John B. Judis
Bull in China Shop
December 09, 2009
Financial Times columnist Martin Wolf has a particularly good summary today of the danger that China’s undervalued currency poses to the world economy. As Wolf points out, China’s “real exchange rate is … no higher than in early 1998 and has depreciated by 12 per cent over the past seven months, even though China has the world’s fastest-growing economy and largest current account surplus.” That means, in effect, that China is levelling a large, uniform tariff on imports (whose price is higher than they should be relative to China’s goods) and granting a large subsidy to its own exports. That
What would Ron Bloom Say?
December 07, 2009
My eye was drawn to the provocative headline, “Alcoa head says weak dollar is bad for US industry.” How could that be? Aren’t American manufacturing firms being hurt by an overvalued dollar that increases the price of their goods made here relative, say, to imports from China? That may be true, I learned, but that is not what bothers Klaus Kleinfeld, the CEO of Alcoa. He is worried because a weaker dollar makes the products that Alcoa manufactures outside the United States more expensive inside the United States. “It is actually hurting us substantially,” Kleinfeld told the Financial Times.
Bernanke's Conservative Message
December 04, 2009
My colleague Noam Scheiber has parsed Federal Reserve Chairman Ben Bernanke’s testimony about the power of the Federal Reserve, but Bernanke also commented in hearings yesterday about government fiscal policy; and what he had to say was, to say the least, disturbing. Echoing the charges of economic conservatives and Wall Streeters like investment banker Peter Peterson, Bernanke took aim against what these folks call “entitlements,” but which are known popularly to be social security and Medicare. Republicans can be expected to cite his comments in the current debate over the Democratic health
More on Obama's Inconsistencies
December 02, 2009
I want to add a few things to Richard Just’s excellent comment on Obama’s speech. I think there are two reasons why Obama soft-pedaled nation-building and human rights (not even mentioning the fundamental rights of women that the Taliban deny). The first, which Richard notes implicitly, is a desire to appease Americans who think the administration is neglecting the U.S. in favor of Afghanistan.
Sorry, but I Hear Echoes of Vietnam
December 01, 2009
I don’t oppose what Barack Obama plans to do in Afghanistan. I don’t know enough, and from what I know, I don’t have an alternative to propose. I would have preferred he find a way to achieve American objectives without escalating the war, but I agree with his objective of denying al Qaeda a home in Afghanistan through a Taliban victory, and I hope that his strategy will achieve it.
Cheney for Fisherman
November 29, 2009
Jon Meacham is clearly an intelligent person and skilled writer, but his judgment about America and what America needs is somewhat inferior to that of my cat Lexie. Last November, he was telling us that the election affirmed the nation’s conservatism. Now he is urging Dick Cheney to run for president in 2012.
The Incredible Lightness of the U.S. Media
November 27, 2009
If you just read American newspapers, you might not know that financial markets around the world plunged over news that the government-owned Dubai World – upon which that emirate’s claim to economic (non-oil) leadership in the Middle East rests -- may be on the verge of collapse. I followed the Dubai story in The Financial Times, which headlined it on its web page from the early morning yesterday. Today, they have a three page spread.
Political trouble for Obama
November 25, 2009
There has been a lot of talk lately about whether Obama is or is not losing support among independents. Charles Franklin, writing at Pollster.Com, insists there is no evidence of defection among independents or Democrats. “There is no evidence that any group of Democrats, especially liberal Democrats, are unhappy with Obama,” Franklin writes. But the most recent Gallup Poll shows significant signs of defection among independents and Democrats. Obama lost 18 percentage points – from 62 to 44 percent approval – among independents. And what about Democrats? The figures here are disturbing.
Case for deficits (continued)
November 25, 2009
In my column today, I posed the question of whether the Fed’s infusion of cash, and near-zero interest rates were inspiring bank lending to businesses. On the basis of the Fed’s quarterly interviews with loan officers, I concluded that its measures had not. Today, there is further evidence – from the Federal Deposit Insurance Corporation (FDIC) quarterly report on bank practices. According to the FDIC, commercial and industrial loans declined by 6.5 percent from the second to third quarter of 2009 and by a whopping 15.1 percent from the third quarter of 2008. That suggests, again, that the nor
The Case for Deficit Spending
November 25, 2009
If there was one thing that seemed certain about the Obama administration, it was their commitment to Keynesian deficit spending to boost the economy out of its slump. But Keynes beware: With unemployment at a whopping 10.2 percent, and probably rising, the White House has begun trumpeting its commitment to Hoover-style deficit busting. On November 13, the White House warned cabinet departments of a spending freeze. The next week, while in China, Barack Obama told an interviewer the United States could suffer from a “double-dip recession” if it didn’t restrain public debt.