Irwin M. Stelzer

The fundamentals are still strong. But the stock market collapse is on the president's thumbs.

Actually, the president accomplished quite a lot.

The president has elected himself to GM's management team.

The future only looks bad.

The FAANGs (Facebook, Apple, Amazon, Netflix, and Alphabet) have real problems.

Unless political peace breaks out, the only way Democrats and Republicans can meet interest payments is to let inflation rip, devalue the dollar.

If the president wants to do deals with the Democrats, he probably can.

If things can't get better, does that mean they have to get worse?

He didn't start it, but he's joining it.

Trump said he would erase America's debt in 8 years. It's now bigger than ever.

Donald Trump wants Jay Powell to stop raising rates. Like, now.

The USMCA is more than just a rebranded NAFTA. It's the shape of things to come.

Don't look now, but gas prices are climbing.

Bailouts, inflation, and tariffs—oh my!

The politics of protectionism mean it's here to stay.

“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…

Jay Powell continues to show his independence from Donald Trump.

The Fed chairman stands up to President Trump at Jackson Hole.

It's Trump's economy against the rest of the world—and as of now, America is winning.

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elections only 87 days away, Donald Trump has added to his revolutionary use of tweets what might prove to be an outdated reliance on two old-fashioned electoral winners to pull Republican candidates through tough elections: a booming economy and promise-keeping.…

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…

On July 25, 2018, at approximately 3:00 p.m. eastern daylight time, the tweets fell silent, and a truce was declared on the European front of the trade war between the United States and, well, the rest of the world. President Donald Trump of the United States of America, and President Jean-Claude…

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…

Veni, vidi, vici. That’s what Trump would have tweeted en route to a weekend of golf at his courses in Scotland had he not forgotten his high school Latin. Traditional diplomat Nicholas Burns, former U.S. ambassador to NATO, says “The president treated the NATO allies almost with contempt.” Delete…

The American economic expansion, heading into its tenth year, still has room to run. So say some of the best regarded pundits. The Federal Reserve Bank of Atlanta estimates that in the second quarter the economy has grown at an annual rate of 3.8 percent. Too gloomy a guess for forecasters at…

We have now had several opportunities to see just what the president, practitioner of the art of the deal, can do when given an opportunity to negotiate with other heads of state. Short answer: give away the store.

We have British intellectual—founder of think tanks, editor—David Goodhart, to thank for the distinction between “Anywheres” and “Somewheres,” the replacement for the more traditional left-right or class-based distinctions which were, until recently, used to describe democratic politics.

Trump knows when to hold ‘em and knows when to fold ‘em, knows when to walk away and knows when to run, as Kenny Rogers advised all poker players. He was holding a losing hand when it came to handling the children brought to America illegally by mothers crossing the border illegally, so he folded…

There seems to be some confusion about the president’s foreign policy, so here is a guide that might prove useful. By the policy-maker in chief, himself, as told to this writer during a nightmare.

Economy watchers can’t seem to find anything to worry about, with the possible exception of a trade war that few believe will happen. The economy is growing, unemployment is down, labor force participation is up, inflation is hitting Fed targets, the stock market shrugs at bad news and embraces the…

Understanding the economics of MAGA.

Jews worry too much. That seems to be the point of a recent article in the otherwise sensible Economist. Sure, two German rappers won that country’s highest music award by bragging their torsos are “better defined than an Auschwitz inmate’s” and vowing to “make another Holocaust.” But, says the…

No, we are not in the midst of a trade war. A trade scuffle, surely. But not a war. At least not yet.

The great American job-creating machine, already in high gear, picked up in May, when the economy added 223,000 jobs—over 50,000 more than experts had predicted.

The pendulum swings.

Remember the good old days when experts decided that the power of the OPEC oil cartel to control oil prices had come to an end? That fracking had made the United States the swing producer, ramping up production any time prices started to rise? That the future of the world’s economy would be based…

For over a decade there has been a trade war between China and America, with America playing the role of passive victim. China has required American firms investing in its country to take on a Chinese partner and turn over their technology, which it agreed not to do when it joined the World Trade…

How much will the economy matter to voters in November?

Boomerang kids, in-house "gender experts," cigarette revisionism, and more.

2.7%, 3.9%, 3%, and 4.7%.

Never say Never. That’s what some of the Never Trumpers are saying, and even more are thinking. Both in private. They are afflicted with a nagging suspicion. Trump might, how shall they whisper it, Make America Great Again.

News you might have missed:

Seers at the Congressional Budget Office are guessing that due largely to the recent tax cuts, the economy will grow at an annual rate of 3.3 percent this year and 2.4 percent in 2019. Federal Reserve Board monetary policy gurus agree, and expect the tax cuts and the recent budget deal to give the…

"I will do such things, what they are yet I know not, but they shall be the terrors of the earth."

President Trump's use of the presidency to pursue a private vendetta with Amazon is appalling. But that doesn't mean policymakers shouldn't take a close look at the internet giant's power and competitive tactics.

We don't hear much from Donald Trump about the stock market these days. Odd, that. There was a time when he took credit for its spectacular rise after his election. "The reason our stock market is so successful is because of me. I've always been great with money." Perhaps he has been absorbed with…

“Believe me,” said—well, not really “said,” but posted—Mark Zuckerberg. Raising Chico Marx’s old question, Who are you going to trust, me or your lying eyes?

“Misery acquaints a man with strange bedfellows,” wrote Shakespeare. Although the odds that President Trump was reminded of that observation when re-reading The Tempest must be regarded as low, they are somewhat higher that he might at one time have stumbled across the modern variant, about…

Moving forward while backing down is no small feat. But the president managed it last week. On live TV.

Jay Powell and Donald Trump combined last week to shake investors to their core.

To ask coherence of President Trump is to ask too much of a man with the attention span of a tweet, and for whom cognitive dissonance is not something he spends nights losing sleep over. So we have had large tax cuts, putting money into the pockets of consumers, which will enable them to increase…

The president is setting the theme for the November congressional elections: We—he prefers “I” but might deign to share credit with Republican incumbents—have upped the pace of economic growth from below 2 percent to above 3 percent, created millions of new jobs, and cut taxes to put more money in…

The bad news is that share prices have been plummeting, wiping billions in value off the holdings of investors and pension funds. The good news is that share prices are plummeting by thousands of points on the Dow, taking froth off markets and restoring monetary policy to its proper place in our…

So regulation is not always a bad idea after all.

Rarely have both exuberance and anxiety run simultaneously at the high pitch evident these days at gatherings of investors. The exuberants are the noisiest right now. Trump tax cuts have produced a surge in business after-tax profits—which even before the tax cuts were up double digits compared…

It’s time for the January 2018 Hypocrite of the Month awards. The nominees are . . .

Returning from Davos, the gathering of the global elite who had never before seen fit to invite this exhibitionist television celebrity, familiar with the bankruptcy courts, to eschew Big Macs in favor of canapés for a few days, Donald Trump faces a more demanding test next Tuesday, when he…

In that wonderful movie Patton, George C. Scott’s title character imagines himself in a one-on-one tank battle with Field Marshal Erwin Rommel—the winner wins the war. Donald Trump, who hates the Washington Post and therefore its owner, Amazon.com founder Jeff Bezos, may have a similar vision of…

The New Normal. Slow growth. Persistently low inflation threatening to morph into Japanese-style deflation. Stagnant wages. Rising inequality. The American Dream converted to a nightmare. All the result of the metastasizing of the regulatory and entitlement states, say the Republicans. No, it’s the…

“Forgive me Lord, for I knew not what I was doing.”

If Trump set your teeth on edge in 2017, prepare for a grinding 2018. The story coming out of the White House is that the need to garner congressional support for his tax cut forced the president to restrain his reformist-populist-belligerent instincts until his signature legislation was on the…

“Mournful, dazed, sullen, traumatized, self-absorbed, defensive, remote, morbid, bleak, bummed-out, alienated, unprotected, besieged.” That’s how a leading pop music critic describes the music of choice of “millennial and younger listeners . . . making their way into an era of accelerating income…

Second Thoughts: London’s Metropolitan Police Service, aka Scotland Yard because its original entrance was located on Great Scotland Yard, is re-considering two rules that seem to have had consequences that could easily have been foreseen.

‘Twas the night before Christmas and all through the land, pundits are trying to figure out where the voters stand—now that Republicans have passed their tax bill, Santa Trump’s gift to his adoring fans.

Since Europeans have taken to professing amazement and horror at the doings of our president, it seems appropriate to tell then what amazes us about their doings.

It was a close call, but China finally edged out Congress for the Hypocrite of the Year Award. Congress grabbed the lead when Republicans, who bemoaned the wreckage President Obama did to the nation’s credit by adding some $7 trillion to $9 trillion to our national debt, decided that adding to our…

There was a time in the not-too distant past when the government’s monthly labor report was the most eagerly anticipated and influential of all economic data, and could move markets. Unemployment and a rising number of workers dropping out of the labor market meant the Great Recession had not run…

It is the worst of times, it is the best of times. The worst of times if you follow American politics. All is turmoil.

Thanksgiving has come and gone, diets have been broken, and some 88 percent of us have eaten turkey, carving up some 46 million birds in the process. The hunter-gatherers are safely home from the malls—or at least most of them are. The less courageous stay-at-their-computers are resting their…

Had enough of theoretical arguments about free trade—of complaints by establishment Republicans and the business community that President Trump is leading us from the glorious era of free trade into a recession induced by his protectionist policies? Well here’s a tangible example that should help…

It was a busy news week.

When President Trump talks tough on trade to one or several of our “partners,” he is being rude and wrecking the world trading system—in the words of the New York Times, adopting a “starkly unilateralist approach.” Yet when he politely raises America’s problems with that system in private, praises…

They have come to Bonn, Germany, some 25,000 diplomats, scientists, and lobbyists from some 200 nations to put flesh on the bare bones of the climate agreement signed two years ago. That’s when members of the congregation, gathered in Paris, pledged to limit further global warming to 2 degrees…

“Janet, thanks for dropping by the Oval Office. It’s a dump but I’m packing to leave for China to see my new best friend Xi Jinping, so I couldn’t get away to my New Jersey country club. He really likes me. I tricked him into letting us sell some beef in China while he is distracted by building…

Uber comes along and ends the rainy days and nights of waving fruitlessly at cabs with flashing “off duty” signs, and governments respond to pressures from threatened incumbents by making life difficult or impossible for the welfare-enhancing newcomer.

I am an admirer of Larry Summers. And of Kevin Hassett. Which is why I mourn Larry’s descent from civility into dismissive name-calling, and Kevin’s ill-considered attack on the Tax Policy Center, an organization with which I often disagree but is staffed by what Larry calls “highly respected…

Leave Trump country, fly about 2,000 miles east to Washington, D.C., and you enter a different world. In Trump country 88 percent of Trump voters approve of the job he is doing as president according to a poll by the Democracy Fund.

So that’s what it’s come to: Dueling IQs on the White House lawn.

American trade policy is focused on steel, gasoline-powered cars, and coal; China’s is focused on robots, electric vehicles, and solar panels.

The stock market rockets ever-upward, as well it should, what with the president’s tax package destined to make corporate America great again. Sure thing.

It’s put-up or shut-your-tweet time for the president. He has been promising to Make America Great Again by replacing free trade with protectionism, and now has enough opportunities to do just that in cases involving aircraft, dishwashers, solar panels, steel and cars from Korea and, of course,…

Before we get into a brawl over whose tax cut is better than whose, wouldn’t it be wise to ask: Should we cut taxes at all? And if so, why?

“I was very proud of the Senate Democratic Leader, Chuck Schumer. He could speak New York to the president.” So said Nancy Pelosi, showing the distance between hard-left San Franciscans, for whom every belief is a red line they cannot cross, and pragmatic New Yorkers of both parties.

If you think monetary policy is getting boring, think again. True, Fed chair Janet Yellen had no surprises for us earlier this week. To contain the 2008 financial crisis, the Fed printed more than one trillion new dollars to finance its purchase of the assets that it now plans to sell. That took…

There has always been one feature that distinguishes Lindsey Graham from his almost-peers in the Senate: a self-deprecating sense of humor. This characteristic often obscures another engaging characteristic of Graham’s: raw courage.

The President has decided that enough is enough. Until a few weeks ago, he relied on Republican leaders in the Senate and House—majority leader Mitch McConnell and House speaker Paul Ryan—to convert his wish list into legislation. They assured him they could do so relying solely on Republican…

And then there were four. Vacancies on the Federal Reserve Bank’s seven-person board of governors, that is, now that vice-chair Stanley Fischer has tendered his resignation for “personal reasons”—widely believed to be his wife’s health.

“This country's planted thick with laws from coast to coast—man's laws, not God's—and if you cut them down . . . d'you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake.”

Canada’s NAFTA negotiator has now demanded that new chapters be inserted to the agreement which reflect the Trudeau government’s “commitment to gender equality and . . . improving our relationship with indigenous peoples.”

Circuses feature sideshows and main events. So it is with the circus that performs daily at the Trump White House when it comes to trade policy. The sideshow currently on offer is the renegotiation of the 1994 North American Free Trade Agreement (NAFTA) that creates a more-or-less free trade area…

Central Bank, est. 1913, seeks new Chair, to assume duties Feb. 5, 2018: Applicants will be considered even if they have graduate training in economics, although a doctorate might prove a deterrent to selection. Patience to sit through long staff meetings discussing arcane forecasting issues…

The New York Times is upset with EPA Administrator Scott Pruitt. It seems that under the cloak of “rampant secrecy” has set out to “weaken an agency once known for transparency.”

Ten years ago, almost to the day, something went wrong with the American banking system. So horribly wrong that it almost brought down the entire system of international finance and caused what is now known as the Great Recession.

Enough, already! It is time for the commentariat to stop attributing every vulgarity erupting from this administration to the fact that the president, like his now-defenestrated potty-mouthed spokesman, is a New Yorker.

Who says that President Trump refuses to accept responsibility for anything? Just last week he bravely accepted responsibility for the soaring stock market and the good news emerging about the American economy, which grew at an annual rate of 2.6 percent, more than double the first-quarter anemic…

Enough, already! It is time for the commentariat to stop attributing every vulgarity erupting from this administration to the fact that the president, like his now-defenestrated potty-mouthed spokesman, is a New Yorker.

If you wonder what is supposed to happen when the demand for labor outruns the available supply, take a look at the picture below. It’s a Starbucks plea for baristas—the usually young people who make your latte, americano, or coconut milk mocha macchiato every morning. True, this particular branch…

“The trusts are hijous monsters. On the one hand they must be crushed underfoot; on the other hand not so fast.” So spake Mr. Dooley, the fictitious Irish bartender and font of wisdom created by Finley Peter Dunne in the late 19th century. Trusts were the form monopolies took at the time. Dooley…

No rest for the wary. Fearful of facing constituents with nothing but months of intra-party wrangling to offer, senate Republicans decided not to recess for the usual full month of August, and instead stay in Washington for an extra two weeks.

America, the New York Times groans (chortles?), was "ostracized" by the other G20 countries at the recently concluded meeting in Hamburg. And with Angela Merkel leading the band of ostracizers. And on not one but three issues: immigration, climate change, and trade. These are all worth examining in…

So it’s come to this. The monetary policy gurus at the Federal Reserve have decided to reduce the size of the bank’s swollen $4 trillion balance sheet in a gradual process—initially $10 billion per month, rising steadily thereafter.

Chinese president Xi Jinping is headed to the G20 meeting in Hamburg later this week planning to paint the town—no, not red—but green. Using President Trump’s decision to withdraw America from the Paris climate deal as an excuse, Xi will present himself as the new savior of the environment. As he…

With the president once again managing to divert attention from a sensible policy to a vulgar tweet, you might not have noticed that this past week has been “Energy Week.” The immediate result has been a lot of speeches, including one by Harold Hamm, the Trump-supporting oil-and-gas man who played…

Just when it looked as if the professionals in the Trump administration had taken over administration of trade policy, leaving the president to handle the rhetoric, someone in the Trump camp recalled that some 70 years ago—in 1947—23 nations signed the General Agreement on Tariffs and Trade (GATT),…

It was a bad week for the president of the United States and might prove to have been a career-ending week for the chair of the Federal Reserve Board. Special counsel Robert S. Mueller III is investigating whether Trump obstructed justice in connection with the FBI probe into Russian activities…

The president remains a protectionist. His administration? Not so much. That is possible because there are two strong and often opposing forces at work in Washington. One is the president of the United States, Donald J. Trump, sometime resident of 1600 Pennsylvania Avenue. The other is the Trump…

We're out. But we might come back. That's what President Trump has decided to do about the Paris climate accord. We're out because the accord is unfair: It allows China to pollute while we can't. It kills millions of jobs. It requires us to pay tens of billions of dollars to foreign countries. And…

President Trump is no dummy. He chose to exchange gifts with the pope in Rome while leaving his budget director and Treasury secretary in Washington to respond to critics of his budget. Let them take the heat while he takes the bows for a successful trip.

I leave it to others to sort out who said what to whom about Russia, loyalty oaths, secrets, and other matters now roiling Washington. Instead, here is an attempt to sort out the economic consequences of the doings of our political class.

There is something dispiriting about the debate over trade policy, and the problem does not lie with Donald Trump, or his tweets, or his on-again, off-again threats to various trading partners, or his fickle choice of partners to head the negotiating queue: EU to the front, Brexiting Britain to the…

There is no lack of drama in the Trump administration when it comes to trade policy. The ingredients are there: interesting players, uncertainty of outcome, the rise to and fall from favor. The principal actor and star, a man who brooks no rival for the spotlight is, of course, President Donald J.…

There is no lack of drama in the Trump administration when it comes to trade policy. The ingredients are there: interesting players, uncertainty of outcome, the rise to and fall from favor. The principal actor and star, a man who brooks no rival for the spotlight is, of course, President Donald J.…

Monetary policy is on hold: The Fed has set a pattern of interest rate increases and is sticking to it. Fiscal policy is also on hold. Republican scorpions bottled in the House of Representatives are split between deficit hawks and deficit doves, and those favoring a border tax and those joining…

Monetary policy is on hold: The Fed has set a pattern of interest rate increases and is sticking to it. Fiscal policy is also on hold. Republican scorpions bottled in the House of Representatives are split between deficit hawks and deficit doves, and those favoring a border tax and those joining…

Barack Obama thought a 28 percent corporate tax rate is about right. House Republicans think 20 percent would make America competitive again. Donald Trump thinks a 15 percent rate would Make America Great Again. And for comparison, Britain's prime minister Theresa May thinks 17 percent would make a…

The impending end of Donald Trump's break-in period is as good a time as any to see where he will go from here. The first 100 days are typically a honeymoon, during which the political knives remain sheathed. Not this time. Political back-stabbing, intra- and interparty, is rife. Democrats are…

In two weeks Donald Trump will serve his one-hundredth day as President of the United States of America. He approaches that milestone with an approval rating of 40 percent, the lowest of any modern-day president at this stage of his tenure. The man who made his reputation, and part of any fortune…

The American economy added a mere 98,000 jobs last month, less than half the number expected. Not good enough for President Trump, who not only wants more jobs: He wants them for coal miners and those horny handed sons of toil who once were the backbone of the American manufacturing work force. To…

Nothing erodes the power of a bully as much as a victory by those he threatens. Nothing erodes the reputation of a negotiator as much as a failure to succeed in cutting a deal he dearly wants to complete. Which is why President Trump enters negotiations over tax reform in a seriously weakened…

Saudis, Russia, shale. That is all ye need to know in order to understand the oil market. The Saudis lead the OPEC oil cartel, Russia is their largest potential fellow traveler, and the Permian Basin in the Southwest is the oil-rich shale that stands between the other two and $100 per barrel oil.

It seems that President Trump handed German Chancellor Angela Merkel a bill when she visited the United States—for almost $400 billion. That represents the amount Trump reckons is due to cover Germany's failure to meet its commitment to support NATO to the tune of 2 percent of its GDP, plus…

This is a revolt of the masses, in this case masses of economic students from around the world who came of age during the 2008 financial crisis and have united in a movement they call Rethinking Economics. The leaders of the movement, which according to the Guardian has grown to 43 student…

When America sneezes, the world catches a cold. When our Federal Reserve Board raises interest rates, world currencies move, commodity prices jump or slump. When America changes its trade policies, world leaders worry and try to respond. And when an American president who believes climate change is…

This is a revolt of the masses, in this case masses of economic students from around the world who came of age during the 2008 financial crisis and have united in a movement they call Rethinking Economics. The leaders of the movement, which according to the Guardian has grown to 43 student…

Saudis, Russia, shale. That is all ye need to know in order to understand the oil market. The Saudis lead the OPEC oil cartel, Russia is their largest potential fellow traveler, and the Permian Basin in the Southwest is the oil-rich shale that stands between the other two and $100 per barrel oil.

At some point, our border will be secure, resistance to deporting felons will collapse, and we will have accepted the fact that Dreamers will be allowed to stay in this country, probably on a path to citizenship. That's the easy part.

The president's health care reform and his radical budget: RIP. And with them perhaps the era of The Donald as we have come to know and love or hate it.

At some point, our border will be secure, resistance to deporting felons will collapse, and we will have accepted the fact that Dreamers will be allowed to stay in this country, probably on a path to citizenship. That’s the easy part.

Who would have imagined that it would come to this? Leftish activists are campaigning to have the Confederate flag removed from statehouses, statues of southern statesmen removed from campuses and public spaces, and the names of campus buildings changed to remove any they deem racist. These very…

Fifty is only half as good as one hundred, but it's twice as good as twenty-five. That's how anyone who is anyone in the international oil business saw it earlier this week when they gathered in Houston for the annual CERAWeek conference sponsored by HIS Markit, the data and information firm. They…

Donald Trump might turn out to be a blessing in disguise for the environmental movement. As Winston Churchill replied when his wife suggested his party's loss might turn out to be just such a blessing in disguise, "At the moment it seems quite effectively disguised."

There is only one way President Trump can square a circle, a circle in which he will meet himself coming around as he tries to deliver on his promises. Call it the 3-1/2-percent solution. No, not a cocaine shot half as potent as the 7-percent solution self-administered by the world's most famous…

Donald Trump might turn out to be a blessing in disguise for the environmental movement. As Winston Churchill replied when his wife suggested his party’s loss might turn out to be just such a blessing in disguise, "At the moment it seems quite effectively disguised."

Who could be against a rule that requires investment advisers to act in the best interests of their retiree-clients? Donald Trump, the Washington branch of the Goldman Sachs alumni association, the Wall Street Journal, and well-intentioned policy wonks who have never met a regulation they like,…

The American economy has taken the shape of an iceberg. The visible part glistens in the reflected sunlight of Donald Trump. Beneath the surface lurks a structure that might not long be capable of supporting the glistening tip.

Who could be against a rule that requires investment advisers to act in the best interests of their retiree-clients? Donald Trump, the Washington branch of the Goldman Sachs alumni association, the Wall Street Journal, and well-intentioned policy wonks who have never met a regulation they like,…

Donald Trump says he is for free trade. But it has to be fair trade. He sees himself not as a protectionist but as a protector of American workers from the ravages of unfair competition, somehow defined. In 1964 Supreme Court Justice Potter Stewart said when he was asked to define pornography, "I…

A spectre is haunting America, the spectre of TDS. That is the acronym for the plague that is afflicting half of our adult population, more than half if truth be told, and many youngsters whose parents have exposed them to the disease. According to Bernard Goldberg, writing in his column, some…

Most presidential honeymoons are characterized by congressional and presidential vows of everlasting cooperation, but the policy cohabitations are soon torn asunder by the healthy re-emergence of political differences. President Trump's honeymoon period was different. He chose to abuse his…

"Apple would not exist without immigration," warns Tim Cook, Apple's CEO. His colleagues in the board rooms of Silicon Valley agree, and tremble at the rumored issuance of a Trump executive order that might reduce the number of H-1B visas issued to skilled foreign workers. These titans of the…

He means it. The President of the United States of America Donald Trump says he will use the power of his office to tear up the post-WWII international and domestic settlements. No more world policeman, spending blood and treasure to protect nations that won't defend themselves. No more…

Accusations that French bureaucrats are insufficiently innovative are simply untrue. With Brexit forcing American bankers to reconsider maintaining their presence in London, the French finance minister hastened to New York to persuade Wall Street leaders that Paris is the city best positioned to…

The symbolism of President Donald Trump's pre-inaugural appearance before the Lincoln Memorial was part of his effort to show that he is sympathetic to the aspirations of the black community even though one of its leaders declared him "illegitimate" and added a boycott of Friday's swearing-in to…

A week from Monday, when the post-inauguration revelries, which include a "Deplorables Ball", are no more, Donald J. Trump, the forty-fifth President of the United States of America, will for the first time become fully aware of the 115th Congress of the United States of America. Although he has…

It promises to be a fracking good year in some of our oil producing regions. To understand why, you need to keep four numbers in mind: $100, $25, $50, and $60. The first is the approximate price of a barrel of crude oil in the summer of 2014, the second the price to which it plunged early in 2016,…

Ring out the old. Please. Only 18 percent of Americans say things got better for the country in 2016 than they had been in 2015. Ring in the new. Please. Some 55 percent of Americans expect 2017 to be better for them than was 2016, up twelve points on last year's poll. Consumer confidence is at a…

Israel is in real trouble. Not because of Obama's parting shot at the Jewish state and its prime minister. No, the real trouble for Israel, says the New York Times, comes from the fact that Donald Trump is about to become president. It seems that Trump's ascension to our highest office and his…

'Tis the season to be jolly. And for governments to show their concern for the governed, not all of whom have granted their consent to be governed by the in-crowd.

If you thought the heated political atmosphere would cool after voters made their decision, think again. If anything, the tone of political life has turned nastier. Democrats know they can't persuade electors that Hillary really is a better choice than The Donald, but they hope to make enough noise…

There's going to be a new sheriff in town, or as one businessman put it, "We now have to plan for the big fist in the sky." Doug Oberman, CEO of Caterpillar and chairman of the big-businessmen-only Business Roundtable told his members, "Some of us may bear our turn in the bullseye." And some…

Protectionism, I once said to Irving Kristol, is a bad idea. It benefits producers, but it harms consumers. “Where," he asked, "is it written that the welfare of consumers takes precedence over that of producers?" Reflection required, not a new experience after an encounter with Irving. And in this…

Donald Trump has three big problems, two of his own creation, one created by a ticking time bomb that Obama is leaving for him.

History matters, except to politicians.

That's the easy part. President-elect Donald Trump went on YouTube to announce two of his goals. The first was to show the print and television moguls who have been coming and going from Trump Tower in an effort to work out a modus vivendi with the president-elect that he doesn't need them to get…

It's impossible to pick up a newspaper or magazine without finding another story about Fox News journalist Megyn Kelly. Ms. Kelly secured her place in the pantheon of star reporters/pundits/celebrities by her fearless grilling of Donald Trump and, lately, by helping to unseat Fox supremo Roger…

So much ink and punditry is being expended on gossip about how President-elect Trump might cast his play, that too little attention is being paid to the plot. Not that the cast won't matter: Those with roles at key agencies can contribute to the success or failure of the drama now unfolding here in…

Apocalypse now. “Dear God. What have you done? After Brexit and this election … a world is collapsing before our eyes. Dizziness," was the cri de coeur of Gerard Araud, France's ambassador to the U.S., apparently unaware that anything that discomfits the French pleases a vast number of Americans.…

Three days hence those Americans not too lazy, or not seriously unhappy with the choice before them, will join the 37 million who have already voted. Hillary Clinton is hoping they will have taken on board Friday's jobs report. The economy added 161,000 jobs in October, and the reports for the past…

In only ten days the voters will have spoken and Donald Trump will be planning his move to Washington—to the new Trump International hotel, in which he says he will be spending lots of time. The hotel is spitting distance from the White House where the Obamas are making certain everything will be…

Republican Abraham Lincoln waged his Civil War with malice towards none. Republican Donald Trump is waging his intra-party civil war with malice towards just about everyone. Bodies will be strewn across the political landscape, and the projected body-count is rising.

The American economy continues to grow, albeit slowly, and the jobs markets has been generating enough jobs to keep us at or close to full employment without triggering inflation. The economy added 156,000 jobs last month, not seriously out of line with the 75,000-125,000 jobs that observers such…

The French have a term for when the best lines occur to someone after leaving a meeting or a dinner party. They call it L'esprit de l'escalier, the wisdom of the stairs. Here is Donald Trump's morning-after-the-debate version.

The New York Times, which enjoys poking fun at Fox News for claiming to be "fair and balanced," outdid itself in fairness and balance on Sunday. In its Review section it offered its readers two long columns, one laying out how Donald Trump might win the first debate, another on how Hillary Clinton…

When you buy a shirt and the shopkeeper tries to sell you a necktie, that's cross-selling. When you pick up your to-eat-at-the-desk sandwich and the guy at the register persuades you that you need some potato chips, that's cross-selling. When thousands of Wells Fargo employees respond to pressure…

There are times when inordinate importance is attached to a data release. Those are times to follow rules: averages can be deceiving: you can drown in a lake with an average depth of three feet; and disaggregate to get an understanding of the real-world significance of the data.

The winner: John Maynard Keynes, the advocate of government spending to boost growth. The loser: Angela Merkel, the austere fighter for balanced budgets. Host at the loose fiscal celebration at Harvard University: Larry Summers. Chief mourner at the austerity funeral: Jens Weidman, at the German…

Ideas travel, both the bad and the good. One is shared by two life-long members of the ruling class, Hillary Clinton, standard-bearer of the Democratic party, and European Commission president Jean-Claude Juncker, two politicians who feel threatened by the new revolt of the masses.

Exactly fifteen years ago today I was settled into my seat on a British Airways flight 178, scheduled to head from JFK to London in a few minutes. It was not to be. My cell phone rang: It was my wife, Cita, telling me that a plane had crashed into one of the World Trade Center's twin towers, and…

More questions to help you decide whether to vote, and if so, for whom. Those who shared their answers to the last round were split just about 50-50 between the two candidates.

President Obama will tolerate a lot for an opportunity to push his climate-change agenda. At this weekend's G20 summit meeting of the world's developed (aka "rich") nations, which account for 85 percent of the world's economy, his Chinese hosts really poured on the humiliation.

