Category Archives: Economy

Trump Is (Sort Of) Right About Yellen

Posted on by

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

Posted on by

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

Posted on by

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

Posted on by

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?

Posted on by

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.

Posted on by

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

Posted on by

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

Posted on by

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?

Posted on by

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

Posted on by

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 →