Trump’s Perfect Storm that Could Sink the American Economy
Donald Trump has steered the American economy into a perfect storm. In the book, film, and now in real life, a rare combination of destructive forces comes together and magnifies the damage. This storm could break the U.S. economy. Trump’s tariffs are the most destructive force. Their first-order damages begin by arbitrarily driving up the prices of every product and… Continue reading
Where the Administration’s Plan for the Housing Crisis Could Fall…
The President today announced a plan to cut foreclosures and reboot new mortgage financings, at least when the economy shows signs of new life. The fact of offering a plan is an advance, given that Bush and his people did nothing and proposed nothing, even as the crisis reached critical mass. As we have written here since the crisis first…Continue reading
The Impact of the Great Recession on Trade
The new trade data out today show, unhappily, that the surest way to drive down our trade deficit is a deep recession that cuts into the money Americans have to buy imports. In December, the trade imbalance fell to less than $40 billion, a 35 percent drop from its $62 billion level last July. (It’s all seasonally-adjusted.) The last time…Continue reading
Shedding Light on the Stimulus Package
While the chorus of complaints about President Obama’s spending and tax package was dispiritingly predictable, the post-partisan surprise is that its basic structure is evolving to just about where it should be. The legislative process is adding its normal quotient of special interest subsidies on both the spending and tax sides — think of it as a “congressional tax,†because…Continue reading
President Obama Begins to Take on Climate Change
Within one week of taking office, President Obama has dispelled any doubts on whether he’s serious about tackling climate change. His stimulus plan will direct more tax and spending subsidies to climate-friendly technologies and fuels over the next 18 months than the Bush administration did over the last eight years, and the federal government will offer itself as a model…Continue reading
A Serious Thought or Two on the Inauguration, from Halfway…
I'd rather be spending this week in Washington celebrating with friends and my country the politically and spiritually invigorating elevation of Barack Obama to our presidency. These feelings lie very close to the heart of patriotism, and they are an exquisite pleasure to feel again without reserve. Instead, I find myself in one of the coldest places on earth, Mongolia’s…Continue reading
How to Find a “Free†$420 Billion to Stimulate the…
President-elect Obama says he’ll consider any good idea to address our accelerating economic decline and help stabilize the financial system. In fact, there’s a huge, untapped resource to do both sitting on the balance sheets of America’s multinational companies: Their foreign subsidiaries are holding about $1 trillion in past earnings, because our tax laws defer the U.S. corporate tax until…Continue reading
Politics and the Economic Crisis
Barack Obama's historic election as a new, national agent of change will face a daunting test as the economic crisis continues to accelerate, and the political pressures arising from what must now be called “The Great Recession†begin to reshape the response. The latest evidence is today’s unemployment data: One million jobs lost in two months; the sharpest eight-month rise…Continue reading
Christian Science Economics
The Bush administration, long known for faith-based initiatives, has embraced a new form of faith-based economics to address the financial crisis and cascading recession: We’ll call it an economic version of Christian Science, prescribing modest steps to make the patient comfortable while largely leaving us to heal ourselves. It’s only an analogy, but play along. A succession of debilitating infections…Continue reading