Peter Coy | In Retirement, You May Not Need to Spend So Much – The New York Times

Opinion Writer

“If the recent rout in the stock market has you drastically cutting back your retirement spending plans, it probably means that you were counting too much on ever-rising asset prices. But a new research paper suggests that spending less at advanced ages is not necessarily a sign of failure to plan. Even people who plan perfectly do it.

Let’s back up for a minute. The notion that your spending should be consistent over your lifetime is known as consumption smoothing, an economic concept developed by Milton Friedman, Franco Modigliani, Robert Hall and others. The core idea is simple: No amount of luxurious living at age 60 compensates for living in penury at 25 or 85. So you should borrow when you’re young, save and pay off debts during your peak earning years and then spend down your savings in old age. If you do it right, you will enjoy an even standard of living throughout your adult life.”

David Lindsay Jr.
Hamden, CT | NYT comment:
Great essay. I wish it had included, that if you reduce your consumption, you will probably reduce your carbon foot print, with just a little effort.
David Lindsay wrote “The Tay Son Rebellion,” and blogs at

Paul Krugman | Europe’s Gonna Party Like It’s 1979 – The New York Times

Opinion Columnist

“You probably have to be a senior citizen to remember the gasoline shortages of 1979. I am, and I do. I also remember how demoralizing they were. Then as now, outside a few big cities, America was a highly car-dependent nation, and waiting in long lines, not knowing whether you would be able to fill up, was deeply disconcerting.”

Pace of Climate Change Sends Economists Back to Drawing Board – The New York Times

“Economists have been examining the impact of climate change for almost as long as it’s been known to science.

In the 1970s, the Yale economist William Nordhaus began constructing a model meant to gauge the effect of warming on economic growth. The work, first published in 1992, gave rise to a field of scholarship assessing the cost to society of each ton of emitted carbon offset by the benefits of cheap power — and thus how much it was worth paying to avert it.

Dr. Nordhaus became a leading voice for a nationwide carbon tax that would discourage the use of fossil fuels and propel a transition toward more sustainable forms of energy. It remained the preferred choice of economists and business interests for decades. And in 2018, Dr. Nordhaus was honored with the Nobel Memorial Prize in Economic Sciences.

But as President Biden signed the Inflation Reduction Act with its $392 billion in climate-related subsidies, one thing became very clear: The nation’s biggest initiative to address climate change is built on a different foundation from the one Dr. Nordhaus proposed.

Rather than imposing a tax, the legislation offers tax credits, loans and grants — technology-specific carrots that have historically been seen as less efficient than the stick of penalizing carbon emissions more broadly.

The outcome reflects a larger trend in public policy, one that is prompting economists to ponder why the profession was so focused on a solution that ultimately went nowhere in Congress — and how economists could be more useful as the damage from extreme weather mounts.

A central shift in thinking, many say, is that climate change has moved faster than foreseen, and in less predictable ways, raising the urgency of government intervention. In addition, technologies like solar panels and batteries are cheap and abundant enough to enable a fuller shift away from fossil fuels, rather than slightly decreasing their use.

Robert Kopp, a climate scientist at Rutgers University, worked on developing carbon pricing methods at the Department of Energy. He thinks the relentless focus on prices, with little attention paid to direct investments, lasted too long.”

I didn’t like this piece because it was too limited. There are new sustainable economists saying growth no longer works. Here are two of many good comments:

Erik Frederiksen
Asheville, NC3h ago

It is frightening to see how much faster severe climate impacts are occurring at just 1.2°C above preindustrial times. Not many people seem to be aware of how bad things are going to get over the next few decades. We are deep into a planetary emergency and leaders are not responding commensurately.

2 Replies149 Recommended
David Anderson
North Carolina2h ago

The end of Homo sapiens ? ? The Biosphere is defined as the relatively thin layer of the earth’s surface that can support life. It extends down to the deepest layers of soils and ocean trenches and up to the highest levels of the earth’s atmosphere. Change in the Biosphere generally operates on “slow;” that is in multiples of many hundreds or thousands or even millions of years. But change can also operate on “fast.”The Permian Triassic extinction 252 million years ago and the Cretaceous extinction 66 million years ago are two examples of relatively rapid change. The Cretaceous came from a meteorite and resulted in low temperatures. The Permian Triassic came from a Methane (CH4) Hydrate Feedback Loop and resulted in high temperatures. Both were accompanied by Biosphere change so extreme as to extinguish a very large percentage of planetary life. When such change occurs those species that inhabit precisely bounded biological niches are the first to be affected. They die out. Then others follow. We are now in our Modern Age seeing the first signs of Biosphere change due to our industrial civilization adding excessive amounts of (CO2) into the planet’s Biosphere.  As with all other life on the planet, while in the membrane we Homo sapiens are biologically dependent on an evolutionarily constructed and precisely bounded niche.

