Policy Points

13.01.2010 Policy Points Comments Off on Fueling + Fighting the Housing Bubble

Fueling + Fighting the Housing Bubble

At Economist’s View, Mark Thoma asks if low interest rates or regulatory failures caused the housing bubble. His answer: both.

What fueled the housing bubble? There were three main sources of the liquidity that inflated the bubble. First, the Fed’s (and other central banks’) low interest policy added cash to the financial system, second, the high savings in Asia, particularly China, along with cash accumulations within oil producing nations, and third, some of the cash was generated endogenously within the system (e.g. by increasing leverage or by diverting other investments into housing and mortgage markets).

Once the fuel was present, something had to allow the bubble to inflate and then do widespread damage, and that’s where the regulatory failure comes in. But I don’t think the regulatory failure matters much without a large amount of liquidity within the system, and I don’t think the large amount of cash in the system is problematic without the regulatory failures.

13.01.2010 Policy Points Comments Off on Few Job Openings in November

Few Job Openings in November

The newest version of the  Job Openings and Labor Turnover Survey conducted by the U.S. Bureau of Labor Statistics found that job openings remained scarce in November, the most recent month for which data are available. As the Economic Policy Institute noted in its analysis of the data:

This morning the Bureau of Labor Statistics released the November 2009 report from the Job Openings and Labor Turnover Survey (JOLTS), showing that such openings declined by 156,000 to 2.4 million in November. At the same time, the number of unemployed workers decreased by 272,000 to 15.3 million, resulting in 12.9 million more unemployed workers than job openings in November, or 6.4 job seekers per available job, an increase from 6.1 in October.

12.01.2010 Policy Points Comments Off on Around the Dial – Jan. 12

Around the Dial – Jan. 12

Economic policy reports, blog postings, and media stories of interest:

12.01.2010 Policy Points Comments Off on Still No Hiring

Still No Hiring

A data snapshot from the Economic Policy Institute finds that job layoffs have moderated but hiring has not yet picked up.


12.01.2010 In the News, Policy Points Comments Off on The Wages of Re-employment

The Wages of Re-employment

A recent story in The Charlotte Observer looks the issues that are driving increasing numbers of jobless workers to accept jobs that pay less than their previous ones. This is a function of weak labor market conditions. As South by North Strategies’ John Quinterno explained in the piece:

“You reach a point where, for some folks, they pretty much have to make the choice that some job is better than no job, even if they have to take a cut in pay or benefits,” said analyst John Quinterno of Chapel Hill research firm South by North Strategies Ltd.

Later in the same piece, he elaborated further:

Quinterno, the Chapel Hill analyst, said job seekers are becoming increasingly desperate. There are more than six candidates for every available position nationwide – and that means they’ll have limited bargaining power when it comes to salary, he said.