WASHINGTON -- Just for the record, we ought to note that trustees for Social Security and Medicare recently released their annual reports. The two programs alone constituted 45 percent of the non-interest federal budget in 2018, a share that the trustees say is being driven up by the continuing retirement of baby boomers and the high cost of ...Read more
WASHINGTON -- It's unclear whether one or both, or neither, of President Trump's selections for the Federal Reserve Board -- Stephen Moore and Herman Cain -- will win Senate confirmation. What is clear is that this is a teachable moment concerning the Fed's vaunted "independence."
If you think it means that the Fed can do whatever it wants and ...Read more
To: David Brooks
Columnist, The New York Times
We have met a few times over the years while covering the same events. I'm a big fan. You write beautifully and, more often than not, have insights about our politics, lifestyles and beliefs that others have missed. But as time passes, you have grown increasingly somber about our ...Read more
WASHINGTON -- It is astonishing that, even though the global financial crisis occurred a decade ago, we do not yet have a clear and convincing explanation of its basic cause. To be sure, theories abound. Liberals blame Wall Street greed and lax government oversight. The conservatives' villain is the government's aggressive promotion of ...Read more
WASHINGTON -- The Phillips Curve is dead; long live the Phillips Curve.
One of today's economic mysteries is: Why is inflation so low? The unemployment rate is a puny 3.8%. The recovery from the 2007-09 Great Recession is nearly a decade old, just when tight labor markets and strong demand usually push up wages and prices. Yet inflation (...Read more
WASHINGTON -- You can count on one familiar refrain in the 2020 presidential campaign: Fix the schools. Faith in education is one of the nation's bedrock values. Better schools would (we think) narrow economic inequalities and help people reach their personal potential. Promises to revitalize schools are inevitable.
There's a magical quality to...Read more
WASHINGTON -- If you think you understand what's going on with the global economy, you're probably not paying attention.
On the one hand, the stock market is powering ahead. Since its recent low on Dec. 24, it was up 22.4 percent, according to the Wilshire 5000 total market index, which measures the value of all publicly traded U.S. stocks. ...Read more
WASHINGTON -- The real reason that Stephen Moore does not belong on the Federal Reserve Board is not that he is unqualified for the job, though he is. Nor is it that he has been a highly partisan and divisive figure for many years, though he has been. The real reason is that, if he's confirmed by the Senate, Moore could become the Fed chairman -...Read more
WASHINGTON -- There are still some economists who fear another crash. The latest is Eugene Steuerle of the Urban Institute, a liberal think tank in Washington. In a new article, he warns that the economy may be on the edge of a giant "wealth bubble" that will collapse with possibly-dire consequences.
Steuerle is especially worried by parallels ...Read more
WASHINGTON -- We Americans are all socialists now. That's news. Since at least 1906, scholars have contended just the opposite. What happened in 1906 was that Werner Sombart, a now-obscure German sociologist, published a book titled "Why Is There No Socialism in the United States?" Unlike Europe, America was hostile to socialism, Sombart argued....Read more
WASHINGTON -- We all know that "getting into the right college" is as traumatic for parents -- or more so -- as it is for their children. But who thought the admissions craze had become so powerful that it had morphed into outright fraud and corruption? Not me.
The recent allegations are surprising, disgraceful and sometimes amusing. According ...Read more
WASHINGTON -- Those of us who have always thought that Brexit -- Britain's withdrawal from the European Union -- was a bad idea should be feeling self-satisfied and vindicated now. Well, we're not; at least this observer isn't. The reason is obvious. Many of the things that we feared would happen have happened, or might still. Worse, the ...Read more
WASHINGTON -- The good news about President Trump's proposed 2020 budget is that it vividly illustrates the basic causes of large, chronic deficits -- a mismatch between the government's commitments and the taxes needed to pay for them. The bad news is that the budget does virtually nothing to close the gap.
"We must protect future generations ...Read more
WASHINGTON -- If nothing else, the latest U.S. trade deficit -- $621 billion in 2018 for goods and services -- should give President Trump a lesson in the economics of trade. Trump has insisted that a successful policy requires a trade surplus (good) and the absence of a deficit (bad). That's wrong, as many economists have argued. The economists...Read more
WASHINGTON -- The latest pitched battle between Corporate America and its critics involves stock buybacks: Large companies' purchases of their own shares on the stock market. The aim is to raise share prices and satisfy investors. But the practice has triggered outrage from critics, who argue that the buybacks discourage productive investment, ...Read more
WASHINGTON -- Writing in The Wall Street Journal, Princeton economist Alan Blinder calls it "The Obama-Trump Economic Boom." This may be the best bad label for what may soon become the longest economic expansion in American history. Anyone who regularly reads this column knows that I am a great skeptic in assigning credit for good economic times...Read more
WASHINGTON -- They promised complexity, confusion and uncertainty -- and, by golly, they delivered. What we're talking about is Brexit; that's shorthand for Britain's decision to leave the European Union (EU). The deadline is March 29, and as yet, there is no agreement on the new rules that would govern Britain's relations with the EU. All this ...Read more
WASHINGTON -- As Democrats swing left, it becomes increasingly difficult to imagine what their triumph in the next election would mean for America. The presidential candidates endorse a variety of far-reaching proposals that, if adopted, would represent the largest expansion of government since Lyndon Johnson's Great Society. The added spending,...Read more
WASHINGTON -- The "Dreamers" lost again.
As you will recall, the Dreamers are illegal immigrants who were brought to the United States as young children. Most have grown up as Americans; sending them back to a country where they barely lived seems a particularly heartless punishment -- and self-defeating for the United States if they're ...Read more
WASHINGTON -- I am rereading "The Affluent Society" with pleasure and profit.
Written by Harvard economist John Kenneth Galbraith and published in 1958, "The Affluent Society" survives as one of the most influential books of the last half of the 20th century. Galbraith foretold that private prosperity would lead to a larger public sector. But ...Read more