3 Replies50 Recommended

Herman Daly: This Pioneering Economist Says Our Obsession With Growth Must End – The New York Times

“Growth is the be-all and end-all of mainstream economic and political thinking. Without a continually rising G.D.P., we’re told, we risk social instability, declining standards of living and pretty much any hope of progress. But what about the counterintuitive possibility that our current pursuit of growth, rabid as it is and causing such great ecological harm, might be incurring more costs than gains? That possibility — that prioritizing growth is ultimately a losing game — is one that the lauded economist Herman Daly has been exploring for more than 50 years. In so doing, he has developed arguments in favor of a steady-state economy, one that forgoes the insatiable and environmentally destructive hunger for growth, recognizes the physical limitations of our planet and instead seeks a sustainable economic and ecological equilibrium. “Growth is an idol of our present system,” says Daly, emeritus professor at the University of Maryland School of Public Policy, a former senior economist for the World Bank and, along with the likes of Greta Thunberg and Edward Snowden, a recipient of the prestigious Right Livelihood Award (often called the “alternative Nobel”). “Every politician is in favor of growth,” Daly, who is 84, continues, “and no one speaks against growth or in favor of steady state or leveling off. But I think it’s an elementary question to ask: Does growth ever become uneconomic?”

David Lindsay Jr.
Hamden, CT | NYTimes Comment:
Great interview of Herman Daly by David Marchese. I would like to nominate Herman Daly for the two Nobel prizes, the Nobel prize in economics, and the peace prize. When I attended the University of Washington Foster School of Business for an MBA in 1990, I was disturbed that all the economists I studied under assumed that growth was the only way to improve life on the planet. The world has to wake up, and admit that unrestricted population growth and consumerism and all the pollution created by these trends, is completely unsustainable for life as we have known it. We desperately need more ecological and steady-state economists. Which brings me back to my two Nobel prize nominations.
David blogs at

Thomas Piketty’s Radical Plan to Redistribute Wealth – The New York Times

By Thomas Piketty

“Thomas Piketty begins his latest book by genially mentioning the entreaties he gets to write something short — previous books have been around 1,000 pages long — and ends it by expressing the hope that he has given “citizens,” rather than economists, new weapons in the battle against inequality, which is his master subject. This shouldn’t be taken for a sign that “A Brief History of Equality” is consciously simplified. It isn’t centered on a new economic finding, like that in “Capital in the Twentieth Century,” where Piketty reported that the return to capital exceeds the rate of economic growth. But neither is it written in a tone of patient explanation. It’s useful as an opportunity for readers to see Piketty bring his larger argument about the origins of inequality and his program for fighting it into high relief.

Much of the current discussion of inequality focuses on the period since 1980, when the benefits of growth began to go much more narrowly to the rich than they had before. Although Piketty hardly disputes this, he announces here that he has come to tell an optimistic story, of the world’s astounding progress toward equality. He does this by creating a much wider temporal frame, from 1780 to 2020, and by focusing on politics and measures of well-being as well as economics. Life expectancy has gone from 26 to 72 and, with the rise of compulsory state-provided education, the literacy rate from about 10 percent to 85 percent. Slavery and colonialism, once endemic, have been substantially abolished. Perhaps half of the population of the developed world is at least middle class, though before the 20th century there was no middle class to speak of. The right to vote, formerly restricted even in democracies to male property owners, is well on its way to becoming universal.

What caused this progress? Piketty has a straightforward answer: the advent of progressive taxes on income and wealth, and of the comprehensive welfare state. The taxes reduced inequality and paid for the welfare state, which has provided education, health care, old-age pensions and protection against severe deprivation. Our culture’s familiar assertions about how growth, innovation and entrepreneurship are connected with general prosperity stand completely outside Piketty’s account. Instead, he says, property owners have always used their excessive influence over government to create systems of “military and colonial domination” and environmental despoliation that made them even more wealthy than they were already. The idea that growth can solve the world’s economic woes is “totally insane.” Only a substantial weakening of property rights — a process that in the past included the abolition of slavery, but has many more steps to take — can do that.”

