Obama, Micromanaging, and the WSJ Revisited
August 24, 2009
A reader e-mailed just before I went on vacation to quibble with my take on the Journal's "A President as Micromanager" story from two weeks ago. In my item, I argued that the piece's premise was off-base--the Journal was confusing micromanaging with craving detailed information on which to base incredibly consequential decisions. So far, so good. But then I went on to say the piece "sprinkles the micromanager charge liberally throughout," which isn't true.
The Burden Is on the Inflation Hawks
August 24, 2009
The Wall Street Journal has a useful piece up today about the historical analogy that looms large in the minds of administration economic officials: 1937, the year the Fed, FDR, and Congress prematurely tightened economic policy and sent the economy back into a deep recession after several years of recovery. What I always find remarkable about these discussions is that proponents of early tightening essentially (sometimes explicitly) argue that the expected loss from too much inflation (that is, the loss weighted by the probability of it happening) is greater than the expected loss from a doub
Lifting the Shadow Off the Tax System
August 20, 2009
The fact is that it did not happen until Barack Obama became president. It was a standing offense to American tax justice that probably hundreds of thousands of our very rich countrymen brazenly avoided the reach of the Internal Revenue Service simply by transferring (much of) their wealth to foreign banks in Switzerland and about 15 other countries, which protected the identities of these depositors by their laws. We know why this long-time structural injustice was of no interest to either of the Bush administrations. Let's say roughly that both George H.W. and George W.
Should Health Care Be on The Backburner?
August 14, 2009
While the attention of politicians, pundits, and the people is focused on the increasingly bitter debate over health insurance reform, economic developments will have a more profound effect on the well-being of the nation and the fortunes of the Obama administration. Only an economy that provides a steady stream of new jobs and raises personal income can yield enough revenue to restore public confidence and finance the government we need. As the economy struggles to stabilize, we find ourselves in a deep hole--even deeper than we knew.
Waiting For The Fed's Next Apology
August 14, 2009
In November 2002, Ben Bernanke apologized--for the Fed's role in causing the Great Depression of the 1930s. "I would like to say to Milton [Friedman] and Anna [Schwartz]: Regarding the Great Depression. You're right, we did it. We're very sorry.
August 12, 2009
Should Tim Geithner's Wall Street consigliere make us queasy?
Mind the Gap
August 12, 2009
Should we care about economic inequality? That question is the subtext for most debates in American politics. It just remains below the surface because the party that thinks we shouldn't care about inequality--I'll give you one guess--has an endless string of obfuscations ("death tax," "small business," "tollgate to the middle class") to avoid admitting that it doesn't care about inequality. There are, however, some real reasons not to care about income inequality, and right-wingers who don't have to run for public office are happy to admit it.
The Real Reason China Will Surpass Us
August 11, 2009
The usual concern about the U.S.-China balance of economic and political power is couched in terms of our relative international payments positions. We've run a large current account deficit in recent years (imports above exports); they still have--by some measures--the largest current account surplus (exports above imports) even seen in a major country. They accumulate foreign assets, i.e., claims on other countries, such as the U.S. We issue a great deal of debt that is bought by foreigners, including China. There are some legitimate concerns in this framing of the problem--no country can in
Credit Conditions In The Absence Of Consumer Protection
August 10, 2009
Even some of our most sophisticated commentators doubt a link between consumer protection and any macroeconomic outcomes. Consumer protection, in this view, is microeconomics and quite different from macroeconomic issues (such as the speed and nature of our economic recovery). Officially measured interest rates are down from their height in the Great Panic of 2008-09 and the financial markets, broadly defined, continue to stabilize. But are retail credit conditions, i.e., the terms on which you can borrow, getting easier or tougher? On credit cards, there's no question: it's getting more expen
The Future Of Sushi: Farms?
August 05, 2009
Is the end of sushi upon us? It may well be. Bluefin tuna stocks all over the world are on the verge of collapse, thanks to overfishing. The World Wildlife Federation has estimated that Northern bluefin could get wiped out within three years, while the Southern bluefin is critically endangered.