The U.S. economy
Inside Story Americas - Has capitalism proven its durability? "American Pie in the Sky" by Nouriel Roubini. Exit from comment view mode.
Click to hide this space NEW YORK – While the risk of a disorderly crisis in the eurozone is well recognized, a more sanguine view of the United States has prevailed. For the last three years, the consensus has been that the US economy was on the verge of a robust and self-sustaining recovery that would restore above-potential growth. Modern American Economic History in a Few Charts. Matt Stoller is a fellow at the Roosevelt Institute.
You can follow him at The big economic strategy for the next term of whoever is Presidenti is essentially, “turn those machines back on”. It’s fracking to replace cheap oil and a new real estate bubble in housing. Essentially, the idea is to turn America into more and more of a resource extraction economy, or a petro-state. If American politics seems more and more oligarchical, that’s because the American political system is beginning to reflect the Middle Eastern oil states its economic investment implies it should. World’s Most Prestigious Financial Agency – Called the “Central Banks’ Central Bank” – Slams U.S. Economic Policy. The “Central Banks’ Central Bank” Slams the Federal Reserve The central banks’ central bank, the Bank of International Settlements or “BIS” – which is the world’s most prestigious mainstream financial body – has slammed the policy of America’s economic leaders.
This is especially dramatic given that the banks own the Federal Reserve, and that the Federal Reserve and other central banks – in turn – own BIS. In other words, BIS is criticizing one of its main owners. Economics professor Michael Hudson notes: Edward Lazear: The Worst Economic Recovery in History. The Recovery According to Ed “We are not in a recession” Lazear. In Tuesday’s WSJ, Edward Lazear argued that we are now experiencing the “Worst Economic Recovery in History”.
Before dissecting this remarkable document, it would behoove the reader to recall that while he was Chair of George W. Bush’s Council of Economic Advisers, he stated unequivocally in May 2008 (also in the pages of the WSJ): “The data are pretty clear that we are not in a recession.” He wrote this less than five months before US GDP took a remarkable dive; in 2008Q4 q/q growth was -8.9 percent SAAR. Is Obama Still on the Austerity Train?
Mean-Spirited, Bad Economics. By Simon Johnson The principle behind unemployment insurance is simple.
Since the 1930s, employers – and in some states employees — have paid insurance premiums (in the form of payroll taxes, levied on wages) to the government. Graphic of World Military Spending (Iran's too Small to Show up)
We tried to stop the excessive risk-taking that was fueling the housing bubble and turning our financial markets into gambling parlors. But we were impeded by the culture of short-termism that dominates our society. Our financial markets remain too focused on quick profits, and our political process is driven by a two-year election cycle and its relentless demands for fundraising. I’ve had a unique vantage point during my five-year term as chairman of the Federal Deposit Insurance Corp., from the early failure of IndyMac Bankto the implementation of reforms designed to ensure that no conglomerate ever again is deemed “too big to fail.”
The 2007/8 financial crisis. Cognitive Regulatory Capture. Get Ready for TARP 2.0. Washington DC appears to be readying itself for a repeat of the TARP, namely, the passage of unpopular legislation to appease the Market Gods (and transfer even more income from ordinary Americans to the Masters of the Universe).
It isn’t yet clear whether this drama will be played out via generating bona fide financial market upheaval or mere threat-mongering (the Treasury market seems pretty confident that well-trained Congresscritters will fall into line). But unlike the TARP, which was a classic example of well-placed interests finding opportunity in the midst of upheaval, this reprise is a far more calculated affair. Jobless Recoveries... I>Lost Decades</I>, Illustrated. When I discuss Lost Decades I always stress the fact that the “s” denotes the plural.
Figure 1 shows that a decade and a half in, the trajectory of output has been noticeably depressed since 2001Q1. Figure 1: Log GDP (dark blue), OECD forecasted (light blue), potential GDP (gray), and nearest neighbor fit against time, local weighting, bandwidth=0.3 (red). Source: BEA, 2011Q3 2nd release, OECD November 28 forecast, CBO Budget and Economic Outlook (August 2011), and author’s calculations.
