When Is A Budget Not A Budget?

Kabuki plays are known for their showmanship – elaborate costumes and extravagant acting – and for their predetermined outcomes. We saw Act One of such a drama last week when President Trump sent to congress his $4.7 trillion budget for the 2020 fiscal year, which begins on October 1st of this year. Congress then starred […]

An Import We Can Do Without: Economic Slowdown

“O woe! O woeful, woeful, woeful day….Never was seen so black a day as this…” past Wednesday, when the Organisation for Economic Co-operation and Development (OECD) reduced its forecast for US economic growth this year from 2.7% to – wait for it – 2.6%, which is the rate at which the economy grew in the […]

The Old Order Changeth, Alas

Just when economists thought we had begun to understand how to develop policies that might keep the US economy on an even keel, reality bit. Start with inflation. When the economy reaches full employment, wages will begin to rise and push up prices, triggering inflation at an annual rate higher than the 2% the monetary […]

A Failure of Pedagogy

From Alexandria Ocasio-Cortez to Donald J. Trump, our political class is profoundly ignorant of basic economics. We economists, especially those of us who have had some responsibility for educating students, have a lot to answer for. Presumably all the politicians strutting across our television screens did attend some sort of educational institution at one time. […]

The Hottest Economy Anywhere In The World

Two of the world’s most powerful players celebrated last week, one his country’s New Year, the other his substantial policy achievements. China’s president Xi Jinping was celebrating the arrival of the Year of the Pig, America’s President, Donald Trump, his substantial achievements on the economic policy front during the year of, well, of the Donald. […]

IOU and YOU AND YOU AND…

There are now some $247 trillion in IOUs from governments, businesses and households sitting out there in the world economy. That’s over three times the value of all the goods and services produced by all of the world’s economies combined. The size of America’s government debt tops its GDP, a level that scholars say is […]

A Slowdown, But No Recession

Late last year some 800 CEOs surveyed by The Conference Board ranked fear of a recession in 2019 19th on their list of 28 worries. Last week they ranked it first, blaming not economic but geopolitical events – collapse of the world trading system, political instability – for the construction of a new wall, this […]

Angst Down, Calm Up

In the relatively short period of a few weeks the mood here has changed from somewhere between gloom and panic, to somewhere between calm and optimism. For several reasons, first among them the President’s tweets that progress is being made in negotiations to end the trade war with China. Indeed, so promising are the results […]

Jobs Boom, Markets Stagger, Fed Remains Flexible

The jobs boom rolls on. In December the economy added 312,000 jobs, almost twice as many as forecasters expected. Good prospects converted so many couch potatoes into job seekers that the unemployment rate rose from 3.7% to 3.9%. Average hourly earnings rose, and are now 3.2% over last December, with much of the increase coming […]

The Year of Dichotomies Winds To Its End

‘Twas the night before Christmas and all through Asia America increased its exports – of panic. President Trump, whose tariffs many Asian policymakers feared would derail their economies, attacked the Federal Reserve’s chairman, blaming him for turning the man who appointed him into “another Hoover”. Another Great Depression in store? This, after treasury secretary Steven […]