A Moveable Glut – Paul Krugman, The New York Times

Paul Krugman makes articulate arguments for more stimulus spending in the US and Europe.

“But these aren’t just a series of unrelated accidents. Instead, what we’re seeing is what happens when too much money is chasing too few investment opportunities.

More than a decade ago, Ben Bernanke famously argued that a ballooning U.S. trade deficit was the result, not of domestic factors, but of a “global saving glut”: a huge excess of savings over investment in China and other developing nations, driven in part by policy reactions to the Asian crisis of the 1990s, which was flowing to the United States in search of returns. He worried a bit about the fact that the inflow of capital was being channeled, not into business investment, but into housing; obviously he should have worried much more. (Some of us did.) But his suggestion that the U.S. housing boom was in part caused by weakness in foreign economies still looks valid.”

via A Moveable Glut – The New York Times.

Relative to long-term corporate earnings, stocks remain more expensive than at any point from the late 1940s through the early 1990s. nytimes.com|By David Leonhardt

If the Price Earnings Ratio is still above 24, it is still high, and stocks are still expensive. A PE of 15 to 20 is probably average historically.
Price/Earnings = PE. A $20 stock that pays a $1.00 dividend annually, has a PE of 20/1 which equals 20.

Relative to long-term corporate earnings, stocks remain more expensive than at any point from the late 1940s through the early 1990s.
nytimes.com|By David Leonhardt

A Warning on China Seems Prescient – Andrew Sorkin on Kenneth Rogoff, The New York Times

“Kenneth Rogoff has long warned of a potential financial crisis in China.

Mr. Rogoff, a professor of economics at Harvard University, accurately predicted the eurozone debt crisis and for years has been telling anyone who would listen that China posed the next big threat to the global economy. He is starting to look right, again.

“In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could,” Mr. Rogoff said on Monday from Cambridge, Mass., repeating a favorite line from Rudi Dornbusch, the German economist. (Mr. Rogoff sat in on Mr. Dornbusch’s class at M.I.T. in 1977.)”

via A Warning on China Seems Prescient – The New York Times.

The Junk Politics of 2015 The candidates are offering us nothing but empty calories. nytimes.com|By Timothy Egan

Timothy Egan: “At least one Republican wants to sic the Internal Revenue Service on his political enemies. So promised Gov. Bobby Jindal of Louisiana, in a remarkable statement overlooked at the kids’ table debate last week. “I guarantee you under President Jindal, January 2017, the Department of Justice and the I.R.S. and everybody else we can send from the federal government will be going into Planned Parenthood.”

Other Republicans think we should be living in a theocracy. “It’s time we recognize the Supreme Court is not the Supreme Being,” said Mike Huckabee, the former governor of Arkansas, testing the latest version of his church-lady demagogy. He wants to ignore the high court on both gay marriage and abortion — breaking the law while waving his Bible.”

The candidates are offering us nothing but empty calories.
nytimes.com|By Timothy Egan

The Murder of Mexico’s Free Press – The New York Times

“Since 2010, at least 41 journalists have been killed in Mexico. Roughly 20 have disappeared. Mexican journalists are targeted by powerful criminal organizations and in some instances by government officials who don’t want their misdeeds exposed. The majority of cases remain unsolved, leaving journalists in many parts of the country with a terrible choice: they censor themselves or get silenced by a bullet.”

A woman holds a picture of slain photojournalist Rubén Espinosa at a protest in Xalapa, Mexico, on Monday. Credit Oscar Martinez/Reuters

via The Murder of Mexico’s Free Press – The New York Times.

The Closing of the Canadian Mind – The New York Times

Stephen Marche: “Mr. Harper’s war against science has been even more damaging to the capacity of Canadians to know what their government is doing. The prime minister’s base of support is Alberta, a western province financially dependent on the oil industry, and he has been dedicated to protecting petrochemical companies from having their feelings hurt by any inconvenient research.”

via The Closing of the Canadian Mind – The New York Times.

How California Is Winning the Drought, nytimes.com|By Charles Fishman

Charles Fishman, NYT: “The farmers are saving themselves now, but they are inflicting long-term damage to the vast underground water supply that is really California’s only remaining water cushion.”

The state’s scorching summer of 2015 is showing us that we know what to do when it comes to conserving water — we just have to do it.
nytimes.com|By Charles Fishman

Can Our Transit System Get Any Worse? – By THOMAS K. WRIGHT, NYT

“We can learn from others. London and Stockholm have “congestion pricing” that generates revenue for mass transit while limiting the flow of cars in their central business districts. Hong Kong’s transit agency, the MTR, is a for-profit company in which the government holds a majority stake. Because it is publicly traded, it can avoid patronage hiring. By purchasing real estate and leasing property, it acquires revenue while keeping fares low.”

via Can Our Transit System Get Any Worse? – The New York Times.

Debt Is Good. A problem with the economy may be that we aren’t in deep enough, not that we’re in too deep. NYT|by Paul Krugman

Paul Krugman: “Rand Paul said something funny the other day. No, really — although of course it wasn’t intentional. On his Twitter account he decried the irresponsibility of American fiscal policy, declaring, “The last time the United States was debt free was 1835.”

Wags quickly noted that the U.S. economy has, on the whole, done pretty well these past 180 years, suggesting that having the government owe the private sector money might not be all that bad a thing. The Britishgovernment, by the way, has been in debt for more than three centuries, an era spanning the Industrial Revolution, victory over Napoleon, and more.”

…. “But the power of the deficit scolds was always a triumph of ideology over evidence, and a growing number of genuinely serious people — most recently Narayana Kocherlakota, the departing president of the Minneapolis Fed — are making the case that we need more, not less, government debt.

Why?

One answer is that issuing debt is a way to pay for useful things, and we should do more of that when the price is right. The United States suffers from obvious deficiencies in roads, rails, water systems and more; meanwhile, the federal government can borrow at historically low interest rates. So this is a very good time to be borrowing and investing in the future, and a very bad time for what has actually happened: an unprecedented decline in public construction spending adjusted for population growth and inflation.”

A problem with the economy may be that we aren’t in deep enough, not that we’re in too deep.
NYTIMES.COM|BY PAUL KRUGMAN

Mideast governments that are often focused on bloody conflicts are being stressed by the pressures brought on by Mother Nature. nytimes.com|By Thomas L. Friedman

InconvenientNews.Net

Tom Friedman: “Here’s my bet about the future of Sunni, Shiite, Arab, Turkish, Kurdish and Israeli relations: If they don’t end their long-running conflicts, Mother Nature is going to destroy them all long before they destroy one another. Let me point out a few news items you may have missed while debating the Iran nuclear deal.

On July 31, USA Today reported that in Bandar Mahshahr, Iran, a city adjacent to the Persian Gulf, the heat index soared to 163 degrees “as a heat wave continued to bake the Middle East, already one of the hottest places on earth. ”

Mideast governments that are often focused on bloody conflicts are being stressed by the pressures brought on by Mother Nature.
nytimes.com|By Thomas L. Friedman

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