In the State of the Union, President Obama proclaimed the good economic news. He declared 2014 a “breakthrough year for America,” noting “our economy is growing and creating jobs at the fastest pace since 1999.” He also made the case for “middle-class economics,” promising a budget that would focus on “lowering the taxes of working families … Continue reading The Breakthrough Year?
Last week we received the “good news” about the economy. Unsurprisingly, I was a bit skeptical (here). While jobs are being created—321,000 in November alone—long-term unemployment and workplace participation rates remain abysmal. For those who would like to celebrate the recovery, I recommend Binyamin Appelbaum piece on “The Vanishing Male Worker” (NYT). As Appelbaum notes: … Continue reading The New Normal Can’t Last
The Bureau of Labor Statistics has released its Employment Situation Summary for May and the economy added 217 thousand jobs in May. As the Washington Post reports: The strong report, which was released Friday, marks the fourth consecutive month that the country has added more than 200,000 jobs -- a key benchmark for a healthy … Continue reading The Economy: On the One Hand…
This has been a mixed week for economic news. On the positive front, the Bureau of Labor Statistics announced that the economy added 288,000 jobs, bringing the unemployment rate to 6.3 percent, the lowest since 2008 (see New York Times coverage here). While this would appear to provide evidence that things are, in fact, improving, … Continue reading The Economy: Good News, Bad News?
I always find polls to be interesting. In my mind, one of the more fascinating things is when there is a large disjunction between individuals’ assessment of X (e.g., the environment, crime, education, the economy) as they experience it and their assessment of X as the nation experiences it. I often attribute the differences to … Continue reading Rhetoric and Public Opinion on the Economy
It appears that President Obama’s address on inequality was the beginning of a larger move to the left and an embrace of economic populism. As Edward-Issac Dovere (Politico) explains: [Obama is] connecting to progressive populism with an aggressive, spending-oriented, activist government approach to the economy personified by Elizabeth Warren and Bill de Blasio. Obama’s already … Continue reading Left Turn (Reducing Inequality, continued)
Last week, President Obama gave a speech on economic mobility and argued that addressing economic inequality was “the defining challenge of our time.” He stated: But we know that people’s frustrations run deeper than these most recent political battles. Their frustration is rooted in their own daily battles -- to make ends meet, to pay … Continue reading Reducing Inequality: America’s Number One Priority?
Ah, yes, a bit of nostalgia from the "summer of recovery": the Car Allowance Rebate System (CARS), also known as Cash for Clunkers. It seemed quite promising to many in the halcyon days of 2009. Citizens could trade in their old gas guzzlers (which were subsequently destroyed) for a rebate that could be applied to … Continue reading Bootleggers, Baptists and Cash for Clunkers
Here are quarterly data on "usual weekly earnings" in current dollars from the Bureau of Labor Statistics. The first graph shows the first (lowest) decile of wage earners. The second shows the ninth (why not the tenth? BLS does not make that an option). These data should be relevant to the debate over whether most … Continue reading Nominal Wage Growth Over Time
President Obama visited Phoenix yesterday to give a speech on homeownership. The promotion of homeownership has been on the agendas of the past several presidents (e.g., George W. Bush and the “ownership society) and much of President Obama’s speech could have been written by HUD secretaries Jack Kemp or Henry Cisneros. While there is little … Continue reading Obama and Homeownership
Tuesday, President Obama proposed a “grand bargain” as part of his jobs tour (a tour that marks the third anniversary of Vice President Biden’s “Recovery Summer” tour). The grand bargain is relatively simple: corporate tax cuts (to 28 percent), including a one-time lower tax on profits earned overseas that would arguably entice firms to repatriate … Continue reading A Grand Bargain?
Seems like Washington is trying to return to the “ownership society.” As Zachary Goldfarb reports in the Washington Post: The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could … Continue reading File this under “Lessons Not Learned.”