Robert J. Shiller | Inflation Is Not a Simple Story About Greedy Corporations – The New York Times

Mr. Shiller, a professor at Yale, won the Nobel in economic science in 2013.

“The word “Bidenflation” appeared in the news last summer, politicizing inflation and assigning blame for it. By December, the Consumer Price Index had risen 7 percent from a year earlier, the largest annual increase since the end of the Great Inflation, the period of entrenched inflation from 1965 to 1982.

On Dec. 14, when asked about the drivers of the recent inflation, Jen Psaki, President Biden’s press secretary, answered with an example: “The president, the secretary of agriculture have both spoken to what we’ve seen as the greed of meat conglomerates.”

Her answer lent support to the idea that the United States is about to enter a “wage-price spiral,” an economic theory that posits a greed-enabled vicious feedback loop between consumer price inflation and cost increases: Greedy businesses raise prices to increase profits, which causes greedy unions to demand higher wages, which causes businesses to raise prices again, and so on. We are now seeing reports of newly assertive union members demanding higher wages and of greedy corporate price setters charging too much.

But feeding fears of a wage-price spiral can be dangerous, especially if Americans view it as something that might continue indefinitely. Once lawmakers, business leaders and consumers come to believe the spiral has really taken hold, that belief can amplify long-term inflation expectations. It can make people angry and rigid in their demands and depress the stock market and consumer confidence.”

Peter Coy | Cash Is Out. Crypto Is In. What’s Happening to Money? – The New York Times

Mr. Coy is a newsletter writer in Opinion.

“I felt two unexpected emotions — pity and guilt — one day recently while I was packing loose pennies, nickels, dimes and quarters into paper rolls to take to the bank. Coins, which were a big part of my childhood, have come to seem like inconvenient relics, as anachronistic as my grandfather’s stamp collection.

All over the world, people are abandoning old forms of money and adopting new ones, like cryptocurrency, faster than our brains and customs can process.

“We are at an interesting juncture,” Eswar Prasad, a Cornell University economist, told me. “It is a period of a great degree of concern about what happens to traditional forms of money and whether these technological developments we see around us are going to benefit us in some way or just create more disruption and turmoil.”

In much of Europe and East Asia you can go for weeks without touching paper money or coins. In 2013, a bank robber in Sweden was thwarted because the bank he targeted didn’t have any money to steal — the branch was a “cashless” location. Five years later, Cecilia Skingsley, then deputy governor of the Sveriges Riksbank, the central bank of Sweden, told The Financial Times, “If you extrapolate current trends, the last note will have been handed back to the Riksbank by 2030.” “

David Lindsay Jr.
Hamden, CT | NYT comment:
I vote against allowing bitcoin or any crypto currency any serious place in our system going forward. Bitcoin should be made illegal, until it reduces its enormous carbon footprint to something closer to zero. That mobsters, thugs and terrorists all like these untraceable systems, that allow the avoidance of any identification or taxation, should be enough to alert sensible people that you can’t run a town, state or country on an untaxable economy.

Paul Krugman | Inflation Headlines Don’t Tell the Whole Story – The New York Times

Opinion Columnist

“Early this year some prominent economists warned that President Biden’s American Rescue Plan — the bill that sent out those $1,400 checks — might be inflationary. People like Larry Summers, who was Barack Obama’s top economist, and Olivier Blanchard, a former chief economist of the International Monetary Fund, aren’t unthinking deficit hawks. On the contrary, before Covid hit, Summers advocated sustained deficit spending to fight economic weakness, and Blanchard was an important critic of fiscal austerity in the aftermath of the 2008 financial crisis.”

Paul Krugman | History Says Don’t Panic About Inflation – The New York Times

Opinion Columnist

Sign up for the Paul Krugman newsletter, for Times subscribers only.  A guide to U.S. politics and the economy — from the mainstream to the wonkish. Get it in your inbox.