We are having two crises. One is in the boardroom of the Federal Reserve system. In a speech to her central bank colleagues at Jackson Hole, Federal Reserve chair Janet Yellen was believed by others than this writer to say that she was preparing to raise interest rates, subject of course to…

With Labor Day upon us—meaning the election is around the corner—ask yourself: "Who would I rather see in the White House?"

They should have known better, those central bankers and policy-watchers who thought that Janet Yellen's speech at Jackson Hole, Wyoming, on Friday would mark a volte-face. Yellen, who skipped last year's meeting, came to Jackson Hole under pressure from important colleagues to commit to raising…

With President Obama's plans for improving the lives of each one of us stalled by a recalcitrant, mean-spirited Republican congress, liberals and progressives are concentrating on using the tools available on the local level to enrich our lives. None more determined than Mayor Bill de Blasio, who…

"Let Reagan be Reagan" conservatives cried when their champion made his first run for the White House, and it turned out to be good advice. "Let Trump be Trump," cries none other than Donald Trump himself, who has decided to replace the team of professional campaign advisers who want him to be…

Poland's government has passed a law, upheld by its constitutional court, "that significantly limits the rights of people whose property in Warsaw was seized during or after World War II, and their descendants, to apply for restitution," according to the New York Times. The law sets up hurdles…

Earlier this week both Donald Trump and Hillary Clinton revealed the broad outlines of their plans for the American economy. Trump aims to accelerate growth, Clinton to redistribute the economic pie. Both have serious political problems. The Donald managed to trump his own economic plan with what…

Policy makers here in Washington, badly shaken by the anti-American tone of Turkish president Recep Erdoğan, want the European Commission, the European Central Bank, and the International Monetary Fund—the so-called Troika—to get Greece's finances settled and the country on a path to stability. And…

The French have a clear vision of how want Britain's decision to leave the EU should play out: British businesses out of the EU, French businesses into the U.K.

In 1965 the average CEO earned 20 times what the average worker took home. Now, with globalization expanding the reach of CEOs and depressing the wages of factory-floor workers, that ratio is over 300-to-1. This rise in inequality has caused critics of the American capitalist system to begin to…

The twin pillars of the administration's environmental policy have collapsed, but the Democratic platform is calling for a doubling down on that policy of regulation and subsidization in order to achieve "climate justice" and transform America into a "clean energy superstar". Nothing less. The…

July 12 just might have been the day on which the retail sector as we have known it here in America came to its end. If not its end, surely the beginning of its end. Amazon has an estimated 54 million Prime customers in the U.S. who pay $99 per year, and millions more around the world who pay about…

Polls show that we are approaching our date with the November 8 election as a 50-50 America when it comes to choosing between a self-styled billionaire who might initiate a major war if some foreign leader insults him, and a woman whom the FBI has demonstrated has not even a passing acquaintance…

So we will not add to the world's Brexit woes by having a recession here in America. At least not soon. The U.S. economy added 287,000 jobs in June, compared with a meager 11,000 in May (revised down yesterday from 38,000). Since we are deep into the political season, cheers from the Obama-Clinton…

President Obama thinks Britain made a mistake by voting to leave the European Union. So does Secretary of State John Kerry. So do most on the left of American politics. Most on the right see Britain’s so-called Independence Day as a sensible democratic decision to shed the protectionist and…

It didn't take Brexit to make forecasters take a dim view of the future of the U.S. economy. A cloud considerably larger than a man's hand hovered over the computers of most forecasters before Brexit shocked markets into a deep but transient swoon. The Federal Reserve Board said it dare not raise…

It is fashionable these days, and not only in America, to blame the woes of the electorate, and the consequent rise of politicians playing on those woes, on "the Establishment." It is the fault of this never-really-defined group that Britain is leaving the European Union, with consequences only now…

At times it is better to be lucky than good. And yesterday Donald Trump was lucky indeed to find himself in the UK for the re-opening of one of his hotel/golf courses, on what the tabloid Sun calls Britain's "Independence Day". Trump is not alone in believing that Britain's decision to leave the…

Janet Yellen, keeper of the Federal Reserve Bank's money store, announced on Wednesday that free money remains on offer, at least for a while longer. Even cash-rich companies such as Apple can't resist accepting that offer, and our deficit-ridden government can keep on borrowing at phenomenally low…

We are about to prove that two negatives make a positive. According to most polls, almost 60 percent of voters dislike or hate Hillary Clinton, while a bit more than that dislike or hate Donald Trump. One out of every three voters who plan to vote for either Trump or Clinton say they are doing so…

The Federal Reserve Board's good ship Raise-the-Interest-Rate sailed into an iceberg Friday when the government reported that a mere 38,000 new jobs had been created in May—the lowest total since November 2010. And that the figures for March and April had been revised downward by 59,000 jobs. And…

Donald Trump is against the TPP trade pact because he did not negotiate it, but “incompetents" did. Hillary Clinton is against TPP, sort of, at least in its present form, because Bernie Sanders is. Time to take a look at where the national interest might lie, with the help of the 788-page…

The New York Times is to be applauded for its inventiveness. With the State Department Inspector General's finding that she lied when she said she sought and received approval to use a private email server confronting its editorial writers, they had to find a way to continue standing by their…

The upcoming election will match low-tax, high-spending Donald Trump against high-tax, higher-spending Hillary Clinton. By all responsible reckonings, the next president will preside over rising deficits, funded by increased borrowing. That, of course, is what latter-day Keynesians such as…

An important victory for national sovereignty has gone largely unnoticed. Perhaps because the European Union bureaucracy is too worried about the coming referendum when Britain will decide to Remain in or Brexit the EU, the eurocracy finally bowed to a British demand. It seems the Brussels…

Incomes are up. Jobs are so plentiful that employers complain they cannot find workers who have the right skills and can pass a drug test, and college graduates are entering the best market in years. Industrial output is rising. Housing starts rose 6.6 percent and building permits 3.6 percent in…

From Buenos Aires to Buckingham Palace to Beijing to right here in America, economists are an endangered species. A few years ago the Argentine government began fining economists whose reports differed from official government figures. Inflation, said the government, is running at an annual rate of…

Call it pessimism. Or gloom. Or a feeling of being dispossessed. Or as Churchill labelled his periods of depression, Black Dog. Or, to be more modern, cognitive dissonance. It's palpable. Many businessmen here are peering into their always-clouded crystal balls and seeing a bleak future for…

Now we know. It will be Hillary Rodham Clinton vs. Donald J. Trump only some seven months from now, when election day arrives and puts a merciful end to our elongated campaign season. The winner will inherit an economy that, in all probability, will be continuing its slow crawl, with growth at or…

"There will always be an England," sang Vera Lynn in the dark early days of World War II. Probably true, unless the nation becomes subsumed in the EU, which has as its goal the elimination of the nation-state. But it is surely true that there will always be a Paris, or, as Rick so famously put it,…

To death and taxes add a new certainty: Starting next year we will watch the size of our government expand. We Americans, one-time disciples of the theory that that government is best which governs least, will have to choose in November between two paths to bigger government. The Democratic…

As Sinatra might put it, this time we almost made some sense of it. We almost made that long hard climb to reduced dependence on Saudi Arabia for our oil supplies and diminished its ability to affect the fate of the American economy. Not that the technological feat of our frackers made us…

Donald Trump, Ted Cruz, Bernie Sanders, and Hillary Clinton have all come to the same conclusion: no more nice guy when it comes to trade. Voters are convinced free trade is inimical to their interests, and even if it were a good thing our trading partners don't play fair. They have a point. China…

There ariseth a little cloud out of Minneapolis, smaller than the hand of a central banker, but worrying nevertheless. Neel Kashkari, newly appointed president of the Federal Reserve Bank of Minneapolis, wants to break up the big banks. Kashkari has taken to introducing himself with an…

When tales of an Italian codista combined with the NCAA tournament, I was afflicted with remembrance of sports events past. In post-WWII New York City, basketball was the sport of obsession with Jews, in part because it was a low-cost, low user of space. The City College of New York, known as the…

"I must do it. But I fear to do it. Upon my soul I do." So said Alec Guinness' King Faisal to Peter O'Toole's Lawrence in Lawrence of Arabia when faced with demands that he place his Bedouin fighters under British command. And so in effect said Federal Reserve chairwoman Janet Yellen to the…

Karl Marx, Joseph Schumpeter, and Irving Kristol have two things in common. All three recognized the extraordinary ability of market capitalism to produce goods, services, and wealth. And they hoped, believed, and feared, respectively, that capitalism contained the seeds of its own destruction.

With Brussels under attack by Islamic terrorists, it takes a truly self-regarding president to believe that he, not the Islamic terrorists, was orchestrating a world-historic event. If you missed the news while following the doings of terrorists in Belgium or our presidential wannabees scrambling…

Those of us who follow economic news as well as politics were treated to a view of two sides of this country. Turn on a news channel and there is Donald Trump, burly, blonde, braggadocious, belligerent, rude to hostile questioners, promising things he cannot deliver, but doing so in clear, easily…

In descending order of the magnitude of the theft:

Into the home stretch. Unless we aren't. The Republican nomination fight could be all but over on Tuesday. Or if not then on April 19, when New York, Connecticut, Pennsylvania and other voters with 1,299 delegates decide whether they want Donald Trump to make a run at gilding the White House while…

Seymour Lipkin, the pianist/composer who left this world recently, was once asked if he had always wanted to pursue a career in music. "I never considered anything else," he said. "There was never any … thought that I would be, say, an economist, God forbid." At times like this I can't help feeling…

The Democratic candidates, one a professed Socialist, offer a different road to fiscal disaster – more spending. There is a slight variation on the spending theme. Bernie Sanders would ramp up spending by $18 trillion in the next decade by lowering interest rates on student loans, providing free…

This is not a good time to be a banker. Any kind of banker. Our central bankers are alternately accused of having kept interest rates too low for too long, and of raising them too soon. Overseas they are accused of being unable to drive down their currency so as to rescue an economy from decades of…

The science of climate change may or may not be the certain thing that the president claims it is, but surely certain is the fact that he can push the Constitution only so far before the Supreme Court pushes back. Which is what it has done by granting the request of 29 states and several business…

The Times of London reports that for a mere $43,500 per year your child can attend Avenues: The World School in Manhattan, where 4-year olds sit in swivel chairs and are taught in Mandarin or Spanish half of the time. Every student is expected to become a responsible "global citizen" from a "world…

Who'd a thunk it? That's what a famous ventriloquist's dumbest dummy was made to ask on a now-gone radio program whenever he confronted anything new and, to him, inexplicable, although obvious to anyone else. It came to mind when the central bankers of Sweden decided to take current interest rates…

Investors and traders here were hoping that a spurt in job creation would dispel some of the gloom that has stock markets in turmoil, investors watching a decline in the value of their savings and pensions, and Federal Reserve Board chairwoman Janet Yellen and her monetary policy committee…

There will certainly be a recession this year. Unless there won’t. That is the consensus view of economists. The bad news is that even the optimists are having difficulty explaining away the reams of incoming data, and that even the cheeriest of the bunch are predicting a no-to-low-growth outlook…

A sign of what might be called “progress" jogged some memories of battles fought. In reporting Governor Andrew Cuomo's nomination of a new chief to a state regulatory agency, the New York Times identified the appointee as being a litigator in "the white-shoe law firm Paul, Weiss, Rifkind," et al.…

Many Americans are watching the gains racked up in their pension accounts in the last five years wiped out in the past few weeks. And fretting that no one seems to know what to do about it. The president says that economy is just fine. The Congress says the president is detached from reality in…

The final State of the Union address of any president evokes thoughts that vary with his success while in office. For the successful, such as Dwight Eisenhower, Ronald Reagan and Bill Clinton, it is a moment on which to look back with some satisfaction. For President Obama, with only 27 percent of…

The Chinese are wrong to overlook North Korea’s broken promise not to test nuclear weapons, in the interests of "trying to warm long-strained relations." So they are told by John Kerry. But I, the Secretary of State of the United States of America, am right to overlook Iran's repeated provocations…

Americans are convinced that things are not going well, and are not likely to improve soon. Gerald Seib, who follows these things for the Wall Street Journal, says Republican pollsters report the national mood as “Sour and dour. Nervous, on edge, a feeling of vulnerability and a lack of control."…

The BBC reports that organized gangs of young men assaulted, groped "between their legs", in at least one case raped, and robbed some 100 women in Cologne and Hamburg. Similar attacks were reported in Stuttgart. Cologne's police chief reported that the men were of Arab or North African appearance.…

Historical analogies are the last refuge of politicians seeking to justify a policy indefensible on its own merits. Such is the case when it comes to determining policies towards prospective Muslim immigrants. Proponents of allowing these refugees into the country are in difficulty. It seems (1)…

2015 was a bad year for Warren Buffett, oil and natural gas producers, U.S. coal companies, taxicab companies and their lenders, currency traders who thought the yuan could only go up, the New York Giants, Marissa Mayer, university administrators, and Trump haters.

Ntokozo Qwabe, the student at Oriel College, Oxford, co-founder of Rhodes Must Fall, wants the statue of Cecil Rhodes removed from the campus because Rhodes was a "racist, genocidal maniac … as bad as Hitler." Mr. Qwabe is attending Oxford on a Rhodes scholarship.

Guilty as charged. That's my response to anyone who accuses me of having spilled too much ink writing about what Janet Yellen might do, has done, and will do now that she has raised the Fed funds rate for the first time in a decade. By way of expiation, here is a look at some less-heralded…

Monday's editorial would be hilarious if it were not that so many liberals fail to see the humor. The Old Grey Lady is concerned about "A New Cuban Exodus," driven by "hopelessness at home …and fear that the unique treatment Cuban immigrants receive from Washington could end, now that diplomatic…

If it were done when 'tis done, then 'twere well it were done slowly. That is official Federal Reserve Board going-forward policy. The announcement of the Fed's first interest rate increase in almost a decade, an upward move of 0.25 percent from near zero, says, and twice, that future increases…

At minimum it is unseemly, at maximum an example of chutzpah as practiced in Silicon Valley. Having shot themselves in the foot, some prominent tech billionaires want the president to bypass Congress and minister to their wound. They have poured cash into his campaign coffers, and now is payback…

The international conference on climate change attracted thousands of delegates from almost 200 nations. The Conference of the Parties21, so named for the parties that signed the UN Framework Convention on Climate Change in 1992 and had come to Paris for what was their 21st conference, came to an…

"I'll build a stairway to Paradise," promised songwriter George Gershwin decades ago. Fed chairwoman Janet Yellen is about to try to do the same, taking interest rates up that stairway, from the zero level set during the hellish days of the financial crisis to the Paradise of normality or…

To understand Donald Trump's surprising ability to remain at the top of the polls, it is necessary to understand why the attacks of his critics misfire. The best place to start is with the continually uncomprehending New York Times. A story on page 1 et seq. levels what its authors must consider…

Christmas came early this year for Janet Yellen and those of her monetary policy committee colleagues eager to begin raising interest rates. Just a tiny bit, but enough to show that they remember how to do that after eight years of holding rates to just about zero. First gift: Santa, disguised as a…

There are lots of good reasons for conservatives to cheer when various Republican candidates propose a consumption tax, or a tax on spending as some call it, or, in one of its most used forms, a value-added tax (VAT).

California is reeling from a drought, rather like the one suffered by Israel in 1998-2002. California, with an 840-mile coastline on the world's largest ocean, has a water shortage; Israel, with a mere 170-mile coast line, does not. Israel invests in desalinization; California is building a…

On the surface, little seems to have changed as the opening bell rang for the retailers’ battle that is the holiday shopping season. On Thanksgiving day we carved some 46 million turkeys and downed 50 million pumpkin pies despite a shortage of pecans created by Chinese consumers who imported the…

It is not for an economist to adjudicate between the president of the United States, who feels he is appealing to our better angels by asking our blessing for his plan to grant 10,000 refugees from the Syrian wars entry into our country, and his critics who fear that the wave might include…

Retailers are having difficulty moving apparel these days. One analyst attributes the groaning shelves and racks to two successive years of warm weather. So retailers’ worries will soon be over: the world’s leaders are about to assemble in Paris to end the trend to global warming, a bigger threat…

The Wall Street Journal reports that those assembled at the American Bar Association meeting are urging lawyers throughout the nation “to celebrate ‘Love Your Lawyer Day’ to help promote a positive and more respected image of lawyers and their contribution to society.” Alas, we missed the…

At the end of this month representatives of some 200 nations will gather in Paris for the opening of a United Nations-sponsored conclave to prevent the cataclysm that President Barack Obama, backed by the moral authority of Pope Francis, believes will befall the world if we do not slow the pace of…

From Hong Kong to Harvard, erasing history has become a necessity. In the Chinese territory, it is the authorities in Beijing who want to eliminate any memory of the past; in Harvard Square, it is the Law School students. In Hong Kong, memories of its colonial past cannot be missed: the harbor and…

The Germans are angry with the Greeks for retiring at age 50 and counting on Germans to keep working until they are 65 so as to have enough cash to lend to Greece. The French are angry with the Germans for demanding such harsh and humiliating terms from the Greeks in return for a few billion more…

At last, a debate that lived up to its billing. The Fox Business Network promised this would be about economic policy, and not about fantasy football, or personalities, and its panelists delivered. Despite an occasional barb, including a neat put-down of Donald Trump by Carly Fiorina, we actually…

Lift-off. That’s the conclusion to which observers jumped when the government announced on Friday that the economy added 271,000 jobs in October. And that the August and September figures have been revised upward by 12,000. And that the unemployment rate fell to 5 percent. And that discouraged…

Coming soon to a central bank near you, in time for the Christmas shopping season, an increase in interest rates, courtesy of Janet Yellen and her colleagues on the Federal Reserve Board’s monetary policy committee. Or perhaps not. Folks living in euroland can expect the gift that keeps on giving,…

It probably isn’t true that CNBC asked the Republican candidates to wear a metal plate with a number around their necks and face the camera, no smiles allowed. But this was less a debate, with the otherwise able CNBC reporters and analysts teasing out the candidates’ views on economic issues, than…

Jilted. That’s how policy makers here in America feel now that British Prime Minister David Cameron has dubbed his country’s relation with the People’s Republic of China as “a very special relationship”, trumping the merely “special relationship”, the term used by Winston Churchill in 1946 to…

There are times when economics is secondary to other policy considerations—not irrelevant, but secondary. Last week, when 12 nations on the Pacific Rim finally agreed to the Trans-Pacific Partnership after years of negotiations, was one such time. This gives President Obama a much-needed victory—if…

We never thought we would find ourselves stocking a pantry in Arizona. But now that Phoenix is our winter base, there we were, on line at the deli counter of a supermarket located in one of the ubiquitous strip malls that we love because they are home to thrusting small businesses as well as huge…

The next president of the United States will likely wish he or she weren’t. 

Debates produce winners and losers. And CNN, known to some as the Clinton News Network, saw to it the biggest winner was the Democratic contenders as a group. Recall that when CNN staged a Republican debate, most of the questions were aimed at getting each candidate to attack the others, producing…

It is understandable that Donald Trump’s vulgar attack on immigrants has nicer people up in arms, and that pundits are leaping to their computers to chastise Ben Carson for saying he might not want a Muslim to be president of the United States. But it wouldn’t be a bad thing if these comments…

Strange as it may seem, Barack Obama has much in common with the storied matchmaker of Jewish legend. This Polish entrepreneur announced to the poverty-stricken rabbi of a poverty-stricken Polish town that she had found a match for his even more poverty stricken, unattractive son – no less than the…

The only word to describe Friday’s job report is ugly. The private sector created only 118,000 new jobs in September, early estimates of job creation in July and August were lowered, average hourly earnings dropped a tiny bit, the labor force participation rate dropped to its lowest level since…

Worry not about the tens of thousands of Syrians that Barack Obama plans to invite to take up residence here. Secretary of State Kerry assures us that the vetting process to screen out the bad guys will be thorough. Alas, Michael Steinbach, assistant director of counterterrorism of the F.B.I. told…

Two distinguished politicians, one with a constituency of over one billion souls, the other a constituency of over one billion subjects, visited us this week. The pope’s souls, of course, are voluntary adherents to his cause, with the price of disobedience deferred until the disobedient enter…

En route to Friday’s state dinner in his honor, Chinese President Xi Jinping stopped off in Seattle to meet with the heads of America’s great technology firms, from which China denies regularly stealing $300 billion annually in intellectual property, according to the Wall Street Journal. His goal:…

Moody’s must have it in for France. Sure, its economy is moribund. Sure, its trade unions are among the most intransigent in the world. But surely the socialist government deserves some credit for one of the most significant reforms in 200 years.

The opposition British Labour Party, now led by a leftist who favors Hamas, wants Britain to withdraw from NATO because its expansion has antagonized Vladimir Putin, give up its nuclear deterrent, and declare an arms embargo against Israel, has appointed as his shadow chancellor, one John…

The U.S. economy is chugging along. Not at high speed, but at a steady 2.25 percent annual rate, with retailers stocking up in anticipation of a very merry holiday season. The unemployment rate is down to 5.1 percent, according to the Federal Reserve Board headed lower to its “long-run normal”…

In eleven days the much-travelled Pope Francis will set foot on American soil for the first time: Unlike his two immediate predecessors, he did not visit this country before rising to the papacy. His baggage will include the mind-set typical of Latin American anti-U.S. populists, in his case the…

The economic recovery is barely worthy of the name, and there is evidence that inequality in America is increasing. Ignoring the first rule of statistics—correlation is not causation—progressives see this as a new reason to expand government. Reduce inequality and the growth rate will increase. 

“A fact can be a beautiful thing,” sings one of the characters in the award-winning musical, “Promises, Promises.” True. Unfortunately, a gaggle of facts can be somewhere between confusing and a curse, especially if you are a central banker who has specialized in promises, promises that a process…

Warren Buffett had it right, “Only when the tide goes out do you discover who’s been swimming naked.” Peer through the fog of commentary on recent share price gyrations and you can see the unclothed figures of Chinese president Xi Jinping and his fellow managers of the Chinese economy, the very one…

We can always count on the New York Times to remind us how complete has been conservatives’ loss in the culture wars. Elisabetta Povoledo reports from Venice that Mayor Luigi Brugnaro had to retreat from his proposed ban on books headed for the magical city’s preschool library about (1) a male dog…

The late great comedian Milton Berle, when introduced to an enthusiastically applauding audience, would hold up his left hand in a modest gesture as if to say thank you but that’s enough, and with his right hand held at waist level encouraged the audience to even wilder applause. President Obama…

There are times when excessive attention to monthly data reporting what’s up, what’s down, can be allowed to obscure underlying structural changes in an economy. With the game of what-will-Yellen-do-next in full flow, this is one of those times. No, the proverbial tectonic plates are not shifting,…

Liberals and progressives go to great lengths to keep church and state separate. Just try to have religious schools share in a voucher or other government program that provides relief to students trapped by the teachers’ unions into failing schools. No can do. It violates the separation of church…

Google wants a management structure more like Berkshire Hathaway’s. Berkshire Hathaway wants growth more like Google’s. Monsanto and Terex want to be more like Apple and other companies that minimize their tax burdens. And China wants to be more like the U.S., or at least its central bank wants to…

On Friday, the government reported that the economy added 215,000 jobs last month, and that the  unemployment rate remained a low 5 percent. That could support a decision by the Federal Reserve Board to raise its key interest rate in September. But the absence of inflation and of a significant…

The New York Times notes that the Clintons have decided to contribute between $5 million and $10 million to the Clinton Foundation. “That may reflect their enhanced wherewithal” – they earned more than $30 million in the past year and a half, and, it would seem, want to share the wealth. Actually,…

Libertarians in Colorado are flying high after their success in getting marijuana legalized in the state. In our little town of Aspen, there are now seven stores in which eager consumers – I perhaps should say addicts because one user recently held up a store, threatening staff with a hammer,…

Is America, or Illinois, or Chicago the next Greece? The answers are “Yes, if .  .  . ,” “No, but .  .  . ,” and “Perhaps.” Greece joined what was then the European Economic Community even though it had no business applying for admission, and the existing members had no business allowing it entry,…

Hurry up and wait. Hurry to the announcement by the Federal Reserve Board’s monetary policy committee, and then wait for the next one. After 2,417 days of keeping its key interest rate at zero, on Wednesday of last week the Fed policy team decided that a few more weeks or months at that level might…

All bad things must come to end has been the hope of the banking industry for these past eight years. Now it seems that time has come. In the past week or so just about everything has been coming up roses for America’s banks. JPMorgan Chase delivered second quarter earnings that “beat the Street”,…

All bad things must come to end has been the hope of the banking industry for these past eight years. Now it seems that time has come. In the past week or so just about everything has been coming up roses for America’s banks. JPMorgan Chase delivered second quarter earnings that “beat the Street”,…

Conservatives of America, unite. You have nothing to lose but regulations and subsidies. Hark. Listen up. Pay attention. And if there is any other cliché that might get your attention, pencil it in.

Two big deals were signed this week, with one thing in common – can-kicking. The Eurozone countries, more precisely Germany, kicked the Greek debt can down the road for three years by lending the already over-indebted country another €86bn. And the P5+1, the permanent members of the UN Security…

Years ago, a left-leaning reporter for a mainstream newspaper grossly exaggerated the crowd at one of her favorite protest rallies. When I pointed out the much lower crowd estimates by police and other sources, she responded with, “facts are the enemy of truth,” words from the mouth of Cervantes’…

Pope, President, Prices and Paris. That covers just about everything you need to know about the next step in the battle to prevent what has come to be called climate change, the title now preferred to “global warming” by those who worry that CO2 emissions are causing, er, global warming. The Pope…

Flushed with the success of its five-year effort to restore prosperity to Greece, Brussels’ eurocrats have turned their attention to Italy, and ruled that the country’s famous buffalo mozzarella need not be made with fresh milk: powdered milk will do just fine. So Italy will have to repeal a 1974…

The World Bank last week removed a chapter of its latest report on China, saying it had not been properly reviewed. It seems that the chapter, “Special Topic: Reform Priorities in China’s Financial Sector” called China’s financial sector wasteful, poor performing, overly indebted and weakly…

Ever since the environmental movement began it has had a religious fervor: Like God, Earth is always capitalized, and there is an annual celebration, Earth Day, rather like holidays celebrated by other religions. Of course, the dogmas of green religionists have changed over time: Prophecies of a…

Parades, fireworks, patriotic songs, 150 million hot dogs consumed, 41 million car trips of more than 50 miles -- and heightened security in reaction to Islamist terrorist threats to disrupt our celebration with murder and mayhem as part of their celebration of their holy month of Ramadan. That’s…

It makes no more sense to be certain that the globe is definitely not warming than to be certain that it definitely is. It makes no more sense to be certain that if the globe is warming it is not due to carbon emissions than to be certain that it definitely is. It makes no more sense to be certain…

So we once again have a functioning senate, no longer a prisoner of Harry Reid’s theory of government – if you do not like a bit of legislation, you can keep it – keep it from the floor, keep it from debate, keep it from a vote. That proved to be a ticket to the minority, as disgusted voters…

France needs Greece more than Greece needs France. So long as the Greeks grab the headlines with their defense of their unreformed economy, no one seems to notice that France is in violation of EU rules on the size of the allowed deficit, has such sustained high-level unemployment that its young…

Lincoln Chafee, former governor and senator from Rhode Island, has crossed the aisle from the Republican to the Democratic side. He recently announced he will run for his new party’s presidential nomination. A key plank in his platform is to convert America to the metric system. No amount of…

Another Sunday, another New York Times magazine, this one featuring a cover story about “Scott Walker and the dismantling of American unions.” Readers of the Old Grey Lady, a newspaper not without its virtues, are undoubtedly aware of its sympathy for down-trodden workers, especially if they belong…

Animal spirits rampant on a field of cheap money. For some analysts, that describes the red-hot deal-making that is going on here. According to Dealogic, the 4,373 deals consummated so far this year have a total value of $821 billion, a 20-year high. So it’s good news: newly confident CEOs, backed…

Watching the NBA playoffs one cannot but be upset at the rampant inequality that the league tolerates.  LeBron James constitutes less than 10 percent of the number of players on the Cleveland Cavaliers, but scores about 40 percent of the team’s points. Think what this does to the self-esteem of the…

On Friday we learned that the U.S. economy surprised on the upside by adding 280,000 new jobs in May, and that 32,000 more jobs had been created in March and April than originally reported. The fact that economic growth is still sluggish, while more and more workers are finding jobs, suggests that…

There is an important difference between European and American appetites, in addition to those for fast foods: risk taking. “Investments in Start-Ups Pick Up Pace,” reports the New York Times after surveying the high-tech financing scene here in America. “Europe Struggles to Foster a Startup…

Assuming the WNBA approves, Isiah Thomas will be part owner and coach of the New York Liberty, the women’s team owned by James Dolan, the man who brought the Knicks to their current position in the NBA. Thomas, general manager of the Knicks, was convicted of sexual harassment in 2007. Not to worry.…

From Beijing to London to Washington to other points on the map of this globalized economy, “inequality” has become a hot topic. China has its own methods of handling those the regime’s leaders feel have engaged in excessively conspicuous consumption. But show trials and re-education are tools not…

Lower gasoline prices continue to stuff consumers’ wallets and purses with an extra $100 billion annually. So better rush to the stores early, clutching your must-have or merely-want shopping lists to beat the crush. Don’t bother. That cash is staying in consumers’ pockets or bank accounts, or…

Alex Rodriguez hit his eight homerun. 653 more and he will pass Willie Mays for third most non-steroid-propelled homers, and earn a $6 million bonus from the Yankees. Tom Brady refused to turn over his cell phone and email records to the team investigating his possible involvement in deflating…

The American system of market-based capitalism is in trouble. And the reasons are not the ones commonly cited. The trouble is not that the financial system came close to collapse in the fall of 2008: We have experienced panics before, and the ability of the political and regulatory authorities to…

Prices matter. They are the economists’ canary in the coal mine, an indicator of what is to come. Not necessarily as grim an indicator as when we have here a dead canary, but a pointer that cannot be ignored. When oil prices plummeted, analysts paid attention, hunting for causes and effects. Wages…

The ice is finally melting. Not the Arctic ice, although that might be melting too. I mean the frozen position critics of the global warming hysterics have been taking. They disagree with Obama’s contention that the science of climate change is settled, and prefer reading actual temperatures…

