Economy

Behind the Levitation

Featured image Last week when I commented on the downward revision of the already weak First Quarter GDP numbers, several commenters wrote in to ask: what is keeping the stock market so high?  Great question, with the best answer being ZIRP, the Federal Reserve’s “zero interest rate policy,” now matched by many other central banks (with some actually now employing negative interest rates).  I’ll leave for another time whether the risk of »

Welcome to Japan: More on The Q1 GDP Report

Featured image John and I both took note of the disastrous first quarter GDP report yesterday.  Today it is worth bringing to your attention the observations of economist John Makin of the American Enterprise Institute, who is an unassuming and soft-spoken fellow (we were billeted in the same office suite) who has a very impressive track record of calling the shifts and directions in the economy.  His bottom line: forget about 3 »

The 1st Quarter Decline in GDP: Cold Weather, Or Bad Policy?

Featured image This morning, as Steve noted, the Commerce Department revised its estimate of 1st quarter GDP to show a shocking 2.9% annualized decline. The White House tried to spin the awful numbers, arguing that the drop was largely accounted for by cold weather. (Does this mean that we should look forward to global warming as an economic boon?) But Senator Jeff Sessions got much closer to the heart of the matter »

One Shovel-Ready Job: The Grave of the Dems Senate Majority?

Featured image As we noted here on May 29, the Department of Commerce reported that the nation’s economy contracted at an annual rate of about 1 percent during the first quarter of this year.  This morning the DoC is out with revised numbers, showing the economy shrank much more than previously thought: 2.9 percent.  Last year the White House had predicted 2.6 percent growth for the first quarter.  Oops. The suitably grumpy »

Social Science Abstract of the Week

Featured image Everyone who is awake knows that the labor force participation rate is at a 35-year low, making the real unemployment rate much higher than the “official” number of 6.3 percent reported this morning.  Now see this from Science magazine‘s roundup of notable journal articles this week, posted without comment, as none is necessary: Public health insurance costs jobs? Gilbert Chin What is the relationship between employment rates and access to public health »

The Disaster of Obamanomics, In Two Charts [Updated with more charts from Joe]

Featured image Apologists for the Obama administration sometimes argue that the nation’s declining rate of labor force participation is largely a function of baby boomers retiring from the labor force. Unfortunately, this is not the case. This chart, prepared by the Senate Budget Committee, pretty much says it all. An unprecedented number of men–one in six–between the ages of 25 and 54, what should be their prime earning years, are either unemployed »

The Economy: Don’t Look Now, But . . .

Featured image News has just crossed the wire this morning that the economy contracted at an annual rate of 1 percent during the first quarter of this year.  Many people will probably point to the brutal winter weather as a factor, though the Dept. of Commerce fingers “negative contributions from private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment,” and notes that consumer spending was »

Is Thomas Piketty a Fraud?

Featured image French economist Thomas Piketty is the darling of the international Left. His book, Capital in the Twenty-First Century, argues that in a free economy, wealth is inexorably concentrated in fewer and fewer hands. He credits (!) the two world wars and the Great Depression with temporarily interrupting this process and giving rise to more equality, but now, he says, concentration of wealth has resumed in both Europe and America. Piketty »

Why not the highest?

Featured image Yesterday’s Wall Street Journal (here behind the Journal’s dreaded subscription paywall) and today’s New York Times (here) bring glad tidings from the left’s war on income inequality. The Journal gets right to the nub of the story: ZURICH–On May 18, the Alpine nation will vote on an initiative to introduce a minimum wage of 22 Swiss francs ($25) an hour, a level that would be the highest in the world. »

On the Economy, Let’s Get Back to Basics

Featured image This morning, Federal Reserve Chairman Janet Yellen is testifying before the Senate Budget Committee. The Fed has largely dominated economic policy in recent years, with its program of “quantitative easing” intended to stimulate the economy. It has certainly stimulated the stock market, but the real economy continues to languish. Senator Jeff Sessions delivered remarks this morning as the committee’s ranking Republican; they reflect his usual sound judgment: Like the foundation »

Gary Becker, RIP

Featured image The sad news is out this afternoon of the passing, at age 83, of Gary Becker, the Nobel Prize winner in economics in 1992 and long time fixture at the University of Chicago.  Becker was every bit the equal of Milton Friedman—Milton would have been the first to say so—and like Milton, he had a gentle manner as he walked questioners through even the most controversial of propositions.  Becker should »

The Failure of Obamanomics In Three Charts

Featured image Democrats are spinning April’s relatively good jobs numbers as a victory for the administration. The reality, however, is that the current recovery is the weakest of modern times, as economic growth, after more than five years of Democratic Party policies, stands at near zero. The Senate Budget Committee offers the following three charts, which show how the Obama administration’s government-centric policies stack up against the Reagan administration’s free enterprise approach, »

Deep secrets of the banana

Featured image Rumpole of the Bailey had “She Who Must Be Obeyed” (his wife). Now Dems have the Word Which Must Not Be Spoken. At National Journal Charlie Cooke directs attention to the advice disseminated to Democrats by James Carville et al. in a memo summarizing poll results for Democracy Corps, the survey research and message development arm of the House Democratic leaders. Cooke explains that “[f]or tax reasons, all results have »

Reviving the Misery Index

Featured image Graybeards will remember Jimmy Carter’s embrace of the “Misery Index”—the combination of the inflation rate and the unemployment rate—that Peanut Brain used against Gerald Ford in 1976, but which he then doubled during his forlorn presidency as Ronald Reagan skillfully reminded everyone in 1980.  Well, it’s baaaack. Only this time in a much more refined and useable way, as economist Steve Hanke of Johns Hopkins University explains in a terrific »

Don’t Look Now But . . .

Featured image I follow the stock market fairly closely, always have Barron’s on the top of my weekend reading pile, and, as a conservative, incline toward Benjamin Graham-style value investing.  But I never give stock market advice, even when friends ask.  That’s a good way to risk a friendship if they followed your advice and things went sideways.  If I wanted to “invest other people’s money until there’s nothing left” (as Woody »

How Bad Is the Economy? This Bad

Featured image I have often said that in order to understand how bad our economy truly is, you have to have children at an age where they and their friends are getting out of school and looking for jobs. After five years of ostensible recovery, the job situation is brutal for young people. This was confirmed once again by a study of recent Minnesota graduates that was covered in yesterday’s Minneapolis Star »

The lies of Obamacare — bending the cost curve

Featured image One of the supposed benefits of Obamacare was that, somehow, it would “bend the cost curve” for health care cost — in other words, slow the rate of growth of these costs. Just how providing subsidized health care to millions would accomplish this feat was never clear. But the claim, nonetheless, was part of the sales pitch. The claim has persisted since Obamacare was enacted. Supporters note that lately health »