Is Income Inequality a 'Myth'?
October 31, 2011
[Guest post by Matt O'Brien] Pay no attention to soaring executive compensation, or Wall Street bonuses, or even to the latest CBO report on income distribution: skyrocketing income inequality the past few decades is just a “myth”—at least according to Jim Pethokoukis of the American Enterprise Institute.
October 26, 2011
Everybody agrees that the bipartisan deficit super committee had better hurry up and strike a deal to cut the federal budget by $1.2 trillion so it can meet its November 23 deadline. If it doesn’t, then all hell will break loose. Except it won’t. You may have lost track of the deficit story after Congress and President Obama averted catastrophe at the end of July by agreeing to raise the debt ceiling. Perhaps I can help.
When historians look back at this benighted moment in time, they may find themselves puzzled by how we refused to take the necessary steps to improve our economic situation. Depending on what happens in coming months, they may find that the best solutions—aggressive fiscal and monetary stimulus here in the United States, bank recapitalization and debt restructuring in the EU—were left on the table, while millions unnecessarily suffered. A footnote in that history may be the decision of Fannie Mae and Freddie Mac not to do more to help the housing market recover.
Why Greece, Spain, and Ireland Aren’t to Blame for Europe’s Woes
October 11, 2011
It’s all Greece’s fault. That’s what a lot of Europeans secretly—or not so secretly—think as they grumble at the prospect of coming up with yet more money to bail the eurozone out of its debt crisis. But what if that easy view of how Europe landed in its current predicament is not just simplistic, but wrong? Nonsense, argue the grumblers. Clearly the crisis started because debt in the eurozone’s periphery—Greece, Ireland, Portugal, and Spain—became so large that investors grew frightened that entire countries were at risk of default.
September Jobs Report: Eh
October 07, 2011
[Guest post by Matt O'Brien] It is better than zero. That is about the best that can be said about the September jobs report, on the heels of last month's numbers that showed precisely zero jobs added in August.
Obama's Wacky, Possibly Immoral, Possibly Brilliant Jobs Proposal
September 14, 2011
[Guest post by Matt O'Brien] Last week, as the Obama administration rolled out its American Jobs Act, a liberal group called the Progressive Change Campaign Committee launched a strange ad campaign of its own: “[Obama economic advisor] Jason Furman wants you to work for free,” the ads blasted.
No, Payroll Tax Cuts Won’t Create Immediate Stimulus. That’s Exactly Why We Need It.
September 12, 2011
The centerpiece of the jobs plan unveiled by President Obama Thursday night—the extension and expansion of payroll tax cuts to employees totaling $175 billion—has turned out to be among its most controversial aspects. Indeed, policymakers and commentators from across the political spectrum have argued that its stimulative effects could be negligible.
Why Are the Children of the ‘Greatest Generation’ So Selfish?
September 05, 2011
In his book The Greatest Generation, Tom Brokaw paid homage to the generation that emerged from the Great Depression to fight Hitler and other forms of tyranny. Their efforts were all about sacrifice so that their children could enjoy a better life.
If Congress Won’t Help, What Else Can the Fed Do to Boost the Economy?
September 02, 2011
With Congressional Republicans blocking any further fiscal stimulus, it falls on the Federal Reserve to do what it can to reduce unemployment. Those opposed to the Fed doing so express concern that it would spark inflation. We should be so lucky. A moderate increase in inflation, contrary to the overblown fears of inflation-hawks, would be a boon to the economy.
One Way to Speed the Recovery? Help Households, Not Banks.
August 30, 2011
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy.' Click here to read other contributions to the series. As the Great Recession drags on and on, it’s natural to wonder if we will ever get back to normal. Why is the recovery from this recession taking so long? Why was the recovery from other severe recessions, for example the 1982 recession where unemployment reached 10.8 percent, so much faster?