Trump Is (Sort Of) Right About Yellen

Donald Trump this week said that Federal Reserve Board Chairman Janet Yellen won't raise rates because President Obama told her not to. Why he's (sort of) right. [Credit: CNBC]

Donald Trump this week said that Federal Reserve Board Chairman Janet Yellen won’t raise rates because President Obama told her not to. Why he’s (sort of) right. [Credit: CNBC]

The media just can’t keep up with The Donald.

Corporate news-gathering outlets do their best to repeat and amplify his every offbeat utterance.  His accusation that Marco Rubio is a “disaster with his credit cards” has rippled through the press and forced Rubio to respond.  Ditto for Trump’s mockery of Jeb’s energy, Carson’s religion, Carly’s face, Kasich’s poll numbers, Hillary’s marital relations  (“If Hillary Clinton can’t satisfy her husband what makes her think she can satisfy America?”), Bernie’s mental health and the menstrual cycles of debate moderators.

But as they were buzzing about his scheduled appearance on Saturday Night Live, the media largely overlooked what was perhaps Trump’s most heretical accusation of all. Continue reading

On Wind And Eagles

Citing potential damage to protected species, a federal judge recently put a crimp in the Administration's forced march toward wind energy. [Credit: Daily Mail]

Citing potential damage to protected species, a federal judge recently put a crimp in the Administration’s forced march toward wind energy. [Credit: Daily Mail]

Two strains of environmentalism collided in a federal courtroom this month, pitting protectors of bald and golden eagles against advocates of the Obama Administration’s forced march toward wind power.

The eagles won.

Continue reading

If Obama Were President

The mammone -- a jobless man in his 20s, 30s or 40s who lives with mamma -- is an Italian tradition. But under President Obama, labor force participation rates of young men have plunged to Italian levels. [Credit: studenti.it]

The mammone — a jobless man in his 20s, 30s or 40s who lives with mamma — is an Italian tradition. Under President Obama, labor force participation rates of young American men have plunged to Italian levels. [Credit: studenti.it]

In Italy, they call him a mammone: an unemployed man in his 20s, 30s or 40s who still lives with mamma.

The prevalence of the mammone has long been thought to be a predominantly Italian phenomenon, with deep cultural roots.  It has grown more pronounced with the country’s recent economic distress.  Since 2008, a growing percentage of Italian men aged 25-54 have abandoned the labor force, no longer bothering even to look for work.

Italy’s workforce participation rate among men of prime working age is by far Europe’s lowest.  But it is not the lowest in the developed world.  Italy now shares that dubious distinction with the U.S.

That wouldn’t happen if Obama were President. Continue reading

How Cutting Jobless Benefits Cut Joblessness

During his December 2013 Hawaiian vacation, President Obama phoned lawmakers, asking them to extend unemployment benefits.  They did not.    Which is a good thing, according to a new study published by NBER. [Credit: Fox News]

During his December 2013 Hawaiian vacation, President Obama phoned lawmakers, asking them to extend unemployment benefits. They did not. Which is a good thing, according to a new study published by NBER. [Credit: Fox News]

A little more than a year ago, the President was distressed.  It was a few days after Christmas 2013, and extended unemployment benefits for 1.3 million people were about to expire.  In a typically perfunctory lobbying effort, he called two Senators to urge them to move a bill to preserve the benefits.

To recover from his exertions, he and his family then “ventured to the white-sand beach at Bellows Air Force Station, which is on the windward side of the island of Oahu and features turquoise water and a stunning view of the Mokulua Islands,” the Washington Post reported.

That tranquil scene augured the best year for U.S. employment growth since 1999.   According to the Labor Department, the economy added more than 3.1 million jobs in 2014.  The topline unemployment rate was 5.6% in December, down from 6.7% the prior December and the lowest rate since June 2008.

And here is the surprising major reason for the resurgence in employment: Congress spurned the President’s entreaties and let extended unemployment benefits expire. Continue reading

Can Greece Slip The Austerity Trap?

Greek Prime Minister paid tribute to Greek patriots executed by Nazis during WWII. His message to the Germans was clear: we bailed you out, now it's our turn. [Credit: The Guardian]

Greek Prime Minister paid tribute to Greek patriots executed by Nazis during WWII. His message to the Germans was clear: we bailed you out, now it’s our turn. [Credit: The Guardian]

Shortly after his election last Sunday as Greece’s Prime Minister, Alexis Tsipras chose not lay a wreath on the Tomb of the Unknown Soldier in Athens’ Syntagma Square.  Instead, he went to a war memorial in the Athens suburb of Kessariani where Nazi soldiers executed hundreds of Greek Resistance fighters during the brutal German occupation.

Tsipras’s message was not lost on Angela Merkel and other European leaders: the world forgave most of Germany’s debt; now it’s Greece’s turn. Continue reading

Good News Coming On The Deficit. Well, Sort Of.

