Tag Archives: great-recession

A West Virginia Miracle? I’m Not Feeling It.

Mother Jones

<!DOCTYPE html PUBLIC “-//W3C//DTD HTML 4.0 Transitional//EN” “http://www.w3.org/TR/REC-html40/loose.dtd”>

Tyler Cowen shocks us all today by suggesting that West Virginia has been the site of a productivity miracle lately. He admits he’s mainly trying to provoke us, since West Virginia is unquestionably one of the poorest states in the nation. But it made me curious. How much has the West Virginia economy grown compared to neighboring states and to the US as a whole? I chose Maryland since it’s next door and no one considers it especially poor. Here’s what things look like:

In terms of growth, West Virginia has done OK since the start of the century. It was affected less by the Great Recession than the US as a whole—no surprise since West Virginia didn’t suffer from the housing boom and bust—but its growth rate since then has been a little below average. Ditto for median household income, which has been flat since the end of the recession.

As for cost of living, this site says West Virginia is 3 percent lower than the US. It’s a little cheaper on average to live in West Virginia compared to the rest of the country, but not by enough to matter.

So the bottom line is that West Virginia is poor; its growth rate since 2000 is above average thanks to insulation from the housing bust but below average since the end of the recession; and its cost of living is about average. That’s not terrible, but I guess I’m not feeling the miracle.

More:

A West Virginia Miracle? I’m Not Feeling It.

Posted in FF, GE, LG, ONA, Uncategorized, Venta | Tagged , , , , , , , , , | Leave a comment

Urban vs. Rural Recovery From the Great Recession: Another Look

Mother Jones

<!DOCTYPE html PUBLIC “-//W3C//DTD HTML 4.0 Transitional//EN” “http://www.w3.org/TR/REC-html40/loose.dtd”>

Thomas Edsall writes that as we recovered from the Great Recession, big cities did pretty well but rural areas didn’t. “The fact that people living outside big cities were battered so acutely by the recession goes a long way toward explaining President Trump’s victory in the last election,” he says, which he illustrates with this chart:

I don’t think there’s much question that Edsall is right in general, but this particular chart seemed off somehow. It combines both population growth and employment rate in a confusing way, and it covers the whole country, so it doesn’t account for the way different states responded to the recession. I pondered for a while what I’d rather see, and decided to examine the unemployment rate in California counties. California has a good mix of big cities and rural counties, including a lot of farming counties that voted heavily for Trump, and every county benefited from identical state policies since they’re all in the same state. Here’s the chart, which compares unemployment at the peak of the last expansion to today:

There are four points I can make about this:

If you draw an overall trend line (light gray line), it turns out that that unemployment declined a bit more in smaller counties than in larger counties.
The big cities (purple) all fall into a very small cluster, showing declines between about -1 percent and 0. The smaller counties (orange) are scattered all over the place, from -3 percent all the way up to +4 percent.
The average drop in unemployment is roughly the same in both big cities and the rest of the state. Big cities (-0.39 percent) did marginally better than everyone else (-0.25 percent).
The main farming counties have done poorly. Their unemployment rate has increased by +1.0 percent.

This is just one state, and I’m not trying to pretend that this data offers anything conclusive. What’s more, Edsall has some other facts and figures to back up his point. Still, I’ll toss out two guesses:

Big cities may have recovered better than rural areas, but only modestly. The difference isn’t huge, and by itself doesn’t really explain why Trump won.
The large effect Edsall sees may be due to differing state responses to the recession. I suspect that rural red states shot themselves in the foot by adopting conservative policies (cut taxes, slash spending) that hurt their recovery. This may have been an especially big factor in the 2008-09 recession, since the federal government did less than usual to cushion the blow.

I don’t know if anyone with real econometric chops has tested my second guess. If I find anything, I’ll follow up.

Original source: 

Urban vs. Rural Recovery From the Great Recession: Another Look

Posted in Everyone, FF, GE, LAI, LG, ONA, PUR, Uncategorized, Venta | Tagged , , , , , , , , , , | Leave a comment

Immigration and the Economy

Mother Jones

<!DOCTYPE html PUBLIC “-//W3C//DTD HTML 4.0 Transitional//EN” “http://www.w3.org/TR/REC-html40/loose.dtd”>

This post isn’t about immigration and the economy. It’s about immigration. And it’s about the economy. First up, here’s a survey from Pew Research about positive attitudes toward the economy:

Here’s the interesting part. It’s normal to assume that people think better of the economy when one of their own is president. But is it true? During the recovery from the Great Recession, Republicans consistently rated the economy worse than Democrats. When Trump took over, their views suddenly skyrocketed, with a full 61 percent now having a positive view of the economy. Apparently Republicans do indeed view the economy through a partisan lens.

If Democrats followed that pattern, their view of the economy would have plummeted in 2017. But it didn’t. It went up again, at about the same rate as previous years. Democrats, it turns out, don’t view the economy solely through a partisan lens. If you’re looking for an explanation, my guess is Fox News and the rest of the conservative disinformation machine. You can take your own guess in comments.

