  • Economist's View

    Pictures of Austerity

    Brendan Mochoruk and Louise Sheiner of the Brookings Institution say that Fiscal Headwinds are Abating: Tight fiscal policy by local, state, and federal governments held down economic growth for more than four years, but that restraint finally appears to be over... This is a pretty good summary of the charts: Fiscal policy is no longer a source of contraction for the economy, but neither is it a source of strength. But in my view the statement "neither is it a source of strength" understates how poorly fiscal policy has been managed. The strong headwinds never should have been there to begin with, and we have yet to feel the wind at our backs: ...more

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  • Marginal REVOLUTION

    *Leadership*

    The subtitle is Essential Writings by Our Greatest Thinkers, and the editor is Elizabeth D. Samet.  Here’s the shocking truth: these really are writings by our greatest thinkers!  Usually I am allergic to the topic of leadership and all the more allergic to edited volumes.  But this book has well chosen excerpts from Thucydides, Cervantes, Borges, Marcus Aurelius, Tolstoy, Milton, Plutarch, and Shakespeare, among many others, and a variety of moderns, including Mandela, Gandhi, Frederick Douglass, and Osip Mandelstam’s poem on Stalin. This is actually a remarkable book. ...more

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  • Econbrowser

    Guest Contribution: “Should Emerging Markets Fear A Fed Lift-Off?”

    Today we are fortunate to have a guest contribution written by Carolina Osorio Buitron, Esteban Vesperoni, and Prakash Loungani, from the Research Department of the International Monetary Fund. The views expressed in this blog are solely those of the authors and do not necessarily represent the views of the IMF, its management, nor its Executive Board. Though this week’s FOMC statement is still being parsed, market participants generally expect the Federal Reserve to raise policy interest rates this September. In contrast, the European Central Bank has significantly eased monetary policies over the past year and is expected to maintain accommodative policies for a substantial period of time. Should emerging markets fear the consequences of the so-called Fed liftoff ...more

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  • naked capitalism

    2:00PM Water Cooler 7/31/15

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  • All HW content

    Bicyclist killed while raising money for affordable housing

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  • All HW content

    Fidelity National increases ownership stake in ServiceLink to 79%

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  • Calculated Risk

    Freddie Mac: Mortgage Serious Delinquency rate declined in June, Lowest since November 2008

    Freddie Mac reported that the Single-Family serious delinquency rate declined in June to 1.53%, down from 1.58% in May. Freddie's rate is down from 2.07% in June 2014, and the rate in June was the lowest level since November 2008.Freddie's serious delinquency rate peaked in February 2010 at 4.20%. These are mortgage loans that are "three monthly payments or more past due or in foreclosure".  Note: Fannie Mae will report their Single-Family Serious Delinquency rate for May later today.Click on graph for larger imageAlthough the rate is declining, the "normal" serious delinquency rate is under 1%.  The serious delinquency rate has fallen 0.54 percentage points over the last year, and at that rate of improvement, the serious delinquency rate will not be bel...more

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  • Economist's View

    'U.S. Paychecks Grow at Record-Slow Pace'

    Martin Feldstein says that when it comes to income inequality, you're all a bunch of whiners: ...we should not lose sight of how well middle-income families have actually done over the past few decades. Unfortunately, the political debate is distorted by misleading statistics that grossly understate these gains..., the US middle class has been doing much better than the statistical pessimists assert. ... So it's yet another another round of "inequality has not grown as much as Democrats claim." Thought we had gotten beyond that. Today's news: U.S. wages and benefits grew in the spring at the slowest pace in 33 years, stark evidence that stronger hiring isn't lifting paychecks much for most Americans. The slowdown also likely reflects a sharp d...more

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  • Paul Krugman

    Industrial Cities of Yore

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  • Economist's View

    Video: NBER Feldstein Lecture by Alan Krueger on Labor Force Participation

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  • Paul Krugman

    Wall Street Now Hates Democrats

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  • All HW content

    Ocwen tanks in wake of poor second quarter results

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  • Marginal REVOLUTION

    Friday assorted links

    1. Mark Turner part one, and part two. 2. Musical preferences are linked to cognitive styles (speculative). 3. Don’t take a selfie with a bison. 4. The leading horses are those with the most friends. 5. Noah Smith praises Berkeley. 6. Claims about ants. 7. The boom in mini-organs. ...more

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  • Marginal REVOLUTION

    Arrived in my pile

    Arthur C. Brooks, The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America. Greg Mankiw has reviewed the book.

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  • The Big Picture

    Who Benefits from Bailouts?

