Secondary Sources: Productivity, Mortgage Debt, Political Affiliation
A roundup of economic news from around the Web.
- Productivity and Jobs: Dean Baker says productivity surges doesn’t give reasons for the death of jobs. “While productivity progression has been strong over the last year, on the rise by 5.8 percent from the fourth quarter of 2008 through the fourth quarter of 2009, this is common for a period of recovery. Productivity grew at a 6.9 percent rate in the four quarters from the first quarter of 2001 to the first quarter of 2002, a 5.4 percent rate from the third quarter of 1982 to the third quarter of 1983, and a 4.6 percent rate from the third quarter of 1974 to the third quarter on 1975. The rapid productivity progression seen in the last four quarters is a typical pattern at the end of a recession, it does not give reasons for the lack of job progression in this recovery compared with the rapid job progression in prior recoveries. The difference is rather clarified by the relatively weaker progression in this recovery.”
- Mortgage Debt: Richard K. Green looks at mortgage debt and aging. “In 1989, average household returns among 45-54 year olds was $39,934; average mortgage debt outstanding among those who had debt was $39,300, so the ratio was about one-to-one. In 2007, average household returns among 45-54 year olds was $83,100; average mortgage debt outstanding among those who had debt was $154,000, so the ratio was just under two-to-one. In 1989, the share of households in the age group with a mortgage was 58.3 percent; in 2007 it was 65.5 percent. The only excellent news: interest rates have dropped from about 10.5 percent to 5 percent. So in 1989, an average returns household that wanted to amortize an average mortgage in 15 years would need to pay 14 percent of yucky returns to do so; in 1989 it would need to spend 19 percent. So putting this all together, the ratio of debt service to returns for amortization by retirement has augmented by (.19*.655/.14*.583)-1 = 52 percent. Not excellent, but not quite as terrible as I thought, either.”
- Biased Evolution: The left-leaning oktrends blog uses online dating data to produce some fascinating charts on biased affiliation and economic affiliation. “Conservatives are strongly pro-life. But the economic liberals have widely spread views. A solid part of the Democratic economic base really sides with Republicans on this issue? While the two conservative curves are nearly congruent, the liberals ones are really uncommon. The takeaway, the Republican advantage, is this: economic conservatives and social conservatives agree, while the liberal halves of these spectra don’t. Furthermore, the purple overlap — in a sense “the swing vote” — is largely on the conservative side!”
Compiled by Phil Izzo