Wall Street’s Euthanasia of Industry. Michael interviewed on Guns N Butter with Bonnie FaulknerListen here “When I was in Norway one of the Norwegian politicians sat next to me at a dinner and said, “You know, there’s one good thing that President Obama has done that we never anticipated in Europe.
He’s shown the Europeans that we can never depend upon America again. There’s no president, no matter how good he sounds, no matter what he promises, we’re never again going to believe the patter talk of an American President. Mr. The False Dichotomy of Greed. By Sell on News, a macro equities analyst.
Cross posted from MacroBusiness The Euro crisis appears to be developing into something similar to the 1980s Latin American debt crisis when the idea that, to quote Walter Wriston, who ran First National City/ Citibank from the 1960s into the 1980s it was assumed that: “countries don’t go out of business.” The Latin American leadership demonstrated that they, in effect, could, by defaulting. American lessons in how to run a single currency. 20 July 2011, Financial Times In the 1990s, when European monetary union was a plan but not a reality, I would explain to students that the effect was to replace currency risk by credit risk. With exchange rates free to float, loose monetary and fiscal policies would lead sooner or later to a fall in the exchange rate. That expectation implied higher interest rates. Currency markets would limit the scope for bad economic policies. Monetary union meant sovereign governments could no longer print money.
The Truth About the Economy. Financial Sector Fraud. The Billion-Dollar Bank Heist. OpenSecrets.org: Money in Politics -- See Who's Giving & Who's Getting. In U.S. Monetary Policy, a Boon to Banks. Note: The Trade is not subject to our Creative Commons license. The most pronounced development in banking today is that executives have become bolder as their business has gotten worse. The economy is clearly weaker than expected, and housing prices are falling throughout the land, eroding bank asset values. Yet regulators are on their heels in Washington as bankers and their lobbyists push back against the postcrisis regulations, even publicly condemning the new rules.
In a well-covered exchange , Jamie Dimon, JPMorgan Chase's chief executive, challenged Ben S. Rise in risk inequality helps explain polarized US voters. Public release date: 13-Jul-2011 [ Print | E-mail Share ] [ Close Window ] Contact: Philipp RehmRehm.email@example.com 614-292-8196Ohio State University COLUMBUS, Ohio – A new study of political polarization in the United States suggests that changes in the labor market since the 1970s has helped create more Republican and Democratic partisans and fewer independents. The growth in partisanship has to do with people's current income and – importantly – their expectations of job security, said Philipp Rehm, author of the study and assistant professor of political science at Ohio State University. America: The Hungriest, Most Imprisoned Developed Country on Earth - Derek Thompson - Business. Fault Lines... The politics and economics of Austerity.
A fiscal cliff?
The ‘strong-dollar’ policy of the US. The strong-dollar policy is a US government policy based on the assumption that a strong exchange rate of the dollar is both in the US national interest and in the interest of the rest of the world. The policy was first enunciated by the then-Secretary of the Treasury Robert E Rubin, shortly after he succeeded Lloyd Bentsen as US Secretary of the Treasury on 11 January 1995. It followed a sharp rise in Treasury bond yields at the end of 1994 and the weakness of the dollar early in 1995, especially vis-à-vis the deutschmark and the yen — at the time the two major currencies after the dollar. The dollar hit 80.63 yen on 18 April 1995, which was its post-war low until 16 and 17 March 2011. Since August 1995, the strong-dollar policy has consisted exclusively of periodic statements by government officials — mainly the Secretary of the Treasury, occasionally the Chairman of the Fed — insisting that the US continues to pursue a strong-dollar policy (Klein 2011).
The impotence of monetary policy. Gross Echoes Buffett Saying Treasuries Have ‘Little Value’ on Debt, Dollar.