    I always find it amusing whenever someone expresses surprise that the financial bailouts for Greece haven’t benefitted Greek citizens. “Bailout Money Goes to Greece, Only to Flow Out Again” in the New York Times is just the latest example. “The cash exodus is a small piece of a bigger puzzle over why — despite two major international bailouts — the Greek economy is in worse shape and more deeply in debt.” Unfortunately, this is a feature of bailout, not a bug. A plethora of financial rescues during the past decades has proven quite convincingly that this isn’t an aberration. Follow the money instead of following the headlines. That’s how you learn who profits from a bailout. Look around the world — Japan, Sweden, Brazil, Mexico, Ireland, ...more

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  • Calculated Risk

    Chicago PMI increases, Final July Consumer Sentiment at 93.1

    Chicago PMI July 2015: July Chicago Business Barometer Up 5.3 Points to 54.7 The Chicago Business Barometer increased 5.3 points to 54.7 in July led by a double digit gain in Production and accompanied by gains in New Orders and the other three components....Companies reported a strong revival in output in July after five months of relatively weak business activity. Production rose sharply by 12.0 points to 61.8 amid a bounceback in inventory growth to the highest since April underpinned by a solid gain in New Orders....Chief Economist of MNI Indicators Philip Uglow said, “The recent weakness in the Chicago Business Barometer had sounded a few alarm bells over the resilience of the US economic recovery. The positive start to the third quarter, however, suggests that a...more

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  • naked capitalism

    More on the Systemic Risk of Bank IT Systems

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  • Beat the Press

    Second Quarter Employment Cost Index Should Make September Rate Hike Less Likely

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  • The Capital Spectator

    Macro Markets Risk Index: US Trend Remains Modestly Positive

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  • The Big Picture

    Gold Performance & Rate Increases?

    Interesting few examples from the past showing Gold benefitting from rate increases, as per a report by HSBC’s FX strategist, David Bloom. A few caveats: Rate increases typically occurred during periods of elevated inflation, and during currency fluctuation, especially a weak dollar. At present, we have deflation, and the dollar is at 12 year highs. Traders are urged to be careful drawing any conclusions from any one single variable. Except for 2004, it looks like the Fed follows gold, and not vice versa.   Source: Reformed Broker ...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) Tweet… is from page 113 of the 1997 Johns Hopkins University Press edition of H.L. Mencken’s 1956 collection, Minority Report: Of all varieties of men, the one who is least comprehensible to me is the fellow who immolates himself upon the alter of what he conceives to be the public interest – in other words, the reformer, the uplifter, the man, so-called, of public spirit.  What I am chiefly unable to understand is his oafish certainty that he is right – his almost pathological inability to grasp the notion that, after all, he may be wrong. ...more

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  • Beat the Press

    David Brooks Is Confused, Thinks God Created Patents

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  • The Capital Spectator

    A Delicate Balance For US Macro Outlook Via Treasury Yields

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  • naked capitalism

    Links 7/31/15

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  • The Capital Spectator

    Initial Guidance | 31 July 2015

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  • The Housing Bubble Blog

    The Bust Doesn’t Destroy Wealth

    It’s Friday desk clearing time for this blogger. “A Nobel Prize Laureate is warning that Sydney’s real estate market is showing every sign of being in a dangerous price bubble. Professor Vernon Smith, who was honoured for his work in experimental economics, is in Sydney to talk about global property prices and he spoke to our business editor Peter Ryan. Ryan: ‘What lessons should Australia be learning from the subprime crisis in the United States, which led to the housing crash which triggered the global financial crisis, even though the circumstances are different that Australian holders of mortgages simply can’t drop their key off at the bank.’” ‘Smith: ‘Guard against allowing people to buy homes that last up to 10...more

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  • Fabius Maximus website

    Stratfor: The Middle East Recalibrates After the Nuclear Deal with Iran

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  • The Housing Bubble Blog

    Bits Bucket for July 31, 2015

    Post off-topic ideas, links, and Craigslist finds here.

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  • ProfessorBainbridge.com

    Be my amici: ABA Blawg 100 Nominations are open

    Email from the ABA Journal: We're working on our annual list of the 100 best legal blogs, and we'd like your advice on which blogs you think we should include. Go to this link to tell us about a... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • ProfessorBainbridge.com

    Best news I've heard in ages

    I'm very excited to announce that Hammond, May and I have signed a deal with .@AmazonVideo— Jeremy Clarkson (@JeremyClarkson) July 30, 2015 Good news! I've got a job with @AmazonVideoUK. Bad news! So... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Econbrowser