And now for immigration. Last month, DHS Secretary John Kelly bragged that illegal border crossings were down. This month he crowed about it again. But a sharp-eyed reader pointed out that there’s really nothing unusual about the latest numbers:

Border apprehensions in March have been on a steady downward trend for nearly two decades. This year’s numbers are just following that trend. Last month I thought that President Trump’s fear campaign might be having a real impact, but now I doubt it. There’s no special reason at all to think that anything he’s doing is having much effect at all.

Original link: 

Immigration and the Economy

Posted in Bragg, FF, GE, LG, ONA, Uncategorized, Venta | Tagged , , , , , , , , , , | Leave a comment

Are Conservative Economists Too Influential? Nah. It’s Worse Than That. But Also Better.

Mother Jones

Brad DeLong is unhappy that his faction of economists had so little influence on public policy during the Great Recession. But I think he makes a fundamental error:

Alesina and Ardagna and Reinhart and Rogoff each had more influence on what policymakers and journalists thought about the effects of fiscal policy than did Paul Krugman and company, (including me). While the Federal Reserve went full-tilt into quantitative easing (but not stamped money or helicopter money), it did so in the face of considerable know-nothing opposition. And the ECB lagged far behind in terms of even understanding its mission. Why? Because economists Taylor, Boskin, Calomiris, Lucas, Fama, and company had almost as much or even more impact as did Paul Krugman and company.

….The most salient relatively-recent example was provided by Carmen Reinhart and Kenneth Rogoff who argued that it was risky for a country to have a debt-to-GDP ratio greater than 90 percent….I think we have by far the better of the argument. There is no tipping point. Indeed, there is barely a correlation, and it is very hard to argue that that correlation reflects causation from high initial debt to slower subsequent growth.

Yet it is very clear that even today Reinhart and Rogoff—and allied points by economists like Alberto Alesina, Francesco Giavazzi, et al., where I also think we have the better of the argument by far—have had a much greater impact on the public debate than my side has.

Brad’s error is in thinking that any of these economists influenced public policy. They didn’t. Politicians and central bankers wanted to do certain things, so they highlighted research from economists who happened to agree with them. Roughly speaking, when Congress wanted to spend more money, it asked for testimony from the Brad DeLongs of the world. When it wanted to cut spending, it asked for testimony from the Reinharts and Rogoffs. Likewise, central banks have their own models and their own political pressures, and they responded to them. They didn’t really care what any academic economists happened to say about it.

This may sound depressing if you’re an economist. Who wants to be nothing more than a handy mouthpiece for whichever politician happens to like the policy implications of your particular beliefs? But in fact, the news isn’t so bad after all.

Brad’s post is titled, “Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?” But they weren’t. If we had responded to the 2007-08 financial crisis the same way we did to the 1929-32 financial crisis, we’d still be waiting for a rerun of World War II to pull us back to normal. The reality was far less grim. We might not have responded ideally, but we responded a helluva lot better than we did in 1931. That’s why it was a Great Recession, not a Great Depression.

And the reason for that is economists. Over the past 70 years they’ve had a tremendous impact on public policy. Compared to 1931, even the austerians are basically ultra-liberals who are just a few degrees less ultra-liberal than DeLong and Krugman. For better or worse, economists have enormous influence, but it’s influence exercised over the course of decades. On that score, the Keynesians are overwhelming winners who have moved the center of gravity of the profession far to the left. It’s only within the current center of gravity that conservatives seemed influential on public policy in 2009-10. But that’s almost always the case. Wherever the Overton Window happens to be, the conservative end is usually ascendant. What really matters, though, is where the window is.

Continued: 

Are Conservative Economists Too Influential? Nah. It’s Worse Than That. But Also Better.

Posted in alo, Anker, FF, GE, LG, ONA, Uncategorized, Venta | Tagged , , , , , , , , , | Leave a comment

Raw Data: Field Worker Wages Since the Great Recession

Mother Jones

Apropos of nothing in particular, I got curious this morning about illegal immigration and field workers. About half of all field workers are undocumented, so if there’s been a surge of illegal immigration lately, as some have speculated, you’d expect to see the wages of field workers decline. But how would you measure that?

I’m not sure what the best approach is, but I decided to compare the wages of field workers to the wages of all nonsupervisory workers. Here’s what I got:

Relative wages for field workers were flat all through the aughts, as illegal immigration was climbing, and declined a bit during the Great Recession. However, since 2012 they’ve risen three percentage points. In 2016, field workers earned nearly 57 percent of the average nonsupervisory wage.

Based on this, I’m willing to bet that that illegal immigration hasn’t surged over the past couple of years. Just the opposite, maybe, which would be consistent with the rise in field worker wages since 2012.

View this article: 

Raw Data: Field Worker Wages Since the Great Recession

Posted in FF, GE, LG, ONA, Uncategorized, Venta | Tagged , , , , , , , , , , | Comments Off on Raw Data: Field Worker Wages Since the Great Recession