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It's Economic Theory, Stupid

As often as Carville's catch phrase has been recycled in its more popular form of "It's the economy, stupid" it doesn't quite hit the mark. While Carville's insight might lead to a political victory for a candidate, it does not necessarily lead to an economic solution. It is only an observation of the disease, not its cause. The cause, as we argued in "The Unraveling of Economics", is economic theory itself. In other words, our woes can be traced to the fact that there has never been a sound theory of economics.

Mortgage Delinquencies Rise in August for 3rd Month in a Row; Average Time In Foreclosure Rises to Record 1010 Days

According to the Mortgage Monitor for August (pdf) from Black Knight Financial Services (BKFS, formerly the LPS Data & Analytics division), there were 912,898 home mortgages, or 1.80% of all mortgages outstanding, remaining in the foreclosure process at the end of August, which was down from 935,460, or 1.85% of all active loans that were in foreclosure at the end of July, and down from 2.66% of all mortgages that were in foreclosure in July of last year.

An American Rant (No Bull)

As most people are well aware by now, that while computers, automation, robotics and other methods in the workforce may have increased worker productivity, gads of publications have shown that wages haven't kept pace for the past 30 years. In a service job, such as at a restaurant or bar, an individual's workload is primarily governed by the flow of customers into the place of business and the management's scheduling of its employees.

The Fair Trade Fallacy (The Euro Unmasked)

This essay is part of on going series built on the simple proposition that there has never been a sound theory of economics (see The Unraveling of Economics). In short, the new model proposes the critical intellectual error lies in a 200 year old idea of the Quantity Theory of Money (i.e. the supply of money determines the price level). The implications of this error will be used to critique the popular notion of Fair Trade" as a panacea to our economic woes. The key conclusion we will draw here is that achieving any form of fair trade is an impossible task.

Personal Income Rises 0.3% in August; Spending Increases 0.5% While Prices Fall

Other than the employment report, the report on Personal Income and Outlays for August from the Bureau of Economic Analysis was probably the most important economic release of this past week, as this is the report that gives us the monthly data on our personal consumption expenditures (PCE), which is nearly 69% of GDP, as well as the important monthly personal income data, total personal savings and the national savings rate, in addition to the price index for PCE,

Deconstructing the Minimum Wage Debate (version 2)

Minimum wage debates are back in vogue. Unfortunately, these discussions instead of reflecting a possible fix for America's economic woes are indicative of the key theoretical failure which permeates nearly all schools of economics. On one hand we find the modern Quantity Theory of Money (QTM) theorists equipped with their models of barter (general equilibrium theory) built on instantly and infinitely flexible wage and price price assumptions.