FIRST: You can think of the labor market as being in one of three different modes. In the first mode there is chronic over supply of labor at the prevailing wage. In the second mode the labor market is in balance, and in order for employment as a... 1/
... whole to rise firms need to offer higher real wages. In the third mode the labor market is at full employment and even increasing wages will not increase employment in the economy as a whole. The labor market has been in the first mood for so long the employers regard... 2/
...the second as grossly irrational, and talk about "labor shortage" whenever we get into it. But mode two is not “labor shortage”. Mode three is when you can talk about "labor shortage":

Anne Laurie: Fruits of Their Labor: The Secret Is Leaking Out: ‘The Wall Street Journal 3/ shocked, shocked—companies that pay competitive wages draw the best, loyalest hires! Of course they knew that worked for MBAs, but who would have suspected even lowly wage serfs were capable of such motivated reasoning?… "After raising employee wages to $15/hour... 4/
...Klavon’s Ice Cream Parlor in Pittsburgh received ‘well over 1,000 applications’ for job openings. Co-owner Jacob Hanchar says customer service has improved and he hasn’t ‘noticed a difference on our bottom line’... LINK: <…> 5/
...One Video: Emi Nakamura: Is the Phillips Curve Getting Flatter? <> 6/END

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More from @delong

22 May
@paulkrugman But, as you note, Bernanke in 2002 and Mankiw in 2006 still saw Friedman as "the economist of the century" <…> <…>. They were fine with the "government should not interfere with the economy" and "whatever is the monetary policy that 1/
@paulkrugman ...happens to stabilize aggregate demand is the true non-interfering 'neutral' monetary policy". It was a con, yes, but it was a successful con. And it is not clear that it was wrong as a practical policy position. It was, after all, Keynes's as well: "the result of... 2/
@paulkrugman ... filling in the gaps in the classical theory is not to dispose of the ‘Manchester System’, but to indicate the nature of the environment which the free play of economic forces requires..." <…>. Friedman's insistence that you could do it with... 3/
Read 13 tweets
22 May
@infinite_me @Claudia_Sahm Touché...

One question I always ask @paulkrugman and company is: what happened to the influence of Milton Friedman? No one was a stronger anti-liquidationist than Milton Friedman...

Milton Friedman <…>: 'A debate on Keynes between Abba P. Lerner and... 1/
@infinite_me @Claudia_Sahm @paulkrugman ...myself... in the late 1940s.... 1930s, pre-General Theory; we have a somewhat similar Talmudic cast of mind and a similar willingness to follow our analysis to its logical conclusion.... [We] agree[d] on a large number of issues-from flexible exchange rates to the... 2/
@infinite_me @Claudia_Sahm @paulkrugman ... volunteer army. Yet we were affected very differently by the Keynesian Revolution-Lerner becoming an enthusiastic convert... I... somewhat hostile.... Lerner was trained at the London School of Economics, where the dominant view was that the depression was an inevitable... 3/
Read 14 tweets
20 May…

This is NUTS. & GENIUS. GENIUS-NUTS: On startup, the Apple Silicon M1 notices that it has lots of background and housekeeping work to do—mds_stores, bird, cloudd, kernel_task, & c.—and so it starts doing it. It immediately full-throttles all four... 1/
...of its IceStorm efficiency cores. Then I start working. And it responds, giving me FireStorm core #5, with occasional spillover to FireStorm core #6, holding FireStorm cores #7 & #8 in reserve, just so if I ask it to do anything heavy, it can respond instantaneously... 2/
..., rather than get caught up on its background and housekeeping by letting those processes onto the performance cores. Let’s see if I can get it in gear… Here I have an unconverted terabyte zoom session lying around… PEDAL to the METAL, Commander! Zoom & MacOS are not... 3/
Read 13 tweets
20 May…

No. There is neither a transcript nor a video nor an audio of John Cochrane's 2008 CRISP Forum keynote at the Gleacher Center. It appears to have been deep-sixed. All we have of it appears to be Cochrane’s declaration—made at a time when the share... 1/
... of the U.S. labor force in construction was below its long-run average and had been below its long-run average for fifteen months—that: “we should have a recession. People who spend their lives pounding nails in Nevada need something else to do.” No recognition at all... 2/
...that the structural-adjustment climb-down from the housing boom had already taken place. No recognition that structural adjustment takes place by pulling people into high-value jobs, not by pushing them out of low-value jobs into zero-value non-jobs. No recognition at... 3/
Read 9 tweets
20 May…

First: Even though she is endorsed by Ross Douthat, Angela Nagle seems to me to be a remarkably silly person. She “hoped or expected… Trump” would “adopt… national economic revival policies”. And now she is surprised that the hated “Libs” are... 1/
... enacting such policies, have “gone much further with them”, and “these are good policies”. In spite of huge amounts of evidence, she has not yet been able to open her eyes and realize that Donald Trump is a grifter who does not care about anything other than staying... 2/
... out of jail and owning the media cycle. Expecting him to lead a national economic revival was really stupid. Did I hint that it is surprising that someone endorsed by Ross Douthat is remarkably silly? My bad. That start should be: “Since she is endorsed by Ross Douthat... 3/
Read 11 tweets
19 May…

Jackson Hole in 2005: The "unremitting attack"—as Alan Blinder characterized it—on Raghu Rajan's warnings of financial instability and mistrust of the neoliberal market-financial order: Summers, Fraga, Fischer, Trichet, Sinai, Weber, Kohn—an... 1/
...impressive group saying that Rajan had overstated his case, with only Blinder coming to his defense, saying: "I’d like to defend Raghu a little bit against the unremitting attack he is getting here for not being a sufficiently good Chicago economist and... emphasize the... 2/
...sentence in his paper... “There is typically less downside and more upside risk from generating investment returns.” This is very mildly said. The way a lot of these funds operate, you can become richer than Croesus on the upside, and on the downside you just get your... 3/
Read 6 tweets

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