Picture of the Day: Un-Recovery

From Greg Mankiw (whom, I suspect is making a political statement being on the payroll of the Romney campaign - I am not attempting to do anything of the sort, but the picture is revealing: lost decade anyone?):

Picture of the Day: Stimulus v. Austerity

I am grading, grading, grading today so I'll resort to the good ol' picture of the day.  This one from Krugman who uses it as a provocation for those that claim that resorting to stimulus rather than austerity has slowed our recovery.

While the US has used fiscal stimulus the UK has gone whole hog on austerity and here are the results.  Is this a good natural experiment?  Can we reasonably draw conclusions from this?  Discuss below.  Oh wait, Spring break has begun for most of the OSU students out there so nevermind - go empty your minds and soak in some sun while us poor faculty are knee deep in snow grading endlessly...

Picture of the Day: Income Inequality Across High Income Countries

This graph comes from Daron Acemoglu and James Robinson.  What is shows in essence is the great democratization of wealth after the concentrations of the industrial revolution and the gilded age followed by, in a couple of countries, a huge move back to incredible concentrations of wealth at the very top. But not all.  So what is it about the US particularly, and to a lesser degree the UK, that causes this?

Picture of the Day: Income Inequality

Emmanuel Saez updates his well-known data on income inequality:

Notice the massive concentration of wealth that occurred during the Gilded Age and then again in the run up the the financial crisis.  Well with the crash, you might be tempted to think that it was a temporary blip - and you'd be wrong, the trend is continuing right on through the recession.

And here is the takeaway, stated beautifully by Saez:

The labor market has been creating much more inequality over the last thirty years, with the very top earners capturing a large fraction of macroeconomic productivity gains. A number of factors may help explain this increase in inequality, not only underlying technological changes but also the retreat of institutions developed during the New Deal and World War II - such as progressive tax policies, powerful unions, corporate provision of health and retirement benefits, and changing social norms regarding pay inequality. We need to decide as a society whether this increase in income inequality is efficient and acceptable and, if not, what mix of institutional and tax reforms should be developed to counter it.

Picture of the Day: Lost Decade, American Style

From The Economist:

Picture of the Day: Meanwhile, Across the Pond...

As the US employment situation continues to improve, in the UK things are getting worse:

Actually, that is a bit misleading, the number of people in work has risen but this is largely due to part-time workers who want full-time work, which, as I understand it, in the UK counts in both the jobs figures and in the unemployed figures.

Debate away about austerity v. stimulus but two cautions: one, there is no counter-factual and two, the proof is in the long-term as well not just the short term.

Picture of the Day: Reality Check

Yes the jobs report on Friday was very good, but here is your cold-water moment: things are still historically awful.

Source: Bureau of Labor Statistics. Chart by Amanda Cox/New York Times.

Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

Picture of the Day: Growth Private and Public

Via The New York Times' Economix blog, this graph comparing private sector growth and public sector growth:

Quarterly change at seasonally adjusted annual rate.
Source: NYTimes. Data source: Bureau of Economic Analysis

You can have your own correlation and causation debate here: shrinking government  returned the private sector to growth or held overall growth down hurting the private sector.  I am in the latter camp: in a time of recession the severe austerity imposed at the state and local levels have had a big role in suppressing growth.

Update: Here is Krugman posting on the same thing.

Picture of the Day: De-leveraging

From the Economist:

As the Economist notes, a significant part of US household de-leveraging is due to mortgage default:

These transatlantic differences stem from the trajectory of private debt. Government borrowing soared everywhere after 2008 as government deficits ballooned. But in America the swelling of the public balance-sheet has mirrored a shrinking of private ones. Every category of private debt—financial, corporate and household—has fallen as a share of GDP since 2008. The financial sector’s debt is now at its 2000 level. Corporate indebtedness, never very high, has shrunk. So, more importantly, has household debt. America’s ratio of household debt to income is down by 15 percentage points from its peak in 2008, after rising by over 30 percentage points in the eight preceding years. McKinsey reckons America’s households are between a third and halfway through their debt-reduction process. They think the household-debt hangover could end by mid-2013.

Ah good, mid 2013. Remember all that crazy-talk of a lost decade? Welcome.

Picture of the Day: State and Local Government Jobs

From the Wall Street Journal:  State and local governments are still cutting jobs but the pace of these cuts has slowed.  This will likely continue to be a drag on the national economic recovery for 2012 as state and local governments are dealing with continued revenue shortfalls, but with private sector job growth getting stronger and consumer spending increasing, there is some hope that 2012 will be the last year of big cuts for a while.

Picture of the Day: Budget Deals

Via The New York Times' Economix blog:

Picture of the Day: Manufacturing Up

Via the WSJ.

Picture of the Day: Which States are Most Exposed to Europe

Don't make too much of this, the US is so integrated that all states will suffer if Europe goes into recession, but there would likely be some differential effects based on how much trade states do with Europe.  So how much do states trade with Europe?

Data from the Commerce Department and Wells Fargo, and the graph is from the Wall Street Journal.

Picture of the Day: GDP Density

This graph, from a paper by Gallup, Sachs and Mellinger, is taken from an Econbrowser blog post by James Hamilton.  Go there and read it.  Interesting stuff.  I will add, however, that it does read a bit like the rediscovery of the wheel: economic geographers and development economists have been studying all this stuff (the role of geography versus institutions, resources and the like) for decades.

Picture of the Day: Drivers Becoming More Sensitive to Gas Prices

Source: The Wall Street Journal

Picture of the Day: Consumer Spending

From The Economist.  One interesting aspect of this is the decline in spending on consumer durables: cars, furniture, appliances, housing, etc.  Eventually this spending will have to pick up as stuff wears out.

Picture of the Day: A Forecast of Job Growth by State

The Wall Street Journal today reports on a state-by-state job growth forecast by the firm IHS Global Insight.  Click here for the full interactive map. Oregon is forecast to have 1.8% growth over the 2011-2017 period.

Picture of the Day: Declining Household Income

From the NY Times:

Picture of the Day: Computing Costs and Apple

From Felix Salmon:

Just another example of the remarkable increase in productivity in consumer electronics.  And it is industries like this that, when comparing them to industries like symphony orchestras, gives us the concept of cost disease.

Picture of the Day: US Research Universities Still Dominate

Credit: New York Times. Source: O.E.C.D. and SCImago Research Group (CSIC) (forthcoming), Report on Scientific Production, based on Scopus Custom Data, Elsevier, June 2011. Statlink http://dx.doi.org/10.1787/888932485310