For some time, J. Bradford DeLong has been referring to the current economic episode as the “Lesser Depression.” He has now dropped the “Lesser.” His evidence from the bond market is worth reviewing (in particular, the yield on 30-year Treasuries). His conclusion: we may be looking at “a slack and depressed economy, if not for … Continue reading The “Lesser” Depression or a Return to Growth?
A new Washington Post-ABC poll focuses on voter perceptions of whether Obama or Romney would do more to improve the economy (poll results here, discussion here). When asked “Who would do more to advance the economic interests of middle-class Americans,” Obama wins over Romney, 50% to 44%. When asked who would do more to advance … Continue reading Public Opinion and the Economy: What are the Lessons?
The last week has brought a fair amount of attention to the Obama campaign attacks on Romney and Bain Capital, most of which might have been lifted straight out of the “vulture capital” meme started by the Rick Perry campaign. It all started with Corey Booker’s rejection of the Obama strategy on Meet the Press … Continue reading Private Equity, the Government, and Jobs
The unemployment rate fell again, hitting a three-year low of 8.1 percent. But, as the New York Times explains: The unemployment rate ticked down to 8.1 percent in April, from 8.2 percent, but that was not because more unemployed workers found jobs; it was because workers dropped out of the labor force. The share of … Continue reading The Long Hard Slog to Full Employment
Robert Wenzel gave an address to the New York Fed earlier this week. It is worth reading in its entirety (here). You can read some positive reviews by Vox Day (Vox Populi) and Tyler Durden (Zero Hedge, see some of the comments). On economic methodology: I hold the view developed by such great economic thinkers … Continue reading On the Federal Reserve and Things Austrian
Sheila Bair, former FDIC chair, has made the following proposal (WaPo), in part, to illustrate the absurdity of what we view as sound economic policy. The set up: Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a … Continue reading Finally, A Proven Plan for Economic Recovery
As the economy slowly claws its way out of the financial crisis and the deepest and most prolonged recession since the Great Depression, it is good to know that some of the lending practices that contributed to the collapse are once again being deployed. As Jessica Silver-Greenberg and Tara Siegel explain in today’s NYT: as financial … Continue reading As a Dog Returns to its Vomit…
Great news on unemployment, as the rate falls to 8.3 percent (Bureau of Labor Statistics report here). All the normal disclaimers apply, of course (e.g., thing are not quite as rosy when you include those who have fallen out of the labor force in the past few years). But nonetheless, this is good news for … Continue reading Unemployment
David Brooks has an interesting piece in today’s NYT (I must admit, he has written more than a few fine columns this year). He notes that the Obama administration assumed office drawing on parallels to the Great Depression and FDR. It has since abandoned this historical analog and turned, instead, to the Progressive Era. The … Continue reading Brooks: Why the Progressive Era Offers Few Historical Parallels
The House seems ready to vote down the Senate bill extending the payroll tax cut for two months while requiring the President to decide on the Keystone XL oil pipeline within 60 days (see coverage here and here). The bill—apparently negotiated with the Speaker’s blessings—seemed to be a strategic coup. Passed (89-10) by a bipartisan … Continue reading Extending the Payroll Tax Cut
Edward Luce, FT, provides an interesting argument on the many ways in which the current economic challenges in the US are going to be difficult (if not impossible) to solve. He illustrates his argument with some rather painful statistics in “Can America regain most dynamic labor market mantle?” The unemployment rate would be 11 percent … Continue reading The Economy: Unchartered Territory?
The nation added 120,000 jobs in November, driving the unemployment rate to 8.6 percent, the lowest since March 2009. This might seem to suggest that we have turned a corner. Except, as reported in the NYT: The rate fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the … Continue reading When Good News is Bad News
Events in Europe should give us pause, as Eric Dash and Nelson D. Schwartz note in “Crisis in Europe Tightens Credit Across Globe.” (NYT) Europe’s worsening sovereign debt crisis has spread beyond its banks and the spillover now threatens businesses on the Continent and around the world. From global airlines and shipping giants to small manufacturers, … Continue reading The Difficult Path to Recovery
Phil Izzo had a rather dispiriting piece in yesterday’s WSJ. It reports the results of the WSJ survey of 50 economists. The key passage: Americans' incomes have dropped since 2000 and they aren't expected to make up the lost ground before 2021, according to economists in the latest Wall Street Journal forecasting survey. From 2000 … Continue reading 2000-2021: A Lost Generation?