Syriza party leader Alexis  Tsipras hopes to prevail in today's Greek elections, which could mark a turning point in his nation's struggle against a crushing load of debt. Meanwhile, U.S. government deficits are improving. Sort of.

Syriza party leader Alexis Tsipras hopes to prevail in today’s Greek elections, which could provoke a showdown between European leaders and Greece, which struggles under a crushing load of debt. Meanwhile, U.S. government deficits are improving. Sort of. [Credit: BBC]

On Tuesday morning, the Congressional Budget Office will announce that the federal deficit continued to decline last year.

The announcement will trigger an orgy of self-congratulation in Washington.  The Administration will claim that its policies have been vindicated.  Republicans also will take a bow, touting spending constraints they’ve imposed since winning the House majority.

But you’ll hear nothing from the Washingtonians who most deserve credit for reduced deficits: the Federal Reserve Board of Governors.  By holding interest rates near zero and lending trillions in free money to the Treasury, the Fed has allowed the government to reduce deficits even as it gorged on debt. Continue reading

Debt And The New American Exceptionalism

Federal Reserve Chairman Janet Yellen plans to increase interest rates.  Can government and households survive the shock? [Credit: Huffington Post]

Federal Reserve Chairman Janet Yellen plans to increase interest rates. Can government and households survive the shock? [Credit: Huffington Post]

The American economy is back.  After years of tepid growth and a first quarter contraction, GDP grew by a robust 4.6 percent in the third quarter of last year.  The unemployment rate remained at 5.8 percent in November, and analysts expect the Labor Department to announce tomorrow that the economy added substantially more than 200,000 jobs in December.  Inflation is low, the dollar is strong, oil prices have tumbled, and federal deficits are lower.  Nearly six years after the recession ended, the long-awaited recovery appears at last to have arrived.

That recovery has in part been driven by a force that could be its undoing: debt.  Nearly $46 trillion of it, or more than 2-1/2 times our annual economic output. Continue reading

The Black Year Of Italian Olive Oil

The black year of Italian olive struck those who farm these verdant Umbrian slopes, a metaphor for the challenges facing Italy's variegated traditions.  [Credit: italianfoto.com]

The black year of Italian olive struck those who farm these verdant Umbrian slopes, a metaphor for the challenges facing Italy’s variegated traditions. [Credit: italianfoto.com]

Months before the harvest, Enrico suspected the worst.  His grove of 700 olive trees had been subjected to an unusually cool and wet August, ideal breeding conditions for the Bactrocera oleae, a fly that deposits its eggs beneath the skin of olives.  The late October harvest confirmed his fears: the flies had laid waste to his crop.

Enrico didn’t press any olive oil this season.  He wasn’t alone.  Production in Enrico’s region of Umbria is off 45 percent, slightly worse than the nationwide 35 percent decline. La Repubblica has dubbed 2014 “the black year of Italian olive oil.”  In a country where each inhabitant annually consumes an average of more than 26 pounds of the golden nectar, it is a seismic cultural event, one more reminder of the existential threats confronting Italian traditions. Continue reading

Inequality: Has The Income Gap Narrowed?

Two icons of the Left -- economist Thomas Piketty and Senator Elizabeth Warren (D-MA) -- talking about rising inequality last June.  But by some measures, inequality is shrinking.  [Credit: National Review]

Two icons of the Left — economist Thomas Piketty and Senator Elizabeth Warren (D-MA) — discussing rising inequality during an event last June. But by some measures, inequality is shrinking, not rising. [Credit: National Review]

“The game right now in America is rigged. It is rigged so that those at the top keep doing better and better, and everyone else is under increasing pressure, is under increasing economic strain…And that is the profound danger that we see from great inequality.” Elizabeth Warren (D-MA)

Democrats are still stinging from last month’s epic defeat at the polls.  Some of them attribute that unhappy outcome to ideological temperance.  The party would do better, some argue, if their candidates took a more strident tone, denouncing the rich, preaching that Washington governs in the service of Wall Street, and calling for more aggressive redistribution of income and wealth to dampen rising inequality.

But a new study published in the Southern Economic Journal pulls at a critical thread of that narrative.  It found that, at least according to one measure of income, the gap between rich and poor actually narrowed between 1989 and 2007. Continue reading

When Dead Men Rule

G.K. Chesterton worried that our predecessors would have too little influence on our politics. But Gene Steuerle says that they have too much. [Credit: christiancompletely blog]

G.K. Chesterton worried that our ancestors would have too little influence on our society. But a new book by the Urban Institute’s Gene Steuerle says that they exert too much control over our politics. [Credit: christiancompletely blog]

“Tradition means giving votes to the most obscure of all classes, our ancestors.  It is the democracy of the dead.”G.K. Chesterton

Chesterton fretted that modern democracies might show too little deference to past generations.  But according to the Urban Institute’s Gene Steuerle, the very opposite is true: in American democracy, dead men rule. Continue reading