Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in meer dan  20 belangrijke of informatieve artikelen en interviews die vooral de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.

De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.

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How Easy Money Creates the Boom-Bust Cycle – Frank Shostak
10 november
According to the popular way of thinking, various economic data can provide an analyst with the necessary information regarding the state of the economy. It is held that by inspecting various economic indicators such as the gross domestic product or industrial production, an analyst could ascertain the state of the economic business cycle.
Following the experts from the National Bureau of Economic Research (NBER), business cycles are seen as broad swings in many economic indicators, which upon careful inspection permit the establishment of peaks and troughs in general economic activity.
Furthermore, according to the NBER experts, because the causes of business cycles are complex and not properly understood it is much better to focus on the outcome of these causes as manifested through the economic data.
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Is There Really A China Economic Miracle? – Daniel Lacalle
15 November
The year 2020 will be an extremely tough year for the European economy. Added to an unprecedented drop is a strong impact in the fourth quarter due to the new lockdowns. Morgan Stanley estimates that the eurozone’s GDP will fall by 2.2% in the fourth quarter, a 7% drop in the full year 2020. In addition, the investment bank lowers the outlook for 2021 with a rebound of only 5% in the average of the euro area, delaying the recovery of 2019 GDP to 2023.
The “jobless recovery” is even more worrying. The apparently spectacular rebound data for the third quarter resulted in zero job creation. Unemployment in the eurozone in September stood at 8.3% and in Spain at 16.5%, not counting the millions of furloughed jobs in Europe.
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Böhm-Bawerk Explains Why Marxist “Exploitation” Is Nonsense – Edward Britton
10 november
Few contributors in the field of economics have done more to educate the masses about the intellectual failures of Karl Marx than Eugen von Böhm-Bawerk. Most famous for his academic writings on interest rates, the Austrian economist was also known to aggressively debate against the scholastic thinkers of the Old Left. In fact, Böhm-Bawerk was a key figure in establishing the ongoing ideological war between Marxian economists and the Austrian school. This is most apparent in his brief but highly polemical book Karl Marx and the Close of His System. In this title, many individuals, especially young students of the free market, will find the most effective and succinct criticism of Marx: the simple fact that surplus value is not necessarily equal to profit.
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Debt still matters – John H. Cochrane
12 november
In 2021, the United States is projected to pass a milestone: US federal debt is forecast to exceed 100 percent of GDP. In fact, according to an October estimate from the nonpartisan Committee for a Responsible Federal Budget, the debt has already eclipsed that mark. But does all this debt matter, or is worrying about debt passé?
This debate has been going on among economists for a while. Modern monetary theory has gotten a lot of attention for its arguments that debt has few consequences, but one need not go to the extremes of MMT to find support for such a view. Some in the mainstream of economics have argued that since the interest rate on US government debt may be lower than the growth rate of the economy, the US can roll over debt forever. Others have advocated that additional debt-financed spending may have so strong a multiplier as to pay for itself, a super-Keynesian version of the Laffer curve.
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How the Unemployment Fiasco in Europe Is Kept out of Official Unemployment Rates – Nick Corbishley
12 november
The massive and once-again extended Pandemic-era furlough programs serve their purpose, but…
In Europe, people who are furloughed are paid under government programs via their employers. Many of these programs have been created during the Pandemic. In theory, these people still have jobs. In practice, they’re not working, or are working heavily reduced hours. But they do not count as “unemployed” and are not reflected in the “unemployment” numbers. So throughout the Pandemic, the official unemployment rates barely ticked up, compared to the last crisis, and remain low for the EU era, despite tens of millions of people who’d stopped working due to the lockdowns
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***“The Great Reset” Already Happened – Charles Hugh Smith
12 november
Put another way: the elites have cannibalized the system so thoroughly that there’s nothing left to steal, exploit or cannibalize.
The global elites’ techno-fantasy of a completely centralized future, The Great Reset, is addressed as a future project. Too bad it already happened in 2008-09. The lackeys and toadies tasked with spewing the PR are 12 years too late, and so are the critics listening to the PR with foreboding.
Simply put, events outran our understanding of them. The future already manifested while we were trying to cram the present arrangement into an obsolete conceptual framework.
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Looking under the hood of the labour share decline: A tale of superstars, rising stars, and shooting stars – Matthias Kehrig, Nicolas Vincent
14 November
A decline in the labour share of income has been documented in many countries and industries. This column uses data from US manufacturing establishments to analyse the drivers of this phenomenon. It shows that the massive reallocation of economic activity was driven by establishments that lowered their labour share as they grew in size. Yet, these low labour shares are temporary, making establishments more akin to ‘shooting stars’ than ‘superstars’. Coupled with the fact that their status is associated with higher prices, the evidence points to a significant role for demand-side forces, such as product innovation or brand power.