    Current economic conditions

    The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.3% annual rate in the second quarter. You can’t describe the new data as favorable, but I̵7;m still hopeful about what comes next. U.S. real GDP growth at an annual rate, 1947:Q2-2015:Q2, historical average rate (3.1%), and average since 2009:Q3 (2.1%). GDP growth since the end of the Great Recession in 2009:Q2 has averaged 2.1% per year, a full percentage point below the average over the entire 1947-2015 period. And that 3.1% includes both recessions and expansions. Moreover, the benchmark revision of the last three years of data that accompanied today’s report didn’t help. Although the new data revise the weak numbers for the first quarters of 2015 and 2014 up a b...more

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  • Tim Duy's Fed Watch

    GDP Report

    The second quarter GDP report, while not a blockbuster by any measure, will nudge the Fed further in the direction of a September rate hike. At first blush this might seem preposterous - 2.3% growth is nothing to write home about in comparison to history. But history is deceiving in this case. It remains important to keep in mind that 2% is the new 4%. Year-over-year growth rates continue to hover around 2.5%: While the 2.3% quarterly rate of the second quarter was below consensus forecasts, the first quarter figure was revised up from -0.2% to 0.6%. That said, the annual revisions from 2012-2014 disappointed. Average annual growth from 2011 to 2014 dropped from a previsouly reported 2.3% to 2.0%. Sad, very sad. That was still enough growth, however, to sustain fairly...more

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  • Cafe Hayek - Article Feed

    Make Money On Your Identification of Monopsony Power

    (Don Boudreaux) TweetAs readers of this blog know, I often respond to pro-mimimim-wage arguments by advising those who make such arguments to put their money where their mouths are.  Specifically, whenever I encounter the assertion that minimum-wage legislation is justified because employers of low-skilled workers allegedly possess monopsony power, I point out to those who assert the existence in reality of monopsony power as a reason to impose a minimum wage that their assertion implies the existence of profit opportunities for anyone who enters the market to hire away these allegedly underpaid workers.  So I ask those who assert that monopsony power is real and relevant to start their own businesses to give solid evidence of the strength of their belief. The ty...more

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  • Dr. Housing Bubble Blog

    Rental Apocalypse: US homeownership collapses to 48 year low while rental rates continue to climb.

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  • Paul Krugman

    Dentists and Skin in the Game

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) Tweet… is from page 1 of Thomas Sowell’s 2009 volume Intellectuals and Society: Intellect is not wisdom.

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  • The Housing Bubble Blog

    Preparations For Growth Can Be Overly Optimistic

    The Los Angeles Daily News reports from California. “New home building is finally showing signs of life around the Valley with several projects underway or in the planning stages, including one that will bring a taste of Manhattan-style living to the well-heeled. The projects are in Sylmar, Winnetka and Woodland hills. Santa Clarita-based Williams Homes Inc. is doing two of them. ‘We made this bet about two years ago,’ Keith Herren, Williams’ executive VP, said of the decision to develop the Winnetka property. ‘We like the San Fernando Valley and we like the City of Los Angeles. There is unlimited demand (for housing.)’” KPHO in Arizona. “People have lost faith in the stock market and they’re apparently getting over the ...more

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  • Fabius Maximus website

    In our wars the tactics of the weak confound the strong

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  • Beat the Press

    Dylan Matthews Is Upset that Bernie Sanders Thinks that U.S. Citizens Should Live Better Than Chadians

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  • ProfessorBainbridge.com

    A couple of tweets about law schools, gunslingers, and social justice warriors

    Law schools should be about training gunslingers. We shouldn't privilege one set of clients/causes over another. https://t.co/pCqcxoFMII — Stephen Bainbridge (@ProfBainbridge) July 29, 2015 Which I... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Tim Duy's Fed Watch

    FOMC Recap

    The July FOMC meeting yielded the widely expected outcome of no policy change. Very little change in the statement either - pulling out any useful information is about as easy as reading tea leaves or chicken bones. But that won't stop me from trying! On net, I would count it was somewhat more hawkish as the Fed gears up to hike rates later this year. By no means, however, did the statement make any definitive signal about September. The Fed continues to hold true to its promise to make the next move about the data. The era of handholding fades further into memory. The first paragraph contained nearly all of the changes in the statement. Using the Wall Street Journal's handy-dandy Fed tracker: In my opinion, this represents a not trivial upgrade of their thoughts on ...more

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  • Fabius Maximus website

    The 97% consensus of climate scientists is only 47%

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  • Econbrowser

    Median Household Income Trends: Wisconsin vs. Minnesota

    No surprise, Minnesota beats Wisconsin, again. Some individuals have touted trends in Wisconsin’s median household income relative to Minnesota and the Nation. The Census Bureau warns researchers from doing intertemporal comparisons using the standard series (e.g., on FRED), given data breaks due to different methods of interpolation. Here I plot the American Community Survey (ACS) series for Minnesota, Wisconsin and US, which are not subject to the same problem of comparability, and are estimated with greater precision due to larger sample sizes. Figure 1: Median household income for Minnesota (blue), Wisconsin (red), and US (black). A reading of 0.045 means that the value is 4.5% higher than it was in 2010. Source: American Community Survey/Census Bureau, and ...more

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  • Greg Mankiw's Blog

    The Conservative Heart

    Click here to read my piece in this coming Sunday's NY Times Book Review.