Last week’s surprising report that the value of all the goods and services produced in America did not grow in the first quarter, which will be subject to two revisions as firmer data come in, tells us one of two things. Either the American economy has stopped growing, or the GDP figures, which…

April turns out to be “Remember-a-Nazi Month.” A 93-year-old Auschwitz guard, a former member of Adolf Hitler’s Waffen-SS unit, is on trial on 300,000 counts of accessory to murder. He says he “morally” shares the guilt for taking cash and belongings from the prisoners as they entered the camp, but…

Once upon a time the world was run by preppy Wasp men and well-tended sylph-like women. The rules were clear: casual was OK for men so long as they had a crocodile sewn over their hearts, and desert was OK for women, some known as “social X-rays” -- once a month, if that. Lisa Birnbach, co-author…

The Democrats have finally decided on the fair, just minimum wage -- $12 per hour. But they fail to make one important point in favor of their demand. Recall the tale of the diligent robbers who spend a weekend drilling into the vault of a posh jeweler, making off with millions in bling for their…

America has a rather unique role for the wives of Presidents and other office holders -- we designate them “First Ladies” and make available to them the bloody pulpit of their husbands’ office and considerable staff support. At times there is a public benefit: teacher-librarian Laura Bush did…

Every true conservative, or at least every Republican conservative, knows that our freedoms are under continuing threat from the Obama administration, which has already seized control of the health care and energy sectors, and is circling the education sector with the threat of a core curriculum.…

Every liberal knows that poverty breeds crime, although data are unable to show such a correlation, much less causation. This understanding of what is called the root cause of crime was best expressed in one of those Woody Allen flashbacks in which his father is defending the family maid against…

There are three ways to view a carbon tax. Conservatives see it, or should see it, as what is called “a tax swap”—a revenue-neutral tool to shift the burden of taxation from income and other taxes that reduce economic growth and risk-taking to consumption, thereby increasing the efficiency of the…

The day President Obama believes relevant history began. Rather like the French revolutionaries who decreed that the establishment of their Republic be dated Year I of the French Republic. August 4, 1961 was the day on which Barack Hussein Obama arrived on this earth in Honolulu, Hawaii. Anything…

It is not certain that Vladimir Ilyich Ulyanov, better known as Lenin, actually said, “The capitalists will sell us the rope with which we will hang them,” but if he didn’t, he certainly thought it, and if still around would like to claim that prophesy as his own. IBM has announced plans “to help a…

In one of his gag appearances, this one as a 2000-year old man, Mel Brooks was asked to name the greatest invention he had witnessed in his long life. “Saran wrap,” he shot back. A useful product, surely, but if environmentalists had the power they now have, unlikely to have emerged from the lab…

"Keep our story going,” implored Commander Dave Evans in his remarks closing the monthly meeting of the Korean War Veterans Association, General Brad Smith Chapter. At the meeting, one of us—Cita—had given a talk, as she often volunteers to do to veterans’ groups, about Winston Churchill, based on…

General Electric is divesting its finance business, starting with the sale of $26.5 billion of real estate assets. Back to its roots as an industrial manufacturing powerhouse, churning out jet engines, medical devices, oil drilling equipment and the other heavy equipment. Jeff Immelt finally has…

The strong dollar, warns Larry Fink, CEO of BlackRock in a letter to be released to shareholders next week, “will lead to an erosion of confidence on the part of CEOs, with the potential to slow both investment decisions and future growth in the U.S.” When you manage almost $5 trillion in assets,…

Start with those old enough to be graduating from law school. The law business ain’t exactly what it used to be -- so hungry for new lawyers that anyone with a law degree could find work and earn enough to start chipping away at his or her student loan, unless responding to government incentives to…

For your further enlightenment, two news stories on page one of last Sunday’s New York Times. One begins a long report on California’s water problems, attributed to a drought rather than bureaucratic mismanagement. A list of past “catastrophes” that state has survived ends with “budgetary collapse…

Harvard’s estimable Joe Nye has argued for decades that an important component of America’s ability to  influence world affairs is soft power -- a culture and values that coopt other nations and makes them want to follow our lead. A notion beloved of liberals who forget that Nye also mentioned the…

The German chancellor bestrides Europe like a colossus. She sets economic policy for the 18-nation eurozone. She says “If the euro goes, Europe goes”, by which she means that the currency’s value favors German exports to her eurozone partners, and makes it more difficult for them to sell their…

Weightier matters no longer have to wait, to paraphrase the great Stephen Sondheim. Or weight is about to be regulated, caught in a pincer movement. A report from Richard Dobbs, a director of the McKinsey Global Institute, and Boyd Swinburn -- get this -- the Director of the World Health…

The economy might, but only might, be slowing. In March we added only 126,000 jobs, the lowest increase since December 2013, barely enough to absorb new entrants into the workforce. Almost all measures of the health of the labor market -- the unemployment rate, the number of workers jobless for…

Brevity Is The Soul Of Wit

They are men, mostly. They are young, mostly. They are visionaries on a mission -- to systematize and make all the world’s knowledge accessible (Google); to connect all the world’s people with each other (Facebook); to change the way books are read and the sound of music is heard (Apple, Amazon);…

Water, Water Everywhere

“Fed Puts Interest-Rate Hikes in Play,” led the Wall Street Journal’s page one, following Federal Reserve Board chair Janet Yellen’s latest press conference. “Don’t bet on June for Federal Reserve hike,” countered page one of the business section of USA Today. To which I would add a headline for…

Clinton Makes Trouble For Cuomo

So all’s well. No more financial meltdowns. No more taxpayer bailouts of bonus-hunting, risk-taking bankers. The Federal Reserve Board’s regulators have decided that all 31 of the largest U.S. banks, including seven that are foreign-owned, would survive a severe recession with sufficient capital to…

Scaring Putin: Britain plans to meet the NATO requirement that it spend 2% of its GDP on defense by “creative accountancy” rather than by “actually spending more money,” reports the Financial Times. The trick: count spending on intelligence services and war pensions as military spending. This is in…

Sometimes -- not often, but sometimes -- anecdote is more revealing than data. Especially when the data are subject to major revisions, which is the case with most monthly economic data. This is one of those times. Last week’s jobs report -- 295,00 new nonfarm jobs in February -- was a bit more…

Sometimes, anecdote is more revealing than data. A few days’ gleanings:

There will come a time when the survivor of the circular firing squad that is commonly known as the Republican primary debates will square off against Hillary Clinton. That survivor will have to grin and bear seeing multiple videos of his Republican opponents attacking him for one thing or another.…

Markets work. That’s the message from Walmart’s decision to raise its starting wage for 500,000 of its 1.3 million US employees to $10 per hour starting next year. That’s 37% above the statutory minimum of $7.25. No, the notably cost-conscious company, the largest private-sector employer in…

Nothing like a quiet Sunday with the New York Times. Start with the sports section, as I do, hoping for an escape from the paper’s relentlessly liberal approach to what it calls news. No luck. It seems that James Dolan, owner of the Knicks and Madison Square Garden, host to this year’s All-Star…

We are in a war with Saudi Arabia—and losing. The Saudis aim to regain substantial control of our oil supply by driving from the industry many of our shale-oil-producing frackers who have reduced the power conveyed to the kingdom’s rulers by the underground ocean of oil on which their palaces sit.…

The right and left are moving towards each other, in a sort of pincers movement designed to destroy the army of free traders pressing Congress to give President Obama what is known as fast-track authority. That would permit him to put any trade deals he negotiates with eleven Pacific Rim countries…

The itinerant sing-for-your-supper bunch who travel the country sharing wisdom for a fee have a dirty little secret. As a member of the fraternity, I have found that I learn as much as I teach, maybe more, during speaking engagements. But don’t tell those who hand over rather large sums of money to…

We should “stop thinking about the economy as being in a perpetual crisis” commented Charles Plosser, President of the Federal Reserve Bank of Philadelphia, after the government announced on Friday that the private sector added 267,000 jobs in January, and that upward revisions to November and…

Congressional Republicans can reasonably be accused of prioritizing issues about which middle-class voters care little. The president can reasonably be said to have his priorities perfectly in order, with counterproductive proposals that won’t achieve them.

On April 5, 1933, Franklin Roosevelt did it right here in the White House. On August 15, 1971 Richard Nixon came back from Camp David and did it. On September 22, 1985, Ronald Reagan went to the Plaza Hotel and did it.

If you are a German and fancy Pegida, or a Brit and fancy UKIP, or a Frenchman and enjoy marching with the National Front, it’s a reasonable guess that you don’t like immigrants. If you’re an American, the story is different. There is a lady in the harbor to welcome the legal ones and a man in the…

It’s us against them—an American economy on the upswing vs. a global economy that definitely is not. Last year the U.S. economy added almost 3 million jobs, the largest number in fifteen years. The headline unemployment rate is down to 5.6 percent, and the so-called U-6 unemployment rate, which…

Had enough good economic news to see you through the holidays? Good. But if you plan to ask, “Please, sir, I want some more” you might be in store for your own Oliver Twist moment. Here’s why:

Nicholas Stern is one of the world’s über-environmentalists, the author of the famous Stern Review, a 700-page study released by the British government in 2006, which concluded, “Climate change is a serious global threat, and it demands an urgent response.” Eight years on, Stern professes himself…

An estimated 90 million of us will drive 50 miles or more during this holiday season, and recent years’ gnashings of teeth at the pump are being replaced with smiles. The price of gasoline is down 36 percent since April, to a national average of around $2.40 per gallon, with some cities reporting…

The new dawn didn’t. There was to be no more sturm und drang, no more brinkmanship, no more government shutdowns, no more threats of default on America’s debt. Just routine passage of a $1,100,000,000,000 spending bill to keep the government running until next September when the current fiscal year…

So we’ve done it: wrested control of the Senate from the do-nothing Democrats. But who are “we”? Are we the corporatist conservatives who fret that high marginal tax rates are stifling the risk-taking of wealthy investors, that business taxes are too high, that the entitlement state is…

The European Parliament has called for the dismemberment of Google, the French want  “les Gafa,” as they call Google, Apple, Facebook, and Amazon, reined in, EU regulators are under pressure to get tough with the Americans. And the leaders of Silicon Valley’s non-tax-paying, privacy-invading,…

“Give me your tired, your poor … your huddled masses … wretched refuse … the homeless,” implores the Lady in New York harbor. Little can she know that 11.4 million of these “tempest-tost” souls are already here, having arrived illegally, most from Mexico and points south. Some 4-5 million of those…

Some 140 million bargain-hunting customers will descend on retailers on Thanksgiving Day, so-called Black Friday, and throughout next weekend -- or at least those who haven’t shopped already or by early next week will head for the shops. Not so long ago most stores remained closed  on Thanksgiving…

There is more than might have been, but a lot less than first meets the eye. That describes the climate deal struck this week by President Barack Obama and Chinese president Xi Jinping in their private two-day meeting following a gathering of 19 Asian Pacific leaders in Beijing. The very fact of a…

President Obama, an increasingly leaky White House tells us, fears irrelevance. I am still relevant, the president all-but declared at his recent press conference. And to prove it, he told us about his constitutional authority to issue executive orders and to veto bills that he finds in conflict…

On Tuesday those of us who have not already availed ourselves of postal ballots or early voting will troop to the polls to elect all 435 members of the House of Representatives, 36 of the 100 senators, 36 governors, and a host of politicians vying for local office. These old-fashioned voters will…

No longer do innovators style themselves “entrepreneurs.” Too French-effete sounding. Nor do these creators call themselves “capitalists.” Too likely to displease liberal friends who associate that label with exploitation of someone or other. Today’s innovator class prefers “disrupter.” Nothing…

Oh, woe! Ebola has come to America and 150 people from infected countries are landing here every day. ISIS is battering the Kurds, to whom we have not sent the weapons we promised, and will chase the Iraqi army out of Baghdad as soon as they finish taking over Kobani. Europe is headed into still…

Anyone who doubts that the deployment of the technologies we have come to call fracking constitutes a revolution should consider this. U.S. oil production has soared by 70 percent in the past six years. American refineries have cut in half their imports from the OPEC cartel, setting off a scramble…

When it comes to military actions, President Obama likes to declare the end of wars, regardless of whether America’s opponents agree that is the case. When it comes to economic wars, he has no need to declare an end, no need for unilateral disarmament, because he never engages in the first place.…

The U.S. economy added 248,000 jobs in September, and the unemployment rate dropped to 5.9 percent. But the labor force participation rate continued to fall, average hourly earnings seem frozen, and over 13 percent of workers are either out of work, involuntarily working part time or too…

Last week was good for environmentalists, and perhaps even for the environment. President Obama doubled down on his effort to increase the likelihood of the success of the 2015 UN climate change conference in Paris, claiming the U.S. has “a special responsibility to lead. That’s what great nations…

If you know how many months there are in a “considerable time,” you will know exactly when Janet Yellen and her colleagues on the Federal Reserve Board’s monetary policy committee plan to begin raising interest rates. If not, you can add your guess to those of professional Fed watchers who are…

On September 23 in New York, the president will have an opportunity to score a political victory and advance an important part of his agenda. No, not at some Park Avenue fundraiser, although he might squeeze one in, but at Climate Summit 2014, a meeting of heads of state convened by U.N. secretary…

Analysts hoping to rebut the purveyors of gloom who are arguing that America is in long-term decline were looking to Friday’s job report for comfort. They got none. Instead of continuing to create about 200,000 each month, the economy produced a mere 142,000 new payroll jobs, and only 134,000 in…

On a recent trip to Washington I had the rare experience of some free time between meetings. Best used to get a much-needed haircut, I thought. A few blocks from my hotel I found myself in a barber shop of the sort that caters to people more modern than I, a gray-haired economist, and generally…

Free trade is a huge benefit if you are a Walmart shopper. All those microwave ovens, lamps, sneakers, and other stuff available for a relative pittance. It’s a tragedy if you are a domestic manufacturer or worker attempting to compete with cheap labor and subsidized Chinese manufacturers pouring…

Congratulations to you, Tom Montag, named sole chief operating officer of Bank of America this past Wednesday. And first thing Thursday morning asked to sign a check to the government for $16,650,000,000 to settle complaints that the bank sold flawed mortgage securities in the days preceding the…

At long last we are emerging from the blind alleys down which the debate about income inequality seems to have wandered. The first such dead end was marked “fairness.” The top tenth of one percent of earners feel the tax system unfairly expropriates too large a portion of their incomes, bloated…

At long last we are emerging from the blind alleys down which the debate about income inequality seems to have wandered. The first such dead end was marked “fairness.” The top tenth of one percent of earners feel the tax system unfairly expropriates too large a portion of their incomes, bloated…

Bank of America likes to top rival J.P. Morgan Chase in as many ways as possible. Except one. The $16-to-$17 billion check it is about to write to cover the fine for sins committed before the financial crisis tops the previous record of $13 billion paid by J.P. Morgan Chase just nine months ago.…

At last, some good news about the U.S. economy. Sort of. The government’s Bureau of Economic Analysis (BEA) reckons the economy grew at an annual rate of 4 percent in the second quarter of the year (data subject to revision). If that rate continues, five years of a lackadaisical recovery would be…

The following is a transcript of a conversation in the Oval Office passed to me simultaneously by the German, French, and British intelligence services, along with copies of their governments' complaints about the immorality of American spying on its allies.

Celebrating a fourth birthday and growing nicely. That’s the story of the Dodd-Frank law, designed to end a “too big to fail” banking system that forced taxpayers to bail out bankers who took not only their own banks but the entire financial system to the verge of collapse, and brought on a record…

Conflate two separate issues and you get one policy error. That is what too many opponents of carbon taxes are doing, getting caught up in the argument about climate change, which really has nothing to do with the case for a carbon tax. That case is that such a tax can make growth-inducing tax…

The New York Times does it again. On Sunday, Ethan Bronner, the paper’s deputy national editor, handed us his analysis of what has unleashed another round of horror in the Middle East. It seems that the cause is Israel’s decision to build a wall which creates “growing human distance between…

All good things must come to an end. And bad things, too, if you believe that the Federal Reserve Board’s bond buying program was a mistake. The minutes of its June 17-18 monetary policy committee meeting, published a few days ago, reveal that these purchases, largely credited with keeping…

After celebrating our Declaration of Independence from the British oppressor, we will return to work Monday having consumed 155 million hot dogs and, for some 41 million of us, bucked traffic jams, long security lines at airports, or storm-induced flight delays in order to visit family or whatever…

To meteorologists, an inversion is a deviation from the normal change of an atmospheric property. It can lead to pollution and adverse health effects. To Wall Street dealmakers, and now to most boards of directors, an inversion is a cross-border merger that allows the buyer to reincorporate in a…

The problem America faces is not that government is dysfunctional—an election might fix that. It is that America is now governed by a New Political Class, divorced from the concerns of all save its richest constituents. The Class is bipartisan, with members of both parties strolling arm-in-arm into…

And we thought the bad old days of oil shocks were over. Embargoes, price spikes, gasoline lines in America, a sweater-bedecked president ordering the end of hot water in many facilities, collapsing retail sales as high gasoline and energy prices hit stores as much as a big tax increase would,…

Until Eve’s encounter with the serpent, Adam did not spend a lot of time looking for work. Didn’t have to. Expelled from Eden and cursed with the necessity of earning his bread “in the sweat of his face,” he found work. Had to. Therein lies a partial, but only partial, explanation for one of the…

It is mandatory for economists to point out that one data point does not make a trend. We then all-too-often fill space with, er, a discussion of one data point, most usually the monthly report on job creation. Not being one to defy convention, I will report that Friday’s jobs report was a yawner.…

Little ado about not very much. Markets yawned when the government revised its initial estimate of economic growth in the first quarter from a slight positive, +0.1 percent, to a non-trivial negative of -1.0 percent. There are several reasons that the first shrinkage of the economy in three years…

Having lived through and survived Richard Nixon’s promise of energy independence, Jimmy Carter’s effort to substitute a hair shirt and a woolly sweater for a thermostat set at comfortable levels, George W. Bush’s insistence that Americans surrender their incandescent light bulbs, other presidents’…

The fracking euphoria had to end. For three reasons. First, the claims for its benefits were wildly exaggerated, ensuring eventual disappointment as even a cheerful reality could not meet the imaginings of the pro-fossil-fuel gang. Second, environmental groups were not going to sit idly by, their…

Pfizer is an American pharmaceutical company that makes Viagra to increase many men’s sexual activity, and Lipitor to prevent strokes and heart attacks (my lay language, not the more precise Pfizer claims). AstraZeneca is a British pharmaceutical company that makes cancer and other drugs. Pfizer…

Hedge fund manager Barry Rosenstein is not a man to be fazed by the recent rise in mortgage interest rates. Nor is he one to worry that the housing market might be softening, loping the odd million off the $147 million he shelled out for an 18-acre beachfront home in the Hamptons, on New York’s…

The nonpartisan Congressional Budget Office regularly revises its forecast of economic growth, the deficit, and other variables it studies. The economists at the International Monetary Fund likewise periodically revise their forecasts, at one point claiming that “downward revisions to growth…

The economy grew in the first quarter at “point one percent,” announced Mitch McConnell, and then repeated it by way of introduction to an attack on President Obama’s economic policies. Whether seeming to revel in the misery of a slow recovery that has kept unemployment high and wages low simply…

For those of us who believe in the market system, there is something unsettling about the thought of the billionaire bosses of Google, Apple, Adobe, Intel, two Disney subsidiaries, and Intuit sitting around a table and agreeing not to compete for staff. Facebook declined an invitation to join the…

"The dinosaurs surviving the crunch” was how Stephen Sondheim described women living an outdated lifestyle and grimly aware that “everybody dies.” If Sondheim had the slightest interest in the less exalted subject of economics, he would apply that descriptive to a host of companies and industries…

A few weeks ago I suggested that we now know when Federal Reserve Board chair Janet Yellen will raise interest rates: never. Her first formal monetary policy speech can be read to support that view, or at least that “normal” interest rates are what the Economist describes as “a distant prospect.”…

It is a decade since America confronted the question of just how much financial assistance to provide Iraq, then burdened with billions in debt incurred by the Saddam Hussein regime. Now we face a similar problem in Ukraine, the important difference being that Iraq’s huge but mismanaged oil…

Employers’ requests for the limited number of H1-B visas that allow foreign skilled workers to work and live here has wildly exceeded the supply. After all, the visas allow employers to hire foreigners, rather than bid up wage rates to attract American citizens, or incur the cost of training…

We now know the approximate date when Federal Reserve Board chair Janet Yellen will feel comfortable ending the Fed’s near-zero interest rate policy: never. Those who were led to believe by her first press conference that she has shed her dove’s feathers for those of an inflation hawk, circling…

America is a fracking cornucopia of crude oil, independent of the rapacious OPEC cartel. And has an inexhaustible supply of natural gas, putting us in a position to become a major exporter able to use its gas reserves as a geopolitical weapon. Take that, King Abdullah and Vladimir Putin. Too good…

We now know a lot more about the probable course of the economy than we did a few months ago, and are likely to learn even more in the next few weeks when the jobs report is released on April 4.

So Comcast’s chairman and CEO Brian Roberts is counting on his political clout with the Obama administration and a few inconsequential divestments to win regulatory approval for Comcast’s $45 billion acquisition of Time Warner Cable. And antitrust experts such as myself will be crunching numbers to…

President Obama might have been economical with the truth when he promised Americans they could keep their doctors when Obamacare takes effect, but he is proving a man of his word when it comes to the exercise of presidential power as he defines it. “I’ve got a pen and I’ve got a phone,” he told…

Five years ago this Sunday share prices hit a 13-year low: the S&P index of 500 shares fell to 676.53. Today it stands at 1,878.04, an increase of about 170 percent. Five years ago Sunday the unemployment rate stood at 8.7 percent, and was to reach 10 percent in a few months. Today, the…

In an increasingly grim and dangerous world, we must give thanks to the Old Gray Lady for providing its readers with one howler after another. Some of the latest.

Millions of Americans, glutted with benefits that until now have seemed likely to be renewed and renewed again, have suddenly become devoid of ambition, shed the work ethic, and taken to the couch and the TV remote. Or found a back pain or emotional problem that entitles them to the even higher…

The housing market and house prices are the economy’s gift to journalists. For one thing, almost everybody either owns a house, is looking to buy one, or to sell one – and all want to know whether prices are going up, down, or sideways, whether buyers are in the saddle and ride sellers, or vice…

Some three hundred years ago Sir Walter Scott asked, “Breathes there a man with soul so dead who never to himself hath said, This is my own, my native land.” Well, in America corporations are legally deemed  “persons,” so the answer to Scott’s question is “Yes,” at least when it comes to tax…

Janet Yellen made her first appearance before Congress since assuming the chair of the Federal Reserve Board and produced the yawns she was seeking, even thanking several of her interlocutors for calling her “unexciting.” Knowing that some Fed critics are seeking to rein in the bank’s independence…

When economic forecasts prove wrong, it is customary to blame the weather. So cold that consumers stayed home, or so hot that consumers, well, stayed home. So cold that outdoor construction was unexpectedly low, unless of course unusually high temperatures made such work impossible lest heat stroke…

President Obama surely deserves to relax this weekend and enjoy the Super Bowl after an arduous week in which he prepared and delivered his fifth State of the Union message, one the White House admits set forth a rather limited agenda, and then took to the hustings for stops in four states on the…

Republicans are being urged to support President Obama’s request for TPA so that he can complete negotiations on TPP and TTIP while pursuing other deals at the WTO. For those who do not often feast on this alphabet soup: Obama wants what we used to call fast-track authority to make a trade deal.

There is something about the energy business that is conducive to the creation of myths. So Roger Sant, a long-time and highly respected participant in the energy policy game and in the industries that energy legislation and regulation affect, told a group of Houston oil men recently. Energy myths…

Here we go again. JPMorgan Chase will pay $2.6 billion in fines and compensation for its inattention to numerous red flags warning that its important customer, one Bernie Madoff, was running a $65 billion Ponzi scheme. Among other things, JP Morgan Chase failed to notify the authorities that it had…

Herewith some thoughts about the outlook for this year. Thoughts, not forecasts, for which I have neither the skill nor the courage. I offer these thoughts in deference to the understandable demand for look-aheads. Human beings are always hunting for certainty, attempting to reduce randomness,…

There is reason to look back on the year about to end with some satisfaction – not joy, but satisfaction. The until-now deeply troubled industrial sector last month topped its December 2007 pre-recession peak for the first time, and is over 20 percent above its June 2009 low. Autos led the way:…

Years ago, when Americans began visiting Europe in significant numbers, they invariably returned with trophies ranging from cashmere sweaters (Britain), silk scarves (France), several inches on their waistlines (Italy), and assorted knick knacks. And with stories of the sullen London shop staffs…

Free traders are ecstatic. Negotiators at the 9th World Trade Organization ministerial conference in Bali cheered, hugged, and wept at what they see as the successful culmination of their recent round of talks. “A giant step for businesses large and small,” enthused the CEO of UPS. The…

I am no Miniver Cheevy, pining for days gone by. Not usually. But having just signed piles of paper before a gaggle of lawyers to get a relatively simple transaction done, I am thinking of Wally, if that was his real name. 

“Everything’s coming up roses,” a mother reassures her daughter in Gypsy, the 1959 musical chronicling the rise of burlesque dancer Gypsy Rose Lee. Were lyricist Stephen Sondheim surveying the American economy, he might want to extend the reassurance to the rest of us. For it does seem as if, at…

Our economy is increasingly policy-driven, at least in the near- and medium-terms. What Congress and the president do or don’t do, what incoming Federal Reserve Board chairman Janet Yellen does or doesn’t do, will be important determinants of our growth, inflation, and job creation rates. So here…

Go into almost any shop and hear Christmas carols and read signs trumpeting enormous discounts. Unusual, since the scramble for discounts traditionally begins after, not before, the first turkey has made the ultimate sacrifice to celebrants of Thanksgiving. By the end of next week, 45 million…

In Geneva, the famous “Pink Star” diamond fetches $83 million at auction, almost double the price ever paid for such a stone, and in Arkansas, Walmart lowers its sales outlook for the holiday season. That might be a metaphor for the holiday shopping season, where grouchy retailers are predicting a…

That’s the way globalization ends, not with one large headline, but with several changes in the direction of policy, caused by events seemingly unrelated to the policy changes they produce. That’s bad news for those who believe that freer trade and an increase in the international flow of capital…

Some attribute the recent spate of less-than-encouraging news about the U.S. economy to the  government shutdown, the battle over the debt ceiling, and to the reprise due in a relatively few weeks. They point to the decline in consumer confidence during and immediately after the shutdown: the…

“The thrill is gone,” famously warbled B.B. King among others. And so it is for watchers of the U.S. economic scene. The eighteenth partial government shutdown is over, World War II veterans can legally visit the monument to their bravery, hikers can trek through national parks, and the National…

The government re-opened, and there was no default. No surprise. This was the 18th shutdown since 1976, when the current budget procedure was established. The five shutdowns under Jimmy Carter were mostly over major policy issues such as abortion (he was for it) and the construction of a…

Janet Yellen, dubbed “Ms. QE Infinity” by some wags because of her support for printing money to create jobs, and her willingness to pierce the Fed’s long-held 2 percent annual inflation ceiling, will have more to worry about than monetary policy when she steps into Ben Bernanke’s ample shoes on…

Two stories were prominently featured on the front page of the Wall Street Journal a few days ago. America either is, or in a few months will be, the world’s largest producer of energy, “a new era of opportunities,” says Adam Sieminski, head of the U.S. Energy Information Administration. And…

If not Janet Yellen, who? Larry Summers wanted the job, but couldn’t win the support of leftish Democrats and feminists. Former Treasury Secretary Tim Geithner, who can have Ben Bernanke’s job as chairman of the Federal Reserve board for the asking, is said to have told the White House that he…

Given that mine is the dismal science, it is my role to cool the exuberance of investors at the news that the Fed will continue to print money rather than taper, with a bit of news that should worry them--the possible revival of the trade unions, long a fading force in the private sector.

Tomorrow it will be five years since Lehman Brothers departed the financial world, and we can almost still hear the gnashing of teeth as then-treasury secretary Hank Paulson watched Richard Fuld, then-boss of Lehman Brothers, take his company into bankruptcy after British regulators refused to…

It’s not that anyone here in Washington begrudges Britain, and to some extent Spain, their fledgling recoveries. But President Obama and other proponents of more government spending aren’t delighted that those nations’ austerity programs seem to be paying off in renewed growth rather than in the…

Monday will be an important day here in America. It is Labor Day, the day on which many of us say goodbye to summer – the last holiday from work until we carve our turkeys on Thanksgiving Day at the end of November. Barbeques will be fired up, beer kegs tapped, the all-too-short leases on beach…

All is quiet on the Washington front. But don’t let the lull in partisan warfare fool you. In two weeks Congress returns from its summer recess, after hearing from constituents who hold the institution in lower esteem than used car salesmen, and view eating Brussels sprouts, enduring traffic jams,…

The antitrust lawyers I have served as a consultant often have the same complaint: Their clients don’t know when to shut up. This was certainly true of the executives of US Airways and American Airlines as they touted the virtues of their proposed $11 billion merger. US Airways president Scott…

You probably know what NAFTA is--the North American Free Trade Agreement that reduced trade barriers between the U.S., Mexico and Canada. You might even know that TTIP is the acronym for Trans-Atlantic Trade and Investment Partnership, a deal that would remove some of the non-tariff barriers to…

Spare a bit of sympathy for the Federal Reserve Board’s monetary policy gurus. They have said they will begin to “taper” their purchases of bonds and mortgages when the unemployment rate falls to 6.5 percent. So July’s dip from 7.5 to 7.4 percent, the lowest rate since December 2008, should edge…

Another presidential “pivot.” Having “pivoted” from Europe to Asia, Barack Obama’s White House has announced another pivot. This one, according to Politico, “to re-focus his oft-meandering message back on the economy.” It seems that voters are less interested in Obama’s drive for gun control (he…

Data-driven, legacy-driven. Keep those two descriptives in mind and you will know a good deal about the prospects for a dialing back of asset purchases—“tapering”—by Federal Reserve Board chairman Ben Bernanke. After some confusing, market-roiling signals in the past two weeks, Bernanke has made it…

Here’s a TTIP for you. No, that’s not a typo missed by our ever-vigilant editors. It stands for Transatlantic Trade and Investment Partnership, what British prime minister David Cameron calls a “once-in-a-generation prize” that can create two million jobs on both sides of the Atlantic, and Sir…

Until recently it has been fashionable to denigrate the U.S. economic recovery: “America is the best house in a bad neighborhood,” sniffed many analysts. No longer. America is now a very good house in a terrible neighborhood.

