A Tale of Two Deficits
June 01, 2011

Listening to today’s debates, one might think that the United States faces a budget deficit. Not so. America faces two budget deficits. The first challenge is near term. Once the economic recovery is well-advanced, we must find a way to cut spending or raise taxes to prevent government debt from rising faster than income. The second challenge is dual: to slow the growth of health care spending, in general, and Medicare spending, in particular, and to decide whether to make cuts to Social Security.

Broken Links
March 15, 2011

Not many people in the American electronics industry had ever heard of the Japanese town of Niihama before the summer of 1993. That changed overnight when a small specialty chemical factory there was knocked out by a fire. Obscure though it may have been, this factory accounted for 65 percent of the world's supply of epoxy cresol novolac, a resin essential in making most semiconductors. As shockwaves shot through the world electronics industry, prices of some kinds of semiconductors doubled in days.

The Case for More Federal Aid
February 15, 2011

State governments are facing catastrophic budget deficits for fiscal year2012, and they are suggesting drastic cuts to attempt to fill the gaps. But this proposed austerity may not be necessary, and, moreover, it is almost certainly unwise.

Geithner, A Personal Note, and a Geithner Personal Note
February 14, 2011

[Guest post by Noam Scheiber:] For those who haven't seen it on the homepage, I briefly wanted to plug my profile of Tim Geithner in the latest issue of the print magazine. The piece tries to explain how he recovered after his disastrous start in the Obama administration. My working hypothesis: Geithner now realized it wasn’t enough to get the big calls right and let the politics take care of itself. To really play at this level, he would need, if not an outside game, then at least an inside game that took account of how the public perceived his actions.

From Mississippi to ‘The Corner’: A Tale of Right-Wing Wrongness
February 08, 2011

By now, it’s easy to be cynical about the Internet’s ability to degrade rational argument. After all, one can only read so many birther blogs without starting to go numb. Still, once in a while, the foggy chaos that is the online world parts, and we catch a glimpse of how the realm’s worst ideas form, adapt to the environment, and, despite their utter lack of fitness anywhere else (well, with the popular exceptions of AM radio and Fox News), thrive in cyberspace. Perhaps the best recent example is a chart that has been racing around the conservative blogosphere for the last few months.

Material World
February 03, 2011

Cairo, Egypt—Egypt’s economy has by all accounts ground to a halt as a result of curfews, travel restrictions, and communications blackouts. Here in Cairo, the effects are readily apparent: Reduced delivery of goods and a shortage of wheat have shuttered subsidized bread-distribution points, reducing the quantity of bread available and generating long, angry breadlines snaking down the city’s alleyways. “I’ve been waiting here for two hours,” one man in a military-run breadline told me.

Paul Ryan's Other Big Idea
January 23, 2011

[Guest post by Noam Scheiber:] We've all heard that Republican ideas man Paul Ryan--who's slated to give the GOP response to the State of the Union--has some deep thoughts on how to save the country from fiscal ruin. (Though, alas, not everyone understands that these ideas are spectacularly vague and substantively dodgy.) Less well known is that Ryan has some equally dodgy ideas about monetary policy. FrumForum's Noah Kristula-Green unpacked them last week:   [H]e wants the Federal Reserve to set monetary policy from the price of a "basket of commodities"...

Karat Top
January 13, 2011

In the summer of 1932, Louis McFadden, a former bank president turned Pennsylvania Congressman, stood up on the House floor to reveal a sinister plot. Over the course of a 25-minute speech, he explained how the Federal Reserve—“one of the most corrupt institutions the world has ever known”—was being steered by a cabal of European bankers who had, among other sins, paid for Leon Trotsky’s return ticket to Russia and funded the October Revolution. But McFadden’s pleas to dismantle the Fed and embrace gold (in his view, “the only real money”) were greeted with ridicule.

Not So Fast on Those Bill Daley Chief of Staff Rumors
January 03, 2011

[Guest post by Noam Scheiber:] The rumors are flying that Bill Daley--the former Clinton Commerce Secretary, current JP Morgan executive, and longstanding member of that Daley family--is under consideration for a senior White House position, "most likely chief of staff," as the Washington Post puts it.

Is the Favorite to Replace Larry Summers Too Close To Wall Street?
December 30, 2010

[Guest post by Noam Scheiber:] If you’ve spent much time talking to Treasury officials over the past two years, you’ve probably heard them joke that Gene Sperling, a counselor to Secretary Tim Geithner, is the department’s in-house populist. What makes this funny (insofar as wonk humor can be funny) is that Sperling isn’t exactly your classic pitch-fork wielder. He was director of Bill Clinton’s National Economic Council (NEC) in the late ‘90s, a period when the White House got pretty good marks for its understanding of business and the broader economy.