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  • Dr. Housing Bubble Blog

    Venice California and riding the waves of housing mania: An area where 1 bedroom will fetch $1 million.

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  • Piggington's Econo-Almanac

    Shambling Towards Affordability, Mid-Year 2015

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  • Robert Reich

    Happy Birthday Medicare

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  • Dr. Housing Bubble Blog

    Los Angeles one of the top area Americans are ditching: Areas losing Americans but gaining people from outside the country.

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  • Robert Reich

    Why Progressives Must Stay United

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  • Macro and Other Market Musings

    The Big Lesson of the Eurozone Crisis

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  • The Baseline Scenario

    More Misinformation about Banking Regulation

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  • The Baseline Scenario

    Friedrich Hayek Supported a Guaranteed Minimum Income

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  • Robert Reich

    How Goldman Sachs Profited from the Greek Debt Crisis

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  • Greg Mankiw's Blog

    The Mess in Europe

    Click here to read my column in Sunday's NY Times.

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  • macroblog

    Getting to the Core of Goods and Services Prices

    table { font: inherit; font-size: 90%; } .citation, .byline { font-style: italic; } .centeredImage { display: block !important; margin-left: auto !important; margin-right: auto !important; } In yesterday's macroblog post, I highlighted an aspect of a recent Wall Street Journal article that concerns how households perceive inflation. Today, I'm going back to the same well to comment on another aspect of that story, which correctly notes that service-sector prices are rising at a faster clip than the price of goods. Of course, this isn't just a recent event. Core services prices have outpaced core goods prices over the past 50 years, save a few short-lived deviations. What's unusual about the current recovery, as the chart below shows, is how low services inflation...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Hong Kong Residential Property Prices: HKU-REIS March 2015

    The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in March, the price of residential properties declined 1.06% since February but still remained 16.57% above the level seen in March 2014. The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market. ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: June 2015

    Today’s New Residential Construction Report showed generally improving results with total permit activity rising 7.4% since May while total starts surged 9.8% over the same period.Single family housing permits, the most leading of indicators, increased 0.9% from May to 687K single family units (SAAR), and rose 6.0% above the level seen a year earlier but still remained well below levels seen at the peak in September 2005.Single family housing starts declined 0.9% from May to 685K single family units (SAAR) but still remained 14.7% above the level seen a year earlier. ...more

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  • Tim Duy's Fed Watch

    The Case For September

    The Wall Street Journal reports that most economists still expect the Fed to raise rates in September: Financial market participants tend to be less confident, with odds of a September hike running around 35%.  Still, the consideration of any rate hike may seem odd given the lackluster nature of the US economy. Notably, inflation wallows below trend and anemic wage growth suggests significant remaining labor market slack. The Fed, however, looks at the progress towards its goals, which on the unemployment side has been substantial, as well as the perceived need to act ahead of actual inflation. In short, the Fed believes the risks to the economy are shifting toward overheating, even if the economy is not yet overheating. And, as Greg Ip at the Wall Street Journal id...more

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  • macroblog

    Different Strokes for Different Folks

    table { font: inherit; font-size: 90%; } .citation, .byline { font-style: italic; } .centeredImage { display: block !important; margin-left: auto !important; margin-right: auto !important; } A recent Wall Street Journal article offered an interesting conjecture. The author stated,"[b]ecause consumers pay service bills more often than they buy most goods other than food and gasoline, perceptions of inflation skew on the high side." Research supports the idea that inflation perceptions are unusually influenced by particular prices. For example, some authors have noted that inflation expectations appear to be unusually influenced by movements in gasoline prices. This research by Georganas, Healy, and Li shows that inflation perceptions are affected by how frequently ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    NAHB/Wells Fargo Home Builder Sentiment: July 2015

    Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that overall assessments of housing activity generally went flat in July with the composite HMI index remaining at 60 while the "buyer traffic" index declined to a level of 43 from 44 in the prior month.Overall, conditions for new home construction appear to have remained stable recently but still remain below the peak assessments see prior to the Great Recession. ...more

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  • Macro and Other Market Musings

    Who Predicted the Eurozone Crisis?