Investors worry more about China’s slowdown than about Federal Reserve Board chairman Ben Bernanke’s “taper,” according to a recent informal poll. Goldman Sachs expects the Chinese economy to grow by 7.4 percent this year. That’s way down from 10.4 percent in 2010, 9.3 percent in 2011 and 7.8…

The bad news is that there is good news. At least, that’s how many skittish investors in shares and bonds see the increasingly cheery view of the Federal Reserve Board’s monetary policy gurus who concluded last week that downside risk to the economy has diminished since the Fall, and guessed that…

Chinese president Xi Jinping and U.S. President Barack Obama doffed their ties, rolled up their sleeves (well, at least Obama did), and even took the now-obligatory stroll around the Sunnylands Estate in Rancho Mirage, California, in the manner of Eisenhower and Khrushchev at Camp David, and Reagan…

Federal Reserve Board chairman Ben Bernanke hints that he might—perhaps, maybe—be thinking about possibly slowing the Fed’s purchases of bonds and mortgages. That leads bondholders to start selling, driving up interest rates, and causing tremors on stock markets. Not only here in the U.S.: the…

Thomas Carlyle had his own reasons for labeling economics the dismal science, and today’s economists seem intent on proving that the label applies in the circumstances of today’s American economy. After all, we are being treated to some really good news, especially compared with that being dished…

The burgeoning deficit has stopped burgeoning, at least for now. So Republican plans to attack the profligate president and to use the debt ceiling as a weapon to get more spending cuts can be shelved. Conservative deficit hawks should turn to a more immediate and important task—devising policies…

At the conclusion of a lunch at the British embassy here in Washington, Britain’s ambassador, Sir Peter Westmacott, asked each of the four scribbler-economists he had invited to give his forecasts for the year. I usually decline to participate in this sport, but after hearing the unoptimistic views…

"Trade makes the cake bigger so everyone can benefit.” So advised our distinguished visitor, British prime minister David Cameron, on the op-ed pages of the Wall Street Journal.

Governments everywhere are on the prowl for more revenues. French president François Hollande wants to tax incomes in excess of €1 million at a 75 percent rate. Britain’s chancellor of the exchequer, George Osborne, has jacked up VAT. Southern Europe’s finance ministers have come up with the novel…

A funny thing happened to our dysfunctional government. It functioned, unwittingly perhaps, but function it did. President Obama forced Republicans, unwilling to risk the political consequences of taking America over the fiscal cliff, to accept a $180 billion tax increase. Republicans returned the…

The U.S. economy grew at an annual rate of 2.5 percent in the first quarter, well ahead of the paltry 0.4 percent in the final quarter of 2012. Consumer spending led the way, increasing at a rate of 3.2 percent. But leave the champagne on ice for now. Consumer outlays were boosted by involuntary…

I cannot claim to have been an intimate of Margaret Thatcher’s. But I can claim to have known her on several levels—as a prime minister from whom I learned to put the “political” back into “political economy,” as a woman who fancied both her whisky and her sweet desserts, and as one who made it…

They come, they meet, they confer, they dash from television studio to television studio. Whether all of this to-do at the meetings here of the International Monetary Fund and the World Bank signify anything very much in the world outside of policymakers’ conference rooms is unclear. The IMF did…

To understand the American economy, you have to answer four questions. How can it be that unemployment remains high at the same time the number of job vacancies is rising? Will consumers keep buying cars and houses at anything like the current pace despite the recent increase in payroll taxes? How…

Enough is enough. That isn’t a bad shorthand description of Japanese prime minister Shinzo Abe’s new economic policy. Enough of lost decades, enough of deflation, enough of an over-valued yen, enough of wage stagnation, enough of the Bank of Japan’s (BOJ) “timidity.” More printing of money, more…

There is a great tendency both here and abroad to concentrate on the entertaining features of American politics:

There are times when the absence of really, really bad news passes for good news. This is such a time here in America, at least for those who worry that our fiscal deficits of over about $1,000,000,000,000 per year will soon have historians referring to the glory that was Washington.

Poor kids to go without lunches and vaccinations, meat sold without being inspected, firemen and cops laid off, illegal aliens released from prison, 17,200 teachers fired, airports closed, long lines at airports, and 700,000 workers laid off. Egypt in ferment? Syria at war? Austerity-ridden Greece?…

Put vote-getting ahead of policy. Then conflate and aggregate. That’s all you have to do to make a mess of immigration reform. Which is what our political class seems determined to do. 

“The tectonic plates are shifting” is a much over-used expression. But when it comes to the international energy industry, the expression is apt.

I knew Ed Koch, and Mayor Bloomberg is no Ed Koch. 

All of the fuss by the G-7 and the G-20 at their meeting this week about whether Japan should be condemned for attempting to end decades of stagnation by easing monetary policy, with the effect of driving down the yen, makes for good copy. Especially since the various G-7 spokesmen put on a…

Growth is the summum bonum of economic policy. Tough to arrange at home: stimulus packages don’t work very well, and monetary policy produces lots of fiat money but not very many jobs. The solution: export-led growth—the other guy will buy so much of your goods and services that your economy will…

It took only a tiny drop of .01 percent in fourth quarter GDP to produce another battle in the ideological war that is going on in Washington. Republicans blame it on the president’s spending and deficits, the president and his team on the congressional Republicans they call a “major headwind” and…

Elections matter. And they matter most when a party on one side of the political and ideological spectrum succeeds a rival on the other side of the spectrum. Any doubt that just such a shift occurred in America in 2008 was dispelled when the Obamas put their fashion stamp on the Bushes’ Texas-style…

Take heart: There is more going on than meets the naked ear. Yes, the mud-slinging contest that has replaced serious policymaking in Washington continues, with President Obama the clear winner last week when he told a nationally televised press conference that House Republicans “have suspicions…

Wall Street has taken to thinking in terms of walls. There is a “wall of money” waiting to tumble down on stock markets and into corporate investments if only investors could climb the “wall of worry” constructed by America’s politicians who can’t seem to put the nation’s finances in order.

Dysfunctional, the much used adjective to describe our political class, generally taken to mean deviating from norms of behavior, is a poorly chosen adjective. The president and the Congress have shown no sign of deviating at all from some norm—this is their norm. Economists have taken to using the…

This is the time that tries economists’ models. It has become the fashion at this time of year for forecasters to opine on the growth of GDP, the level of unemployment, the inflation rate next year—to at least one decimal place. I respect those who consult their models and intuition to come up with…

This is a good time to see where we have come during the year now coming to a close. Some things haven’t changed very much, or so it might seem. When the year began, households reported that 142 million Americans held jobs; right now, 143 million are in work. The labor force participation rate—the…

The fiscal cliff is a diversion, designed by politicians to conceal their inability to come to grips with the fact that they continue to spend too much, and refuse to reform a tax structure that reduces the competitiveness of American companies in world markets. No matter what deal is cut, whether…

There is an increasing feeling that if President Obama’s insistence on my way or the highway produces “a plunge over the fiscal cliff,” catastrophes will follow, not least being a downgrading of our credit rating. Perhaps. But consider the possibility that a deadlock might be a non-event. What we…

Markets move even when politicians don’t. Investors and consumers aren’t waiting for America’s politicians to decide whether and, if so, how to put our fiscal house in order. They are acting, now. Good thing, given the increasingly intransigent mood that has the president refusing to put spending…

By the end of this long weekend, we will have eaten (46 million gobblers gobbled up), travelled (44 million 50+ mile trips in cars, planes, and trains), malled (147 million crazed bargain hunters), and spent enough time watching football to have become familiar with every vulnerable bone and…

Let’s be clear what the bargaining over the fiscal cliff is all about. It is not about a long-term solution to our run away deficits and the iceberg looming in the distance: entitlement spending that will sink our fiscal ship. It is not about extracting more revenues from “the rich,” however…

We heard throughout the campaign of President Obama’s “all of the above” energy policy. That was then. This is now. About 48 hours after he was assured of reelection, the president’s Interior Department issued a plan to close to oil shale development 1.6 million acres of federal land in the West to…

The robocalls have stopped. Television ads have gone from attacks on candidates to the usual pitches for medications and exercises that will enable you to live forever. Political post-mortems are under way. And the 2016 wannabees are lining up financing and staffs for their runs at the Democratic…

One thing is certain in these waning hours of the presidential and congressional election campaigns: it is Barack Obama and the current members of Congress who will have to make the initial decision on what to do about what we have come to call the fiscal cliff. By the time the new Congress and the…

There are two U.S. economies. Well, not really. But there is the economy reported in the New York Times as part of its pre-election coverage, and far different one reported in the authoritative financial press.

Until now, most forecasters have been framing the assumptions underlying their projections on what they assume a reelected Barack Obama would do about taxes, appointments to the Federal Reserve Board, spending, the deficit and a host of other policies. Suddenly, they are back to the drawing board.…

One can’t help being in awe of the New York Times. The ingenuity it displays in running down Mitt Romney, if applied to a more useful project, would be a national treasure.

The good thing about the presidential debates is that they give us a clear idea of where each candidate wants to take the country. Not in great detail, with every twist and turn on the road to each man’s promised land marked off, but in terms of the general direction. Obama wants more government,…

Joe Biden showed us just why Washington isn’t working, why politics has become so nasty, why stalemate is the order of the day: The Obama administration have contempt of anyone who respectfully offers ideas that challenge theirs -- or would challenge them if given even the slightest consideration.

We are entering an age of energy abundance. Or not. In keeping with the great tradition of economics, dubbed by Thomas Carlyle the dismal science, let me raise a cautionary note. What God has showered upon us, politicians can make unavailable. Not only because they have to balance our need for…

Never underestimate the ingenuity of the New York Times when it comes to creating – not finding, creating – misfeasance by Mitt Romney. In a front-page, above-the-fold story on Wednesday, under the headline, “Romney’s Trade Message and Bain’s China Ties,” Sharon LaFraniere and Mike McIntire ran…

Friday’s jobs report might, but only might, have been the last one that will have any effect on the race to the White House. By the time the next report is published on November 2, only four days before the election, about 40 percent of all voters will have cast early or mail ballots. But the…

Permit me to add two points to the comments on the first presidential debate. First, no one seems to have noticed that after extolling Americans for “their genius, their grit, their determination,” the president said that everything he has tried to do and will do if reelected is to see that these…

Free trade might not be the first casualty of an American election campaign, but it is right up there in the top rank. President Obama is bashing Mitt Romney for sending jobs to China when he ran Bain Capital, and Romney is returning the favor by accusing Obama of failing to label China a currency…

I know a gaffe when I see one, having made many myself, and Romney’s 47 percent remark was no gaffe. It was an expression of a belief so deeply held, and so thoroughly validated in the circles in which Romney travels, that it required no fact-checking. Add to that the tin ear that allowed the…

So it’s come to this. A former professor of economics turned central banker can keep policymakers and investors on the edge of their seats, waiting for his latest pronouncement. That tells us two things. First, in the near-term, the president and Congress are irrelevant, frozen in mutual antipathy…

If Washingtonians think they live in a Democratic-dominated city, they should come out here to the Rocky Mountain hotbed of liberalism that is Aspen. In Washington, each party recognizes that the other must exist. Otherwise, they would have no one to attack and would be forced instead to come up…

The party conventions are over, the signs and funny hats are overflowing trashcans in Tampa and Charlotte, and reality returns to center stage in the form of Friday’s jobs report. It’s rare that a single data report matters much. After all, we can’t project a trend from a single data point. The…

Many conservative commentators saw in Bill Clinton’s speech an overly long, rambling, charming, endorsement of Barack Obama, a bit too wonky, and probably successful, if at all, only in assuring some wavering voters to stick with their 2008 decision and renew President Obama’s contract with America.

There is much to admire in Michelle Obama’s speech to the Democratic convention: the admirable delivery, the praise of her husband’s virtues was sincere and moving, and the rags-to-riches tale avoided seeming stale after so many others.

Here is an easy way for any non-economist to tell whether an economy is in dire straits: If investors are looking to their central bankers to get them out of the mess created by over-borrowing, ineffective regulation, and political paralysis. Markets unwilling to lend money at reasonable rates? No…

The end of Medicare and Medicaid as we know them—through reform, the Ryan way, or -bankruptcy, the Obama way. The direction of the country—via the Romney-Ryan right track, or the Obama-Biden wrong track. Those are the choices, made stark by the addition of Paul Ryan to the Republican ticket.

Diana Furchtgott-Roth, former chief economist at the Department of Labor and now a senior fellow at the Manhattan Institute (as well as a former colleague of mine at the Hudson Institute), likes to tilt at windmills, and in her latest book she has an opportunity to do so—and at actual windmills, no…

Federal Reserve Board chairman Ben Bernanke now has two reasons to disappoint those who are hoping he will use his speech next week at the conclave of central bankers in Jackson Hole, Wyoming, to launch the good ship QE3. The first is that the economy continues to move ahead, albeit at a slower…

Media bias consists of more than partial quotes, deliberate misreporting, and economy with the truth. Doubt that, and read the New York Times last week, reporting—on page one—“U.S. Reliance on Saudi Oil Goes Back Up: Security Concerns Rise With Gulf Imports.” If you think this has anything to do…

“America goes shopping again,” exulted one commentator. “The American consumer is back, big time,” chortled another. “Retail sales increase notably more than expected in July reflecting across-the-board strength in sales,” commented the more sober economists at Goldman Sachs, reporting a 0.8…

When the I.R.S. and New York Times effect a merger, beware: truth suffers. On Saturday we were treated to this headline, strapped across the top of page one of the business section of our newspaper of record, “In Superrich, Clues to What Might Be in Romney’s Return.” Note: This is a news story, not…

If the Federal Reserve Board’s monetary policy gurus hoped that Friday’s jobs report would give them solid guidance as to how to set future monetary policy they were sorely disappointed. The jobs situation neither deteriorated sufficiently to justify another round of easing, nor improved…

So President Obama has abandoned his claim that America has been headed in the wrong direction for 30 years and decided to run on Bill Clinton’s record. Well, Mr. President, the voters know Bill Clinton, and they know that you are no Bill Clinton.

This week I offer a rather narrow range of choice of scenarios: gloomy, gloomier, and gloomiest, leavened only with a brighter after thought. The merely gloomy forecasts anticipate unsatisfactory growth but no recession. Analysts of this view advance three arguments.

Slow, slower, and maybe even stop—that’s a quick summary of how Federal Reserve Board chairman Ben Bernanke sees the U.S. economy. The economy grew at an annual rate of 2.5 percent last year, 1.9 percent in the first quarter of this year, “and available indicators point to a still-smaller gain in…

President Obama has one thing right: Obamacare will end the process by which insured patients, or those capable of paying from their own pockets (e.g., the rich Saudi princes who inhabit the best suites in our hospitals), subsidize patients who show up in the emergency room, are treated, and then…

It’s easy to blame politicians for their inability to come to some sort of compromise on the issues facing the economy. And they surely deserve a good portion of whatever obloquy is heaped upon them as they posture and subordinate the national interest to narrower and often baser goals. But…

Two percent is no solution. That’s the growth rate chalked up by the U.S. economy in the first quarter (1.9 percent for those who believe in the precision with which GDP is measured) and that most forecasters see in America’s near-term future. Macroeconomic Advisers is not alone in lowering its…

If you want to get some sense of where the economy is heading, don’t ignore what the courts are doing. No need to repeat much of what you have heard—some of it may be true—about the Supreme Court’s decision to uphold the constitutionality of the Patient Protection and Affordable Care Act, a.k.a.…

Barack Obama doesn’t have George W. Bush to kick around anymore. At least not credibly. Sure, he will continue to argue that he inherited such a mess that his own policies can only be regarded as a smashing success. But it’s been four years since the patient was turned over to the new president for…

Slow growth here and in China—as well as a recession in Europe—is reducing demand for oil. Inventories in the U.S. are at a 22-year high. The Federal Reserve Board’s QEs that pumped paper money into the economy and drove up the nominal price of oil have come to an end. And the twelve OPEC oil…

This is a tale of knishes, taxes, and conservatives’ hopes to replace income and capital gains taxes with a national sales tax on consumption. Like all those who preside over national treasuries, Britain’s chancellor of the exchequer, George Osborne, has a deficit that needs closing. Unlike other…

Just as America proved to be such a safe haven for immigrants in the latter 19th and early 20th centuries, it is now seen as a safe haven for wealth attempting to escape Europe’s tax collectors and financial chaos and recession in Europe, and for foreign central banks newly enamored of the dollar.

To many observers the choice is simple: These are the worst of economic times, or almost—and we are on the brink of something worse. Incumbent politicians fear this is the case, and challengers, sotto voce, hope it is. They focus on what to them is the long run—the 22 weeks until Election Day,…

Debtors of the world, unite—you have nothing to lose but your IOUs!

America is the best house in a run-down neighborhood: The famous BRICs are crumbling.

The tide sweeping from Greece across Europe and into the United States is washing away support for austerity, in some cases reinforcing opposition to it, largely from the left. President Obama is delighted at this support for his refusal to cut spending in the face of mounting deficits, and the…

Perhaps the best way to understand China’s trade policy is to consult professional China watchers who always accuse mere economists of ignoring “context.” The Chinese regime is in transition to a new generation of leaders; a scandal has led to the purging of Bo Xilai and the arrest of his wife in…

Summer is approaching and nerves are jangling. In recent years the green shoots of the early months withered in the heat of summer. The queue of people worried that this summer will be another in which a recovery is aborted is long: the unemployed, retailers, investors, President Barack Obama and…

“The world is too much with us,” lamented William Wordsworth over 200 years ago. Lately, American investors, businessmen, policymakers, and workers agree inclined to agree. At least in the case of Europe. Just as our recovery from a deep recession seemed to be gaining momentum, strong headwinds…

There I was, in a posh resort south of Los Angeles, addressing an audience of mostly lawyers. I had arrived a few days early to see some clients and, in the lingo of the aging hippies of nearby Laguna Beach, “chill out” by catching the NCAA semifinals and a Knicks game on Pacific Coast time.

Good news for those of us who know that only a reformed version of market capitalism can survive current unhappiness with its performance. Citigroup’s shareholders have told their executive employees, and most especially CEO Vikram Pandit, that it is the owners of the business, not their hired…

We’re all in this together. The globalized economy, that is. We Americans worry that the eurozone crisis has returned, and will abort our fragile recovery, while Europeans worry that America’s none-too-robust economy and its weak dollar will make it difficult for EU export industries. America’s…

It is no easy thing to peer through the fog of recent economic data. Confidence that the economic recovery would accelerate ran into a not-so-good job report Friday. To the chagrin of the president’s reelection campaign team, only 121,000 workers were added to private sector payrolls in March, far…

It’s been more than three years since Barack Obama was elected on a pledge to “transform” America. Two of the industries in his sights were health care and energy. Whether he will get to realize his vision of a government-managed health care system depends now on the Supreme Court, which will…

We may be entering an era of creeping de-globalization. It is one thing to be generous with the perceived foibles of your trading partners when your economy is growing and jobs are plentiful. It is quite another to decide to be tolerant when your economy is struggling, and domestic political…

It’s better to be lucky than good. So goes the old saw. It’s better still to be both lucky and good, which is what Britain’s new ambassador here in Washington seems to be. Sir Peter Westmacott surely demonstrated just how good he is at what he does by setting up a dream visit for Prime Minister…

President Obama probably took a few minutes off his fundraising tour to hum a few bars of “Everything’s Coming up Roses” when the jobs report was published this morning. The private sector added 233,000 jobs in February, and earlier reports for December and January were revised upward by 61,000.…

Don’t feel embarrassed if you can’t figure out where the American economy is headed. I don't. After all, Federal Reserve Board chairman Ben Bernanke told the House Financial Services Committee last week that the economy is sending “somewhat different signals” about growth. The good news is that the…

The good thing about election campaigns is that they force both parties to do things, or at least to promise to do things they should have done long ago. President Barack Obama is a born-again tax cutter. He wants the top rate of corporate income tax cut from 35 percent to 28 percent, and the…

Xi Jinping, the heir apparent to the leadership of the Chinese Communist regime, came to America to meet the president, dine with the vice president, visit a farm in Iowa—following in the 1959 footsteps of Nikita Khrushchev—and attend a basketball game in Los Angeles. The Iowa visit was designed to…

Happy days are here again, to cite the song favored by Franklin Roosevelt in his successful 1932 campaign for the presidency and the unofficial theme song of the Democratic party ever since. At least, they seem to be here again for President Barack Obama, whose approval ratings have climbed to or…

Some fear America is about to go protectionist. Others fear it won’t. Where you stand on this issue depends on where you sit. Sit in the chair of the CEO of a major exporter, and you fear protectionism and the ever-rising spiral of retaliations. Sit in the chair of the president of a trade union,…

Today’s jobs report is all good news for the country, and bad news for Republicans who are hoping that a failing economy is all they need in order to unseat President Obama. The economy added 243,000 jobs in January, 257,000 in the private sector, driving the unemployment rate down to a three-year…

Right diagnosis. Wrong prescription. That’s the fairest way to describe Rick Santorum’s idea to provide tax breaks for “manufacturing.” Leave aside the definitional issues—some of us at The Weekly Standard who “manufacture” ideas might qualify for the benefit he intends for others. The solution to…

If you are one of the many who believes that uncertainty is stalling our recovery, you should be smiling. Much uncertainty has been replaced by a surer knowledge of what policy makers have in mind for the economy, and of the direction of some of the key economic indicators. If you are sure you love…

On Monday, the European Union is expected to decide to boycott Iranian oil. If it does—nothing is ever certain when EU policymakers gather, least of all a firm decision—Iran says it will close the Strait of Hormuz, through which 20 percent of the world’s oil moves to market. That country’s navy…

America’s more or less free-market capitalism is not under threat from Marxist-Leninism: That system’s demonstrated failures have consigned it to the ash-heap of history. Nor is it under threat from China’s system of managed economy plus political repression: We can’t even abide police breaking up…

Politics makes for strange posturings. It seems that several of the candidates for the Republican presidential nomination—some eagerly, others somewhere between reluctantly and warily—have decided that it is evil to take over failing companies and attempt to restructure them so that they can grow…

“We believe that the U.S. is best positioned for both a cyclical recovery and dealing with … its growing debt burden,” advised Goldman Sachs’s chief investment officer for private wealth management, Sharmin Mossavar-Rahmani, to the firm’s clients in her investment management division’s “outlook.”…

Now that you have read the results of the various economic forecasting models that have served so many so badly in recent years—they are predicting the U.S. economy will grow in 2012 at an annual rate of between 1.5 percent and 2 percent—let me offer an alternative way of looking at things. It is…

"A man attending a wife-swapping party without his wife.” So a very annoyed French negotiator at the latest European summit characterized British prime minister David Cameron’s refusal to trade the future of his nation’s financial center for the approval of the 26 other members of the European…

Were you returning from a year off, you might think you hadn’t missed much. Stock markets must have been boring: The S&P index of 500 shares is ending 2011 at about the same level as it ended 2010. As for currency markets, not much action there: At the end of last year it took $1.30 to get you a…

Two very important changes have occurred in America, and indeed in other Western economies. My guess is that they will prove to be permanent phenomena, just as permanent as the changes introduced by Franklin Delano Roosevelt’s New Deal.

We all spend so much time trying to make sense of the daily data deluge—retail sales, jobs, exports, deficits, political polling—that we often overlook more durable shifts in the underlying economy. Two are worth considering.

“[A] U.S. recession caused by the fiscal crisis in Europe would be very costly and could throw millions of Americans out of work.” So says the Center for Economic and Policy Research, a think tank that numbers Pulitzer Prize winning, generally liberal economists Joe Stiglitz and Robert Solow among…

Greece and Italy may be ungovernable, but America is ungoverned. The president ducked out of the country for an Asian tour while the supercommittee tried to reach agreement on a plan to cut the deficit. But the Democrats refused to offer specific cuts in entitlement spending, despite a Republican…

The average American family is not going to cancel a trip to Disneyland because of headlines about “something going on in Italy or France,” says James Bullard, president of the Federal Reserve Bank of St. Louis. So he is guessing “The holiday season will be reasonable.” Pollsters support that view.…

Greece is a far away country about which we know very little, as Neville Chamberlain described Czechoslovakia right before developments there brought the world closer to World War II. France has not been a great friend in recent times of America—remember Freedom Fries?—so its travails aren’t…

There are three sorts of economic news: good, hinting that a recovery might be around the corner; ambiguous, perhaps hinting that a double dip is unlikely; and bad.

Politics being what it is, I suppose it is no surprise that Herman Cain’s rivals for the Republican nomination should heap scorn on his 9-9-9 tax reform plan. I have no massive computer model that can tell me whether Cain’s proposal would generate enough revenue to be part of any plan to bring the…

The length of American political campaigns is a source of annoyance to those for whom there is a life other than sound bites, attack ads, and commercials extolling the virtues of their sponsors and the evils of opponents. And the cost of campaigns is a source of amazement to foreign observers. But…

Barack Obama might be on to something. He has brought class warfare to American politics. Well, revived it anyway, after Al Gore rode it to a loss in the 2000 presidential election. In fact, America has seen such outbreaks from time to time, most notably when William Jennings Bryan represented the…

President Barack Obama has a ten year $447 billion jobs plan, but the Senate isn’t buying it. The Republicans have a jobs plan, but the Democrats aren’t buying it. Keynesian economists have a jobs plan, but economists who don’t believe in borrow-and-spend to stimulate demand aren’t buying it. Obama…

Better to war-war than to jaw-jaw, to stand Winston Churchill’s remark on its head. The United States Senate and the trade unions are not alone in believing that we have been jaw-jawing with China for too many years, while it continues to take jobs from America by manipulating its currency,…

We are all Europeans now. Doubt that—and just try to get news about the American economy on the financial news networks on any morning. No luck. Lots of talk about German chancellor Angela Merkel’s balancing act—trying to keep from being turfed out of office, while still sending Germans’…

Willie Sutton separated over 100 banks from $2 million before he was finally incarcerated in 1952. When asked why he robbed banks, he is said to have responded, “Because that’s where the money is.” Apparently, politicians around the world now want to tax the rich, because they believe, or say they…

One of our great misfortunes is that all of the world’s leaders seem to have a stake in proclaiming that the end of the world is near. President Barack Obama is touring the country telling audiences that unless Congress passes his new jobs bill -- the word “stimulus” is considered too laden with…

With Paul Ryan out of the race, the last chance of a substantive program emerging from the debates of the Republican wannabes has gone a‑glimmering. Or has it? Dare we hope that some one​—​better still, several​—​of the candidates eager to take on a president whose popularity is suffering from the…

The president used the occasion of his address to a joint session of Congress to propose $450 billion in spending and tax cuts, 3 percent of GDP, to bring down the 9.1 percent unemployment rate that threatens his reelection chances. Supporters say the proposals—some new, some a continuation of…

There is gloom and then there is doom. We Americans have plenty of reason for the former as we say goodbye to summer on this holiday weekend on which I am told the last gin and tonic of the season is consumed by those so inclined. Confidence in the economy is plunging at the fastest rate since the…

“Don’t just do something, stand there,” President Ronald Reagan once advised his staff. Federal Reserve Board chairman Ben Bernanke has decided that remains pretty good advice: In his Friday speech to the world’s central bankers assembled in Jackson Hole, he said that he will not use “the range of…

As if the economic news is not worrying enough, politicians around the world have decided to make things worse. The Chinese regime treated vice president Joe Biden rudely on his visit to Beijing to discuss economic issues of mutual concern—the rapidly depreciating dollar worries the Chinese, while…

President Obama blames the recent turmoil in financial markets on floods in Japan and Republicans who won’t raise taxes. Republicans blame roiling markets on the president and Democrats who won’t cut spending. The Europeans blame short-sellers. Stock traders blame the problem variously on Standard…

None. That’s the total of on-the-other-hand good news I have to report this week. Lest you think I am overlooking the debt deal cut in Washington last week, consider this:

As of this writing, the president has pulled off a great political trick, with the help of some kamikaze Republicans. He has refused to offer a deficit-reduction plan, or submit a budget, or allow the Senate Democrats to do either—and has the public persuaded that he is the man who is seeking a…

If you want to have a relaxed summer break, definitely do not include on your beach reading list This Time is Different: Eight Centuries of Financial Folly, by Carmen Reinhart and Kenneth Rogoff. Based on a massive multi-nation data base covering 800 years the authors conclude that, in the case of…

It was bad enough when Moody’s Investor Services placed America’s credit rating under review for a downgrade because our politicians can’t agree to raise the $14.3 trillion debt ceiling. Now Standard & Poor’s has taken an even tougher stance. It is putting U.S. debt on “Credit Watch negative,” with…

This is a tale of two cities. Well, two streets, Wall Street and Main Street, with a stop on Pennsylvania Avenue along the way. On Wall Street all is cheery, if you don’t count the investment banks that are faced with rising costs, lower incomes, and the need to pare staffs. Investors have watched…

We worry as we prepare to fire up our barbeques, head for the beaches and ballparks, and otherwise celebrate our hard won independence from British despotism. That’s the good news, because it reflects a realization that a policy shift can no longer be postponed. By 44 to 34 percent, we have told…

President Barack Obama spent over a trillion dollars on projects he claimed were  “shovel-ready” and would prevent the unemployment rate from reaching 8 percent. Federal Reserve Board chairman Ben Bernanke obligingly printed $600 billion with which to buy the president’s IOUs, predicting that…

If you are an oil trader, the daily jiggles in the price of oil are of interest: if you guess right, it’s champagne and caviar; if you bet wrong, it’s beer and potato chips. But if you are a policy maker trying to make sense of oil markets so that you can plan your nation’s energy security, or an…

There are times when anecdote trumps data, when a general impression gives a clearer picture of what is going on in the economy than a data-laden description, especially when the data point in opposite directions, or cover only one month. This is such a time. So here are some impressions gathered…

The only question now is whether the slowdown in the economy is what economists at the HSBC bank call “a speed bump” on the road to continued recovery, or the first step down the road to a double-dip recession. No less an expert than former Federal Reserve Board chairman Alan Greenspan answers, “I…

The fuss about a possible default if our warring politicians fail to agree on an increase in the debt ceiling is good fun for reporters: the president removed himself from the negotiations in favor of a visit to the Palace and says he won’t agree to cut spending unless the Republicans agree to…

The black day – with the red ink – arrived this week: America reached the limits of what it can borrow. But the world didn’t end, the economy didn’t grind to a halt, and the dollar didn’t collapse. This non-event is being handled by accounting sleight of hand: some $4 trillion of the $14.3 trillion…

Phoenix—There is something bracing about a trip away from Washington, a town in which it is widely accepted that no person of prominence means what he or she says. The president says that he will not sign on to any significant spending cuts, and the Republicans say they will not sign on to any tax…

A spectre is haunting Europe​—​the spectre of the disintegration of the eurozone. All the powers of old Europe have entered into a holy alliance to exorcize this spectre: German chancellor and French president, the Brussels eurocracy and the bonus-laden bankers. Let the ruling classes tremble. The…

When the killing of Osama bin Laden was announced, Washingtonians joined in the nationwide spontaneous celebrations. Then began the calculation of the impact of the president’s actions on his electoral prospects.

