John Irons's Blog


Economic News, Data and Analysis

Washington Post on Plagiarism of Brookings Website

Looks like the Post has picked up the story that has been bouncing around blogs for a while…

Brookings Irked by Web Imitation (
Civilian administrator L. Paul Bremer’s webmasters apparently lifted the design for their Web site ( directly from the Brookings site ( The duplication included overall layout as well as small details, such as fonts, colors and the placement of a search box — just with a little splash of Arabic here and there.

Filed under: Technology

Corporate Profits at Record Highs, While Labor Compensation at 38-year Lows

OMB Watch – Economy and Jobs Watch: Corporate Profits at Record Highs, While Labor Compensation at 38-year Lows

Recent data show a major shift in the balance between corporate
income and labor compensation. As a share of the economy labor
compensation has not been this low in almost 40 years (since 1966), and
after-tax corporate profits are at the highest levels ever recorded by the Bureau of Economic Analysis.

Since it’s peak in 2001, as a share of gross domestic product
(GDP), labor compensation has decreased by about 4 percent (from 67 to
63 percent) and corporate profits have increased by about 4 percent
(from 8 to 12 percent) see chart below. After taxes, corporate
profits reached 9.6 percent of GDP the highest level recorded dating
back to 1947.

(Components are percent of GDP; source: graphic adopted from National Economic Trends, St. Louis Federal reserve.)

Over the past year, the overall economy, as measured by GDP, has
grown consistently at a rate of about 5 percent, and is seen by many to
be a sign that the economy has, at long last, come out of the 2001
recession. The conventional wisdom is that increased overall production
will eventually make its way into the pocketbooks of ordinary
Americans. However, this recovery appears to be different in part
because of the dismal performance of employment in the postrecession
period but also because it appears that a lower proportion of
national income is going towards labor.

An economic recovery is not real unless there is widespread
participation in the economy, and the economic benefits accrue to a
broad base of Americans. The current recovery appears to be failing
that test.

Filed under: Data, Economics, Economy, Policy, Recession

House Passes Budget – Adeptly Dodges Responsibility

The House just passed a buget – with more revenue reductions (about $20 billion worth for next year) and cuts to services.
It was a 1-year budget rather than a 10-year – they apparently couldn’t get their act together to pass a real budget with real discipline in the process – (they want to pass a PayGo rule that requires spending increases to be offest, but revenue reductions and new loopholes need not be paid for. It would have made much more sense to just extend the PayGo rules from the 1990’s that helped to generate a surplus.)
It looks like moderate Senators are not biting…
“All we’re called upon to do is not spend our nation into bankruptcy while our soldiers risk their lives. I fondly remember a time when real Republicans stood for fiscal responsibility.” Sen. John McCain (R-AZ)
(Quote from: – AP Washington)

Filed under: Economics

National Income Shares

Recent data show a major shift in the balance between corporate income and labor compensation. As a share of the economy labor compensation has not been this low, and after-tax corporate profits have not been this high in (at least) 25 years.
Source: National Economic Trends (St. Louis Fed)

Filed under: Economy

Greenspan on deficit

Greenspan states the obvious… he’s a long way away from the position that these deficits are “manageable.”

Business > Greenspan Says Soaring Budget Deficits Are Long-Term Threat” href=””>The New York Times > Business > Greenspan Says Soaring Budget Deficits Are Long-Term Threat
America’s soaring federal budget deficits represent a major obstacle to the country’s long-term economic stability, Federal Reserve Chairman Alan Greenspan warned on Thursday.
“Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances,” he said in remarks to a banking conference.
Greenspan noted that the federal deficit, estimated to climb above $500 billion this year, will amount to 4.25 percent of the total economy after being in surplus just a few years ago.
He said one of the biggest concerns was that the deficits now were occurring right before the first wave of baby boomers will begin retiring.
“We have legislated commitments to our senior citizens that, given the inevitable retirement of our huge baby-boom generation, will create significant fiscal challenges in the years ahead,” Greenspan said in his remarks, which were delivered by satellite to the conference in Chicago.
Greenspan cautioned that the country should not be lulled into a false sense of security about the federal deficit just because at the moment interest rates on long-term Treasury securities remain at low levels.

Filed under: Economics