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  • Piggington's Econo-Almanac

    June 2015 Housing Data Rodeo

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  • macroblog

    Have Changing Job and Worker Characteristics Restrained Wage Growth?

    table { font: inherit; font-size: 90%; } .citation, .byline { font-style: italic; } .centeredImage { display: block !important; margin-left: auto !important; margin-right: auto !important; } In the wake of the Great Recession, nominal wage growth has been subdued. But it is unclear how much of this relatively low wage growth reflects protracted weakness in the labor market versus other factors, such as changes in the composition of the workforce and jobs over time. Wage growth tends to vary across personal and job characteristics, so it stands to reason that changes in the composition of the workforce, alongside demographic and work characteristics, could be an important explanation of overall movements in wage growth. In this post, we explore the impact of the ch...more

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  • Macro and Other Market Musings

    Did Monetary Policy Really Offset Fiscal Austerity in Canada?

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  • Greg Mankiw's Blog

    :)

    Click on graphic to enlarge

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  • Piggington's Econo-Almanac

    May 2015 Housing Data Rodeo

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  • The Baseline Scenario

    I Agree with Milton Friedman!

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  • TheMoneyIllusion

    Bankrupt Greece breaks promise, rehires 15,000 public employees

    That’s equivalent to about 450,000 new public employees in the US.  Here’s the FT: Opposition lawmakers accused Syriza of violating that agreement with the new laws, which could expand the government payroll by as many as 15,000 employees. But government ministers remained defiant. “We aren’t going to consult [bailout monitors], we don’t have to, we’re a sovereign state,” Nikos Voutsis, the powerful interior minister, told parliament. Yes, and other sovereign states “don’t have to” give Greece any more money. The municipal police force, which was disbanded 18 months ago, will be revived and several thousand caretakers at state schools, known as “guards”, are to be rehired. Kyriakos Mitsotakis, who — as the previous governme...more

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  • TheMoneyIllusion

    Xenophobia plus cognitive illusions = mass ignorance

    Don’t be offended by the title of this post.  I’d guess 99.9999999% of people don’t understand currency manipulation or quantum mechanics.  So I’m using the term ‘ignorance’ loosely. And of course since I’m in the tiny minority (of seven people, based on the percentage above), there’s always the small chance that I’m the stupid one.  This post is to organize my thoughts, as I’m going to be interviewed on “currency manipulation” tomorrow. Let’s start with the term ‘currency manipulation.’  That’s what central banks do.  They manipulate the nominal value of currencies.  Period. End of story.  On the other hand: 1.  Monetary policy has no long run effect on real exchange...more

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  • TheMoneyIllusion

    The Economist dispels some China myths

    A few years back I commented on a “Ghost Cities” story on 60 minutes: They pointed to a “ghost town” development in Zhengzhou, which is capital of a province of 90 million people.  I’d expect its current population (4 million in the urban area) to grow to 10 to 20 million in a few decades.  How much longer will that development seem unneeded? Here’s The Economist: WHEN “60 Minutes”, an American television news programme, visited a new district in the metropolis of Zhengzhou in 2013, it made it the poster-child for China’s property bubble. “We found what they call a ghost city,” said Lesley Stahl, the host. “Uninhabited for miles and miles and miles and miles.” Two years on, she would not be able to say the same. The empty streets ...more

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  • Dani Rodrik's weblog

    The War of Trade Models

    There is an interesting debate going on in Europe about the likely consequences of the TTIP (Transatlantic Trade and Investment Partnership). Much of the real debate is (or should be) about the proposed Investor-State dispute resolution (ISDS) and the desirability of regulatory harmonization when nations have different preferences about how these regulations should be designed. But there is also a fascinating numbers game going on, with alternative quantitative estimates deployed by pro- and anti-TTIP groups. The studies used by the pro group tend to show positive, if small, GDP effects. Probably the best known among these is a study by Joseph Francois and his colleagues, according to which EU and US GDPs will rise by 0.5% and 0.4%, respectively, by 2027 (relative to th...more

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  • Richard's Real Estate and Urban Economics Blog

    Is Free Trade Good for Everyone?

    Greg Mankiw implies that it is, and that all economists agree that it is.  But it actually isn't.  Who says so?  Economists.In particular, the workhorse theory of International Trade, the Hecksher-Ohlin Theorem, leads to the Stolper-Samuleson Theorem, which shows that when countries start trading with each other, the relatively abundant factor of production in each country becomes better off, while the relatively scarce factor becomes worse off.   In the US context, this implies that opening up trade will leave capital better off relative to labor, and skilled labor better off relative to unskilled labor.Does trade increase the total size of economies?  Yes--this is something that economists do agree on. But in the absence of redistribution--som...more