People in nations with economic problems can be permitted to enjoy an occasional pause from contemplating their woes. Once there were circuses for diversion. Yesterday Great Britain chose a royal wedding as its relief from debt, benefits cuts, and taxes. And this week America was diverted by the…

So the sovereign debt of the American government has been downgraded. Not last week by Standard & Poor’s, which merely put it on negative watch. But last November, by Dagong, China’s rating agency, which down-rated it from AA (its highest rating) to A+, and rated its outlook “negative.” Of course,…

President Obama got it right when he said the budget is about “more than just cutting and spending. It’s about the kind of future we want. It’s about the kind of country we believe in.” And, at long last, after years of the president’s ostrich-like approach to the huge federal deficits, and after…

Whatever coordination existed between policymakers immediately after the world’s economic crisis is no more.

The jobs market continues to improve: 200,000 jobs were added in March. Corporate profits are exceeding forecasts for about three out of four firms, and the quarter that ended yesterday is the best first quarter for stocks in twelve years. Real consumer spending (adjusting for inflation) is up a…

The president and his team have one goal – reelection. Nothing ignoble about that. They know their chances of achieving that goal depend heavily on getting the unemployment rate to turn down, sharply and soon, leaving enough time for the feel-good factor to take hold before November 2012. Nothing…

The disaster at Japan’s Fukushima Daiichi nuclear plant, and the upheavals in the Middle East are the sort of events that send economists back to their forecasters’ drawing boards. As usual, there is a tendency to confuse the long-run and the short-run, and to blame developments that were due to…

That headline should be the policy mantra of sensible politicians. Unfortunately, President Obama believes he has to do something to get prices down lest he pay a terrible price at the polls. Equally unfortunate, Republicans are using high gas prices as a stick with which to beat the president.

There’s some light at the end of the tunnel. Just a thin ray, and at the end of a very long tunnel littered with government and private debt.

Pity the poor economist trying to create a coherent picture of the U.S. economy from the bits and pieces of the data jigsaw puzzle, the most recent piece of which was Friday’s jobs report. Non-farm payrolls were up 192,000 in February, and the estimates of the previous two months’ jobs growth were…

No need to do a careful analysis of the budget President Obama dropped on the desks of the Congress last week – a few broad brushstrokes paint the picture. Debt triples from 2008 levels by 2021; debt as a percent of GDP goes from 41 percent to 77 percent. Not a word about how to reform Medicare,…

Don’t hit the panic button just yet. But keep it handy. Absent drastic, “and I mean drastic” spending cuts, and tax increases, and continued bond buying by the Federal Reserve Board to suppress interest rates on the federal debt, the U.S. will be unable to balance its budget. That’s the advice I…

If Barack Obama were looking for a further boost in his popularity from the new jobs data, he'd be disappointed. Yes, the unemployment rate dropped from 9.4 percent in December to 9.0 percent last month, in part due to a decline in the labor force participation rate to the lowest level since March…

The American economy is being re-floated on a sea of red ink. Yes, there is good news. Factory sales are up, as are retail sales. Orders for capital goods, if the volatile aircraft-order segment is backed out, are coming in stronger than expected, and the figures for back months are being revised…

The good, the bad, and the ugly. That about describes the state of play in America.

China’s president, Hu Jintao, is about to make a state visit to Washington, hard on the heels of a statement by Liang -Guanglie, his defense minister, that “in the next five years our military will push forward preparations for military conflicts in every strategic direction.” Not quite Nikita…

The tragic shooting by a deranged man in Tucson absorbed the president’s time and attention last week, and culminated in a masterful speech in which he refused to blame the tragedy on heated political discourse, but nevertheless called for a more civil discourse to help the nation face up to its…

It is not for nothing that Victorian historian Thomas Carlyle’s description of economics as the “dismal science” hangs around the profession’s neck like some dreadful albatross. For where most people see clear blue skies, we see clouds. Just as the American economy is picking up, threats are…

As readers of these piece already know, I possess neither a sophisticated model of the U.S. economy such as the ones available to the bright sparks whose mis-measurement of risk almost brought down the financial system, nor a crystal ball. All I can offer with any confidence is the observation that…

As we look back on the year that is limping to an end, there is little—not nothing, just little—to cheer about. The year opened with the headline unemployment rate at 9.7 percent, and the rate including workers too discouraged to look for work or involuntarily on short-time (the U-6 rate, in the…

The Chinese are playing grandmaster chess against an amateur America that can’t see beyond the second move. In a bipartisan display of geopolitical obtuseness, America continues its historic trade policy: It’s free trade, except occasional lapses into protectionism when a whinging constituent must…

“Is it an earthquake or simply a shock?” asked Cole Porter in lyrics made famous by Frank Sinatra. That’s what policy analysts are asking about the sudden increase in the interest rates investors in U.S. government bonds are demanding, an increase only partly reversed at week’s end. One would have…

If you want to know why this economic forecaster is turning grey before your very eyes, or your investment adviser is mumbling incoherently when you dial him up for advice, consider the three important reports that were issued at the end of this week. The jobs report attracted most of the…

Enough of what President Nixon’s equally disgraced vice president, Spiro Agnew, called the “nattering nabobs of negativism.” This is Thanksgiving weekend, and we Americans, who have just combined to consume almost 50 million turkeys, have much to be thankful for, and reason for cheer. The political…

“Don’t worry, be happy,” songwriter Bobby McFerrin instructed. But that was in 1988, at the close of Ronald Reagan’s successful presidency. The unemployment rate, at 7.2 percent and rising when Reagan was sworn in, had fallen to 5.3 percent. The economy, which had been shrinking under Jimmy Carter,…

This is a tale of two printing presses.

“The people have spoken, the bastards,” said minor politician and prankster Dick Tuck after losing his bid for a seat in the California State Senate almost 50 years ago. Barack Obama undoubtedly shares that sentiment as he plans to face a Republican-controlled House of Representatives and a Senate…

If you abhor uncertainty, this coming week will be a good week for you. On Tuesday voters will let you know the direction in which we want our politicians to take our country. On Wednesday Federal Reserve Board chairman Ben Bernanke and his colleagues -- or some of them, since unanimity at the Fed…

The good news, as reported by the Federal Reserve Board survey of business conditions, is that “on balance, national economic activity continued to rise” in September and at the beginning of this month. The bad news is that the rise was only “at [a] modest pace.” Translated into political language,…

They came. They met. They dined. They whined. And then the finance ministers, gathered for the meetings of the International Monetary Fund and the World Bank, representing some of the most indebted countries in the world, flew out of Washington, filling the first class sections of most of the…

Some 53 percent of Americans now say they don’t much like free trade, compared with 32 percent a decade ago. In part that is due to unhappiness with the jobs situation. Today’s jobs report might have cheered specialists who dig beneath the headline numbers: 64,000 private sector jobs were created…

Profits rising. Pricing power returning. Credit rating upgrades. Deal makers flying high. Can this be the airline industry investors periodically love and loathe? The International Air Transport Association (IATA) certainly thinks so. Most carriers are reporting healthy second-quarter profits --…

It’s the policies, stupid. That should be the guiding light for everyone trying to figure out the course of the U.S. economy for the rest of the year. As things now stand, in the absence of any dramatic policy shift, the economy should continue on its present path—slow growth, a bit of job creation…

Chinese citizens can’t vote in national elections. Not at home. And, of course, not in America. American citizens can. That combination of circumstances is likely to have an effect on U.S. trade policy as Congress settles in for the final weeks before the November 2 elections. President Obama and…

It’s official: There are “widespread signs of a deceleration [in growth] compared with preceding periods.” So concludes the Federal Reserve Board after surveying the state of business around the country. Calm observers would note that slower growth is far from a double dip, that consumer spending…

Not many people can define GDP (the value of a nation’s output). But everyone can define jobs. So the fact that the U.S. economy is growing and GDP is rising—inching up might be a better description—pales into insignificance compared to the fact that the job market remains in the doldrums. No use…

"Bewitched, bothered and bewildered," warbled Ella Fitzgerald, among others. That old song, written in 1940 by Lorenz Hart and Richard Rogers, just about describes what is going on in the American economy. When seven of the seventeen officials of the Federal Reserve Board dissent from the…

If it were ever true that we Americans are provincial -- the charge made by European elites and pundits -- it no longer is. True, only about one-in-three American adults have passports, but then Europeans can drop in on neighboring countries by hopping on a train, whereas Americans face a longer,…

The American economy is in serious trouble, and the remaining weapons we have available to prevent a double dip are few indeed. We will try to avoid a long period of deflation of the sort that doomed Japan to a lost decade, but are not confident we can. That’s a free translation of what the Federal…

America runs large and persistent trade deficits. Our partners figure out how to make lots of things we want, and we can’t figure out how to produce an equal amount of stuff they want—or are permitted by their governments to buy. 

There is gloom enough to satisfy Eeyore. The president promised the country that his massive $787 billion stimulus package and other spending would reduce the unemployment rate to 8 percent; with the loss of 131,000 jobs in July, it is stuck on 9.5 percent, and would be higher still had more than…

There are two battles going on that will influence how the economy performs for the rest of this year. The first is a battle for attention between the general economic news and the profits performance of America’s leading companies. The second is a battle between austerity advocates and the…

“The Economy Is Back,” trumpets the upper left  corner of the cover of Time magazine. “The Economy Stinks,” moans the lower right corner. More professionally, Federal Reserve Board chairman Ben Bernanke tells Congress that most of the participants on the Fed’s monetary policy committee view…

President Obama wants to declare a truce in his war on the business community. And, well, he might. For one thing, he has won almost all of the ground attainable between now and the November congressional elections. His health care “reform” is law of the land, and his financial-sector regulation…

President Barack Obama, Larry Summers, and the rest of the White House economic team think a second stimulus package is needed if the recovery is to be sustainable and job creation is to perk up. They point out that debt-ridden consumers, aware that their various benefits, especially state…

We Americans needed this weekend, with something to celebrate -- our independence from overseas oppressors. Indeed, the Tea Party movement is attempting to recapture the attitude of our nation’s founders toward overweening government, in this case our own. The distance from Washington to Main…

Americans are fighting what Winston Churchill called “a Black Dog … on his back.” Americans are losing the fight, which is odd since the economy is finally gaining rather than losing jobs, and the manufacturing sector is growing nicely. The new Wall Street Journal-NBC poll shows that the Black Dog…

There is a direct line from Athens to Toronto, and not only on Air Canada. The more important connection is provided by the financial markets. When Greece ran out of accounting subterfuges and the ability to borrow at non-ruinous interest rates, it set in motion a process that caused the euro to…

“We are all balloons dancing in a world of pins,” noted Sir Anthony Montague Browne, one of Winston Churchill’s private secretaries. That seems to describe our economic condition. Share prices drop like stones in response to actions by Greek civil servants, an oil spill in the Gulf of Mexico, an…

The bad news is that there is a lot of bad news. BP, known to our president as British Petroleum (which infuriates our British friends who say that name was abandoned long ago and Obama is merely trying to rubbish their country), is destroying the ecology of the Gulf of Mexico, and wrecking the…

Economists call them exogenous shocks. Then-Prime Minister Harold Macmillan called them “Events, dear boy, events.” Former U.S. secretary of defense Donald Rumsfeld called them “unknown unknowns.” Investors care less about the precise label than the fact that the world seems a scary place. Never…

President Obama is a busy man. What with having to persuade the United Nations Security Council to pass the latest and toothless sanctions on Iran, excoriating oil companies for the Gulf Oil spill, pushing a financial reform bill through congress, and attacking the state of Arizona for enacting a…

Two conflicting currents are sweeping through both Main Street and Wall Street. The first is nervous-making; the second is soothing. They are, respectively, a sense that things are beyond the ability of individuals or governments to control; and a sense that the economy is turning around, that the…

We are all Greeks now. Or so it would seem if we are guided by the gyrations of share prices. Or if we believe that today’s Greece is tomorrow’s United States. After all, we are running Grecian-style deficits, our debt-to-GDP ratio is approaching the magic 90 percent mark that stifles growth and…

If the Federal Reserve Board’s monetary gurus -- technically, the Open Market Committee -- were given to exuberance of the sort some pedants might consider irrational, at the conclusion of last week’s meeting they might have declared the dawning of a decade of growth and prosperity. Central bankers…

There are two ways to look at the profits reports that are emerging from corporate boardrooms, often after a brief stop for an added shine at the office of the firms’ accountants. One is to find out just how this or that firm has been doing in the past quarter, compared with a year ago and with…

Chinese-American relations have one of the characteristics of an iceberg. The part that is visible is cold -- lots of mutual recriminations -- and jagged; the greater part, nine-tenths, is submerged, invisible to the naked eye, and far more consequential. This is one area in which what you see is…

The gloom is dissipating. It might be because Congress is in recess, and therefore unable to add any billions to the burgeoning government debt, at least for a few weeks. It might be because spring is sprung. And it might be because most people are focusing less on the economy and more on the NCAA…

The fiscal train wreck is happening sooner than we thought, a leading bond market trader says. Which is why investors are now telling the U.S. government it will have to pay more to borrow money. Not as much more as Greece, but enough to constitute a shot across the Obama bow by what we call the…

Small groups, gathered in meeting rooms scattered around the world and focused on a single issue, can affect the way we live, at least now and perhaps for a long time. Consider only this week’s conclaves.

Now we know. Two million of the “good jobs” America needs to create in the next five years are to come from doubling American exports. So President Obama promised Thursday. We are to have a “National Export Initiative,” an “export promotion cabinet” consisting of representatives of several federal…

President Obama’s economic policy has run smack into reality. No one believes that he can keep spending even to the massive levels he projects, or eventually lower the deficit, or persuade congress to switch from profligacy to prudence, or … well, you get the idea. Worse still, even if you believe…

Markets hate uncertainty, so the conventional wisdom goes. And it is true. But the reduction of uncertainty can be a mixed blessing, especially if what becomes more certain is likely to interfere with recovery from the recently ended recession.

Enough is enough. That is the message the most reliably Democratic state in America sent to President Obama and his Democratic congress Tuesday when its voters chose Republican Scott Brown to represent them in the U.S. Senate. The majority of Americans style themselves as somewhere between centrist…

We have met the enemy and he is us. So Pogo might have described the situation that the business community has created for itself. There is no question that the Obama administration, and even more the Democratic leadership in Congress, harbor something between skepticism and hostility towards free…

Politicians on both sides of the aisle here have been devoting almost all of their energy and attention to two things: the battle over the president’s plan to take the health care sector under the government’s wing, and the battle over competing plans to solidify the current fragile economy…

I have nothing but sympathy for those economists compelled, or who feel compelled, to deliver detailed forecasts of GDP, prices, the value of the dollar, the unemployment rate and other economic variables at the beginning of each year. And this year their crystal balls must be cloudier than ever,…

No sense wasting too much of this year-end report on what you already know. The financial sector is back from the brink; the largest banks are able to raise capital and earnings sufficiently to repay their government bail-out loans and have enough left over for generous bonuses. Share prices have…

Reality bites. Well, not quite bites. Bares its teeth. And is ignored. During this holiday season President Obama and his Democratic congress feel entitled to an extra glass or two of the bubbly now that health care "reform" seems ever more likely to pass, the threat of financial collapse is past,…

It took the Obama administration less than a year to reduce the United States from the country with a currency that is considered a safe haven when international storms threaten, to one that is warned by a rating agency that unless it mends its profligate ways it will lose the triple-A credit…

"Modestly", "moderately", and "jobs" are the three words that cover just about everything that is going on in the U.S. political economy. The latest summary of economic conditions prepared by the Federal Reserve Bank of New York reports that "economic conditions have generally improved modestly;…

Odd, that. There is Hu Jintao, the world's leading protectionist, the man who manipulates his nation's currency so as to keep goods and services made in other countries out while Chinese-made goods capture more and more market share, lecturing the American president on the dangers of protectionism.…

Yesterday, an estimated 134 million Americans descended on the malls and shops in search of bargains on the second biggest shopping day of the year (the Saturday before Christmas ranks first). Given the number of stores that for the first time opened for business on Thanksgiving day (including…

Today we consume some 50 million turkeys who kindly dedicated themselves to sating our appetites as we try to decide whether we have very much to be thankful for. It turns out we do. And not only for the traditional blessings of freedom and the rule of law. Or the mixed blessing of families…

It sounds harmless enough, the news that the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change will meet in Copenhagen early next month. Another U.N. talking shop, surely, designed mainly to provide a nice expenses-paid junket for the U.N. bureaucrats,…

"Buy gold," we are told by no less an authority than G. Gordon Liddy. "It's value has never gone to zero," says an official once in charge of America's gold hoard, including the bars stored in Fort Knox. Why investors should find that reassuring is not obvious, but never mind. They have bid the…

As I mentioned in earlier columns, there are times when the economic data point in one direction, and businessmen in the privacy of their board rooms point in another. A case in point is the recent report that the recession is over: the housing and manufacturing sectors are recovering; once…

"Dollar murdered. Drowned in red ink. Clues point to the White House." So might a tabloid headline read as the angry mourners gathered to affix blame for the end of the era in which the dollar served as the currency in which the world does business -- its reserve currency, to use the economists'…

Manchester

Americans should be hoping that the Chinese will be kinder to us than we were to the Brits after World War II. Readers of a certain age will remember, and the few younger ones who study history will have learned what creditor Uncle Sam did to debtor John Bull when Britain sent John Maynard Keynes…

Britain's Labour party has come a long way from 1994, when a charismatic Tony Blair, the new leader of a party then in opposition, forced through the repeal of clause four of its constitution--the one that promised nationalization of the means of production and distribution. Not all of the…

A funny thing happened on the way to the collapse of market capitalism in the face of the worst economic crisis since the Great Depression. It didn't. Indeed, in Germany voters relieved Chancellor Angela Merkel of the necessity of cohabiting with a left-wing party, allowing her to form a new…

Veni, vidi, dixi. That about describes President Obama's week. Five, count them, five Sunday morning talk shows, a comedy talk show on Monday, followed by talks at an international conference on climate change, at the UN General Assembly to apologize for America's sins in the years before he moved…

With all 40 of the eyes of G20 finance ministers riveted on the questions of bankers' bonuses and exit strategies when they met in London, the issue of creeping protectionism seems to have been ignored, or at least kept out of public view. Not a bad idea from the point of view of the world leaders…

"Let the good times roll . You gotta go out and spend some cash . I don't care if you're young or old let the good times roll." So advised blues singer B.B. King in 1999. Whether it is good advice today depends on how you read some complicated data. Most consumers will look at last week's job…

Bliss is it in this dawn to be alive, but to be a banker is very heaven--with apologies to Wordsworth. The Federal Reserve Board's monetary policy gurus are making cash available to banks at almost no cost, it can be re-lent to desperate borrowers at mouthwatering margins, and if anything goes…

$2,000,000,000,000. That's the amount by which the Obama administration raised its ten-year estimate of the nation's budget deficit from the one it made only a few months ago. Now, $2 trillion is a lot of money. But even more significant is the fact that this revision represents almost a 30 percent…

Eleven and one-half days. That's how much prison time columnist Charles Krauthammer reckons Libyan terrorist Abdelbaset Ali al-Megrahi served for each of the 270 people he murdered when he planted the bomb that blew Pan Am flight 103 out of the skies. Nothing like the 27 years to which Megrahi was…

So it's to be more Bernanke -- assuming the Senate goes along, as it almost certainly will. That's one thing economists got right -- the consensus was that he had a 70+ percent chance of being reappointed. What does it all mean? For one thing, Larry Summers stays at the White House. Not a bad thing…

Can Obama and Bernanke get the U.S. out of the current economic slump without creating bigger problems down the road? Americans look to three sources for clues about the future of our economy: President Barack Obama, in charge of fiscal policy; Federal Reserve Board chairman Ben Bernanke, in charge…

Trouble ahead. Almost exactly two years ago economists discovered that the problems in the housing and mortgage markets had spread to the financial sector. Subprime mortgages proved highly infectious, a couple of Bear Stearns funds collapsed, banks suddenly looked at their neighbors with such…

Relatively good economic news could help Obama. Washington will be a different place now that the Senate has followed the House of Representatives' flight from the city. On vacation? Certainly not. According to the official House schedule, its members are on their "Summer District Work Period", a…

Americans look to three sources for clues about the future of our economy: President Barack Obama, in charge of fiscal policy; Federal Reserve Board chairman Ben Bernanke, in charge of monetary policy; and Warren Buffett, the revered "sage of Omaha" whose authority rests on his decades-long record…

"It started out like a song we knew we had a good thing going. And if I wanted too much, was that such a mistake?" President Obama's answer to composer Stephen Sondheim's question would be "yes", were he not a president who rarely admits error.

Liberals like big systems: mass transit, yes; the individual motor car, no. A massive electric grid, yes; regional electric grids relying on informal arrangements among companies, no. A massive government health care insurer, yes; individual customers using competing insurers, no. It has to do with…

Three inter-related forces are beating on the economy: cyclical, secular, and presidential. Dispensing with economic jargon, the recession, longer-term trends, and Obama. Here are some guesses as to the shape of some of the industries that will emerge from the interplay of these forces.

Trade skirmishes are one thing, full-blown trade wars quite another. Politicians, even the most fervent believers in the virtues of free trade, sometimes have to bend to constituents' demands for protection. Ronald Reagan urged Japanese auto manufacturers to accept "voluntary quotas" on their…

Sometimes we might be better off if this globalized world of instant communication were less global and less instant. This week we benefited, if that is the right word, from simultaneous news from London, England; Sun Valley, Idaho; Washington, D.C.; and L'Aquila, Italy. Integrating all of this…

This was not the cheeriest of holiday weekends. Yes, we still celebrated our Declaration of Independence from the British oppressor some 233 years ago. And yes, many towns had parades and fireworks to celebrate that event. And yes, "Big Pay Packages Return to Wall Street", headlined the Wall Street…

Death by a thousand cuts. Or in the case of the efficiency of the U.S. economy, by at least four: energy policy, health care policy, trade union resurgence, and fiscal madness.

The first thing to keep in mind when appraising the President's new regulatory scheme for the financial sector is that it is merely the administration's wish list, with the Congress yet to be heard from, and likely to resist adding the chore of systemic risk regulator to the Fed's burdens. The…

The airline industry has never generated sustained profits -- by some estimates if you add up all the profits and losses since the Wright Brothers flew from Kitty Hawk in 1903, the net would be written in red ink. This year will be no different. The global industry will lose an estimated $9…

Ninety years ago the Chicago White Sox intentionally lost--dumped, to you sports fans--the World Series. Legend has it that a young fan implored the team's star, "Shoeless" Joe Jackson, as he emerged from the court house, "Say it ain't so, Joe." The Shoeless one allegedly responded, "Yes, I'm…

Barack Obama might finally have met his match. Two matches, in fact. No, some new Republican opponent has not emerged to threaten this enormously popular president with a difficult campaign for re-election. No, Republicans in Congress have not produced a coherent alternative to the president's…

Fear not. America will not go bust. At least not in the sense of being unable to cover all of the IOUs it has peddled to China and other investors. After all, hidden in some Washington and Fort Worth, Texas basements are the printing presses that turn out dollar bills on command. So if America â s…

The bad news is that President Obama is keeping his campaign promises to raise taxes on upper-income families, borrow-and-spend, use taxpayers' money to fund the survival of auto-company dinosaurs, take over the health care system, and otherwise pursue an agenda that it is an understatement to…

In the days when it was still necessary to explain to one's parents just what an economist does, my first job was to crank out a forecast of economic activity in the coming quarter. Get it wrong often enough, and you were gone. More senior employees assigned themselves the longer-term outlooks:…

Rahm Emanuel says that the Republican party has become the party of "no"--devoid of constructive alternatives to those parts of the Obama program to which Republicans and conservatives object. There is some truth in that. After all, there is much to which to say "no": a stimulus program that hasn't…

Batten down the hatches. America is about to be overwhelmed by an inflationary wave that will threaten the value of the dollar and its ability to remain the world's reserve currency. Or not.

John Maynard Keynes once wrote that if you want to bet on which of several contestants would win a beauty contest, don't try to guess which girl is the prettiest. Instead, try to pick the girl that the judges will decide is the prettiest. So with the economy. We have to guess not only which green…

Barack Obama is unhappy with much that preceded his occupation of the White House, and not only his predecessors conduct of foreign policy, for which he is a serial apologizer. Pre-Obama domestic policy also displeases him: any prosperity the nation enjoyed, he says, was built on a foundation of…

Diseconomies of scale and scope. If that bit of economists' jargon is unfamiliar to you, you are not alone. It means that some companies are so big (have such grand scale) that they are less efficient than smaller rivals, and so diversified (have such a wide scope of activities), that they are…

Animal Spirits

The American President heads into the G-20 meeting having been told by his top advisers that the U.S. economy is showing signs of recovery. New home sales rose by 4.7 percent last month, durable goods orders were up, the stock market is at least sitting up in its sick bed, and applications for…

Anyone who thought Ben Bernanke and his Federal Reserve Board colleagues were out of ammunition received a rude, or pleasant, shock last week. Rude, if you worry that a few extra trillions sloshing around the economy might one day trigger a wave of inflation; pleasant, if you worry that the economy…

Before joining the mob headed towards AIG headquarters, stop and think. The company is contractually obligated to pay these employees some $165 million in bonuses. Contractually obligated. So before applying the tar and feathers, ask these questions. First, do we want to be a society in which…

Bear trap. Dead cat bounce. The beginning of a bull run. Pick the animal that best describes your view of the recent upward move in share prices, and you will have company from at least some experts. The lack of consensus should be no surprise, for two reasons.

The ghosts of Republicans Reed Smoot and Willis C. Hawley are haunting the corridors of power. The Utah senator and the congressman from Oregon cosponsored the bill that raised tariffs on some 20,000 imported items--increases that came to a whopping 60 percent on some 3,200 items. Despite pleas…

"Reduced cost of Government, adequate Government income, and ability to service Government debts are all so important to ultimate stability.... The United States seeks the kind of dollar which a generation hence will have the same purchasing and debt-paying power.... Our broad purpose is the…

"Hey big spender, spend a little time with me." It is not certain that Cy Coleman's and Dorothy Fields' lyrics from "Sweet Charity" were used by Barack Obama when he invited British Prime Minister Gordon Brown to visit him next week, but it is possible. After all, both men believe that the way out…

Is it possible that every part of President Obama's economic recovery plan is flawed, but the whole might prove greater than the sum of the parts? The short answer is that no one knows. But we now know enough to make some reasonable guesses.

If, like John Maynard Keynes, you believe that spending, any spending, will revive a flagging economy, the freshly minted, 1000-page American Recovery and Reinvestment Act of 2009, calling for $504 billion in deficit-financed spending is for you. Well, not quite. It seems that most of the money…

Congress continues to include "Buy American" provisions in the stimulus package, albeit in a watered-down version. This has set off alarm bells in the free trade community. With reason. During his presidential campaign Barack Obama made it clear that he is unhappy with the way the world trading…

It grieves me to say so, but President Obama's conservative critics just don't get it. The new president has put forward a plan for economic recovery that is more coherent than they are willing to admit. Start with the stimulus package of some $825 billion. A lot of money, more even than George W.…

The new American Treasury secretary uses a Senate hearing room to accuse the Chinese of manipulating their currency, and the Chinese premier uses the Davos gathering of the moguls to accuse America of wrecking the world financial system. Not an auspicious beginning for Sino-American relations in…

The environmentalists, or at least some of them, have fired a warning shot across the bow of Obama's mighty ship of state as it sails "to the shores of need, past the reefs of greed," as Leonard Cohen's perversion of Wordsworth would have it. They have expressed extreme unhappiness with the failure…

As George Walker Bush watches Barack Hussein Obama be sworn in as the 44th president of the United States, he may be among the few happy Republicans in Washington. Those who have been meeting with the 43rd see a man comfortable in his own skin, confident history will vindicate his decision to wage…

Any lingering opposition to Barack Obama â s stimulus plan melted in the face of today â s report that 2.6 million workers lost their jobs last year, 1.9 million in the last four months alone. The official unemployment rate jumped from 6.7 percent to 7.2 percent, the highest since January 1983. If…

The Great Inflation and Its Aftermath

Lot's wife looked back at a scene of devastation and was turned into a pillar of salt. Salt--as in the salty tears we shed last week as we looked back on 2008, a year of deepening economic recession, and the worst for share prices since 1931. Worse: most forecasters are expecting an even bleaker…

Gasoline is selling for less than $1.50 per gallon, about half the price that prevailed a few months ago. Mortgage rates are lower than they have been in almost four decades, so applications for mortgages are soaring to levels not seen in five years. The unemployment rate is 6.7 percent, not bad by…

I have spent the last few weeks talking to economists who are plugged into the policy establishments in both parties, to politicians, and to policy-makers in the think tank community. There is broad agreement on several important points.