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***Stop Confusing Money with Wealth – Bryce McBride
13 november
Even as production of goods and services has declined as a result of the reaction to covid-19, governments have been issuing larger and larger amounts of money.
The fact that this seems reasonable to many people stems from a common and understandable misconception: namely, that money is wealth. After all, aren’t people with a lot of money considered wealthy? However, while wealth and money are often found together, they are very different in their character and importance.
Wealth is in most respects more tangible and therefore easier to understand than money. Useful goods and services and, perhaps more crucially, the productive resources needed to create useful goods and services, are wealth. A loaf of bread is wealth, as are the farms, factories, and human labor and ingenuity that are needed to grow and process the crops necessary to produce it.
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***How people respond to rare events – Martin Eichenbaum, Miguel Godinho de Matos, Francisco Lima, Sérgio Rebelo, Mathias Trabandt
14 November
A central question in economics is how people respond to risk – specifically, how they respond to low-probability events. This column uses the COVID-19 pandemic as a natural experiment to answer this question. Studying the consumption behaviour of Portuguese public sector workers, whose income was likely unaffected by the crisis, they find that older workers reduced their consumption of high-contact goods by much more than younger workers. As the likelihood for dying from COVID-19 is increasing in age, these results suggest that workers’ responses are commensurate with the risk they face.
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Japan’s Ultraloose Monetary Policy Has Undermined Savings and Prosperity – Gunther SchnablTaiki Murai
12 november
Uncertainty over the corona crisis has raised the household savings in many countries. The closure of stores, restaurants, and borders has restricted people from spending money. The support of furlough, rescue credit, and the grant of tax-free bonuses by governments stabilizes incomes. Even in Japan where most stores and restaurants have remained open, the generous handout of around 950 US dollars to all residents increased the savings. Nevertheless, this is unlikely to reverse the long-term downward trend in household savings.
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Wild Ride for Used Cars & Trucks in Weirdest Economy Ever – Wolf Richter
13 november
After Crazy Price Spikes over the Summer, Wholesale & Retail Prices Drop, amid Lower Sales and Plenty of Supply.
The prices of used cars and trucks that are sold at wholesale auctions around the US dropped again in the week ended November 8, compared to the prior week, the 12th week in a row of week-to-week declines that followed a historic 36% spike from April through mid-August, according to data reported by J.D. Power on Thursday. Wholesale prices are now down over 8% from that peak but are still 6% higher than they’d been at the beginning of March.
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There’s No Vaccine for a Terminally Ill Economy – Charles Hugh Smith
10 november
Concentrate wealth and power in the hands of the few at the expense of the many and you guarantee collapse.
Very few are willing to to face the reality that the U.S. economy was on life support long before Covid came on the scene. In a nutshell:
1. Every layer of the economy is vastly over-indebted, and entire swaths are zombies, unable to service their existing debts without borrowing more at lower rates of interest.
2. Productivity has stagnated for decades as capital has been incentivized to seek productivity-killing monopolies and cartels, and socially-economically destructive speculations rather than investments that increased productivity in a socially beneficial manner.
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The US Savings Bond Scam – Trevor Daher
14 november
Very insightful commentary has been made of late, much of it by fellows or fellow travelers of the Mises Institute, regarding the effects that monetary policy is having upon the lives of ordinary people and the potentially disastrous future consequences which may be wrought upon the same. This article will introduce, and lament, the reality of interest rates and inflation.
The interest rate on a thirty-year Treasury—a thirty-year loan to the US government—is 1.6 percent as of this writing. Shorter-term yields are far lower. Interest rates on savings accounts and certificates of deposit are so low that, for long-term holdings of US dollars, a mattress or an old coffee can might, for many people, constitute a satisfactory substitute for banking products.
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Is Another “Crisis” Imminent: The Fed Must Double QE In 2021 But It Needs A Catalyst – Tyler Durden
14 november
One certainly can’t blame the Fed for not doing enough to stabilize markets during the covid crisis: having expanded its balance sheet by over $3 trillion this year alone and injecting $120 billion in liquidity every month, the US central bank – which is also buying corporate bonds and junk bond ETFs – remains the first and last line of defense for any equity drawdown.
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America’s “Stimulus Era” Will Be Loathed For Generations – MN Gordon
13 november
The days in the northern hemisphere inch shorter. The predawn darkness greets us as we step down our front stoop in the morning. Nightfall welcomes us when we return in the evening.
Yet while the days inch shorter. The stock market zigs and zags. One day it’s fear. The next day it’s greed.
