Posts tagged ‘international affairs’

June 25, 2014

CEO-to-worker compensation ratio, USA 1965 – 2013

There’s an amazing increasing difference between both, obviously. And the tendency is also clear, so the question in this case is: what can average people do to reverse this unfair situation?

Real-World Economics Review Blog

from David Ruccio

CEO-worker

In charting the amount of the surplus that ends up in the hands (or, if you prefer, pockets or bank accounts) of CEOs, the Economic Policy Institute finds that: 

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June 20, 2014

The British recovery. No conundrum there… (4 graphs)

and probably it will never recover, that is what you get when you take all jobs and all investments to Southeast Asia

Real-World Economics Review Blog

The British economy has not yet recovered in any meaningful sense of the word. Production per capita is not back to historical levels, private debts are still sky-high, the number of crappy jobs is increasing and productivity is about 7 to 8% below ‘trend’ (a downward adjusted trend, that is), which is of course consistent with the increase of crappy jobs. Also, according to the PSE

The percentage of households who fall below society’s minimum standard of living has increased from 14 per cent to 33 per cent over the last 30 years, despite the size of the economy doubling. This is one of the stark findings from the largest study of poverty and deprivation ever conducted in the UK. Other key figures reveal that almost 18 million people cannot afford adequate housing conditions; 12 million people are too poor to engage in common social activities; one in three people…

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June 20, 2014

China arrasa la economía global

  Toda la inversión occidental se ha desplazado en las últimas 2 décadas al sudeste asiático, no es de extrañar que eso haya terminado aupando a China a la cabeza de muchos indicadores macroeconómicos. Habría que ver qué porcentaje de la población china se está beneficiando de esa situación, teniendo en cuenta que en China se dan la mano la peor perversión del comunismo y el capitalismo de toda la historia conocida

June 9, 2014

Expect rather stable consumer price inflation – but not because of succesful central bank management

an amazing article about the evolution of inflation in EEUU, among other things, and its influence in european economy, including a coment about Woodford’s theories and their influence in the sub-prime bubble.

Real-World Economics Review Blog

In 1910 the index of the USA consumer price level (1982-1984 = 10,000) was equal to 921, not too much above the 1774 level of 782. This seems to indicate very low and stable consumer price inflation in this gold-standard period – until we notice that the 1778 level was equal to 1338, almost double the 1774 level (the American revolutionary war lasted, of course, from 1775 till 1783). Sustained high inflation was not uncommon during the gold standard period, especially during times of war (graph 1, which shows Year on Year changes of the consumer price level as well as a five-year moving average), though there were often also large differences between subsequent years. Collateral information: notice that in the twentieth century, high inflation continued for one or two years after mayor wars. After these bouts of inflation, however, there was some kind of reverse to the mean and…

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June 8, 2014

Increasing self-employment is, alas, not the answer

less than a year ago,the definition of PYME (small & medium companies) in Spain was less than 50 employees…nowadays is less than 250 employees…you can imagine how many big corporations do we have in Spain: only a few of them, because most companies have 249 employees or less, with all financial benefits included in being PYME

Real-World Economics Review Blog

One of the marked characteristics of the last 150 years of economic development is the rise of the large firm. In the days of Adam Smith, a company with 10 employees was already quite large. Toady, a company like Foxconn, which assembles your Iphone, has (about) 1,6 million employees, Walmart has 2,1 million and McDonalds has 1,9 million. Together, the last two companies have more employees than the USA army. A ‘Coasian’ view of this development is that, for some reason or another, large bureaucratic planning systems enable firms to profit from economics of scale (branding, outsizing unions, production) in increasingly global markets characterized by increasing commoditization. Consistent with the rise of these mega-companies, high numbers of ‘self-employed’ seem to characterize economies with relatively low levels of income.

In the European Union, increasing the number ‘self-employed’ is often seen as a method to make labour markets more flexible and…

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May 27, 2014

The Eurozone: domestic demand lowflation continues

not buying has become one of the most powerfull weapons of average citizens

Real-World Economics Review Blog

The ECB officially targets medium term inflation. Inflation, operationalized as a 20 quarter moving average of domestic demand inflation (which is based upon consumer prices but also upon investment prices and prices paid by the government and is, i.e., a broader metric than consumer price inflation), has been declining for 5 years in a stretch. Up to about 2008, there was an about 2 to 3% difference between German inflation and inflation rates in countries like Spain. In Q4, 2013, the highest rate of domestic demand inflation of the larger Eurozone countries was the Finnish 2,0%. For Q1, 2014, not enough data are available for a comparison. Low wage increases and wage decreases may be a larger problem for spending in the Eurozone than low inflation.

Lowflation

Source: Eurostat

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May 26, 2014

El Pueblo colombiano ausente en las elecciones

¿Son democraticos los gobiernos elegidos con tan pocos votos? ¿Qué porcentaje de la población tiene que dejar de votar para que unas elecciones sean consideradas nulas?

Casi 20 millones de colombianos, de los 33 millones habilitados para hacerlo, no ejercieron este domingo su derecho al voto. Su apatía se tradujo en los niveles de abstención más altos en una votación presidencial desde la primera vuelta de 1994 (66%): solo el 40,7 por ciento quienes podían hacerlo votaron este 25 de mayo, lo que traduce en que seis de cada 10 optaron por no ejercer su derecho al sufragio.”

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May 22, 2014

Target2 imbalances, roll-over risk, the Euro and the preferential treatment of private debt in the Eurozone

In spain we got a public debt of nearly 100% of our gross national product … that’s perhaps why private debt got a preferential treatment, at least in our country

Real-World Economics Review Blog

One of the manifestations of the Euro crisis were and are the Target2 imbalances, large debts owed by Eurozone periphery countries to the core countries (graph).

Target2

Recently I understood that even well informed people still misunderstand these imbalances. They were not caused by new net lending and borrowing. The Target2 imbalances effectively saved the Euro when ‘private’ banks did not want to roll over their (large) short-term loans to southern Europe anymore, scrambled for the exit and the European system of central banks provided liquidity. Instead of owing large debts to French or German banks, southern European countries (including their national central banks) now owe large debts to northern European central banks and the ‘private’ banks are of the hook. It’s that simple.

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May 17, 2014

Venezuela y Palestina profundizan relación bilateral

no rest for the axis of evil

 Con la firma de nuevos acuerdos en materia energética y económica, los presidentes de Venezuela, Nicolás Maduro, y de Palestina, Mahmud Abbas, profundizaron este viernes la relación bilateral entre ambos países, así como los lazos políticos de dos pueblos que luchan por la justicia social y contra el imperialismo.

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May 16, 2014

Taking stock of Wall Street’s boom (1)

there’s always somebody earning money with our jobs…the problem in the so called “free-market”, economies completly controlled by corporations like in USA, the people earning money is never us, never the workers

Real-World Economics Review Blog

from Steve Keen

If the US economy was performing as well as the US stockmarket, even Walmart workers would be breaking out the champagne.

Since 2009, the S&P has risen over 250 per cent in nominal terms, and almost 230 per cent in inflation adjusted terms. In nominal figures, it is at its highest value ever, though when you adjust for inflation, it is still 10 per cent below its peak in 2000 (see Figure 1).

The $64 question is: will it keep on going up?

Figure 1: The S&P 500 before and after inflation
Graph for Taking stock of Wall Street's boom

There are good reasons for the stockmarket index rising over time in inflation-adjusted terms. These include sound ones like the reinvestment of earnings (think Berkshire Hathaway),  but also misleading ones like survivor bias.

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