"Don't project beyond the range of the known observations" is a rule followed by careful economists. In plain English this means, for example, that we know how American consumers behave when gas prices move between $1 and $4 per gallon, "the range of the known observations". But we haven't much of…

"Hi ho, hi ho, it's off to work we go" cheerfully sing Snow White's diminutive friends as they head out for a day of toil. And they're 71 years old. So why do so many of us less vertically disadvantaged worry about the talk of extending by a few years beyond age 62 or 65 or 67 the date on which we…

I'm sure you've noticed that the economic news is not exactly designed to start you off to work in a good mood. Unless, of course, the fact that you have work to go to is cheer enough. On the international scene, Islamic terrorists slaughter innocent people in Mumbai, targeting especially Americans…

Set out a giant honey pot, and the bears will come. And the more bearish they are about their prospects, the faster they will come and the louder they will grunt. The Bush administration presides over a giant honey pot, containing some $350 billion. And a smaller one, with a mere $25 billion…

Is Tim Geithner, Barack Obama's choice to succeed Hank Paulson at Treasury, worth 500 points on the Dow? So it seems. No surprise say the professional traders: Markets hate uncertainty, and by making up his mind about this key economic post, Obama has removed a great deal of uncertainty. Plausible,…

An odd thing is going on beneath the surface of the economic news. Several odd things, in fact. There is no question that all, or almost all, of the economic news is grim. New claims for unemployment insurance soared above the half-million mark last week. Over one million unemployed workers will…

What will Barack Obama's sweeping victory mean for the U.S. economy? Here are a few guesses.

London-to-Phoenix-to-Washington does more than throw one's body clock into a spin. It is disorienting. The gloom in London is thicker than the fogs of yesteryear, and the prime minister is trying to avoid culpability for his nation's economic woes by blaming its and indeed the world's problems on…

Europe rejoices. The wish of its political elites and most Europeans has been granted. Barack Hussein Obama is the president-elect, and on January 20 will be sworn in as the 44th president of the United States of America. No more George W. Bush, with his crazy notion that the spread of democracy…

November was much celebrated by investors in 1954. On the 23rd of that month the Dow Jones average of shares of industrial companies for the first time closed above the level it had reached at its peak on Sept. 3, 1929. Are we in for another 25-year wait before share prices match their October 9,…

Don't be fooled. Something more than a coordinated effort to contain the current credit and economic crises is going on. That's why French president Nicolas Sarkozy was so eager to persuade President Bush to convene the international talk shop, to be held in Washington shortly after the election.…

"We are suffering just now from a bad attack of pessimism. It is common to hear people say that the epoch of enormous economic progress is over; that the rapid improvement in the standard of life is now going to slow down ; that a decline in prosperity is more likely than an improvement in the…

Politics may make strange bedfellows, but economic crises make even stranger ones. Gordon Brown, free trader, now finds that Nicolas Sarkozy, arch-protectionist, has virtues he had not previously noticed. It seems that they are united by three things. First, they believe, or at least are pretending…

The world's politicians are now running full tilt to get ahead of the markets. So far, the markets are winning, plunging in what to all appearances is a death spiral. Share prices fall, making it nearly impossible for the banks to raise new capital; house prices fall, reducing the value of the…

Some, but only some, of the damage wreaked by the current turmoil in financial markets is visible. Anyone owning a home knows that it is worth less than it once was. Anyone trying to buy a home knows that mortgages are harder to come by. Anyone out of work knows that the banks' problems are his…

If you think our current economic difficulties are all about subprime mortgages, securitization, the drying up of credit, falling house prices and the like, think again. That's not how the rest of the world sees it. Yes, all of these problems are on the list. But more important, foreigners see this…

NO MATTER WHAT deal is finally cut between Hank Paulson, the Democrats, and unhappy conservative Republicans, or even if no deal at all is finally worked out, market capitalism as practiced in the United States will never be the same. Well, "never" might be too long, so let's say it won't be the…

IT'S NOT A good idea to stand in front of a stampede and try to talk the cattle into stopping, or to argue with a bunch of lemmings headed for a cliff, that follow-the-leader is not a good idea. Still, we ink-stained wretches of the fourth estate do have responsibilities. So before investors and…

While politicians debate the identity of the "pig" at whom Barack Obama took a poke, the nation has stored up another problem for whichever candidate is unfortunate enough to inherit the White House come 2009. Hank Paulson did what he had to do, or at least what he thought he had to do, when he…

Conservative intellectuals and pundits who are overcome with enthusiasm for wooing "Sam's Club Republicans," as opposed to the more traditional country club Republicans, might want to stop off at a Sam's Club or, just as good, a Wal-Mart store to chat with the customers who are not new…

NOW IS THE TIME to try to determine what the rest of the year will look like. For three reasons. First, traders, investors, politicians and executives are back at work, either refreshed or wearied from their summer vacations. Second, as Gerry Baker pointed out in The Times last week, "September is…

THERE IS A REASON I chose "Abandon Hope All Ye Who Enter Here" as the subtitle of the study of energy policy I just completed under the auspices of the Washington-based Hudson Institute. That reason: decades of listening to politician leaders of both of our parties promising "energy independence,"…

TODAY IS THAT DAY that we all realize that summer's lease has all too short a date. The Labor Day weekend starts tomorrow--the last long, lazy weekend of summer. Fewer Americans than usual have taken to the road because gasoline prices, although easing (Hurricane Gustav permitting), remain high by…

BEWARE THE CAPITULATORS. Republicans are chortling over the fact that their "drill, drill, drill" campaign seems to have forced Barack Obama and Nancy Pelosi to backtrack and agree to relax--by no means eliminate entirely--the ban on offshore drilling. Beware what is contained in the Trojan horse…

THE MOST IMPORTANT economic news of recent weeks is the recovery of the long-comatose dollar. On a single day earlier this month it recorded its biggest jump against the euro in eight years, before retreating a bit. Sounds like unambiguous good news, since a stronger dollar might lower import…

SOME SAY THE OLYMPICS, now underway, are all about politics, a coming out party for China's ruling regime, eager to show that its rise to world-power status is no threat to anyone--except for the Taiwanese, Tibetans, domestic Christians, and the few millions of others who might behave in ways the…

"Headwinds", "volatility", "mortgage-related assets", "CDOs", "FDIC", "auction rate securities", "false bottom", "recession". "Words, words, words," as Eliza Doolittle screamed at Professor Higgins' insistence on precision in their pronunciation and usage. We have been deluged with new and often…

"High flying adored, So Young ... A ... beautiful thing, of all the talents, A cross between a fantasy ... and a saint ... Where do you go from here?" So Che Guevara asked Evita in the Andrew Lloyd Weber-Tim Rice hit musical. Barack Obama's campaign advisers think they have the answer when it comes…

Whatever Happened to Thrift?

THAT LIGHT AT the end of the tunnel: a glimmer of hope or, as President Bush's former chief economist, Larry Lindsey, sees it, an onrushing train? That jump in share prices: start of a recovery from a market bottom, or a "dead cat bounce" typical of bear markets?

THIS IS THE SUMMER of our discontent. Only 14 percent of us are satisfied with the way things are going in the United States, the lowest figure recorded by Gallup's pollsters since they began asking that question almost fifteen years ago. Consumer confidence is at its lowest level in 28 years,…

GRIM, GRIMMER, AND grimmest. That runs the complete gamut of the sentiment prevailing on Wall Street and, indeed, in much of the country as we Americans closed our shops for a long weekend. A recent Goldman Sachs report wails, "The economy is fundamentally weak financial markets remain fragile…

LAST WEEK THE Federal Reserve Board's monetary policy committee (technically, the Federal Open Market Committee, or FOMC) decided to leave interest rates as they are. And thereby hangs a tale of oil, our chief bond salesman, the White House, and the Fed Family. What follows is a combination of hard…

Every day that passes makes one thing clearer and clearer: Barack Obama knows precisely what he wants to do to the U.S. economy, and John McCain is intent on proving his self-confessed lack of knowledge with a charming set of homilies.

"THIS TOO SHALL PASS," King Solomon's advisers told him to engrave on a ring, and refer to it whenever he felt depressed. Or so the legend goes. Not a bad idea for bankers beset by still more dodgy paper to write off, for shareholders at loss-making Lehman Bros. and ailing Morgan Stanley (first…

A former colleague dropped into my Washington office to talk shop, which in our case is the exciting subject of regulatory policy. He had just come back from a visit to New York, and reported that the city is now so clean, so crime-free, so graffiti-free, its residents so full of "Hello, can I help…

IT'S ONE THING when consumers grumble about inflation--gasoline prices that are at previously unheard-of levels, food prices that have homemakers spiking their hamburgers with bread crumb. It's quite another when a troika of central bankers says it worries that inflation might be getting out of…

TOSS A BARREL of $135 oil into the economy, and the ripples will swamp some of the boats trying to stay afloat in the current sea of economic troubles. And planes. Airlines are grounding their least fuel-efficient planes in an attempt to cut costs. So fewer budget-priced seats will be available to…

"IN TIMES LIKE THESE, it helps to recall that there have always been times like these," says Paul Harvey, the legendary radio commentator. A "great transformation [is] taking place around the world...a tectonic power shift...the world is very different," writes Fareed Zakaria in his Post-American…

IF YOU ARE HAVING difficulty reading the conflicting signals coming out of the American economy, you are not alone. Consider this: An LA Times/Bloomberg poll shows that 78 percent of Americans think we are in an economic recession. A virtually simultaneous CBS News/New York Times poll found that 72…

Students of energy policy despair, and at times believe that Dante's inscription on the entrance to hell should be emblazoned on the entrances to the Capitol and the White House, "Abandon hope all ye who enter here."

THE MONEY MEN SAY it is over. The economists say it has just begun. And the politicians are loving every minute of it. Perhaps it all depends on what the meaning of the word "it" is.

ONE TEAM OF ECOMEDICS has done what it can. Ben Bernanke's Federal Reserve Board monetary policy gurus dropped its short-term interest rate another 0.25 percent last week, to 2.0 percent, and told its patient, the U.S. economy, not to look for still another shot in the arm. We might do more for a…

THERE ARE MORE MISUNDERSTANDINGS about the oil market than perhaps any other. In America, drivers are fuming and politicians are demanding explanations because gasoline has hit about $3.50 per gallon. That's less than half the price being paid by motorists in most industrialized countries. High to…

Travelers can be forgiven if their first reaction to the proposed Delta-Northwest merger is to wonder what additional atrocities will be inflicted on them. It can't be deterioration in the quality of the peanuts now offered in lieu of meals in most classes of service. Nor can it be a reduction in…

John McCain is for low taxes, rapid economic growth, and free trade. Those are the underpinnings of everything else he deems important:

"INFAMY, INFAMY, THEY'VE all got it in for me!" That wail from a British comedy spoof of the last days of Julius Caesar might now be heard in the private offices of most of the world's key central bankers. Former Federal Reserve Board chairman Alan Greenspan is being blamed for America's…

THE FINANCIAL WORLD changed last week, and no one noticed. No one, that is, except policymakers in the Bush administration and Congress, and the free-wheeling investment bankers whose favorite pastime once was trumpeting the virtues of red-in-tooth-and-claw capitalism. On Thursday staffers from the…

THE INVESTMENT BANKING industry as we knew it is no more. Change has been inevitable ever since the Bush administration and the Federal Reserve Board decided to use taxpayer money to back J.P. Morgan Chase's takeover of Bear Stearns. R.I.P. the deregulatory trend that has dominated policy towards…

The really bad news about the debt crisis is that it is sowing the seeds from which will bloom, if that is the right word, hundreds of doctoral dissertations five or so years hence. Economic model builders, unchastened by the fact that their predecessors' models failed to anticipate, indeed,…

THE LIFE OF A self-styled paragon is not an easy one. So Eliot Spitzer found when it was revealed that he not only prosecuted prostitution rings, but patronized them. And so David Rubinstein discovered when Carlyle Capital Corporation's (CCC) hedge fund collapsed. "I don't think one fund out of 60…

London

THE BRITISH ONCE tried to separate Americans from their money by taxing tea. It didn't work. Now, they're trying again, this time using obscure treaties to raid the U.S. Treasury to the tune of what might be hundreds of millions of dollars--and I am told by sources here in London that our…

WITH ALL OF THE BAD economic news coming out these days, I wouldn't be surprised if many readers are wondering if I am not being overly optimistic in my reports on the U.S. economic outlook. So, to provide a balanced view of the turbulent economic scene, let me sketch the more widely believed…

JUST WHEN THINGS couldn't get any worse, they did. The Federal Reserve Board's economists revised their growth estimate down, and their inflation forecast up. The dreaded word "stagflation" has begun to make its appearance, reminding those Wall Street analysts old enough to remember that in the…

"PLEASE SIR, CAN I have some more," whine the Oliver Twists on Wall Street. More interest rate cuts from the Federal Reserve Board's monetary policy committee, a bigger portion of stimulus from the president and Congress, more direct relief for the housing market, a bail-out of bond insurers--you…

POLITICS MATTER. Not whether Hillary Clinton really teared up before key primaries. Not whether John McCain's famous temper will erupt, scuppering his chances of getting into the White House. And not whether Barack Obama can revive Camelot and find a place in America's future for the ageing Kennedy…

"Agile brain," "shone in the public sector," a "reputation for odds-defying leadership," "bright and arrogant." The financial press's description of the rogue trader who cost Société Général (SocGen), France's second largest bank, $7.1 billion? Actually, no. That's the reputation of Daniel Bouton,…

BOTH BARRELS OF THE heavy policy guns--fiscal and monetary policy--are now aimed at the slowdown. The president and the congress have worked out a stimulus package that will pump some $150 billion into the U.S. economy. Bureaucracies being what they are, it will take the Treasury more time than it…

ONE THING IS certain in this uncertain world: once the currently roiled financial waters have calmed, the world of finance will not be as it was before the storm broke.

It seems that political panic puts paid to partisanship. In a telephone lovefest, George W. Bush and the Democratic congressional leadership reached agreement on the need for and the contours of a fiscal stimulus package, or what the president prefers to call an "economic growth package." They…

"WHAT IS TO BE DONE?", asked Lenin in 1902. He couldn't have been thinking of capitalism's problems circa 2008, but he was asking a question that is on the lips of America's policymakers as the U.S. economy slows. Indeed, more than slows if economists at Goldman Sachs, Morgan Stanley, and Merrill…

THE NEW YEAR has begun not with a quiet whimper, but with a very loud groan, emanating from Wall Street. Economists and analysts are rushing to revise their 2008 forecasts, and journalists are competing for page one placements with scary stories about evicted homeowners sleeping in the streets, and…

AMERICANS DON'T APPROVE of their president (approval rating 36 percent), even more heartily disapprove of their congress (approval rating 18 percent), say their confidence is in free fall, believe their children will be no better or possibly worse off than they are. Three out of four think their…

American capitalism as we know it is dead; America is now the Argentina of the north, a place where no contract is sacred. So go the more apocalyptic reactions to the Bush administration's proposed intervention in the home mortgage market. "Who would invest in U.S. bonds or mortgages if the…

WHEN BOB HOPE, Bing Crosby and Dorothy Lamour took "The Road to Bali," they left from Australia. Over 50 years later Kevin Rudd, Australia's newly elected prime minister, headed to Bali for a more serious purpose: to sign the Kyoto protocol, to the cheers of the assembled 15,000--or is it…

FOR SOME REASON, people, and not only in America, think that their fate--the prices of their homes, what they will have to pay when using their credit cards, the growth rate of the economy--is determined by the central bankers whose periodic decisions are awaited with baited breath by the 24-hour…

THE HOUSING SITUATION is deteriorating, as inventories of unsold houses rise, and prices continue to fall. Credit markets are snarled, as lenders hoard cash to pay the bill for the shoes that are still to drop. Bank earnings are down some 25 percent, driven by mortgage and consumer credit card…

THE HOUSING MARKET remains weighed down with unsold inventory, oil prices flirt with $100 per barrel, the dollar spirals downward, food prices spiral upward, and interest rates on millions of mortgages are about to be reset at levels that owners might not be able to pay.

Externalities. Information asymmetry. Moral hazard. Understand those three bits of economists' jargon, and you can be a do-it-yourself housing- and mortgage-market policymaker. Or at least you can thread your way through the competing proposals of conservatives--who want the government to keep…

AMERICANS HAVE BEEN feeling the pinch of more than $100 oil. Food prices have also been soaring. That will become really up close and personal when the 88 percent of Americans who eat turkey on Thanksgiving descend on their supermarkets and butcher shops to pick up their holiday gobblers.

WHEN ANYONE FROM the Bush administration reiterates the government's belief in a strong dollar he is now greeted with derisive laughter, rather than a mere behind-the-hand titter. The actual White House position is best summarized as favoring a dollar as strong as market forces permit. And that is…

ADD $100 OIL to billions in bank write-offs and it should come as no surprise that the word "recession" is being heard with increased frequency. As is the view that circumstances have combined to neuter the Fed, making it powerless to use its monetary policy weapon to prevent a downturn.

YOU'VE PROBABLY SPENT the past weeks sorting through the hourly fluctuations in share prices and interest rates, expert guesses on what the Federal Reserve Board's monetary policy committee would do to short-term interest rates, who's in and who's out at Merrill Lynch, Citigroup, and other troubled…

IT IS THE BEST of times, it is the worst of times--best of times for America's airlines, worst of times for the passengers they are cramming into their airplanes. Not as good for the carriers as the wonderful days when regulation guaranteed them a quiet, profitable life, nor as bad for the…

THIS PAST FRIDAY was the twentieth anniversary of the stock market crash of 1987, when the Dow Jones Industrial average fell by over 500 points, or 23 percent in a single day. That was almost 60 years after the great crash of October 1929, when share prices also fell 23 percent, but over a two-day…

"NO WAY, NO HOW . . . Aw, come on!" That was Rudi Giuliani's reaction when it was suggested during the recent presidential debate that London might replace New York as the financial capital of the world. And he didn't even know at the time that the Labour government of Gordon Brown was about to…

THE EMISSION OF HOT air at international meetings designed to prevent the earth from warming is rising. Just last week, more than 80 heads of state convened in New York under the aegis of the UN to decide how to tackle climate change. This was followed immediately by Bill Clinton's modestly titled…

THE JOBS MARKET is not collapsing, as panicked investors were led to believe last month when the government reported that the economy had lost 4,000 jobs. Well, it turns out that the early tallies were wrong, and that the economy actually added 89,000 jobs in August. Yet the published, incorrect…

London

THE TURMOIL OF THE past several months has had one advantage: we now have a clearer picture of where the U.S. and world economies are headed. And how monetary and regulatory policies are likely to change.

One and done. That's what some commentators are saying about the decision of the Federal Reserve Board's monetary policy committee to cut the Fed funds rate by 50 basis points (half of a percentage point), twice what the market had been expecting. They reason that chairman Ben Bernanke had a choice…

THE CHINESE ANNOUNCED on Saturday that they would be buying into the company that provides the Pentagon with technology to prevent cyber-attacks--of the sort the Chinese launched a few weeks ago. Why worry? We are all free traders now, according the president and his secretary of the Treasury--all…

IF YOU FOLLOW THE media you must think that everyone agrees that the earth is warming, and that it is our fault because we create greenhouse-gas emissions by driving, flying, heating and cooling our homes, and making other uses of fossil fuels. And you must think that everyone agrees that unless…

BEN BERNANKE FOUND that narrow path between the rock and the hard place. He had to add liquidity to a credit market that is experiencing a crunch, and recognize that the economy is slowing, on the one hand, and not send a signal to improvident lenders and borrowers that all is forgiven--inviting…

BEN BERNANKE WILL decide later today whether the recent turmoil in financial markets, and the apparent slowdown in the "real economy," warrant some action on his part--or whether to stand pat and see whether his recent moves to break the credit logjam are working. Meanwhile, and perhaps more…

IF YOU THINK that the oil cartelists in Vienna on Tuesday did you a favor by agreeing to increase output by 500,000 barrels per day, think again. The increase is too trivial to have much of an impact on oil or gasoline prices. "Our message to the consumer is that we care. We are concerned, and that…

AS YOU READ THIS, OPEC, the cartel of most of the world's oil producers, is meeting in Vienna. No, they will not observe a moment of silence in honor of those who died at the hands of Saudi terrorists some six years ago today. Instead, they will go over some data in a show of empiricism, and then…

ED LAZEAR USED A telephone call from the White House to explain that the jobs report yesterday isn't as bad as it seemed. After 47 months of steady growth, the economy lost 4,000 jobs in August. Keep in mind, the chairman of the President's Council of Economic Advisers told a handful of us…

AS YOU READ THIS, the backyards of America are alive with the sound of happy families. Outside, hot dogs and hamburgers are being grilled; inside, couch potatoes are watching their favorite baseball team, the tennis matches at the US Open, and--if the remote has been misplaced--Fred Thompson…

BE OF GOOD cheer. Relief might be in sight for those of you who must, absolutely must, subject yourselves to the tender mercies of our airlines.

WE KNOW A LOT more about financial conditions than we did a few days ago. First, it is clear that the Fed's decision to make the discount window more accessible succeeded in calming the financial waters. But no more than that: it has not sufficiently eased the liquidity problem to allow money to…

When the inability of a relatively few overstretched homeowners to meet their mortgage obligations results in the firing of the president of Bear Stearns, the forced bailout of a German lender, the suspension of three asset-backed funds by France's largest bank, and the cancellation of several…

LIKE THE CAVALRY coming over the hill just as the Indians were about to overwhelm the wagon train, Ben Bernanke rode to the rescue of beleaguered investors. He opened the discount window, making it possible for those desperate for liquidity to show up, hand over some assets that no one seems…

A market spasm. Repricing of credit risk. Liquidity crunch. Those are some of the terms traders are using to describe the turmoil in financial markets. Frank Sinatra said it better, "The party's over." Note: Normal life resumes after a party, so Frank had it right.

WITH INVESTORS HAVING lost the odd billion in recent weeks (but remember: share prices are still 14 percent higher than they were at this time last year), the hunt for a scapegoat is on. Washington pundits are not famous for their kindness to politicians, regulators and other out-of-power figures…

Gordon Brown bears no physical resemblance to the lanky Jimmy Stewart who starred in the 1939 film Mr. Smith Goes to Washington. But when he makes his first trip to the United States as prime minister this week, Mr. Brown's hosts are not likely to find his version of naiveté any more endearing than…

"Do I contradict myself? "Very well then I contradict myself." IS THIS DESCRIPTION, used by poet Walt Whitman in his classic "Leaves of Grass", fairly applied to economists trying to explain what is going on in the United States and other world economies? I think not, although the information…

OPERATE INTERNATIONALLY, and at times you have to fight a two-front war. That's what the private equity industry, with bases both in New York and London, finds itself called upon to do, as politicians in the United Stated and the United Kingdom launch simultaneous attacks on its tax status. Never…

THAT JUST ABOUT SUMMARIZES what is going on in the U.S. economy. Some weather watchers say the headwinds are close to gale force. The uproar in the subprime mortgage market has the rating the agencies becoming more picky; lenders are taking a longer look at borrowers before handing over money; and…

I ALWAYS WORRY that readers will be exposed only to large doses of the sort of bad-news stories that seem to dominate the media. So it might be useful to look at the good news lurking in the bad-news headlines.

No, class warfare has not broken out in America. And no, there is no "War on the Wealthy." What we are seeing is another of the many adjustments market capitalism makes when excesses become offensive to a broad swathe of quite sensible people in a democracy.

IF YOU ARE one of those people who doesn't mind worrying, really worrying, think of the High Grade Structured Leveraged Credit Strategies Enhanced Leverage Fund. The hedge fund, run by Bear Stearns, is struggling to raise cash so that it can avoid passing into the dustbin of history. Like another…

SOMETIMES, you can have too much of a good thing. That's what the new mega-rich, the private equity entrepreneurs, are finding out. It doesn't matter that there might be sound economic reasons for allowing these risk-takers to pay taxes on their interests in the ventures they put together at low…

What do Mikhail Khodorkovsky, Mikhail Gutseriev, and John Browne have in common? They all thought their desire for profits from Russia's vast oil reserves trumped Vladimir Putin's lust for power. Khodorkovsky now languishes in a Siberian jail. When his sentence is served, he will be rearrested and…

SO THERE IS LIFE in the Bush administration yet. And a bit of good sense. After allowing the 10,000-person staff of the World Bank to sink Paul Wolfowitz for reasons that had less to do with Wolfowitz's girlfriend than with his support for the policy that led to the Iraq war and his attempt to…

DIALOGUE. To Europeans, dialogue has always been preferred to what they see as the grim alternative: confrontation. Until now that has been one of many differences between Americans and our European allies. We set great store by results, Europeans by process. That's one reason for our differences…

There are times when profound changes to our economic system proceed without notice. This might be one of those times. Capitalism is once again doing what it does best--adapting to change. That's what the wheeling and dealing of those billionaire private equity funds is all about. But the emergence…

SO IT DOES INDEED end with a whimper rather than a bang. Free trade, I mean. Thanks to a president too weak politically to withstand the protectionist surge of a Democratic Congress, the era of ever-freer trade has come to an end. It expired quietly, with few mourners, and some of those who have…

TONY BLAIR thinks he has a soul mate in Nicolas Sarkozy. So does George W. Bush. Which is understandable. Anyone would be a relief after the Anglo-Saxon-hating Jacques Chirac, who considered it a major political triumph to embarrass the United States, and thought it amusing to dismiss England as a…

IF YOU EVER GET THE FEELING that you want to be a central banker, lie down until the feeling passes. Consider the problem of Federal Reserve Board chairman Ben Bernanke as he decides whether the economy is headed towards recession, in which case he should lower interest rates; whether inflation is…

ELECTIONS MATTER. Some 85 percent of French voters think so, but only about 60 percent of British and American eligible voters agree. That could be because we Anglo-Saxons see no difference in what is on offer from the various politicians begging for our votes, or because we are too satisfied with…

SHARE PRICES hit record highs; corporate profits are coming in at what only the greedy would consider unsatisfactory levels; jobs are plentiful; real wages are rising--and 6 out of every 10 Americans are expecting a recession.

SHARE PRICES hit record highs; corporate profits are coming in at what only the greedy would consider unsatisfactory levels; jobs are plentiful; real wages are rising--and 6 out of every 10 Americans are expecting a recession.

FOOD-PRICE INFLATION so severe that central banks are forced to raise interest rates to growth-stifling levels; corn prices so high that poor Mexicans can't afford their tortillas; massive deforestation to make way for more corn and palm oil; poor farmers pushed off their land to make room for…

THERE I WAS, sitting in a hotel room in Florence, struggling with an article on the crisis in the subprime mortgage market for my weekly column for THE DAILY STANDARD, rather than taking the more sensible course of reacquainting myself with the artistic marvels of that city. I leave to my readers…

THE KING is dead, long live the King. Ben Bernanke finally exorcised the ghost of his predecessor, Alan Greenspan, by telling a congressional committee that the former Federal Reserve Board Chairman is wrong in contending that expansions "die of old age." But he also told Congress that he thinks…

BORROWING OCCURS when a borrower has confidence in his future and a lender has confidence that the price he is getting for the use of his money--the interest rate--compensates him for the risk that he will not be repaid. Both borrower and lender sometimes miscalculate, and wish they had heeded…

AS THEY STRUGGLE to cope with voters' new concern about global warming, the world's politicians seem to be standing in front of Snow White's mirror asking, "Mirror, mirror on the wall, who in the land is the greenest of all?" while desperately chanting the Everly Brothers hit, "Let it be me."…

IT SEEMS THAT share and commodity prices move in more than one direction--a fact that has shocked some investors, but not a bad thing, it turns out. Investors have been reminded that there is something called risk out there, and that the prices they pay for the assets they want to add to their…

Anyone who thinks President George W. Bush is spending sleepless nights worrying about the machinations of the Democratic Congress, or figuring out how a lame duck president can limp from the political battlefield with honor intact, had better think again. And anyone who likes to regale his friends…

WE LEARNED three lessons last week. The first is that geopolitical news does not always drive markets. Just as the increase in troop strength in Iraq seems to be damping down the killing, just as the Syrians and Iranians decide it would be a good idea to meet with the Iraqi government to see if…

DON'T BE DECEIVED by the headlines coming out of Washington. There is more going on than a tussle over the wisdom of the president's decision to send more troops to Iraq. The battles over economic policy are just as intense, if not as eye-catching.

IN DAYS GONE BY, when share price movements were recorded on ticker tape, those bits of paper were at times showered from skyscrapers on heroes being honored in New York City's ticker-tape parades. Were it not improper, and had paper tape not been made obsolete by electronic reporting, Ben Bernanke…

THE COMPETITION between New York City and London threatens to get out of hand. New York mayor Mike Bloomberg, a billionaire capitalist, trekked to London to see how Red Ken Livingstone, the communist mayor of London, runs things. Well, not precisely. But he did come to see how Callum McCarthy,…

IT SEEMS THAT the apocalypse has been postponed. Just a few weeks ago there was an emerging consensus that the American economy was doomed to below-trend growth in 2007 at best, and a recession at worst. The tale of woe went something like this:

THERE ARE two ways to make policy. One is on the hoof, and in search of headlines, as the president did in last week's State of the Union message. Just as oil prices started to ease, he gave a gift to Hugo Chávez and the Saudis by announcing plans to double the size of the Strategic Petroleum…

Adam Smith never met Vladimir Putin or Hugo Chávez, but, as with so many other things, he anticipated their appearance on the scene. No one can accuse the Great Scot of protectionist proclivities, but he did warn that there are times when free trade takes second place to national defense. He…

"DEMOCRATS CAN GET THINGS through the Congress, but we've got to get the president to sign them. It seems to be in our mutual interest to start working together." No, this Democrat was not referring to the president's plan for a troop surge in Iraq. This was Barney Frank talking, the very liberal…

With the holidays behind us, it is time for a paean to change in America. Those who saw a threat to social harmony in the decision to allow Wal-Mart greeters to say "Merry Christmas" after a more secular "Happy Holidays" last year, or in the various skirmishes over crèches vs. menorahs on public…

Now all the forecasts are in. Readers know what myriad experts think of the outlook for most of the world's economies, the securities traded on the world's exchanges, trends in the commodities markets, and the course of the once-mighty dollar. It would, therefore, contribute little to the sum total…

THE CALENDAR IS AN ARTIFACT, a 12-month period unrelated to the fundamental movements in the U.S. and world economies. For that reason, and because so many others feel confident enough to offer detailed and precise forecasts of what is in store for us in 2007, I am inclined to leave such chores to…

EARLY IN JANUARY victorious congressional Democrats will swarm into the offices from which they have evicted their Republican foes. Republicans who have lost their seats will find reasons to get work as Washington lobbyists, rather than return to the hometowns they have always said they love.…

Mission impossible. That's the best way to describe Secretary of the Treasury Hank Paulson's just-concluded trip to Beijing, ostensibly to persuade the Chinese to do something to whittle down their huge trade surplus with the United States. Paulson and his colleagues--the delegation included the…

BEN BERNANKE thinks the economy is strong and that inflation remains a danger. The equities market believes the Federal Reserve Board chairman, so share prices hover around record levels. The bond market doesn't, and expects that he will soon have to recognize the economy's underlying weakness by…

"YANKEE, STAY HOME" is what the world's currency markets are trying to tell us, as the dollar sinks to a level where it takes $2 to buy one British pound, and over $1.30 to buy a euro. And if you're thinking about a major purchase of a made-somewhere-other-than-the-U.S. product, think again. The…

ROSY SCENARIO may be the belle of the Christmas ball, but she is due to be replaced by her only slightly less ebullient cousin, Goldilocks, in the New Year. In business-press jargon, all signs are that retailers here will have a merry Christmas, to be followed by a slowing but still healthy economy…

AMERICA IS FINISHED as a great power. Not because it no longer possesses the resources, but because it has lost the will. That was brought home to me on both ends of a recent trip through London's Heathrow airport en route to Phoenix.