When the week began, greed was the dominant emotion. With President-elect Kamala Harris – by way of Uncle Joe and fake votes – poised to take Washington, anything and everything was possible. Superimpose promises of a new coronavirus vaccine onto the outlook and the future had never been brighter.
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Emerging markets sovereign spreads and country-specific fundamentals during COVID-19 – Timo B. Daehler, Joshua Aizenman, Yothin Jinjarak
15 November
Covid-19 was predicted to hit emerging markets particularly hard, as many containment measures were deemed less effective in an emerging market context. This column examines emerging market sovereign credit default swaps spreads during the pandemic and assesses the relative importance of global factors, sovereign fundamentals, COVID-19 mortality, and policy responses. The analysis suggests that while emerging market sovereign CDS spreads can be explained by regional and global risk factor before COVID-19, they were driven by fiscal space, commodity revenues and mobility dynamics during the pandemic, but not directly through variation in country-specific COVID-19 mortality rates.
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Fed Chair Powell Admits The Truth: “We’re Not Going Back To The Same Economy” – Michael Snyder
12 november
Even Jerome Powell is admitting that the boom years are over. For months, I have been trying to explain to my readers that the debt-fueled “prosperity” that we were enjoying prior to the COVID pandemic won’t be coming back, and initially I received quite a bit of criticism for saying that. But that criticism has subsided, because at this point pretty much everyone can see the truth. Despite stimulus package after stimulus package, and despite unprecedented intervention by the Federal Reserve, we continue to be mired in the worst economic downturn since the Great Depression of the 1930s. Fear of the virus continues to drag down the overall level of economic activity, more businesses are going under with each passing day, and the layoff announcements never seem to end.
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Americans Drove Less, But Population Growth Propped up Vehicle-Miles Driven for Years. Then Came the Pandemic – Wolf Richter
15 november
Bounce back to what? The Pandemic Scrambled Long-Term Trends in both directions.
Total miles driven in September on all roads and streets in the US fell by 8.6%, or by 23.4 billion vehicle miles, compared to a year earlier, to 248.3 billion miles, according to the Federal Highway Administration on Friday. While that year-over-year decline is huge by historic standards, it’s the smallest year-over-year decline since the Pandemic started.
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Election Distraction Has Taken Eyes Off Our Economic Ills – Bruce Wilds
14 november
Lately it has been difficult to write about the economy because of all the noise flowing from the election and covid-19 hype. There is a growing reluctance to opine by many economic skeptics because it appears we have been wrong on recent predictions. Only time will tell if this is true due to the huge distortions now evident in the markets. Still, all this tends to diminish confidence in the ability to see what is ahead. This has forced not only me, but other economic watchers to go back and question all we hold true.
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Why GDP Can’t Measure the Quality of Life – Asim Hussain
14 november
GDP is an important economic idea; it is often discussed in the media, it is seen in all kinds of textbooks, and spoken about by politicians. But what is GDP? GDP is the market value of all final goods and services produced in a country within a given time frame, and GDP per capita is GDP divided by the population to find out the value per citizen. It is calculated by finding out what households, governments, and firms spend in the market; after all, what they are buying must have been produced by someone. GDP is great to measure the aggregate value of goods and services being produced within a country and sold on the market. But although it’s is an amazing measuring device, GDP is often criticized because it only measures aggregate market activity and doesn’t measure anything that can’t be counted in terms of market prices. For example, Moore McDowell, Rodney Thom, Ivan Pastine, Robert Frank, and Ben Bernanke criticized it in Principles of Economics (3d European ed., McGraw Hill) for various reasons. In this article I plan to explain those reasons from an Austrian perspective. Here are some of the things GDP doesn’t count.
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American Retirees Are Drowning In Debt – SchiffGold
12 november
American retirees are buried in debt…
Between 1999 and 2019, the total debt burden for Americans over age 70 increased by 543% and totaled $1.1 trillion according to data compiled by the Federal Reserve Bank of New York. Debt grew by 471% over the same period for those in their 60s and totaled $2.14 trillion at the end of last year.
Retirement often turns out to be more expensive than planned. As a result, retirees turn to credit cards to make ends meet.
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***The (un)sustainable nature of sharing – Laura Straeter, Jessica Exton
13 November
Sharing is an ancient, universal practice in which people grant others temporary access to their possessions. This column questions whether a ‘sharing economy’ would be sustainable in practice. Online experiments involving over 400 adults in the US revealed that products shared with other people are disposed of earlier, irrespective of the frequency of use. Though consumer-to-consumer sharing has immediate environmental benefits through, for example, decreases in the use of raw production materials, its long-term benefits appear limited.
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