WASHINGTON -- To understand the economy, you've got to resort to psychology. Throughout the recovery, forecasters -- including those at the Federal Reserve and the International Monetary Fund -- have repeatedly overestimated the economy's strength. They've predicted faster economic growth than has occurred.
The main reason for the errors, I ...Read more
WASHINGTON -- It was exactly 50 years ago this week that President Lyndon Johnson flew to Independence, Missouri and, with former President Harry Truman at his side, signed into law the legislation creating Medicare and Medicaid. It was a seminal moment in American political history.
For three decades, liberals and conservatives had warred over...Read more
WASHINGTON -- Hillary Clinton has just given us an object lesson -- presumably unintended -- demonstrating why our tax system is such a complex mess. The main reason is this: Politicians of both parties cannot resist the temptation to use the tax code to promote the latest political fad or to please favored constituencies. As a result, tax ...Read more
WASHINGTON -- We're told that Puerto Rico is our Greece, and sometimes it seems so. The U.S. territory (its residents have been American citizens since 1917) has a heap of economic problems. Gov. Alejandro Garcia Padilla recently told The New York Times that its $72 billion debt is "not payable." To buttress the point, he commissioned a study of...Read more
WASHINGTON -- What's surprising about the disappointing slowdown in productivity is that, by all outward signs, it ought to be booming. Productivity is economic jargon for efficiency, and robust productivity growth is the engine of higher living standards. We routinely associate faster productivity with major technology advances (the steam ...Read more
WASHINGTON -- China's spectacular stock crash poses three questions. First, what caused it? Next, will it harm the "real" economy of spending and hiring, inside China and beyond? And, finally, how will it affect China's Communist Party and its economic strategy?
If you haven't paid attention, here are some basics about the crash. The Shanghai ...Read more
WASHINGTON -- Suddenly Greece is about a lot more than Greece.
The lopsided Greek vote -- 61 percent to 39 percent -- to reject the last rescue package from the country's creditors has cast their impasse into a high-stakes drama over the future of Europe. Greece itself is teetering on the edge of economic collapse. Its banks are virtually ...Read more
WASHINGTON -- We have the Greeks to thank for an elementary tutorial in what ails the world economy. Greece's central problem is that it has too much debt and too little economic growth (none actually) to service the debt. The country is caught in an economic cul de sac. It can't seem to generate growth without spending more or taxing less, ...Read more
Rory: King of PetlaJennifer Zartman
Rory Anderson, an epic-nerd on an ordinary science field trip, is pulled through a portal into Zed, a place outside of time. His perception of reality shifts, and the King of the Fountain of Life commissions him as an ambassador to Petla, a place in another galaxy. He arrives wearing the ...
WASHINGTON -- A central economic question of our time is whether the policies undertaken to recover from the last financial crisis are laying the groundwork for the next. We now have two reports from reputable groups suggesting just that.
The first comes from the Bank for International Settlements (BIS), which was created in 1930 to handle ...Read more
WASHINGTON -- A recent Congressional Budget Office report -- "The 2015 Long-Term Budget Outlook" -- reminds us that the federal government is slowly becoming an agency for taking care of the elderly. Almost everything else is being crowded out. We ignored that during the Obama presidency, and now it seems that the fledgling presidential campaign...Read more
"Prosperity can't be just for CEOs and hedge fund managers."
WASHINGTON -- It seems inevitable that the unfolding presidential campaign will also become a referendum on American capitalism and, in turn, that capitalism will be defined in part by lofty executive pay. This makes CEOs among capitalism's worst advocates. ...Read more
WASHINGTON -- The recent meeting of OPEC provides an opportunity to understand the mysteries of the global oil market. As expected, OPEC decided not to cut its oil production. Barring unanticipated developments, prices will drop, says oil analyst Larry Goldstein. Potential oil supply, including drawdowns from bloated inventories, exceeds demand....Read more
WASHINGTON -- The latest hacking of U.S. government data files, capturing personal information on about 4 million past and present government workers, has predictably stirred outrage. The allegation that the hacking came from China (no published evidence either confirms or refutes this widespread belief) has compounded the anger. We are incensed...Read more
WASHINGTON -- Among the economic and social trends worth worrying about is the fate of the NEETs. Never heard of the NEETs? I hadn't either. It's one of those clumsy terms concocted by government bureaucrats and social scientists to designate a group, social condition or political problem -- and then to make it obscure by wrapping it in jargon. ...Read more
WASHINGTON -- Was the Federal Reserve's massive bond-buying program an engine of economic inequality? It's easy to think so. The Fed bought more than $3 trillion of U.S. Treasury securities and mortgage bonds to prop up financial markets. The idea was that investors who sold to the Fed would reinvest their cash, raising stock and bond prices. ...Read more
WASHINGTON -- The American economy continues to stumble. It's creating jobs at a goodly clip, but other aspects of growth are less impressive. Business investment has been lackluster. The housing recovery is improving but remains short of where many economists thought it would be. Consumer spending, representing slightly more than two-thirds of ...Read more
WASHINGTON -- The minimum wage -- long relegated to the sidelines in the war against poverty and inequality -- is back in the game. Los Angeles has just decreed that by 2020 the city's minimum should rise in steps to $15 an hour, a 67 percent increase over California's minimum of $9. Previously, San Francisco and Seattle had approved $15. ...Read more
WASHINGTON -- It's time to worry about China.
On any list of calamities threatening the world economy, a China crash ranks at or near the top. Just what would constitute a "crash" is murky. Already, China's sizzling rate of economic growth has declined from 10 percent annually -- the average from the late 1970s until 2011 -- to 7 percent, which...Read more
WASHINGTON -- Guess what? This isn't a low-wage job recovery. Listen to the media, and you might think that the only kind of jobs being created are in fast-food restaurants and retail chains. It turns out that this is wildly misleading and that the economy's employment profile -- the split between high- and low-paying jobs -- hasn't changed much...Read more
WASHINGTON -- This is no time to get all worked up over China's currency manipulation. To use it as an excuse to resist the Obama administration's pro-trade posture is perverse. This opposition weakens America's competitive position. All of Asia -- the fastest growing part of the world economy -- is watching the debate over the Trans-Pacific ...Read more