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  • Dani Rodrik's weblog

    Turkish economic myths

    Preparing for a panel discussion on Turkey gave me the opportunity of putting together some notes and slides on the country’s economy. That Turkey is not doing well at the moment, economically or politically, is well known. But the roots of the problem remain misunderstood. Many analysts blame the weakening of “structural reforms” (on economics) and the turn towards authoritarianism after the Gezi protests in 2013 (on the politics). See for example here. In truth, Turkey’s problems on both fronts predate the recent slowdown in growth and have been long ingrained in the governing party’s (AKP) strategy. I have discussed the politics before at length. Here I focus on the economics. First, let’s dispense with some misconceptions about how well the Turkish econo...more

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  • Richard's Real Estate and Urban Economics Blog

    LA has zoned itself out of the ability to house its residents (h/t Matthew Glesne)

    Once upon a time, the zoning in Los Angeles would have allowed for 10 million residents to live within its municipal boundaries.  Greg Morrow, in his UCLA dissertation, "Homeowner Revolution: Democracy, Land Use and the Los Angeles Slow Growth Movement 1965-1992," documents how this was eroded over time:So LA really did create a moat around itself and pulled up the drawbridge.  For those of us who think the blessings of cities should be shared widely, this is a shame....more

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  • Richard's Real Estate and Urban Economics Blog

    It is hard to feel urban form sometimes.

    I have spent a fair amount of time in Sao Paulo over the past 3-4 years, and always thought it sprawled more than LA, because it takes forever to get from one side of the place to the other.  So was I surprised when I went to Google Earth and looked at both of them from the same elevation. Here is LA:Now here is SP:It is far more compact.  Metro LA has about 18 million people; SP has about 20 million. But it takes about 2 hours to get from Santa Clarita in the west to San Bernardino in the east--the distance between the two is 85 miles; it can take four hours to go just 30 kilometers in SP.  Sao Paulo feels much larger to me....more

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  • Dani Rodrik's weblog

    Premature deindustrialization in the developing world

    Mention “deindustrialization,” and the image that comes to mind is that of advanced economies making their way into the post-industrial phase of development. In a new paper,[1] I show that the more dramatic trend is one of deindustrialization in the developing countries. This is a trend that is appropriately called premature deindustrialization, since it means that many (if not most) developing nations are becoming service economies without having had a proper experience of industrialization. Latin America appears to be the worst hit region. But worryingly similar trends are very much in evidence in Sub-Saharan Africa too, where few countries had much industrialization to begin with. The only countries that seem to have escaped the curse of premature industrializati...more

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  • Rick Bookstaber

    Ex Ante versus Ex Post Social Policy

    I have written various posts on social policy related to the question of whether and how we redistribute income. One argument of equal opportunity and social egalitarianism is that it is fair to control for the randomness of life. For example, take the luck of the draw in who your parents are. If your best career choice was to be born into a wealthy family, if you got ahead because your father could pull strings to get you an internship at a big investment bank; because you built up your high school resume by spending a summer building houses in Tibet while a classmate had to spend the summer working at the 7-11; or because you could afford two years of one-on-one tutoring for the SAT, the result might be to score higher in an objective standard of selection and have a ...more

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  • Rick Bookstaber

    On Death with Dignity

    We take the will to live as a positive attribute, and naturally so; it is, of course in our genes.  Whatever subset of our species took a lackadaisical view toward the prospect of death was screened out long ago. We look with admiration on those who battle against terminal illness --  “She’s a real fighter” -- and look down on those who take their own lives. Fighting for your life is the genetic prime directive.   Thus the recent death of Brittany Maynard spurred a flurry of news articles and posts on the Death with Dignity movement. There will be a lot more to come on this topic, and the movement will gather steam because whatever is in the crosshairs of the baby boomers weighs down on society as a whole. Soon the baby boomers will come to the...more

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  • Rick Bookstaber

    Uber: What could possibly go wrong

    Uber at the core is nothing more than a bunch of guys who came up with a clever app for streamlining the way you call for a car.  Rather than phoning or texting, you tap on the app.  Rather than paying with cash or credit cards, you have an account.  And rather than depending on the reputation of the car company, you depend on the ratings-based reputation of the specific driver. (Another feature, the pre-determined fare, with that fare essentially including all fees including tip, is nothing new for car services). And, by the way, it is readily replicable by any other car services, including those that already have a reputation and experienced drivers.  So it seems to me that it is only mildly innovative.  How do you build a successful world-wid...more

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  • The Street Light

    Transfer Pricing Economics

    I'd like to announce that after a long hiatus from blogging, I'm taking it up again in a new forum.  The new blog, Transfer Pricing Economics, is primarily devoted to exploring my particular area of professional specialty, namely "transfer pricing".  If that term doesn't mean anything to you, then feel free to check out my brief explanation of transfer pricing. My aim is to expose and analyze the connections between the arcane world of transfer pricing and broader developments in the economic and financial world. And the connections are significant: the rules and economic logic of transfer pricing have a direct impact on trillions of dollars of international trade every year. So please feel free to check in on and contribute to the discussions about these...more

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  • The Becker-Posner Blog

    Farewell

    In memoriam: Gary S. Becker, 1930-2014. The Becker-Posner blog is terminated. Richard A. Posner

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  • The Becker-Posner Blog

    Sabbatical Notice

    Starting this weekend, we will be taking a one-month sabbatical from blogging. We will resume at the end of that period.

