Why Inflation Stays Low Even Though Unemployment Is Down

January 3, 2018

To long-time baseball fans, the Phillips Curve sounds like a tribute to A.W. Phillips, a New Zealand-born economist who in 1958 noticed that wage growth is strong when the jobless rate is low. (Yes, kind of obvious to the layman.) American economist Paul Samuelson later made a bolder restatement of the Phillips Curve, saying that overall inflation—not just wage growth—is higher when labor markets are tight. Except the Phillips Curve hasn’t…

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Outrage Over Proposal to Let Employers Pool or Pocket Workers Tips

December 17, 2017

I scanned the latest 1,000 comments about the Labor Dept.’s proposed rule on tip-sharing, and the imbalance was startling. Nine hundred ninety-six of them did not like the idea. Here are some unedited excerpts, with names and hometowns of commenters where available. There were more than 5,300 comments in all as of Dec. 13. Forgive me for not looking at all of them. — Ronald Putman, Spring Hill, Fla. — Donna…

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The U.S. Economy Is Finally Living Up to Lowered Expectations

December 9, 2017

People are cheering that the U.S. economy is finally back to operating at its full potential, eight years after the global financial crisis ended. “U.S. Economy Reaches Its Potential Output for First Time in Decade,” the headlined its Congressional Budget Office, Federal Reserve Bank of St. Louis This chart makes the point. The red line represents gross domestic product. It just managed to cross the blue line, which is the Congressional Budget Office’s…

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Trumps Latest Pick for the Fed Is No Fan of Paper Money

December 8, 2017

Economist Marvin Goodfriend doesn’t like the green paper rectangles in your wallet, which are formally known as “Federal Reserve notes.” His opinion matters, because President Trump has nominated him to the Board of Governors of the Federal Reserve. If confirmed by the Senate to a 14-year term, Goodfriend may take the opportunity to pursue his academic interest in abolishing—or at least demoting—paper money. Goodfriend’s dislike for cash could become an issue in…

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Demanding a Bachelors Degree for a Middle-Skill Job Is Just Plain Dumb

October 29, 2017

Ever wonder why employers demand advanced credentials for jobs that don’t seem to require them? So did Joseph Fuller, a professor of management practice at Harvard Business School. He co-led a study that found it’s “a substantive and widespread phenomenon that is making the U.S. labor market more inefficient.” To take one egregious example, two-thirds of job postings for production supervisors require a four-year college degree—even though only 1 in 6 people already…

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Billionaire Mathematician James Simons Flopped the First Time He Invested

October 29, 2017

James Simons is an investing legend. He founded a wildly successful hedge fund, Renaissance Technologies LLC, that employs Ph.D. mathematicians to detect subtle predictive patterns in market data. He’s accumulated a net worth of almost $16 billion, according to the Bloomberg Billionaires Index. In a talk on Oct. 26, Simons revealed that he hasn’t always been so smart about investing. He said he opened his first account, with Merrill Lynch…

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Science Advances One Funeral at a Time. The Latest Nobel Proves It

October 17, 2017

The German physicist Max Planck said that science advances one funeral at a time. Or more friendly rival; they even play tennis together. “In the long run,” Azoulay said, “the best ideas probably win. But in the short run, lots of funky things can happen. Thaler’s career is an embodiment of the beginning and the end of that process.” Peter Coy Bloomberg Businessweek Columnist @petercoy Peter Coy is the economics editor…

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Dr. Doom, at Age 89, Has Ideas About How to Pick the Next Federal Reserve Chief

October 16, 2017

There aren’t many people still working on Wall Street who can blithely say “Bill” when speaking of long-ago Federal Reserve Chairman William McChesney Martin. Henry Kaufman, now 89, is one of them. The Wall Street economist once known as Dr. Doom for his bearish pronouncements on interest rates cited Martin in an Oct. 5 talk that was full of pointed observations about Fed chiefs past, present, and future. Kaufman, who…

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How to Make Sure Global Companies Pay Their Taxes

October 1, 2017

We all know by now that big multinational corporations, from Apple Inc., to Pfizer Inc., to IKEA of Sweden AB, minimize their tax bills by exploiting differences in tax rates and rules between different countries. Outrage is running high, especially in Europe, where there’s strong pressure on politicians to extract more taxes from big companies, especially the U.S. tech giants.  There’s a clean and fair solution in plain sight. It’s not…

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