Trouble in Beantown
September 29, 2009
A month-old labor dispute in Boston has taken a curious twist. It began when on August 31, a hundred housekeepers at three Hyatt hotels in Boston were fired and replaced by workers from a Georgia company, Hospitality Staffing Solutions. The housekeepers, some of whom had worked for Hyatt for over twenty years, were making between $14 and $16 an hour plus health, dental, and 401(k) benefits. Their replacements were to make $8 an hour with no health benefits.
How Legitimate Is the G20?
September 29, 2009
Strong advocates of our new G20 process are convinced that it will bring legitimacy to international economic policy discussions, rule-making, and crisis interventions. Certainly, it’s better than the G7/G8 pretending to run things--after all, who elected them? But who elected the G20? The answer is: No one. And, in case you were wondering, there is no application form to join the G20 (although you can crash the party if you have the right friends, e.g., Spain). The G20 has appointed themselves as the world’s “economic governing council” (to quote Gordon Brown). Is this a good idea? Not reall
Taxpayers Already Subsidize Abortion Coverage. Maybe Even Yours!
September 29, 2009
For those who haven't followed the intersection between abortion rights and health care reform, today's New York Times sums up the situation: Abortion opponents in both the House and the Senate are seeking to block the millions of middle- and lower-income people who might receive federal insurance subsidies to help them buy health coverage from using the money on plans that cover abortion. And the abortion opponents are getting enough support from moderate Democrats that both sides say the outcome is too close to call.
Was the G20 Summit Actually Dangerous?
September 26, 2009
It is easy to dismiss the G20 communique and all the associated spin as empty waffle. Ask people in a month what was accomplished in Pittsburgh and you’ll get the same blank stare that follows when you now ask: What was achieved at the G8 summit in Italy this year? Perhaps just having emerging markets at the table will bring the world closer to stability and more inclined towards inclusive growth, but that seems unlikely. Should we just move on--back to our respective domestic policy struggles? That’s tempting, but consider for a moment the key way in which the G20 summit has worsened our pre
This Week's Mediscare
September 25, 2009
The Republican grandstanding on Medicare during Finance Committee hearings this week hasn't been surprising, I suppose. But the audacity is still pretty breathtaking. As you may have heard or read by now, the Republicans are angry over proposed cuts to Medicare Advantage, the private insurance alternative to traditional Medicare. The insurers who offer Medicare Advantage plans receive a flat fee for every senior that signs up.
Palin Talks Economics in Hong Kong. Really.
September 23, 2009
Let me start by saying that if you write a blog about finance and economics, then newspaper headlines don't really get much better than, "Palin Addresses Asian Investors," which, as luck would have it, appears on the Wall Street Journal site today. Judging from the piece, Palin's speech was basically a lot of granular investment advice--as you'd expect: "We got into this mess because of government interference in the first place," the former Republican U.S. vice presidential candidate said Wednesday at a conference sponsored by investment firm CLSA Asia Pacific Markets.
September 21, 2009
We’ve heard Glenn Beck’s rants on Fox and read Sarah Palin’s posts on Facebook. We’ve watched LaRouche supporters disrupt town hall meetings and seen teabaggers descend upon Washington. We’ve talked about immigrants, abortion, and death panels--and listened to a woman named Betsy McCaughey explain why reform will mean pulling the plug on grandma. But, at the end of the day, the central challenge in crafting health care reform remains exactly what it’s always been: Coming up with the money to pay for it.
How Much Will Wall Street Shrink?
September 18, 2009
Today's Journal story on the declining allure of a finance career has some interesting numbers: Although the biggest banks are showing a revived appetite for risk taking and certain exotic instruments such as credit derivatives, many of the vanished jobs aren't expected to be back soon. The White House Council of Economic Advisers expects finance and insurance jobs to decline to 4.1% of the work force in 2016 from 4.8% at the end of last year, a point at which many were already gone. ... Harvard's 2009 graduating class shows the shift in career directions.
This Giant Isn't Sleeping
September 17, 2009
It’s now widely believed that the global recession is coming to an end, but the path out has been far from typical: This time around, China, not the U.S. has led the global recovery. With its $600 billion stimulus package and with banks lending with abandon, China has become the engine of global manufacturing and industrial activity.
The Paradox of the Paradox of Thrift
September 16, 2009
Keynes' paradox of thrift holds that if everyone tries to save at the same time during a recession, then the economy continues to contract due to a fall in demand. This sends incomes lower and gives people less money to sock away, so that total savings actually fall instead of rising. The implication for our times is that a new era of frugality might not be what the economy needs. But in a new IMF paper, Yasser Abdih and Evan Tanner argue that Keynes' paradox might not apply after a financial crisis. In normal times, companies can finance investment through their own savings.