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  • The Becker-Posner Blog

    The Embargo of Cuba: Time to Go- Becker

    The US embargo of Cuba began in 1960, a year after Fidel Castro turned this island toward communism. It was extended to food and medicines in 1962, the same year as the showdown with Russia over the installation of missiles there. The embargo has prevented American companies from doing business with Cuba, and discouraged tourism to Cuba. The American government also tried with quite limited success to prevent other countries from trading with Cuba. In general economic embargoes are undesirable because they interfere with free trade among countries. Yet a case could be made for an embargo against Cuba. Castro not only allowed Russian missiles to be installed in Cuba, just 90 miles from Florida, but was also actively trying to interfere in other countries by sending troop...more

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  • Stan Collender's Capital Gains and Games

    Capital Gains And Games Now Being Published By Forbes

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  • Stan Collender's Capital Gains and Games

    Big Changes Are Coming To Capital Gains And Games

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  • Stan Collender's Capital Gains and Games

    Camp Plan Puts Nail In Tax Reform Coffin For This Year, And Next, And...

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  • democracyarsenal.org

    Can the F-35 Replace the A-10?

    by Nickolai Sukharev  One of the big decisions the United States Air Force has considered over the last few months is whether to retire the A-10 Thunderbolt II fleet as a cost saving measure while developing and procuring the F-35A Lightening II. Given the Budget Control Act caps on Pentagon spending and the need to better allocate funds, officials have expressed their preference to prioritize multi-mission platforms in the inventory. But the problem is that the F-35A is not a replacement for the A-10’s close air support. The reason is simple: it lacks comparable capabilities despite a higher operating cost. Given the constrained budgetary environment, the comparative cost to maintain and operate the two aircraft should be a decisive consideration. The A-10 is a...more

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  • democracyarsenal.org

    After Geneva Talks A Consensus on Moving Forward

    By Homa Hassan The two-day round of P5+1 negotiations with Iran just concluded in Geneva and Western diplomats are carefully reviewing a detailed proposal presented by Iran. As this proposal is being reviewed ahead of the follow-on meetings in November it is important to look at what the realistic prospects of a deal will look like. Going into this week’s talks, a number of commentaries came out attempting to set negotiations up for failure. However, it is widely agreed that a negotiated solution to Iran’s controversial nuclear program is the best way to achieve a sustainable solution and a recent survey of reports and recommendations from bipartisan think tanks and high-level experts demonstrates a broad consensus on how to approach negotiations a...more

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  • democracyarsenal.org

    TPP, TTIP and Getting America's Competitiveness Back on Track

    By Marcela Heywood Last week’s Asia-Pacific Economic Cooperation summit in Bali, Indonesia marked further progress for the Trans-Pacific Partnership (TPP) and set an ambitious goal to finish negotiations by the end of the year. Although the U.S. government shutdown – and President Obama’s absence in Bali – did not hinder the trade talks, it did call America’s credibility into question. Government shutdown could threaten both TPP and Transatlantic Trade and Investment Partnership (TTIP) negotiations by displaying uncertainty in U.S. economic and foreign policy priorities. Congress needs to reach an agreement and prioritize TPP and TTIP, as they are necessary policy initiatives to boost American competitiveness, stimulate the economy, and exert soft power to cr...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-09

    Given that I block NSA & PRISM tweets, was entertaining tuning into twitter & trying to figure why everyone was on about Lord Snowdon -> Turned on GoT tonight just in time to catch Daenerys reenacting her Level 2 YMCA gymnastics pageant. -> How Not to Be Alone | Jonathan Safran Foer – http://t.co/HMFxg75lfh http://t.co/DzAtvWBQJr -> Excellent, but fellow sports-med geeks only: Sports and exercise-related tendinopathies: a review – http://t.co/WGkhRlO6Uz -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-07

    Photo-set: Flooding Across Central Europe – http://t.co/8G6j8teCbd -> CDC Update: Severe Respiratory Illness Associated with Middle East Respiratory Syndrome Coronavirus – http://t.co/hWqN1338VN -> Col Flagg: Have you ever heard of Malaysian Chest Implosion Torture? Radar: No. Coll Flagg: Good. It hasn’t been invented… yet. -> tl;dr: There are Manchurian Candidate engineers at large tech cos that have stolen SSL root cert and NSA is using it for cattle mutilation. -> Brian: …Will you please listen? I'm not the Messiah! Do you understand? Honestly Woman: Only the true Messiah denies his divinity! -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-05

