Core inflation rose 0.2 pct for the month, after rising 0.4 pct in April. But that still left core inflation up 3.0 pct in the past twelve months, matching last month's pace. The last time core inflation over a twelve-month period rose more quickly was December 1991.
Employer health care costs are poised to rise almost 10 percent in 2008 — more than double the annual inflation rate — and nearly that much again in 2009, according to an industry report released Tuesday.
German carmaker Opel, owned by American automobile giant General Motors, as well as the European division of Ford could both profit from the current crisis at their mothership companies across the big pond. GM and Ford have been hit hard by falling sales of gas-guzzling pickup trucks and SUVs. With drivers having to pay an average of over $4 per gallon, sales of larger cars have slowed to a trickle, blindsiding US automakers, who have focused for years on the formerly lucrative truck and SUV market. Unable to quickly retool to develop their own fuel-efficient models, GM and Ford are both reviewing their units in Europe -- where compact and subcompact models are far more prevalent -- for possible models that could be produced for the American market.
As it turns out, that old saw about how a frog slowly boiled in water never jumps, isn't true. The frog jumps. Recent surveys show that over 80% of Americans believe the country is on the wrong track. They too are "ready to jump."
In order to convince them to jump, and to stay with a revived and long-term progressive coalition, we need to provide them with the coherent, persuasive, intellectual underpinnings of why the Right Wing has failed, and why they should embrace a new New Deal.
There is an absolutely compelling case to be made, but too often among the blogosphere, that case seems to be marginalized, and drowned out by the shouts of "The End is Near!" More than one economic blogger I respect has gone overboard calling for the Apocolypse, only to have to explain why it keeps getting delayed.
We live in an age of bubbles. I suppose that this should come as no surprise.
The Greek roots of the word "economy" are oikos and nomia. The former meaning household, and the latter its management. For most of human history, this has been the purpose of the economy, to provide the means of subsistence by which a people survive. Karl Polanyi, the author of The Great Transformation wrote in the midst of the Second World War about how the market may behave like a type of cancer. Economic activity and the production of profit is seen as an end unto itself, rather than simply the means by which societies produce the means by which they exist. And in doing so it unleashes what Polanyi called the "double movement."
One item not discussed, despite wide expectations that it would be, was currencies, and particularly the possibility of intervention to prop up the slumping United States dollar. Japan’s finance minister, Fukushiro Nukaga, the host of the meeting, said currencies were discussed only on the sidelines
Macroeconomics is about systematic fluctuations in output, employment and prices. Macroeconomics is also about social interactions between agents who do not understand very well how the world functions. As a result, they watch each other to get clues of what is going on in the world. This leads to herding and group behaviour. This social behaviour is at the core of macroeconomic fluctuations. Keynes gave this a name, “animal spirits”.
All this is absent in [Central Banks' macroeconomic models]-models where agents who understand the complexity of the world, behave in an atomistic way. There is no need to learn from others, since each individual’s brain contains the full information. Everybody understands the “Truth”.
The housing crisis grew worse in May, as more than 73,000 American families lost their homes to bank repossessions, up a staggering 158% from the 28,548 households that were dispossessed in May 2007.
I will be on the road this morning when the CPI is reported. I will check back in later and update after I have had a chance to look at the numbers and the release, but here are a few things to watch for: -- UPDATED with analysis!
Originally I was going to call our new form of rotten economic performance with heightened inflation, "Stagflation nouveau" but I don't think that quite catches the meaning I want to convey. I think "Scroogeflation" works better. What we have here is an inflation which is gradually, month after month, slowly eating away at middle and working class Americans' standard of living. It is the kind of inflation that Ebenezer Scrooge would welcome. Hence, "Scroogeflation". If you think of something better, let me know.
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