“Martin Wolf in the FT today”:http://blogs.ft.com/martin-wolf-exchange/2010/07/25/the-political-genius-of-supply-side-economics/

bq. Whatever the rhetoric, I have long considered the US the advanced world’s most Keynesian nation – the one in which government (including the Federal Reserve) is most expected to generate healthy demand at all times, largely because jobs are, in the US, the only safety net for those of working age.

I’m not sure I agree (or more precisely: your level of agreement with this statement will depend on exactly how you want to define Keynesianism) – but it’s worth pointing out that this is at the least quite consonant with Tyler Cowen’s “arguments about Germany”:http://www.nytimes.com/2010/07/18/business/18view.html?_r=1&scp=1&sq=tyler%20cowen&st=cse. On the one hand, this intellectual convergence could be taken as suggesting that Tyler’s case suggests that German-style social democracy works better than US style Keynesianism (an argument which I _think_ Tyler agrees with, at least with respect to Germans). On the other, it could be taken as suggesting that despite Wolf’s frequent minatory statements about the external consequences of the German model, he believes that it works better in relative terms than US-style Keynesianism in providing _internal_ economic security and political stability. Certainly, he is quite skeptical about the prospects of the US economic system given Republicans’ role as a blocking minority and perhaps majority in the near future (his most provocative suggestion is that Republicans are a perverted species of Keynesians).

Who has gained from the inequality boom?

by John Quiggin on July 25, 2010

A question that comes up at CT quite a bit is: who has benefited from the massive increase in US income inequality over recent decades. I finally got around to chasing down Congressional Budget Office data (derived from tax records for the period 1979 to 2005), and the answer, in short is:
* The top 1 per cent roughly doubled their share of both pre-tax income (9 per cent to 18 percent) and after-tax income (7.5 per cent to 15 per cent)
* The rest of the top 10 per cent slightly increased their share (from about 20 to about 22 per cent)
* The next 10 per cent held their share (about 15 percent)
* The remaining 80 per cent of households saw their share drop (from 58 per cent to 48 per cent of post-tax income, with the biggest drops coming at the bottom. The bottom 40 per cent of households now get a smaller share of post tax income (14 per cent, down from 19) than the top 1 per cent.
[click to continue…]

Live on Video

by John Quiggin on July 25, 2010

After the usual hassles, UQ School of Economics finally has its own videoconference facility, an IP-based Tandberg system, which should (fingers crossed) be interoperable with other standards-based systems. I just did my first conference, and it worked very well. Unfortunately, we are still waiting for an upgrade that will let me run a presentation at the same time as appearing on video. But I’m confident of ultimate success, so I’m now announcing that I’m available to give seminars and talks on a wide range of topics to anyone (subject to time and timezone constraints!) who would like to organise a videoconference. Email me j.quiggin at uq.edu.au if you are interested.