Recession Indicators, June 21

Industrial production, personal income ex-transfers, and Macroeconomic Advisers’ monthly GDP are all below recent peak; manufacturing and trade industry sales and nonfarm payroll employment are still rising (although barely, in the latter case). Here’s a graph of these five indicators.

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“Seattle’s Chinese American veterans to receive long overdue honor from U.S.”

I saw this Seattle Times article while visiting my hometown, and it struck me as relevant, as the Trump administration is now deporting veterans, willy nilly. From the article.

When the [Second World] war began, the United States government had not yet repealed the Chinese Exclusion Act of 1882, the nation’s first immigration ban on a specific ethnic group. The law severely limited Chinese immigrants from entering the country and becoming naturalized citizens for more than 60 years, until the end of 1943.

This meant that while up to 20,000 Chinese Americans served in the military during World War II, about 40% were not even granted citizenship, according to the Chinese-American World War II Veteran Congressional Gold Medal Act.

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Down, Down, Down: 10 Year Yields in Advanced Countries

Perusing the last issue of the Economist, I noted that among advanced economies, only Greece (180 bps), Spain (87 bps), Australia (133 bps), South Korea (112 bps) and Chile (108 bps) had larger declines in the ten year yields than the US (81 bps).

Of these, one could argue Greece and Spain declines were attributable to a decline in default risk, leaving only Australia, South Korea and Chile.

Figure 1 below illustrates what has happened to 10yr-3mo, 10yr-2yr and 5yr-3mo spreads over the past year (indicated by vertical green line)

“[L]et’s have Bretton Woods again.” Arthur Laffer 1982

And maybe other folks, up for the Fed? Well, Judy Shelton says gold might be the way to go…

That’s from an interview Erik Brynjolffson, Tod Loofbourrow and I conducted back in 1982 for the Harvard International Review. So, if Obama’s November 2008 election could’ve caused the Great Recession that started in December 2007 (and the Lehman Brothers collapse in September of 2008) as Laffer has claimed, why not Bretton Woods redux?