“Back in July the White House’s Council of Economic Advisers posted a thoughtful article to its blog titled, “Historical Parallels to Today’s Inflationary Episode.” The article looked at six surges in inflation since World War II and argued persuasively that current events don’t look anything like the 1970s. Instead, the closest parallel to 2021’s inflation is the first of these surges, the price spike from 1946 to 1948.

Wednesday’s consumer price report was ugly; inflation is running considerably hotter than many people, myself included, expected. But nothing about it contradicted C.E.A.’s analysis — on the contrary, the similarity to early postwar inflation looks stronger than ever. What we’re experiencing now is a lot more like 1947 than like 1979.

And here’s what you need to know about that 1946-48 inflation spike: It was a one-time event, not the start of a protracted wage-price spiral. And the biggest mistake policymakers made in response to that inflation surge was failing to appreciate its transitory nature: They were still fighting inflation even as inflation was ceasing to be a problem, and in so doing helped bring on the recession of 1948-49.”

Stephanie Kelton | Biden Can Go Bigger and Not ‘Pay for It’ the Old Way – The New York Times

” . . .  That’s why to avoid short-run constraints like supply bottlenecks, the U.S. government can look elsewhere for capacity. American businesses can make use of depressed conditions abroad, buying from countries with economies that might be struggling to fully recover from the economic downturn and that will be more than happy to mutually benefit from our boom. There will be no lack of eager foreign producers if we need to relieve some demand pressure on the domestic front.

So it was unfortunate that in his long-awaited infrastructure speech, President Biden promised “not a contract will go out, that I control” that isn’t for “a company that is an American company with American products, all the way down the line, and American workers.”

This “buy American” philosophy is well intentioned but could lead to counterproductive trouble, particularly since the president has promised that “no one making under $400,000 will see their federal taxes go up” — a pledge that takes raising taxes on the middle class, which has a higher marginal propensity to spend, off the table as a potential inflation offset.” . . . . . .

” . . . Modern Monetary Theory is not alone here. For a historical outlook, we can revisit what John Maynard Keynes proposed in “How to Pay for the War: A Radical Plan for the Chancellor of the Exchequer,” a lesser-known work of his. To the contemporary ear, the title suggests that Keynes was trying to figure out how to come up with the money to finance World War II spending. He wasn’t.

Keynes understood that the British government, which controlled its national currency, could create all the money needed. The purpose of the book was to show the government how to scale up and sustain higher levels of spending while containing inflationary pressures along the way. It noted the soldiers, bombers, tanks, combat gear and more that would be needed to prosecute the war and how the entire economy would need to be reoriented, quickly, to supply those things.

We’ve all grown accustomed to thinking about taxes as an important source of revenue for the federal government. That’s in part because it’s easy to think of the federal government as being like state and local governments, which without sufficient revenue — from income taxes, property taxes, sales taxes and more — could not finance their operations. Yet these entities don’t have the federal government’s currency-issuing powers, which greatly changes the spending capacity of government.

In 1945, a man named Beardsley Ruml delivered a fiery speech before the American Bar Association titled “Taxes for Revenue Are Obsolete.” He wasn’t a crank. He was the chairman of the New York Federal Reserve Bank. As Mr. Ruml explained in that speech, taxes first and foremost help to avoid a situation where too much money chases after too few goods: “The dollars the government spends become purchasing power in the hands of the people who have received them,” he said, while “the dollars the government takes by taxes cannot be spent by the people.”

More recently, economists like L. Randall Wray and Yeva Nersisyan have begun to think about how to pay for a Green New Deal using Keynes’s earlier “radical” framework. And even if one were to accept the terms of the old deficit-oriented budgeting currently favored in Washington, going even bigger on infrastructure, if executed carefully, is still doable: Larry Summers, the former Obama White House senior economist, admitted in 2014 that “public infrastructure investments can pay for themselves” and that “by increasing the economy’s capacity, infrastructure investment increases the ability to handle any given level of debt.”

We face enormous intersecting crises: a climate crisis, jobs crisis, health crisis and housing crisis, among others. It is going to require a lot of money to do what is necessary. As Kate Aronoff recently wrote in The New Republic, “To meet the emissions targets outlined in the Paris Agreement, experts estimate the United States government will need to spend at least $1 trillion annually.” And the White House’s infrastructure proposal, while historically ambitious, still falls far short of the scale of the problem.” . . .