THE ALCHEMISTS who run America's airlines are at it again, attempting to turn base metals into gold. US Airways' almost $9 billion hostile bid for bankrupt Delta, if successful, would create the industry's largest carrier and might be followed by the long-rumored merger of United with Continental,…

ELECTIONS ARE A DISTRACTION. Necessary to a democracy, but a distraction nevertheless. At least, that has been the case in America in recent months. Instead of debating important questions, such as how to extricate the nation from Iraq without leaving chaos in our wake, or how to finance the…

THEY SAY THAT ECONOMIC FORECASTERS were invented to make weather forecasters look good. To that I might add that political forecasters were invented to make economic forecasters look good. So it is with considerable trepidation that I build this week's column on a political forecast: When the polls…

NEXT WEEK AT THIS TIME voters will troop to the polls to elect all 435 members of the House of Representatives, 33 of the 100 senators, 36 of the 50 state governors, and hundreds of state, city, and local officials. Opinion polls suggest that the Republicans are in for a drubbing, due to a…

SO WE LIVE in a globalized world, which impacts on jobs, wages, consumers, and producers. All of which already have received too much attention to require further comment by me.

London

NORTH KOREA'S ABILITY and willingness to set off a nuclear device of some sort is being blamed on a failure of American diplomacy. Never mind that Kim Jong Il's survival depends on the continued support of China, or that Russia has consistently refused to help pressure North Korea to end its bid to…

IF YOU ARE THE SORT who thinks that the free movement of goods, capital, and people enriches all the world's nations, you are probably worried because the Doha round of trade talks is on life support and the plug is about to be pulled. And if you are the sort who worries when another nation's laws…

SURPRISES: they come to economists not singly, but in battalions. Just when many analysts were cranking out reports of a peak in oil production, and a permanent new era of $80 or $100 oil, crude oil prices fell by about 25 percent. The multiple surprises that produced this drop include:

BEN BERNANKE and his Federal Reserve Board monetary policy colleagues must have had the words of Ronald Reagan ringing in their ears when they met last week, "Don't just do something, stand there." Which is about all they could have done, given the fact that the slowing economy calls for an…

IT'S TOUGH attending dinner parties these days. Until recently, all an economist had to cope with was a demand for a forecast of house prices--for each of the neighborhoods represented at the table. Now things are harder. Every guest has his own reason for wanting a forecast of oil and gasoline…

"THE TOP FIFTH of American households claimed 50.4 percent of all income last year, the largest slice since the Census Bureau started tracking the data in 1967." So reported the Wall Street Journal just one day before the Commerce Department announced that second-quarter corporate profits were 20.5…

HI HO, HI HO, it's back to work we go. Most Americans who escaped home and hearth for the long weekend fired up their last barbecues of the season yesterday, the holiday on which we down our final gin and tonics, or Diet Coke-and-hot-dogs, depending on taste and upbringing, and prepare to face the…

THE "R" WORD IS BACK. The housing market has moved from cooling, through slide, into collapse. At least, that's what many property analysts and economists are saying. They are hoping that the Federal Reserve Board's monetary policy gurus take note when they convene in less than a month, and turn…

AMERICANS' OBSESSION with house prices remains undiminished. Indeed, now that it is becoming obvious that prices can move down as well as up, anxiety has increased the intensity of that obsession.

INNOCENT UNTIL PROVEN guilty" is one of the few prop ositions that everyone supports, irrespective of his place on the political spectrum. Well, almost everyone. Some liberals don't need a trial to decide that Scooter Libby should be given an orange jump suit, and some conservatives think it absurd…

IF WE NEEDED ANY REMINDING that our world can change with nerve-rattling speed, we got it last week when the security services uncovered a plot by Islamofascists to slaughter innocent air travelers. Suddenly, a cup of coffee looks suspiciously like a terror weapon, an iPod like an explosives…

FEDERAL RESERVE BOARD CHAIRMAN BEN BERNANKE and his monetary policy committee should allow some time at their meeting on Tuesday for a round of self-congratulation. They have been raising interest rates at every meeting, continuing Alan Greenspan's program of putting paid to the era of low interest…

"HE THAT IS WITHOUT SIN among you, let him first cast a stone . . . " European Union Trade Commissioner Peter Mandelson, secure in the knowledge that the Biblical interdiction doesn't disqualify him as a first-stone-thrower, rushed to the television studios to blame the United States for the…

ONE OF THE ANOMALIES I have mentioned several times is the gap between the American economy's performance, and the public's perception of the quality of President Bush's economic management. The first thing to keep in mind is that the U..S economy is a huge, sprawling, diversified beast, driven in…

ECONOMICS DRIVES THE LAW. Globalization is about more than cheap sneakers and Indian call centers. It is about pressures forcing the legal systems of every nation to take account, somehow, of what is going on in the rest of the world.

LET'S GIVE TWO CHEERS for Bill Gates and Warren Buffett. They have given new meaning to the word philanthropy, and not only by virtue of the magnitude of the funds they are jointly deploying. Not that somewhere between $60 billion and $70 billion is chicken feed. The lifetime donations of…

GARY MULGREW, David Bermingham, Giles Darby, Ken Lay, Eliot Spitzer, Hank Greenberg--the list goes on. The first three, now known as "the Natwest Three," are awaiting extradition from Britain to the United States to face charges in connection with the collapse of Enron. Lay, of course, is--was--the…

GARY MULGREW, David Bermingham, Giles Darby, Ken Lay, Eliot Spitzer, Hank Greenberg--the list goes on. The first three, now known as "the Natwest Three," are awaiting extradition from Britain to the United States to face charges in connection with the collapse of Enron. Lay, of course, is--was--the…

THIS IS A SPECIAL WEEKEND IN AMERICA. Because the Fourth of July holiday falls on Tuesday, most Americans stayed away from work yesterday, and treated themselves to a four-day weekend. That has given us time to fire up the barbecues, catch some of Wimbledon (starts at 7:00 a.m. in most U.S. time…

SEVERAL READERS have complained of late that my reviews of the American economy, its current state, and its outlook, have been too inconclusive for their tastes. Too much thesis and antithesis, and not enough synthesis, one reader said.

"GLOOM", "turbulence", "volatility." A small sample of the adjectives festooning the business pages as America, and indeed the world, reaches what is being called "the end of the era of easy money." Result: a worldwide "flight to safety," as investors end their wild speculation in commodities and…

"DON'T JUST DO SOMETHING, STAND THERE," Ronald Reagan is reported to have told over-zealous legislators and regulators. Many on Wall Street are wishing that Federal Reserve Board chairman Ben Bernanke would follow that advice and leave interest right where they are, at 5 percent, after 16…

IN MOST MERGERS IT IS easy to distinguish the acquirer from the acquired. Not in last week's highly publicized merger of Goldman Sachs and the White House. For the last two months, day-to-day operational control of the White House has been in the hands of a Goldman Sachs alumnus, Joshua Bolten,…

ALAN GREENSPAN'S REPUTATION for perspicacity mounts by the day. The former Federal Reserve Board chairman could easily have persuaded the president to extend his term by a few months so that he could break Truman-appointee William McChesney Martin's record as longest serving chairman. He didn't.…

YOU ASKED FOR IT. You've got it. We are at the beginning of the adjustment of the worldwide "imbalances" that have so troubled policymakers. The U.S. budget deficit, complained the seers, is a testimonial to the profligate ways of Congress and the president and must be eliminated now that America…

THE ECONOMY avoided two looming problems last week. First, the Federal Reserve Board's monetary policy committee decided not to bow to pressure from the housing industry and some investors. Ben Bernanke and colleagues refused to announce a halt in its series of interest rate increases. Instead,…

THE MASS MARCHES, stay-away-from-work, boycotts, and other demonstrations by Hispanic immigrants, legal and illegal, have been extraordinarily effective. They have persuaded me to reexamine my steadfast support for immigration. Me, a guy whose father came over from Poland at the age of nine, with a…

SENATOR PAUL SARBANES and Rep. Mike Oxley are both retiring from Congress at the end of this year. The business community will be delighted to see them gone--and to get on with the task of pushing through changes to the law that bears their names, and is better known as SOX. That legislation was…

THE ORDINARY NERVOUSNESS of investors and market watchers has been converted into advanced paranoia by the business media's preference for bad news. Consider this headline in the Wall Street Journal: "Economy's Surge Stirs Questions About When Slowdown May Come".

"WE ARE THE PARTY OF IDEAS," says President Bush. And he has been right, at least until now. But, as he refreshes his team, he faces three years that might prove a dreary descent into irrelevance unless he also refreshes his domestic economic policies. The fact is that what worked for compassionate…

SOME OF THE FOG that has been making economists' crystal-ball gazing more difficult than usual seems to be lifting, enabling us to sketch what the rest of 2006 might look like.

SUDDENLY, several policy issues that have until now been swept under the rug are being brought into the open:

ROB PORTMAN has a tough job. As United States Trade Representative he does have the rank of ambassador and a staff of over 200 (considered tiny by the standards of Washington's bloated agencies). That, and the fact that he is siding with the angels by fighting for freer trade, must be a comfort on…

WHERE ARE THE AMERICANS? United Kingdom companies, once the special targets of America's acquisition-minded executives, who believed they spoke the same language as the Brits and whose wives hankered after frequent visits to Harrod's, are falling to acquirers almost every day--but American firms…

Much of the talk since the Palestinian people decided that Hamas best reflects their views has centered on the question of whether the US and the EU should continue to send aid to an organization pledged to destroy Israel, and on the humanitarian consequences of discontinuing that aid. Interesting…

WILL HE OR WON'T HE? The guessing about whether the Federal Reserve Board's monetary policy committee will continue to ratchet interest rates upward has not stopped with the retirement of the enigmatic Alan Greenspan. The clues provided by the financial markets, says Federal Reserve Board chairman…

This might be one of those turning points in economic and political affairs. In economics, we might be seeing the end of the era of free trade. In politics, we might be witnessing the reemergence of nationalism and its close cousin, protectionism. The result will surely be a less efficient use of…

DUMB, DUMBER, DUMBEST. Dumb: Democrats who think voters will ignore all of their votes against tighter security if they oppose the transfer of the management of some operations in six ports to state-owned Dubai Ports World. Dumber: Republicans who immediately hopped on the anti-deal bandwagon for…

LAST WEEK'S VALENTINE'S DAY may be the last on which lovers of low interest rates will find their love requited. It is increasingly likely that short-term interest rates will be above 5 percent when sweethearts next exchange vows of undying devotion.

ECONOMIC THEORY is clear about one thing: increase the supply of a good and, other things being equal, its price will fall. So the U.S. government massively increased the supply of its bonds in order to finance its deficits, and their price . . . rose. (When bond prices rise, their yields, or…

IT'S DIFFICULT to decide which is more depressing: the goal the president has set to cure us of our "addiction" to oil, or the prescription he has written to help us kick the habit. In his State of the Union address President Bush set as his goal the replacement of some 75 percent of the oil we…

HE CAME, he saw, he spoke. His was the sound, Democrats, sullenly refusing to applaud at many points, provided the fury, and sober reflection reveals the significance to be nothing at all.

CALL IT the war of the State of the Union Address. As you read this, the final battle in that war is underway, with the winners to be determined tonight when the president goes before a joint session of Congress and assorted dignitaries, and the nation, to report on the state of the Union. More…

AT MIDNIGHT ON JANUARY 31 Alan Greenspan will hop into bed for his first worry-free sleep in almost two decades. So he told me during a recent visit to London at the invitation of Chancellor of the Exchequer Gordon Brown, who credits Greenspan with persuading him to grant the Bank of England…

IT HAS BEEN SOME TIME since I sat opposite the CEO of a major oil company at a seminar in which I suggested that shareholders should know how much they are paying the CEO to run what is, after all, their company. He was more than a little annoyed. If everyone knew how much he earned, kidnappers…

THIS MAY BE THE YEAR in which we get some proof that we should be careful what we wish for. The chorus of those demanding that we correct what have come to be called "imbalances" is rising to a decibel level at which it might actually affect policy.

VENICE IS A TOWN, and Italy is a country, where the quality of the panettone is of greater concern than the quality of the nation's central banker. When Italy's central-banker-for-life was forced to resign amid charges of corruption in mid-December, no one save some politicians and the financial…

UKRAINE is the West writ small. Its confrontation with Russia over energy supplies, during the course of which Vladimir Putin gave "cold war" a new definition, is a warning to major energy-consuming countries that their long-term prosperity is in the hands of very dangerous people.

The year that ended a few days ago was a pretty good one in America--unless you built GM or Ford cars, piloted Delta airplanes, or lived in the path of Katrina. And, sadly, unless you had a loved one killed or maimed in Iraq.

The year that ended a few days ago was a pretty good one in America--unless you built GM or Ford cars, piloted Delta airplanes, or lived in the path of Katrina. And, sadly, unless you had a loved one killed or maimed in Iraq.

IF THE FEDERAL RESERVE BOARD'S monetary policy gurus have any doubt that "possible increases in resource utilization . . . have the potential to add to inflation pressures," as they said in last week's statement accompanying their 13th consecutive increase in interest rates, they need look no…

PRESIDENT BUSH'S VISION OF SOUND economic policy has remained remarkably constant over the last five years--tax cuts, free trade, and a generous amount of immigration. And why not? Low taxes, free trade, and new immigrants have benefited our economy over the past quarter century, and helped produce…

THE GATHERING of 189 nations in Montreal at the Climate Change Conference ended last Friday as most U.N.-sponsored conferences end these days: with denunciations of the United States. Canadian Prime Minister Paul Martin sent a message to "reticent nations, including the U.S. . . . : there is such a…

THE WAR IN IRAQ, hurricanes in the Gulf, the unsettling prospect of a change at the top of the Federal Reserve Board, a president unable to persuade the majority of Americans that he can lead them to peace and prosperity, a Doha trade round that seems more rather than less likely to fail, high…

GENERAL MOTORS, which, like Ford, lost $1.3 billion in the third quarter, will lay off 30,000 workers and close or downsize 12 plants in a desperate effort to avoid bankruptcy. Kodak is frantically attempting to build its digital business as the use of film declines. Knight Ridder shops for a buyer…

THE WASHINGTON POST doubted that Americans would enjoy the Thanksgiving holiday, announcing on the morning of turkey day that 61 percent of Americans are "anxious about money." So anxious, in fact, that the very next day between 130 million and 150 million headed to the malls to spend a sum that…

THE EASY PART is almost over. The Senate Banking committee has declared itself satisfied with Ben Bernanke's responses to its members' not particularly penetrating questions, and overwhelmingly recommended that the full Senate confirm the president's choice to succeed Alan Greenspan for a 14-year…

IT IS FINALLY HAPPENING--the much-predicted bursting of the bubble. Surprise: It is the gasoline price bubble that has burst, not the house price bubble. Prices of regular unleaded last week averaged about $2.34 per gallon, below the levels prevailing immediately before Katrina struck, and well…

IMAGINE A HUNT in which the Master of Fox Hounds is replaced just as the pack picks up the scent. Add a dense fog. That's a good description of the circumstances in which the Federal Reserve Board's monetary policy gurus find themselves as they hunt for the interest rate that will allow the U.S.…

THERE WAS A TIME WHEN it was almost fun to confront the Bush-haters and anti-Americans in Britain, where I live. And not only because of my natural love of forensic combat. No, the arguments were fun because my wife, Cita, and I invariably won. Not that we changed any minds, or induced any "I see…

"CONTINUITY." That's what Alan Greenspan's nominated successor is promising the president and the financial markets. But be careful before concluding that Ben Bernanke is simply Greenspan Mark 2. He isn't. My dictionary defines "continuity" as a "logical sequence," not quite the same thing as…

AT LONG LAST IT'S COME, the day of reckoning for the U.S. economy. That's what some experts are saying as they study the data that have been published since Katrina struck the oil, gas, and shipping industries. True, those data contain more good news than bad. It is now clear that the economy was…

Blackpool

IT TAKES A LOT to get Alan Greenspan on an airplane these days. He has enough to do at home: tend to the economy, develop monetary policy that can cope with the profligate fiscal policy concocted by the president and Congress; and begin packing his office so that he can be out the door when his…

Brighton

THE STORM CLOUDS that darkened the skies over New Orleans and Houston have lifted, but those that are darkening the economic outlook remain threatening. Some related directly to Katrina and Rita will pass sooner rather than later. But other clouds might, just might, prove to linger far longer, long…

"IF WE EXPECT LARGE CHANGES but are very uncertain as to what precise form these changes will take, then our confidence will be weak." So wrote John Maynard Keynes in his classic General Theory of Employment Interest and Money in 1936. That might explain why consumer confidence fell 14 percent…

KATHLEEN BABINEAUX BLANCO, LOUISIANA'S lachrymose governor, wants hundreds of billions of dollars of taxpayers' money so that she can "recreate our communities." You know, the community that appalled the rest of America when wall-to-wall television coverage of Katrina showed us just what it looked…

HALF OF ALL PASSENGERS flying around America are now sitting in airplanes operated by bankrupt airlines, flown by pilots about to see their wages and pensions cut, and served by cabin staff worrying that a pink slip awaits them when they land. These carriers are part of an industry set to lose $7.4…

WE DO NOT YET KNOW enough to make a definitive estimate of the amount of time it will take to get the pipelines pumping at full capacity, all of the refineries up and running, the port operating on a normal basis, and other parts of the Gulf Coast economic structure back into pre-Katrina shape. But…

The first issue of this magazine appeared in September 1995, part way through the Clinton administration, and less than a year after the Republican victory in the congressional elections of 1994. The pressing foreign policy issue of the day was Bosnia. The world seems a very different place today.…

"WE WILL ACCEPT NOTHING less than total victory over the terrorists and their hateful ideology," President Bush told the Veterans of Foreign Wars last week. But, as they say both on the streets of New York and the ranches of Texas, talk is cheap. We now have a choice--in the vernacular, it is to…

VERY FEW MARKETS are as complicated as the housing market, which may be why it so confuses market watchers. One week the New York Times reports "Healthy Housing Market Lifted the Economy in July," the next week the same writer discovers, "July Slowing of Home Sales Stirs Talk of Market Peak."

VERY FEW MARKETS are as complicated as the housing market, which may be why it so confuses market watchers. One week the New York Times reports "Healthy Housing Market Lifted the Economy in July," the next week the same writer discovers, "July Slowing of Home Sales Stirs Talk of Market Peak."

ALAN GREENSPAN famously described the failure of long-term interest rates to rise in tandem with the increases he is engineering in short-term rates as a conundrum, a puzzle. The Fed chairman might with even greater accuracy describe the situation in which he now finds himself as a quandary, a…

DAVID O'REILLY has made a big bet--big not only by Las Vegas standards, but by the standards of the swashbuckling oil industry. The Chevron CEO bet more than $18 billion that oil supplies will be tight and prices will stay high when he bought Unocal--after the Chinese authorities yielded to…

THERE ARE TIMES WHEN THE president can convert his famed inarticulateness into a charming trait. But more often, the inability to explain and defend his policies causes serious political damage. Somehow, for instance, all the president's men have managed to snatch defeat from the jaws of victory in…

THERE IS LESS HERE than meets the eye--unless there is more. That's the considered reaction of the experts to the recent decision of the Chinese authorities to allow the renminbi to increase in value by 2.1 percent and fluctuate 0.3 percent daily, and to switch from a dollar yardstick to a basket…

London

IT IS IMPORTANT not to become so absorbed in studying the blips in interest rates, exchange rates, inflation rates and other economic indicators that we forget these are merely thermometers. They can tell us something about the temperature of an economy, but, taken alone, not much about the major…

IT IS IMPORTANT not to become so absorbed in studying the blips in interest rates, exchange rates, inflation rates and other economic indicators that we forget these are merely thermometers. They can tell us something about the temperature of an economy, but, taken alone, not much about the major…

THE U.S. ECONOMY, we were told at the beginning of the year, is in trouble. The boom in house prices is producing a bubble that will burst, with consequences even more dire than the bursting of the Internet bubble. The dollar will fall and the federal budget deficit rise, increasing inflationary…

AMERICANS RETURN TO WORK TODAY after a bittersweet weekend. Yesterday we celebrated our Declaration of Independence from Britain with fireworks, parades, unfurled flags, and the consumption of 150 million hotdogs, a statistic that warms the hearts at the National Hot Dog and Sausage Council, but…

FEDERAL RESERVE CHAIRMAN Alan Greenspan teamed up with Treasury Secretary John Snow to urge calm when they went before a Senate committee last week. Once again, politicians and policy wonks are up in arms about a foreign takeover of an American company, in this case the attempted acquisition of…

THE BUSH ECONOMIC TEAM SAYS IT IS WORRIED. Its key players fret that life has gotten difficult for Americans with incomes below the middle level of around $45,000 per year. High gasoline prices are hitting the wallets of workers who must use their cars to get to work and the pocketbooks of moms who…

WELL, we have now heard from all the players in the Eurodrama. The French are angry with the Brits for canceling--oops--postponing their referendum on the constitution. It seems that it is not the French "non" but the British postponement that has put paid to this adventure in superstatism. The…

IT'S PAYBACK TIME IN WASHINGTON. Britain's prime minister, Tony Blair, is coming to town to discuss the state of the world with President Bush: His steadfast support of Bush and America in Iraq entitles him to more than a friendly photo-op. Blair paid a heavy price at the polls for that support,…

THE FIRST SALVOS have been fired in a trade war that is unlike any other. Not that all has been peace and quiet on the trade front until now. Opposition to the Central America Free Trade Agreement (CAFTA) by America's inefficient but politically potent sugar beet producers and apparel makers has…

"SOME ARTIFACT or some development, seemingly new and desirable--tulips in Holland, gold in Louisiana, real estate in Florida . . .--captures the financial mind. . . . The price of the object of speculation goes up. . . . This increase and the prospect attract new buyers; the new buyers assure a…

A PERFECT STORM. That's what one of Washington's top lobbyists tells me is brewing. It might blow away the decades-long consensus in favor of free trade. It is not only that the Treasury used its latest report to Congress on exchange rate policies to warn China to unpeg its currency, or else. The…

DON'T BE MISLED by the collapse of GM and Ford's credit ratings and market shares--or the impending bankruptcy of Delta Airlines--or America's trade and budget deficits. Or even by the turmoil in America's financial markets, so worrying that Timothy Geithner, president of the New York Federal…

London

SOFT PATCH or the beginning of a downturn--that's the question that divides America's economy watchers. Last week the Federal Reserve Board's monetary policy makers enlisted in the soft-patch camp, and kept to their program of "measured," repeated, one-quarter point increases in interest rates.…

SEVERAL YEARS AGO I SUGGESTED in these pages that it would be good conservative policy to raise, rather than lower, inheritance taxes. After all, American conservatives, traditional and neo, believe in a meritocracy in which material success should depend mostly on our own efforts and…

London

SO IT HAS FINALLY HAPPENED, just as the nay-sayers said it would. A memo is leaked suggesting that Korea's central bank is considering switching out of dollars, and the value of the U.S. currency drops. Unexpectedly weak job market and retail figures hit the wires, and the experts scramble to be…

WE DON'T HAVE TO WAIT for the outcome of the battle between American International Group (AIG) and its regulators to predict that it will affect how public companies can be governed in a world in which prosecutors are unconstrained by rules designed to protect the rights of the accused.

DAVID BROOKS, OUR FELLOW scribbler, is in torment. The emergence of a home team in Washington is forcing a break with the Mets, his last link to his native New York City. The Mets out, the Nats in, and what David calls "a spiritual crisis" is upon him. But he needn't mourn. The city David remembers…

TRADE NEGOTIATORS dance to mood music, and the mood music is decidedly sour. Start with the fact that the constituency that favors free trade is fractured and politically ineffective relative to the constituency seeking protection from international competition. The apparel manufacturer and his…

WHEN PETER MANDELSON slammed the telephone down on Bob Zoellick during a conversation over subsidies received by Airbus, he was applying to the former U.S. trade representative and current State Department number-two the intimidating tactics honed in dealing with Britain's editors and reporters in…

INFLATION IS BACK, or it isn't. The dollar is back, or it isn't. There is a dangerous housing bubble, or there isn't. The trade deficit is worrying, or it isn't. The Fed is about to become more aggressive in raising interest rates, or it isn't. The economy is headed for steady, high growth, or it…

NOW THAT THE SOVIET UNION is no more, there are two economic models on offer in the world--three, if you count Cuba and North Korea, which there is no reason to do since imitators are hardly lining up for that short-cut to impoverishment. The American model can broadly be described as one that…

JEFF GEDMIN LURED ME TO Berlin the other week with the prospect of good talk--specifically, an interesting exchange of views with some journalists, politicians, policymakers, Foreign Ministry planners, Britain's ambassador to Germany, and the U.S. chargé d'affaires (our old ambassador has left, and…

WHEN THE OPEC CARTEL convenes this week it will have to deal with demands that it rev up its capacity to supply the world with the increasing amounts of oil that America's drivers and shivering homeowners, China's industries, and even Europe's stalled economies need. The International Monetary Fund…

IT ISN'T EASY to know where you are going when you don't even know where you have been. That's the problem facing economists as they try to guess where the U.S. economy is headed. A month ago the government reported that the growth in productivity in the fourth quarter had plummeted to the puny…

HAPPENINGS IN THE TWO GLOBAL MARKETS that do not conform to Adam Smith's model frequently roil free-market economies such as America's. The foreign exchange market is dominated by central banks that manipulate the value of national currencies for reasons unrelated to what we think of as natural…

THE GOOD NEWS is that the Kyoto Protocol aimed at reducing greenhouse gas emissions came into effect last week, legally binding the 34 industrialized countries that have ratified the treaty to cut their greenhouse gas (GHG) emissions by 2012. Good news not because the agreement can do much to…

WHEN DICK CHENEY SAID, "Deficits don't matter," economists took that as proof of the economic illiteracy of the Bush administration. But it turns out there is a case to be made that Cheney was onto something.

WE HAVE BECOME ACCUSTOMED to seeing their major industries changing before our very eyes. For investment bankers, these restructurings produce a fee bonanza that sends the prices of New York condominiums soaring, and puts smiles on the faces of Porsche dealers, as thirty-something masters of the…

A COLD WEATHER WAVE HITS America's northeast, oil inventories are drawn down, and prices rise. A pipeline is blown up in Iraq, and prices rise even more. The OPEC cartel meets and agrees to cut back production, adding to price pressures. The government announces a rise in inventories, or weather…

THE MUSIC HAS STOPPED, the flower arrangements have wilted, and the 2,000 police who came from all over the country to aid the 4,000 Washington cops (and the military) maintain security have gone home, as have the 12,000 Texans and Texan-wannabes who consumed 21,000 enchiladas at the "Black Tie and…

THE DATA RELEASED last week showing that America's trade deficit hit still another record in November startled those who have been expecting the shrunken dollar to shrink the deficit, and soon. The $60.3 billion recorded in November, a jump of 7.7 percent from the October level, appalled those…

PRESIDENT BUSH WANTS TO REFORM the Social Security system. He is right to want to transform the system into one that meets the needs of an America whose economy and demography markedly differ from the day when Franklin Roosevelt put this safety net in place. He is right, too, to have decided to…

FEDERAL RESERVE BOARD CHAIRMAN Alan Greenspan is famous for his ability to use the language with such precision that it ceases to be a means of communication. He once told a congressional committeeman, who congratulated him on the clarity of his response to a question, "Then I must have misspoken."

THERE ARE TWO REASONS why economic forecasters live dangerous lives. The first danger lies in the unknowables--unpredictable events of such magnitude that they swamp the variables that economists are comfortable dealing with. Consider just a few:

THIS WAS THE YEAR THAT WAS . . . . It opened with the world angry at America because of its willingness to use the strength of its military, and closes with the world angry at America for its willingness to tolerate the weakness of its currency. Thar's just no pleasin' these folks, as they say in…

ONE NICE THING about the falling dollar is that it makes oil cheaper for European and other consumers who are complaining that the rise in their own currencies is hurting their competitiveness. When the euro and the dollar were at about parity, and oil was selling for $40 a barrel, it took E40 to…

PRESIDENT BUSH'S CHANCES of keeping world financial markets calm while pushing through Social Security and tax reform took a dive last week. Remember: If the president is to succeed in privatizing a portion of the Social Security system, he will have to persuade financial markets that it is safe to…

WHILE THE WORLD'S FINANCE MINISTERS and assorted politicians fret about the falling dollar, and markets chew over Alan Greenspan's warning that continued inattention to our trade deficit might have deeply unpleasant consequences, most Americans find the issue a true yawner, and certainly not one to…

THERE IS LITTLE in the spate of economic statistics that was published this week to upset economy-watchers here in America. The economy is growing at an annual rate of 4 percent. The Institute of Supply Management reports that both the manufacturing and service sectors are expanding at an…

THERE IS INDEED something new in financial markets: overseas followers of the Bush administration's so-called "strong dollar policy" are learning the meaning of the American colloquialism "Snow job." As America's traders know, that means deception, accomplished by burying the listener under a…

"PRIME MINISTER BLAIR wants to talk about Iraq, and we want to talk about Iran. Which is why we allocated two days to his meeting with the president," one high-level Bush official told me in advance of the Anglo-American summit last week. So all was not sweetness and light, probably a plus for Tony…

"DOWN AND DOWN I go, . . . loving the spin I'm in" might have been written by Harold Arlen and Johnny Mercer as an anthem for the dollar. As it spins down, cries of both glee and anguish are heard in the land, and economists scramble to offer explanations.

