finance

The Economic Storm Ahead
August 26, 2009

 With the near-simultaneous release this morning of CBO's updated Budget and Economic Outlook and OMB's Mid-Session Review, we have the most detailed economic analyses and forecasts we are likely to see for the rest of the year. If the consensus these documents represent is in the ballpark, the country and the Obama administration are in for a rough ride.

Can The Sahara Desert Power Europe?
August 25, 2009

What with all that hot sun beating down on the Sahara Desert day after day, it's no surprise that energy planners have suggested lining the sands of North Africa with mirrors and building vast concentrated solar plants to deliver lots and lots of carbon-free power to Europe.

Aliyah and Interest Rates
August 25, 2009

Aliyah is the at once mystical and practical "going up" to Zion. Stanley Fischer is one of the very many men and women who have made that journey and are, thus, olim. It was Bibi Netanyahu who, as minister of finance in Ariel Sharon's government, summoned him to the service of the Jewish state and turned around his whole life.

More on the Administration's Drug Deal
August 25, 2009

What kind of deal did the administration and Senate Finance Chairman Max Baucus make with the drug industry? And was it a good deal? I (try to) answer those questions in an article that appears in TNR's latest print edition--and is running on our (new!) home page today. As I note, albeit briefly because of the print edition's space constraints, three other articles advanced this story before I came along. One was a New York Times article, in which PhRMA chairman Billy Tauzin first spilled the beans about a key concession his group had secured.

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.

Should Health Care Be On The Backburner?
August 13, 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.

Sachs Appeal
August 12, 2009

Should Tim Geithner's Wall Street consigliere make us queasy?

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

After Peak Finance
July 24, 2009

There are three kinds of "bubbles"--a term often used loosely when asset prices rise a great deal and then fall sharply, without an obvious corresponding shift in "fundamentals." A short-run bubble. Think about 17th century Dutch Tulip Mania: spectacular, probably disruptive, but not a major reason for the decline of the Netherlands as a global power.  A distorting bubble. In this case, the increase in asset prices contributes to a reallocation of resources across sectors. Think of the Dot-com Bubble: fortunes were made and lost, the collapse was scary to many, and--at the end of the day--you'

Why Aren't Banks Lending?
July 17, 2009

John Judis and I have been debating this question around the water cooler for the past several months, so we figured we'd drag it into our pages. He went first last week with this rather compelling piece. Today, I pushed back here. Here's a flavor for what I'm arguing: In mid-October, then-Treasury Secretary Hank Paulson forced nine of the nation's 20 largest banks to accept $125 billion in government money. Despite this increased capital buffer, the five biggest banks cut their lending by 16 percent (roughly $120 billion dollars) during the fourth quarter of last year, according to the Fed.

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