The Politics of Inflation

Unless political peace breaks out, the only way Democrats and Republicans can meet interest payments is to let inflation rip, devalue the dollar. If you think America’s fiscal mess-a deficit in excess of $1 trillion every year for as far ahead as the budgeteer’s eye can see-is no concern of yours, think again. Democrats about […]

Trump, the Economy, the Midterms, and the Road Ahead

If things can’t get better, does that mean they have to get worse? The economy grew at annual rate of 3.5 percent in the third quarter, following an even more robust second-quarter rate of 4.2 percent, the best six-month performance in the past decade. There are more job openings, 7.1 million, than there are unemployed […]

Trump’s Debt

Trump said he would erase America’s debt in 8 years. It’s now bigger than ever. As a candidate, Donald Trump promised to get rid of the entire national debt “over a period of eight years.” When this promise was made, the national debt stood at $19 trillion; it has since risen to $21.7 trillion. In […]

Trump, Inflation, and the Fed

Donald Trump wants Jay Powell to stop raising rates. Like, now. Donald Trump wants fewer and later. Jay Powell, chairman of the Fed, more and sooner. He is confident that his plan is what the booming economy needs: raise the Fed’s benchmark interest rate from its current range of 2 percent to 2.25 percent by […]

Trump vs. the Fed

Bailouts, inflation, and tariffs-oh my! You only find out who is swimming naked when the tide goes out,” Warren Buffett warned almost a decade ago. Lots of swimmers who have been happily paddling along in the nude are starting to feel a chill as signs mount that the interest-rate tide is indeed starting to expose […]

Trump’s Fiscal Policy Is Moving from Loose to Reckless

“Oh, when will they ever learn?” asked Pete Seeger in 1955. Surely not by 2008, when Lehman Brothers, the fourth largest bank in America, was forced to file for bankruptcy after 158 years in business because Wall Street titans had failed to learn the lesson of crises past: that they must all hang together or […]

In Praise of Disconnects

Jay Powell continues to show his independence from Donald Trump. Thank goodness for disconnects. For three, to be precise. The first is the disconnect between Donald Trump and Jay Powell, the man he appointed to chair the Board of Governors of the Federal Reserve System. It wasn’t too long ago that they seemed joined at […]

Trump’s Economy Might Not Be Enough to Save the House

With the November congressional elections only 87 days away, Donald Trump has added to his revolutionary use of tweets what might prove to be an outdated reliance on two old-fashioned electoral winners to pull Republican candidates through tough elections: a booming economy and promise-keeping. Most presidents attempt to expand their political base once in office. […]

Is the Trump Economy Sustainable?

Growth trumps decline. That’s what President Trump is gambling on to hand him victory if the trade skirmish morphs into a trade war. The U.S. economy is growing at an annual rate of 4.1 percent and continues to create jobs. According to yesterday’s jobs report, the economy added 157,000 new jobs in June. That was […]

The Limits of Prosperity?

Lots of good news last week. “The economy is as good as it’s ever been, ever. . . . People can’t believe what’s happening,” says President Trump, abandoning his usual preference for understatement. Economic growth “may be 4 percent for a quarter or two” Larry Kudlow, the president’s economic advisor, announced. CNBC analyst Jim Cramer […]