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Politics

The Stubborn Tax Gap

WASHINGTON -- The Internal Revenue Service has just released its latest estimate of the "tax gap" -- the difference between what Americans pay in taxes and what they actually owe. For the years 2008 to 2010 (the IRS's latest data), the annual gap averaged a huge $458 billion. It's surely higher now.

Gulp.

If everyone religiously paid every ...Read more

Britain Flirts with Economic Insanity

WASHINGTON -- Countries usually don't knowingly commit economic suicide, but in Britain millions seem ready to give it a try. On June 23, the United Kingdom will vote to decide whether to quit the European Union, the 28-nation economic bloc with a population of 508 million and a gross domestic product of almost $17 trillion. Let's not be coy: ...Read more

Andrew Jackson's Reckoning

WASHINGTON -- Harriet Tubman is in; President Andrew Jackson is out.

Treasury Secretary Jacob Lew's decision to replace Jackson on the front of the $20 bill with abolitionist and Underground Railroad conductor Tubman has been widely praised. It honors women's role in American history and, indirectly, disparages slave-owner Jackson, who moves to...Read more

What's the Real Gender Pay Gap?

WASHINGTON -- The gender pay gap is back in the news -- and may become a major issue in the presidential campaign. It seems an open-and-shut case of job discrimination. Women earn only 79 percent of men's average hourly earnings. Who could favor that? Actually, the comparison is bogus. A more accurate ratio, after adjusting for differences in ...Read more

A Competition Deficit?

WASHINGTON -- The Obama administration has a new economic worry: competition or, allegedly, the lack of it. America's businesses, the indictment goes, merge too often, innovate too little and bilk consumers too much. The open question is whether this argument is shrewd politics, shrewd economics -- or both.

No doubt, the politics are enticing. ...Read more

Why Tax Reform is Doomed

WASHINGTON -- Almost everyone agrees that America's income tax is too complex. Considering this, you might expect that simplifying the income tax would be a slam dunk. Sure enough, the various presidential candidates have proposed sweeping overhauls. But any agreement is mostly rhetorical. The odds that the next president -- whoever it be -- ...Read more

The Least Ugly Economy

WASHINGTON -- Among the world's major economies, America's is "the least ugly," as Adam Posen, head of the Peterson Institute for International Economics, puts it. So it is. The American economy is plodding along at about a 2 percent annual growth rate, which is much slower than most past periods, but compared with most other economies, looks ...Read more

Brazil's Nightmare

WASHINGTON -- Woe is Brazil. As the summer Olympics approach in August, Latin America's largest country -- with a population of 206 million and an economy that is 40 percent of the region's total -- is caught in a harsh slump and faces a political crisis that could result in its president being impeached. How did this happen? What does it mean? ...Read more

Solving the Productivity Mystery

WASHINGTON -- A paradox of our time concerns productivity. We are awash in transformative technologies -- smartphones, tablets, big data -- and yet the growth in labor productivity, which should benefit from all the technology, is dismal. This matters. Productivity is economic lingo for efficiency, and it's the wellspring of higher living ...Read more

We're Not a Poor Country, Donald

WASHINGTON -- We are a very wealthy society, and we shouldn't forget it. Donald Trump apparently has -- along with many other people. Visiting recently with The Washington Post editorial board, here's how Trump explained his suggestion that the United States limit its overseas military commitments, including support for NATO, founded in 1949:

"...Read more

The Biggest Cyber Heist Ever?

WASHINGTON -- It's a big story that has stayed beneath the radar of most American media. Somehow, cyber criminals stole $81 million from Bangladesh's central bank (its Federal Reserve). The theft surely qualifies as one of the biggest cyber heists ever. It's also a reminder that the world's financial systems remain vulnerable to cyberattacks ...Read more

Trade Myths and Realities

WASHINGTON -- In this bitter campaign, one area of agreement unites the major candidates: trade. Bernie Sanders brags that he's opposed all recent trade agreements; Hillary Clinton now rejects the Trans-Pacific Partnership (TPP), President Obama's signature trade success that she once supported; and Donald Trump blames incompetent U.S. trade ...Read more

Good News for Discouraged Workers

WASHINGTON -- Surprise: America's discouraged workers are finding jobs -- or so it seems. Unanticipated by many economists, this is good news for the country (and, assuming it continues, probably for Democrats this fall).

Ever since the Great Recession, economists have worried that the severity and length of the slump would forever consign many...Read more

Soaking the Rich: A Primer

WASHINGTON -- There's no subtlety about Democrats' tax plans. Between Hillary Clinton and Bernie Sanders, details differ, but the central themes are identical: Soak the rich. To hear Democrats tell it, the country's main budget problem is that the rich don't pay their "fair share." If they did, the fiscal outlook would brighten. We can now test ...Read more

Where's The $3 Trillion?

WASHINGTON -- Is the American economy stronger than we think? Perhaps. A persisting puzzle about its recent performance is the stark contrast between growth of jobs (which has been unexpectedly robust) and the growth of the economy's output (which has been unexpectedly weak). How could a struggling economy produce so many jobs? The puzzle would...Read more

Up With Political "Bosses"!

WASHINGTON -- What we are seeing in the continuing march of Donald Trump toward the Republican presidential nomination is the power and significance of political entrepreneurship. If you want to become president (or senator or House member), you don't need the permission of either party. You just announce, comply with the legal requirements for ...Read more

The Way We Were (in 1915!)

WASHINGTON -- By 1915, the United States was the world's richest nation -- and yet, most Americans were dirt poor by today's standards. Adjusted for inflation, men's average wages were about a third of what full-time workers now earn. The average work week in manufacturing hovered around 50 hours, and many employees worked a half day on Saturday...Read more

A New Theory of Inequality

WASHINGTON -- Thumbing through the annual report of the White House's Council of Economic Advisers (CEA) is always an education. This year's 430-page edition is no exception. Crammed with tables and charts, it brims with useful facts and insights.

--On page 62, we learn that the growth of state and local government spending on services (schools...Read more

Hooked on Cheap Money

WASHINGTON -- Say it ain't so, Doug.

From 2009 to early 2015, Douglas Elmendorf was the widely respected director of the Congressional Budget Office, where he repeatedly warned lawmakers that chronic deficits are unsustainable, pose long-term dangers -- and that shrinking them sooner rather than later would make the task easier.

Now, economist...Read more

The Aging Business Cycle

WASHINGTON -- At her most recent press conference in December, Federal Reserve Board Chair Janet Yellen had this (abbreviated) exchange with ABC News reporter Rebecca Jarvis.

Jarvis: Historically, most economic expansions fade after this long. How confident are you that our economy won't slip back into recession in the near term?

Yellen: .....Read more

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