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
Deficits Matter — But Right Now, Not So Much as…
The conventional Washington wisdom is that the key to economic policy today is deficit reduction for 2011, and battles over spending cuts almost certainly will dominate our politics for the next several months. This so-called wisdom is the economic-policy equivalent of snake oil. Britain and Germany both tried it, and now both are struggling with significant slowdowns. The U.S. recovery…Continue reading
The Economics and Politics of Cutting Deficits
The 2011 battle over the budget brings to mind the U.S.-Soviet nuclear arms talks of the 1970s and 1980s. The issue is not whether the antagonists can settle everything at once, but whether each will accept modest concessions and keep on talking until the next round, when more incremental compromises can be reached, and so on into subsequent rounds. Â The…Continue reading
The Real Economic Implications of the Uprising in Egypt
Thanks to globalization, the uprising in Egypt raises serious questions about the impact on Western economies, including America, as well as Egypt’s political and economic development.  The precipitating event for the current unrest almost certainly was a facet of globalization — steadily rising worldwide food prices which hit record levels just before the unrest broke out.   An average household in…Continue reading
The State of the Union and the Real Meaning of…
Last Tuesday night, the President exhorted Americans to raise our economic game and challenged Congress to give us the means to do so. His basic proposition, which comes from mainstream economics and more recently from Bill Clinton’s 1992 economic plan, is that expanding certain national investments can make us more competitive, especially if it’s tied to overall deficit restraint. Moreover,…Continue reading
What the Obama-Hu Meetings Can Mean for the U.S. Economy
Barack Obama and China’s President Hu Jintao have genuinely important economic matters to talk about this week, even if there’s little prospect for any agreements that could materially improve our own economy anytime soon. But President Obama can –– and certainly will –– use these meetings to hammer home his long-term priorities for the U.S.-Sino relationship. And so long as…Continue reading
Why It Matters So Little that Obama’s Jobs Record is…
The great partisan squabble of 2011 over the economy begins this week with the new Congress. Even if some of the rhetoric seems fresh, the core issues likely to become the stuff of real political fights — the terms of entitlement spending, the shape of the tax code, and the value of public investment — are all familiar from battles…Continue reading
At Last, the Net Neutrality Fight Is Over
Official Washington, which usually doesn’t accomplish much at all, is having a week of extraordinary achievement. There’s the deal on taxes which should boost the economy next year and into 2012, the START Treaty, the long-overdue end to discriminations against gays and lesbians in our military, and now new open Internet rules from the Federal Communications Commission (FCC). The text…Continue reading
The Pitfalls of Economic Nostalgia
The United States faces economic problems as daunting as any seen since the 1930s. GDP growth and job creation remain slow in the early stages of the current recovery, when both should be strong. Moreover, the pressures of globalization, along with technological advances, have reduced the capacity of American businesses to create new jobs even when demand is strong. These…Continue reading