    FRED: Free Energy Data – http://t.co/90H7GVDazO -> Solipsisms ‘r’ us, courtesy of my friends at @thinkup: I apparently mention me a lot – http://t.co/9rTRXvBM9D -> Almost 10,000 words on soccer/Italy/economics/racism by @wrightthompson? Yes, & it’s super. Go. http://t.co/g4sgEFLkIC -> When The Beautiful Game Turns Ugly: A journey into the world of Italy's racist soccer thugs http://t.co/nckrbeLPfs -> Can’t remember last time I read an OpEd or column. Do those still exist? -> ...more

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

    To me, the central issue raised by this week's Cyprus debacle is how it has affected confidence across the eurozone.  To what degree has the possibility of insured depositors at a eurozone bank losing a portion of their deposits affected the mindset of depositors?  To what degree has ECB acquiescence to this possibility undermined the notion that deposit insurance in the eurozone means the same thing in all countries?  And to what degree has the ECB's direct threat to end support for Cyprus's banking system in the event that the government of Cyprus can not arrange sufficient funds to meet its conditions made a farce of its earlier promise to "do whatever it takes to preserve the euro"?These, to me, are the interesting questions prompted by this week's ev...more

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  • The Street Light

    When the Fed Chair is an Academic

    The big economic news of the week was, in fact, big economic news: the Fed's announcement of significant changes from past practice in the the quantity of its next round of large scale asset purchases ("unlimited"), and in the timing of any future reversal of this expansionary policy ("a considerable time after the economic recovery strengthens").I view this as a pretty fundamental shift in how the Fed hopes to affect the economy.  Rather than trying to push economic activity one way or the other through its management of interest rates (which can alter economic activity through its portfolio-rebalancing and wealth effects, for example), the Fed is now quite explicitly trying to affect economic activity by altering interest rate and inflation expectations.  As...more

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  • TPMCafe

    Message to world government: Don't govern the Internet

    You could think of the Aspen IDEA report published today as a letter to the head of the International Telecommunications Union, Hamadoun Touré, suggesting that he should reconsider his intent to put the "light touch" of government on the Internet's operations. M. Touré will be running a major meeting of world governments in Dubai at the end of this year. The Dubai meeting, known as WCIT 12, may have an agenda that is a light touch only if that's what you can call a grab for the jugular vein of the Internet. The issues may include a "per click" tax on international Internet traffic, individual nation state regulation identities to online activity, national encryption standards to allow government surveillance, and multinational governance of the Internet. Russia, Chi...more

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  • TPMCafe

    Obama and Romney on Foreign Policy - Drawing the Contrasts

    The political battle lines are being drawn for the general election debate over foreign policy and national security, and you can't do much better than my fellow Democracy Arsenal blogger Michael Cohen for a guide. One key theme of Michael's latest column for ForeignPolicy.com is what a difference it makes for a candidate to bear the responsibility of governing, or on the other hand, campaign to be commander in chief on the basis of self-serving pot shots. My only quibble regards how Romney's reed-thin foreign policy argument will fare with voters. Take Michael's analysis of Romney's potential advantage in the debate on Iran: He can simply lob rhetorical haymakers that hype up the threat of an Iranian bomb or offer Churchillian declarations about his intention to stop...more

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  • TPMCafe

    Will Yale's Alumni Save Liberal Education?

    Hoping to head off alumni resistance to the brand-new "Yale-National University of Singapore" college that the Yale Corporation has created somewhat stealthily in collaboration with the government of that authoritarian city-state, Association of Yale Alumni chairman Michael Madison has inadvertently demonstrated one of the ways Yale College is being transformed from a crucible of civic-republican leadership, grounded in liberal education, into a global career-networking center and cultural galleria for a new elite that answers to no polity or moral code: STATEMENT OF THE OFFICERS OF THE AYA BOARD OF GOVERNORS, Michael Madison, Chair of the Board "All Yale-NUS College graduates will be warmly welcomed as a part of the Yale alumni community. They will also be invited...more

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Aaron Menenberg Policies of Scale

Aaron Menenberg is Foreign Policy and Energy analyst, and a Future Leader with Foreign Policy Initiative. He also co-hosts Podlitical Risk (@podliticalrisk). He is a graduate student in international relations at The Maxwell School of Syracuse University. Previously he has worked at Praescient Analytics, The Hudson Institute, for the Israeli Ministry of Defense, and at the IBM Corporation. The views expressed are his own, and you can follow him on Twitter @AaronMenenberg. He welcomes questions and comments at menenbergaaron@gmail.com.