Though we've just got some very upbeat GDP numbers, he's having none of it-we're going to be in recession pretty soon. Turns out this is actually near the top of the business cycle. Sobering indeed.
"I realize many economists celebrate the strong real GDP growth of over 4% in the 3rd quarter 2013, and they forecast more strong growth for years to come… Many people get enthusiastic too. It is easy to celebrate the height of an expansion. However, everything needs to be put into the context of a larger picture. The dynamics of profit and savings for capital income are signaling the limit of the economic expansion.
http://angrybearblog.com/2013/12/preliminary-signs-of-a-coming-contraction.html
We have Sumner crowing over the 4% GDP-aha, fiscal austerity worked! We would not have had these numbers if it hadn't been for the sequester. Now we have Lambert to tell us that this is as good as it gets. Which narrative is more depressing? I must say I don't get Lambert's argument at all as I noted in my previous post.
http://diaryofarepublicanhater.blogspot.com/2014/01/edward-lambert-calling-for-fiscal.html
I don't find that he clarifies much for me in this post of his either-doesn't mean he's wrong just that I don't get him at all. He foresees all the doom and gloom because: the capital savings rate had gone up. What's perplexing is what he thinks are the drives of this rise: an increase in government borrowing and private investment. Yes, the more I read the less I understand.
"In the 3rd quarter 2013, capital income is saving more because government borrowing and private investment both rose. That may not seem like a cause for a recession, but there is another side to this. Capital income consumption of final goods and services drops, which also happened in the 3rd quarter 2013."
"Also, some capital over-extends itself at this moment of optimism to their future sorrow. Some capital income protects its assets too. This dynamic of some getting into trouble while others are getting out of trouble is a common dynamic at the end of the business cycle."
"As for the aggregate profit rate, it has been flat, but high, for 2 years. A flat aggregate profit rate is a sign of real GDP reaching the effective demand limit. The aggregate profit rate is showing signs of reaching its expansion limit."
"The trend would now be to see these lines move together over the next year increasing the likelihood of a contraction. We will have to wait until March 2014 to get a good reading for 4th quarter 2013."
Again, I'm really not trying to diss Lambert here-his name is not Scott Sumner- I just really don't get it. If you do please explain it to me.
"I realize many economists celebrate the strong real GDP growth of over 4% in the 3rd quarter 2013, and they forecast more strong growth for years to come… Many people get enthusiastic too. It is easy to celebrate the height of an expansion. However, everything needs to be put into the context of a larger picture. The dynamics of profit and savings for capital income are signaling the limit of the economic expansion.
http://angrybearblog.com/2013/12/preliminary-signs-of-a-coming-contraction.html
We have Sumner crowing over the 4% GDP-aha, fiscal austerity worked! We would not have had these numbers if it hadn't been for the sequester. Now we have Lambert to tell us that this is as good as it gets. Which narrative is more depressing? I must say I don't get Lambert's argument at all as I noted in my previous post.
http://diaryofarepublicanhater.blogspot.com/2014/01/edward-lambert-calling-for-fiscal.html
I don't find that he clarifies much for me in this post of his either-doesn't mean he's wrong just that I don't get him at all. He foresees all the doom and gloom because: the capital savings rate had gone up. What's perplexing is what he thinks are the drives of this rise: an increase in government borrowing and private investment. Yes, the more I read the less I understand.
"In the 3rd quarter 2013, capital income is saving more because government borrowing and private investment both rose. That may not seem like a cause for a recession, but there is another side to this. Capital income consumption of final goods and services drops, which also happened in the 3rd quarter 2013."
"Also, some capital over-extends itself at this moment of optimism to their future sorrow. Some capital income protects its assets too. This dynamic of some getting into trouble while others are getting out of trouble is a common dynamic at the end of the business cycle."
"As for the aggregate profit rate, it has been flat, but high, for 2 years. A flat aggregate profit rate is a sign of real GDP reaching the effective demand limit. The aggregate profit rate is showing signs of reaching its expansion limit."
"The trend would now be to see these lines move together over the next year increasing the likelihood of a contraction. We will have to wait until March 2014 to get a good reading for 4th quarter 2013."
Again, I'm really not trying to diss Lambert here-his name is not Scott Sumner- I just really don't get it. If you do please explain it to me.
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