Former Speaker (and aspiring economist) Nancy Pelosi is speaking about unemployment again as she works to drum up support for the American Jobs Act. When heralding the success of the $862 billion American Recovery and Reinvestment Act, she noted: Well, let me just say that as a matter of fact that the Recovery Act saved … Continue reading Nancy Pelosi, Counterfactual Economist
The new CNN/USA Today poll on the economy offers few surprises. 90 percent of those polled characterize the economy as poor (40 percent somewhat poor + 50 percent very poor). This is the worst outcome since December of 2008 when 93 percent characterized the economy as poor. The majority (52 percent) blame Bush and the … Continue reading The Economy: No Surprise and…a Surprise
There have been quite a few interesting pieces on Solyndra in the past few days (see here, here, here, here and here for some good examples of recent coverage). As most of you know, Solyndra was one of the beneficiaries of the administration’s efforts to engage in a green industrial policy, receiving a loan guarantee of … Continue reading Green Industrial Policy Fiasco
This weekend, economist Robert Barro had an interesting piece in the NYT entitled “How to Really Save the Economy.” Although there is nothing particularly new for those who have followed Barro over the years, it is worth a quick read. Drawing on Keynes, Barro calls for a mix of policies that would create the conditions … Continue reading Barro on the Economy
I want to piggy-back here on Mark's great post on urban planning and the poor. I've been playing around with some state-level data on local land-use regulations and cost of living. The last decade in the U.S. has been one of very slow productivity growth. As a result, fast-growing states tend to be those with … Continue reading Land-Use Regulation and Growth
The web is a buzz with Paul Krugman’s supposed comments regarding yesterday’s earthquake: "People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage." Given the comment a just over a week ago regarding the economic benefits … Continue reading In Praise of Earthquakes
Last Friday, I had a post on the “Cost of Government Day.” According to a piece by Grover Norquist and Patrick Gleason, “the Cost of Government Day arrived Aug. 12 — meaning that the average American toiled 224 days to foot the bill for this year’s total cost of government.” One reader (Greg) questioned the … Continue reading Jobs and the Cost of Regulation
As efforts continue to frame the debates over recovery, Paul Krugman discussed the merits of World War II and the potential benefits of an alien invasion on Fareed Zakaria’s GPS this past Sunday (video clip here). Michael Pento (HuffPo) provides a useful critique. Money quote: "the Keynesian economist's favorite pastime is seeing people waste their lives … Continue reading Keynes and the Twilight Zone
The President is on the tail end of his Midwestern bus tour, which was designed to focus on the issue of jobs. While there is no shortage of presidential remarks (punctuated by the obligatory hand shakes, autographs, and baby kissing), the lack of substance exhibited by the President is frustrating the NYT (see today’s lead editorial): … Continue reading A Jobs Plan (details to be announced)
This is a comment that I have heard a few times in the past few weeks regarding the issue of austerity. The Tea Party forced the GOP to embrace austerity, and we know that when FDR mistakenly listened to Treasury Secretary Morgenthau in 1937 and cut back on expenditures, the economy entered a rapid decline. … Continue reading “That Really Worked in 1937”
Now that the debt problem has been solved deferred, the attention of Washington turns to jobs (one of the issues that was seemingly unaddressed during the Summer of Recovery, 2010). Just ask the President: Obama offered little praise for the $2.1 trillion deficit package during a press conference at the Rose Garden, instead vowing to fight for “new jobs, … Continue reading Jobs, Jobs, Jobs