Posts Tagged ‘greg mankiw’

The top 1% are different. Yes, they own more financial assets.

25 June 2013

Lawrence Mishel’s recent piece on inequality includes a very telling graph:


We see that the second half of the 1990s  is the first prolonged period when the top 1%’s income soared above that of the college educated in general; it coincided with the dot-com boom/bubble. We see a similar takeoff during the mid-2000s housing bubble and stock boom. In the market corrections/crashes that began in 2000 and 2007, we see the top 1%’s advantage mostly, but not completely, disappear. 

A combination of stock options, stock-market-based bonuses, and “Takes money to make money” seems to be at work here. The graph seems to be at odds with the common argument (Greg Mankiw’s?) that the top 1% deserve all they get because they are so much more productive, as it seems doubtful that their superior productivity deserts them in bad times.

Fed up with Bernanke?

31 July 2011

Greg Mankiw has a good column in today’s NYT in defense of embattled Fed Chair Ben Bernanke. How embattled is Bernanke? Mankiw notes an (admittedly unscientific) online CNBC poll from June, in which the question was “Do you have confidence in the way Ben Bernanke is handling the economy?” 95% of respondents answered no.

Mankiw says the Fed has done basically all it can to combat the Little Depression (unfortunately “all it can” is not enough), while steering clear of high inflation. The core inflation rate in recent years has been just 2%, widely believed to the Fed’s unofficial target inflation rate. Mankiw suggests making that 2% target official, but otherwise sees no obvious room for improvement in Bernanke’s performance.

I tend to agree that Bernanke’s Fed has done about all that monetary policy can do here, but Scott Sumner, one of the more interesting monetary thinkers I’ve come across lately, says the Fed actually has a lot more ammunition in its arsenal and compares the situation to the early 1930s, when the Fed increased the monetary base but needed to do a lot more to stem the massive tide of bank failures and monetary collapse. Unfortunately, I’ve yet to find the specifics of his argument, but I’ll share them with you when I do.

Sumner, by the way, loves the idea of a 2% inflation target and even suggests that Mankiw be appointed to the Fed’s Board of Governors. Maybe Mitt Romney (to whom Mankiw is an adviser) can do that next year.