Economy

Maryland cuts state spending by nearly half a billion, but it’s not enough

Featured image Today’s jobs report was good and the Congressional Budget Office (CBO) is predicting a V-shaped recovery, with GDP growth topping 12 percent for rest of 2020. However, the economic outlook for the coming years is less than rosy. In January, the CBO predicted that unemployment would average 4.2 percent for the decade. Now it predicts that the average will be 6.1 percent. It also predicts that GDP will be lower »

Jobs Surge In June

Featured image The June jobs report is out, and it is great: The job gains in May were also revised upward, from 2.5 million to 2.7 million. In short, the economy is roaring back. I assume this accounts for the Democrats’ desperate attempts to re-impose shutdowns. They need to keep the economy in a depressed state until November. One sector has not seen job growth over the last two months: As the »

How to Recover From the Shutdowns

Featured image The shutdowns that almost every governor imposed in response to the COVID-19 epidemic devastated the nation’s economy, unemploying tens of millions and bringing many industries to a standstill. With the country now gradually beginning to re-open, the financial markets appear to be anticipating a rapid return to prosperity. But that will depend, in considerable part, on the wisdom of policies that are adopted at both the federal and state levels. »

How Can We Recover From the Shutdowns?

Featured image The shutdowns that almost every governor imposed in response to the COVID-19 epidemic devastated the nation’s economy, unemploying tens of millions and bringing many industries to a near halt. With the country now gradually beginning to re-open, the financial markets appear to be anticipating a rapid return to prosperity. But that will depend, in considerable part, on the wisdom of policies that are adopted at both the federal and state »

Blockbuster Jobs Report

Featured image The May jobs report came out today, and it shocked everyone. It shows nonfarm payrolls up by 2.5 million, and unemployment dropping to 13.3%. This compares with private forecasts, where the median prediction was 7.5 million jobs lost in May and an unemployment rate of 19.2 percent. The numbers may be a little wacky; some economists think the BLS’s methodology can’t quite cope with today’s unusual circumstances. But that is »

No news is better than fake news

Featured image The Washington Post complains that the Trump administration has decided not to release updated economic projections this summer. The administration says it won’t release projections because of the “unprecedented state of play in the economy at the moment.” In other words, although the economy clearly will be in bad shape for a while, and everyone knows it, no one has a clear idea of what the numbers will look like. »

Good News for Trump from … Team Obama?

Featured image There are quite a few raised eyebrows about today’s story in Politico with the headline “The General Election Scenario That Democrats Are Dreading.” The story is built around the economic forecast of the former chief economist for President Obama, Jason Furman, who is now a professor at Harvard. I sat next to Furman once at one of those big deal luncheons in Washington DC back when Furman was in the »

The deadly health impacts of prolonged lockdowns

Featured image Since the early days of the pandemic, we have noted that an economy seriously damaged by prolonged lockdowns would be very bad for public health. In our first Power Line VIP program following the lockdowns, Steve pointed to robust research regarding the adverse health effects of major economic downturns. Since then, many others have made the same point. Even some liberals seem finally to be recognizing this reality. Writing in »

Unintended Consequences Show Up Again

Featured image The Wall Street Journal has a long feature today (“The Day the Coronavirus Nearly Broke the Financial Markets“) about the breakdown and near collapse of the credit markets on March 16. As the story’s short nut graf puts it, “March 16 was the day a microscopic virus brought the financial system to the brink. Few realized how close it came to going over the edge entirely.” It makes for great reading, »

Will Republicans “lose it all” in November ?

Featured image E.J. Dionne thinks they very well might, and for once I agree with him. So, apparently, do some Republican Senators. (I hope I’m wrong. If I am, it won’t be the first time I have underestimated President Trump and the American public.) Let’s start with the presidential race. Come November, the U.S. will likely be in a depression. Deaths from the coronavirus in the U.S. might well be in the »

Oil, Toil, and Trouble

Featured image The lockdown, now entering its third month, is starting to do permanent damage to the economy which may take years to overcome. The Wall Street Journal reports this morning about a growing number of manufacturing plants, many of them in the industrial midwest, that have decided to close for good. And there is growing doubt that we’ll have a “v-shaped” recovery even if we reopen the economy soon. One of »

The Great Reset (1)

Featured image My county out here in Krazifornia ostentatiously banned single-use plastic bags back in 2012, to “save the planet” naturally. So I whooped a whoop of joy through my mask when the local grocery store bagged my haul in plastic bags over the weekend. My guess is plastic bags will be back for good. The aftermath of the virus crisis is going to change a lot of things—a process I’m calling »

Italy to begin reopening. What are the numbers behind that decision?

Featured image Readers probably recall that Italy was the first country to impose a nationwide lockdown in response to the Wuhan coronavirus. It did so on March 9. Now, finally, Italy is set gradually to reopen its economy. The Wall Street Journal reports that the Italian government has “announced a timetable for reopening its economy and daily life beginning on May 4.” ABC News says that reopening has already commenced on a »

Why Is Housing So Expensive?

Featured image Affordable housing is a current mantra of the Left. Housing is too expensive, liberals tell us, so we need more and more subsidies. Never mind that, far from addressing the underlying causes of high prices, subsidies generally make the thing subsidized more expensive. The Twin Cities present an interesting case, because housing here is more costly than anywhere else in the Midwest or most other regions of the country. Why »

“What Happens If We Break the Pencil?”

Featured image The most significant news of the day may well be the warning from Tyson Foods, made in a full-page ad in the New York Times and several other newspapers, that the food supply chain is breaking down, and could lead to food shortages in the U.S. in another few weeks. Meat packing plants, where workers are in close quarters in which contagious disease is easily spread, and which has led to »

A Master Class On the Perils of Regulation

Featured image Economic regulation is always presented as serving the public good, but often it is merely rent-seeking by powerful interests. Even when well-intentioned, it more often than not has negative unintended consequences. Tomorrow at noon Central, Martha Njolomole, an Economist at Center of the American Experiment, will present the fourth in the Center’s Master Class in Public Policy series, on the perils of regulation. At 23, Martha is the Center’s newest »

Waiting for good dough

Featured image In yesterday’s Best of the Web column — “Waiting for Good Dough” — James Freeman quoted from Elliott Management’s most recent newsletter to investors. Elliott Management is the hedge fund run by Paul Singer. Freeman obtained a copy of Singer’s otherwise private newsletter. He quotes Singer on the epic bouts of debt financing and modern money manufacture undertaken by the federal government over the past 10 years. This is Singer »