SO IT'S TO BE four more years of George W. Bush, to the consternation of most of the chattering classes, but to the apparent glee of investors and traders. If Bush and his fans needed any frosting on the cake it came with soaring share prices last week, and Friday's report that the economy had…

WHEN IT COMES to economic policy, this is no race between Tweedledee and Tweedledum, although in some ways it is between Dumb and Dumber. Both President Bush and Senator Kerry have promised to halve the budget deficit in four or five years, although neither has a credible budget-balancing plan.…

AMERICANS NOW KNOW EVERYTHING about the economy that they will know by the time they go to the polls to choose between George W. Bush's continued stewardship and John Kerry's plan to return the Clinton economic team to the White House. Late last week the government announced that the economy grew…

JUST WHEN THE FINANCIAL SERVICES INDUSTRY thought it had made its peace with New York's attorney general, Eliot Spitzer showed that his battle with the investment banking industry had whetted, rather than sated, his appetite for combat. Helped by guilty pleas from two executives with American…

THE GAME of predicting the economic consequences of a president is, in a sense, a frivolous exercise: It is impossible to predict in advance the nature of the problems any president will be called upon to solve. Franklin D. Roosevelt was elected on a pledge to balance the budget, and reelected on a…

Bournemouth

IS IT AN EARTHQUAKE or simply a shock, asked Cole Porter almost 70 years ago. That question, or one almost like it, is puzzling economists today, as they try to decide whether the U.S. economy has merely hit a speed bump in the road to continued recovery, or driven into a ditch. The nervous types…

Brighton

HURRICANES hit America's offshore oil rigs, temporarily closing down about 10 percent of the nation's oil production. Insurgents hit Iraq's oil facilities. Rebels led by Alhaji Mujahid Dokubo-Asari hit Nigerian oil fields. Terrorists hit foreign oil workers in Saudi Arabia. Putin hits Yukos. All…

EARLY LAST WEEK a select group was invited to George Soros's posh New York apartment to witness a debate between Richard Holbrooke, assistant secretary of State in the Clinton administration and a leading candidate for the top State Department job in a Kerry administration, and Bill Kristol, editor…

BUSINESS IS BOOMING. Most airplanes are full, or almost so, including--so British Airways's staff tell me--the pricey first- and business-class cabins on most transatlantic flights. As September 11 recedes from memory, and as the business recovery takes hold, carriers are putting more buns on…

ECONOMIST FRIENDS who have served in government like to joke that after a newly arrived president has finished admiring the Oval Office, he starts hunting for the secret room containing the knobs that control the economy. It's always a fruitless search. Still, presidents are not completely…

THROUGHOUT the start-and-stop growth that has characterized the American economy in the past year, all eyes have been on the American consumer. Accounting for about 70 percent of the U.S. economy, consumers have kept the American and, indeed, the world economies from slipping into a deep recession…

THERE IS AN OLD POLITICAL SAYING: "It is better to be lucky than good." This week, President Bush was both: He gave a well-received acceptance speech to the Republican convention, and now he gets a jobs report that suggests his economic recovery program is working.

SO NOW WE KNOW. If the demand for oil grows at a surprising rate, and the supply is constrained, the price will rise. Add myriad threats of supply disruption, an infrastructure which has been starved for capital and environmental permits for a decade, and a producer cartel, and you get increases…

THERE WAS A FLOOD of economic data last week--and of political commentary on the data--and John Kerry had it all his way. The economy created surprisingly few jobs--a mere 32,000, 10 percent of the number Bush had been hoping for--in July. To add to the president's discomfort, the already low…

ONE OF THE ADVANTAGES of spending a great deal of time in London is the opportunity to meet with Britain's prime minister from time-to-time, and to watch him in action through the eyes of the British media. Americans who have witnessed his performances in the press conferences that inevitably…

VLADIMIR PUTIN may have done John Kerry a very big favor. When the former KGB agent threatened Yukos with closure for failure to pay the $3.4 billion in taxes he discovered it owed when Yukos' principal shareholder became a political opponent, oil prices temporarily hit a 21-year high. Never mind…

GAME, point, and possibly even match to Fed chairman Alan Greenspan. When he and his monetary policy committee raised interest rates by only 0.25 percent a few weeks ago, the inflation hawks were out in force. The economy, they said, was overheating, and the Fed chairman, wedded to the view that…

ALL THOSE EUROPEANS who live for the day when John Kerry will be sworn in as the 44th president of the United States should have paused before cheering his selection of John Edwards as his running mate which they uniformly think will add to Kerry's chances of moving into the White House.

ON SUNDAY, we Americans did what we always do on the Fourth: We grilled hot dogs and watched fireworks in celebration of the day in 1776 when we declared our independence of Britain by adopting "The Unanimous Declaration of The Thirteen United States of America." As Edmund Burke told the…

WHEN MARKETS TALK, politicians would do well to listen. The oil markets are doing more than mere talking--they are shouting for the attention of policymakers who seem determined not to listen.

RONALD REAGAN would be proud of George W. Bush. The president so many Americans are now so fondly remembering had to face down a contemptuous foreign policy establishment for years, when the received wisdom was that his policies were a failure. Reagan didn't win the Cold War without setbacks; Bush…

IT IS HARD TO BELIEVE that it has been only one week since the celebration of the 60th anniversary of the D-Day invasion that liberated France from the Nazis. A lot has changed in a mere seven days.

SO NOW WE KNOW. The U.S. economy created 248,000 non-farm jobs in May, OPEC decided to increase output only slightly, consumers reined in their spending a bit despite the better jobs market, perhaps because the value of their homes increased a mere 1 percent in the first quarter, and the Economist…

OLD-LINE POPULISTS and left-leaning politicians are fond of setting "Main Street," where the votes are, against "Wall Street," where the money is. The latter, inhabited by fat cats, price gougers, insider traders, and assorted corporate felons, enriches itself by overcharging the doughty denizens…

THERE IS NOTHING quite as effective as $40 oil to turn merely silly politicians into, er, dissemblers. This past weekend Europe's finance ministers and others, all of whom take a lot more out of their motorists' pockets in the form of gasoline taxes than the OPEC oil cartel can ever dream of doing,…

IF YOU HAVE BEEN FOLLOWING the news about oil prices, you are probably totally confused or seriously misinformed. The situation is both much better and far worse than you have been led to believe.

"WE WON," an Iraqi militiaman in Falluja crowed to reporters, "We didn't want the Americans to enter the city and we succeeded." The Iraqis there have created a no-go zone every bit as effective as the old no-fly zone imposed by America. Better still from the locals' point of view, a few hundred…

"THE ECONOMY IS ON STEROIDS," an administration official told me last week, before the latest jobs report was released. The April jobs report, released late last week, certainly supported that view, at least as to the growth rate. The economy added 288,000 jobs last month, well above the 150,000…

"THANK GOODNESS they've left town, whoever they were," sighed Washingtonians after days of traffic mayhem. Not satisfied with the security assured by their anonymity, the G-7 finance ministers roared around Washington in their black SUVs, led by police with sirens wailing, and accompanied by armed…

IF ANALYSTS AND INVESTORS would listen to Federal Reserve Board chairman Alan Greenspan with a degree of precision equal to that which he employs when he speaks, the world of financial markets would be a calmer place. Those who reacted in mild panic to last week's testimony just weren't listening…

PRESIDENT BUSH used last week's press conference to argue that the short-term expenditure of American blood in Iraq is justified by the long-term benefits in increased security for Americans, greater freedom for Iraqis, and the possibility of a pacified, prosperous, and democratic Middle East that…

BY THE DREARY STANDARDS of America's airlines, things are looking up. The six biggest carriers cut their 2002 losses of $7.4 billion to a mere $5.3 billion last year, and some may actually be in the black this year--if we ignore pension obligations. United Airlines remains a bankrupt, US Air…

THEY SAY that a week is a long time in politics, and we've just had proof of how true that is. It now seems hard to remember that just a few weeks ago George W. Bush was considered to have a sure winner in his Iraq policy, and an equally sure loser in his no-new-jobs recovery. With Iraq now in…

London

THE BEST ADVICE for today's investors may have been penned some 350 years ago by the poet Robert Herrick, "Gather ye rosebuds while ye may, . . . this same flower that smiles today, tomorrow will be dying." The American economy looks set for robust growth this quarter and next. After that, many…

London

MADRID REMINDED INVESTORS of something they had chosen to forget--that there is risk out there that is unlike any other. It is possible to make an informed guess as to where the dollar is headed, or the price of oil, or the demand by China for the various commodities it is gobbling up at a furious…

THAT CHINA'S NATIONAL PEOPLE'S CONGRESS convened last week is not news, though it provided the occasion for prime minister Wen Jiabao's first address to the rubber-stamping body, a 90-minute affair which, quite predictably, was well received. That China released two dissidents, Wang Youcai and…

"TWO OUT OF THREE AIN'T BAD," sang Meat Loaf some years ago--a song of which my good wife reminded me (well, to be exact, told me about) when I worried that I had not been entirely accurate when I named three countries in which I thought our ambassadors are not doing as much as they might to uphold…

ALL OF THOSE DISENCHANTED FOLKS who have been staying away from the voting booths because they say that all politicians are the same, so why bother voting, no longer can claim that excuse. GWB and JFK (get used to it, that now refers to John Fitzgerald Kennedy's initialsake) may both be millionaire…

YEARS DIVISIBLE BY FOUR are not good for free trade. When Americans go about the quadrennial chore of choosing a president, the candidates seeking their votes know one thing: everyone disadvantaged by the free international movement of goods and services and jobs knows who they are. But the…

IT HAS BEEN almost 50 years since our government decided to emblazon "In God we trust" on the nation's paper currency. That's more comforting to some than "In markets we trust," but somewhat less accurate, now that the Bush administration has abandoned the so-called "strong dollar" policy of Bill…

GEORGE W. BUSH thinks the biggest danger to his second term comes from John Kerry, but it may come from $35 oil. His political team worries that last week's decision by the OPEC oil cartel to cut output, in order to keep oil prices up, will kill off the economic recovery. They can't forget what Dan…

"IT'S CLEARLY A BUDGET. It's got a lot of numbers in it," George W. Bush told a reporter during his run for the presidency some four years ago. After examining the budget that the president submitted to Congress last week most of Washington is saying, "It's clearly a budget. It's got a lot of lies…

A FEW DAYS from now the finance ministers of the world's richest, industrialized countries will gather in Orlando, Florida, for still another meeting of the G7. What better place to escape the wintry weather that is making life miserable in many of their countries than the warm climate of Florida,…

THIS IS THE SEASON of high-level international meetings and, therefore, the season of many discontents. Europe's concerns about the fall of the dollar and America's fiscal profligacy were aired at the World Economic Forum in Davos last week, as were America's concerns about the inability of…

IF YOU WANT TO KNOW why ordinary folks find it difficult to understand what economists are saying about the American economy, consider the question of jobs. We know a few things. We know that jobs are such an emotive political issue that one candidate for the Democratic presidential nomination…

London

THE DOLLAR IS DOWN. Oil is up. America is running huge trade and budget deficits. The Japanese are intervening massively in the currency markets to prevent the yen from rising, and the Chinese show no signs of abandoning the renminbi's peg to the dollar. So the euro is bearing the brunt of the…

AS ECONOMIC FORECASTERS cranked up their models at the end of last year, many pored over the printouts and decided that Robert Browning had it right when he wrote, "Never glad confident morning again." The economy seemed in such bad shape that the Democrats looked forward to teaching another Bush…

MOST ANALYSTS expected this year to end with a whimper. Instead, it is ending with a bang, and not only because Saddam Hussein was extracted from his rat hole. The economy is roaring ahead at a pace that so amazes observers they are guessing it will slow a bit in the new year. That would still mean…

THE PRICE OF OIL has jumped about 7 percent in the past two weeks. Under ordinary circumstances, and for most commodities, volatility comes as no surprise and is of little consequence. But oil is different. For one thing, its price is affected by a powerful cartel, OPEC, that tries to lock in price…

ON THANKSGIVING DAY, my wife and I woke up in a hotel in New York, where we'd come en route to a festive lunch with old friends. A waiter of Middle Eastern origin brought us our breakfast--not a remarkable event by itself. But consider the rest of our day.

WE WERE TAUGHT in graduate economics classes that if a country runs large and persistent trade deficits, the value of its currency will decline relative to the value of the currencies of its trading partners. Oh yes, other things being equal, of course. Then we entered the real world and found that…

BY NOW, we will have consumed the leftovers from our Thanksgiving feasts, which saw us dispose of 45 million turkeys, perhaps 200 million sweet potatoes, and at least 50 million pies of various sorts. Add in stuffing made from white bread, cranberry sauce loaded with sugar, and carrots roasted in…

IF PORK WERE A FUEL that could produce electricity and power SUVs, America would now be independent of imported oil. Unfortunately, the pork contained in the first new energy bill in over a decade has more to do with a desire to please Iowa corn farmers and assorted auto and energy companies than…

ONLY ONE THING can stall the U.S. economic recovery that is now underway: a major policy error by America's politicians. And, unfortunately, they have two such blunders in mind, namely protectionism and fiscal profligacy. The economy itself continues to grow, although not at the breakneck 7.2…

IF YOU THOUGHT the report that the U.S. economy grew at an annual rate of 7.2 percent was good news, wait until you see the revised estimate. I am told that the final figure will be at least 7.8 percent, and might well reach 8.0 percent. So much for the look in the rear view mirror. The more…

HERE IN WASHINGTON, the November 2004 election is not a year away--it's now. So the Bush team is trying to figure out how fast the economy has to grow to create political capital at a rate that outpaces the mounting death toll in Iraq. Take away the economy as a stick with which the Democrats can…

THE DEATH LAST WEEK of Madame Chang kai-Shek, wife of the Generalissimo who lost his battle to prevent the communist takeover of China, brings to mind the Republican accusation that communists in the Roosevelt and Truman administrations were responsible for that loss. "Who lost China?" was the…

GOOD NEWS about the U.S. economy is easy to come by. "The good times are back," chortles the Wall Street Journal. Most analysts are guessing that the economy is now growing at an annual rate of somewhere between 6 percent and 7 percent. It seems that the happy recipients of this summer's tax…

YOU DON'T HAVE TO BE a close reader of the business pages to know that the free-spending American consumer gets credit for keeping the American economy from slipping into a serious recession. What is less heralded is just how the supply side of the economy has contributed to the willingness of…

THE BRITISH PRIME MINISTER and Hollywood's premier tough guy have similar advice for California governor-elect Arnold Schwarzenegger. Tony Blair once said that campaigning is a lot more fun and a lot easier than governing. And after congratulating Schwarzenegger on his victory, Clint Eastwood said,…

Bournemouth, England

WE HAVE ALWAYS KNOWN that the views of economic forecasters are best taken with a barrel of salt. Now it turns out that not only don't economists have a clear view as to where the economy is headed, they can't even tell with any accuracy where it's been. In Britain, analysts were shocked when the…

THE AMERICAN ECONOMY seems bedeviled by twin towers. The terrorist destruction of the World Trade Center has left a residue of homeland security costs that will be a drag on the economy for years to come. Then there are those financial twin towers--the trade and budget deficits--that have caused a…

THE HUNT for the assassins is on. With the corpse of the Cancun meeting of the World Trade Organization now moldering in its grave, those who hoped to push the round of trade-opening measures forward are accusing the usual suspects--and some unusual ones--of inflicting the death-dealing blows. The…

THE BUSH ADMINISTRATION has learned something about the economic consequences of the war. It was not so long ago that Deputy Defense Secretary Paul Wolfowitz assured Congress, "We're dealing with a country that can really finance its own reconstruction, and relatively soon." The administration now…

ENVY IS A TERRIBLE THING. Not so much because it makes those whom it afflicts unhappy, or as myth has it, turn green, but because it dulls their analytical skills. At meeting after meeting, in university seminars and in think tanks around the world, envy of America distorts discussions of what…

AMERICA HAS China in its sights. Fortunately, it's a trade war and not a shooting war that is about to erupt. The Chinese rebuffed Treasury Secretary John Snow's efforts to get them to increase the value of their currency relative to the dollar. After the secretary's visit to China, a spokesman for…

SOME THINGS were unchanged yesterday as, since 1894, we celebrated the holiday called Labor Day. Millions of hot dogs were grilled, and Democrats took to their soap boxes to proclaim their loyalty to the trade unions that provide the financial and logistical muscle on which they depend. But the…

THE SCRAMBLE IS ON. Politicians who have spent decades watching our vulnerability to power outages greeted the recent massive blackout with the plaintive cry, "If only you'd listened to me . . ." New Mexico governor Bill Richardson, secretary of energy when Bill Clinton was cavorting in the White…

A FUNNY THING happened on the way to our economic recovery: The people who engineered it are coming under fire for alleged policy errors. Federal Reserve Board chairman Alan Greenspan should be garnering kudos for his management of monetary policy and President Bush should be hearing applause for…

WHEN GEORGE BUSH unfurled his banner of "compassionate conservatism," most critics predicted it would not be long before the conservatism overwhelmed the compassion. They were wrong. Instead, the compassion has overwhelmed the conservatism. President Bush's compassion now impels him to give tax…

FREE TRADE and free elections do not always coexist peacefully. In an economy in which workers find jobs hard to come by, employers find their pricing power sapped by foreign competition, and the 2004 election campaign is on fast-forward, free trade is likely to find itself among the badly wounded.…

THE SAUDI ROYAL FAMILY has decided once again to pour oil on troubled waters. Faced with a congressional report apparently criticizing it for continuing to fund the mosques and schools around the world in which the violently anti-Western, Wahhabi version of Islam is taught, the Saudis persuaded…

"I WAS ADORED ONCE . . ." one of Shakespeare's characters sighs to another in "Twelfth Night." Alan Greenspan must be having similar thoughts as he faces the new-born enmity of the bond investors who once worshipped him. The Federal Reserve Board chairman, the man who warned of "irrational…

AS TONY BLAIR heads for America to collect his Congressional Gold Medal this week, he must be thinking, "With America for a friend, I surely don't need any enemies." He gambled that his new friend, George W. Bush, would see loyalty as a two-way street. So far, he is losing his bet. Britain's prime…

ECONOMISTS AGREE that a progressive freeing of trade contributed importantly to world economic growth since World War II. With the current world economy best described as fragile, many policymakers are pinning their hopes for renewed growth on a successful conclusion of the so-called Doha round of…

ROSY SCENARIO, Iraqi version, suddenly finds herself out of favor. Not so long ago, she was the belle of the postwar ball. With a bit of tweaking by highly skilled American technicians, and some money that could be generated by the sale of oil, Iraq's industry would be restored to its pre-Saddam…

TO SHOW how much times have changed from the days when we all talked about how to keep the inflation genie bottled up, news that core consumer prices (excluding food and energy) jumped in May brought sighs of relief from investors and policymakers. No longer spooked by fears of inflation, they were…

IT HAS BEEN skillfully re-engineered, all the new parts are in place, and it is now on the launching pad. All it needs for a blazing lift-off is some cheaper fuel. Such is the state of the U.S. economy. The tax cut is about to put billions into the hands of consumers. Homeowners continue to augment…

IT IS EXACTLY 100 years since the Wright Brothers took off from Kitty Hawk. Over that century America's airlines have operated at a net loss, repeatedly turning to the government for bail-outs. The most recent subsidies are dressed up as reimbursement for post-September 11 security losses and…

I WAS FORTUNATE last week in being able to gather round the dinner table in my London flat a group of economists, media folk, geopoliticians, and foreign policy types to review where the world is, and where it is going. Whereas the heads of state convened in Evian today are bound by the stilted…

IT'S D-DAY in Europe again--"D" as in "dollar and in "deflation." This time it isn't American bombs that are falling with ruinous effect, but the American dollar. Some attribute this new onslaught on Europe's well being to the Bush administration's public abandonment of the "strong dollar" policy…

IF YOU FIND Alan Greenspan's economic statements difficult to follow, you will find Treasury secretary John Snow's pronouncements on the dollar positively inscrutable. According to Snow, the administration (a) has a "strong-dollar policy . . . we've had it forever"; (b) is delighted that the weaker…

PRESIDENT BUSH may be interested in working out trade agreements with Middle Eastern countries that have so remained outside of the world trading system. He is, after all, a free-trader by instinct--with the occasional deviations resulting from overwhelming domestic political pressures. But his…

PRESIDENT BUSH says the combat phase of the war against Iraq has been successfully concluded, and Alan Greenspan's doctors say the Fed Chairman's minor prostate problem has been successfully treated. So the president flew to the aircraft carrier USS Abraham Lincoln to meet and thank his troops, and…

WHEN THE U.S.-UK-AUSTRALIA coalition found that Iraq's technicians had refused to torch their oil fields or damage pumping stations, buyers looked forward to falling crude prices. But analysts who had predicted that the liberation of Iraq would quickly increase the volume of crude oil coming onto…

IT'S MORE THAN a decade since my wife Cita and I came to Washington, with the intention of spending a year here before returning to New York. The "why" we came is easy: Irving Kristol, the Pied Piper of the neoconservative set, persuaded us that the intellectual excitement of the Washington policy…

PRESIDENT BUSH'S foreign policy team is trying to persuade him that he should now turn his attention to Syria. His domestic advisers want him to concentrate on jobs--enough new jobs to ensure that he keeps his own after next year's election. Right now the president is riding the brilliant American…

[img_assist|nid=|title=|desc=|link=none|align=right|width=|height=] NOW THE RECONSTRUCTION BEGINS. What it will cost no one yet knows. Nor do we have a clear idea where the many billions will come from. But we do know this. The amount of outside aid that Iraq will require will depend on a prior…

THEY KNOW THE WORDS, but they don't quite have the tune.

"WAR IS GOD'S WAY of teaching Americans geography," Ambrose Bierce, the eccentric author of "The Devil's Dictionary," told a Carnegie Hall audience one year before America entered WWI. He might have added economics to the disciplines about which we learn something from wars. One lesson we have…

IMAGINE that it is Day 1 in the post-Saddam era. The war is over, save for the mopping up of a few irregulars, the tyrant has been "dealt with," to use military lingo, and Jacques Chirac is leading a charge in the United Nations to wrest control of the reconstruction process from the Americans and…

THE WASHINGTON RUMOR MILL has it that the president's commission to consider bioethical issues such as, but not limited to, cloning, is about to issue its report on the possibility of creating a market for human organs. And the word is that the bioethicists have decided that it is a bad idea to…

TONY BLAIR'S PROBLEMS will not end with the unseating of Saddam Hussein. Nor will they end when he crushes the revolt of the loony left in his party. He will still have to face the fact that his foreign policy--indeed, his view of the world in the 21st century--is in tatters.

SUDDENLY America's consumers are running scared--scared of possible terror attacks, scared that their jobs might not be there when they turn up for work in the morning, scared that the pensions on which they were relying to convert their declining days into golden years will dry up. Most consumers…

THE CAPTURE OF Khalid Sheikh Mohammed may bring a bit of cheer to anxious New Yorkers, and make nervous Wall Streeters take a rosier view of the prospects for the economy and their favorite shares. But I rather doubt that the relief will endure, especially when New Yorkers realize that bin Laden's…

"ONLY A DEMAGOGUE would say, 'Don't buy German' or 'Don't buy French,'" says Norbert Quinkert, chairman of Motorola Germany.

GASOLINE PRICES are up by over 50 cents per gallon, have passed $2 in some places, and show no signs of moderating. Venezuela, one of our major suppliers, is in an uproar, with unions curtailing oil production. Never mind: We have a reliable supplier to fill the supply gap--Iraq. Our imports from…

AS IF PRESIDENT BUSH didn't have enough on his hands with his so-called French and German allies, he finds himself in a second war at home with his one-time domestic-policy ally, Federal Reserve Board chairman Alan Greenspan.

I CAN'T RECALL WITNESSING such all-pervasive gloom as pervades Washington and New York. Washingtonians are focused on the coming war, and the disintegration of the space shuttle Columbia jolted them into a realization that risks taken can result in deaths realized. New York businessmen, surrounded…

WHEN YOUR EYES TEAR UP at the singing of "God Bless America" during the broadcast of the Super Bowl on your favorite British television station, it's time to go home. That's what my wife, Cita, and I decided. London is a wonderful place, but it has suddenly become more foreign, more hostile, at…

"FOR IF THE TRUMPET give an uncertain sound, who will prepare himself for the battle?" In the face of perceived economic uncertainty, certainly not the Federal Reserve Board's monetary policy committee, which decided last week that standing pat while the economy passes through a "soft spot" is the…

London

THIS WEEK BEGAN with Hans Blix's report to the U.N. Security Council, will proceed to President Bush's State of the Union message tonight, and will end with Tony Blair's visit to Camp David. Which means that talk of war and its possible economic consequences will continue to dominate the news.

NOW IT CAN BE TOLD. More precisely, now it has been told in new studies of comparative economic performance. It seems that the U.S. economic model trumps the European model, and is set fair to continue to do so.

GOOD TAX POLICY it may be, but a stimulus package of any consequence, the president's proposed tax cut just isn't. Even if the president gets all he wants, which he assuredly won't, the best that can be said for this "stimulus" is that it might help the economy, already in fairly good shape, grow a…

IT SEEMS SAFE to assume that most readers of this piece have now pored over all of the economic forecasts for 2003, and decided between the doomsayers and the optimists. Or perhaps latched onto a consensus such as that of the 66 economists surveyed by BusinessWeek. That august assemblage of experts…

OLD WINE in new bottles. That's what the shakeup of the administration's economic team seems to come to. Since it is the president who will determine just what he wants to put to the Congress when he delivers his State of the Union message, most likely on January 28, the policy implications of the…

Blackpool, England

IT ISN'T EASY being on the White House economic team these days. For one thing, the public and the pundits seem fixated on the volatile stock market, to the virtual exclusion of the steadily growing economy. For another, the public face of the team is gaffe-prone Treasury Secretary Paul O'Neill,…

IN MY OLD NEIGHBORHOOD, an IOU meant something. Not the formal, lawyer-written documents that are used today, but the currency of reciprocal obligation widely in use on the Lower East Side of Manhattan. It is this system that academic communitarians and other do-gooders are trying to figure out how…

WEEP NOT FOR BANKRUPT US Airways, or soon-to-be-bankrupt (so it says) United Airlines. They are not victims of the disruption of air traffic after September 11. Their difficulties began long before jihadists turned airplanes into missiles. Greedy unions, inept management, flawed government…

Globalization and Its Discontents by Joseph E. Stiglitz Norton, 282 pp., $24.95 THERE IS AN IMPORTANT BOOK to be written about the need to reexamine the international financial architecture that was erected long before currency traders in their twenties could push a button and move billions of…

NO SENSIBLE PERSON can quarrel with what the president told the Wall Street biggies he addressed last week. Crooks should be forced to disgorge their ill-gotten gains, and should go to jail for extended periods. Enforcement agencies should be given adequate resources. Corporate executives should be…

SAY IT AIN'T SO, ALAN. Say you have no intention of retiring. Sure, you are 76 years old, and your term is due to expire in 2004. So retire now, you are being told, and give the president an opportunity to name a replacement before the 2004 campaign season is upon us. Get out while the getting is…

NO SENSIBLE PERSON can quarrel with what the president told the Wall Street biggies he addressed last week. Crooks should be forced to disgorge their ill-gotten gains, and should go to jail for extended periods. Enforcement agencies should be given adequate resources. Corporate executives should be…

OUR POLITICIANS have never shown their best side when confronting energy policy issues. In recent weeks Iraq's Saddam Hussein cut off his nation's oil exports to show solidarity with the Palestinians whose families he pays to strap suicide bombs to their children. Saudi Arabia, for its part, warned…

LONDON THINKING OF VISITING London? Great idea. Airfares are low, the weather is fine, the chance of contracting mad cow disease has fallen from infinitesimal to zero, and the talented British actors tread the boards of the West End and National theaters with their usual skill and verve. But leave…

I HAD NEVER visited Germany--at least not until last week. That's no accident, as I do travel hundreds of thousands of miles every year to a wide variety of destinations, but is instead a choice rooted in history. World War II was the dominant theme in my house when I was being brought up on the…

AIRLINE MECHANICS apparently include among their many skills an ability to drive nails into coffins. Last week the International Association of Machinists and Aerospace Workers rejected the 37 percent pay raise offered by United Airlines--its members want 43 percent--and threatened to strike. Never…

MY MOTHER-IN-LAW is just this side of 90, and has the ailments that are normally associated with her advanced years. She is, in fact, more or less housebound, leaving only to visit her stable of doctors or for emergencies--such as last week's trial in a Baltimore city court, in which she found…

EVEN THE CASUAL READER of last week's financial news will know that Enron, the energy and trading company, has been acquired by its smaller rival, Dynegy. This is more than just another multibillion dollar merger, which explains why liberals, who can ordinarily be expected to oppose any marriage of…

SO NOW WE KNOW: The Saudi Arabian regime is no friend of ours. Sure, they sell us oil and tell us that they keep the OPEC cartel from pushing prices through the roof. But their refusal to go along with OPEC price hawks is self-serving. They have huge wealth stashed away in investments here and in…

ON A RECENT FLIGHT FROM LONDON, back in the pre-September 11 era when a transatlantic trip meant an opportunity to relax and read, I took along a reprint of E.B. White's slim volume "Here is New York," written in 1949. Delightful read, I thought, paying no particular attention to a passage I have…

THE AIRLINES have too few passengers and too many seats, and so go to the government for an immediate $15 billion bailout. Amtrak has too many passengers and too few seats, and goes to the government for an immediate $3 billion bailout. The airlines want subsidies so that they can fly more empty…

AT 8:45 LAST TUESDAY MORNING, I was sitting in a plane at Kennedy airport waiting to take off when my cell phone rang. A very worried spouse said that a plane had crashed into one of the towers of the World Trade Center, and she was checking to be certain that it wasn’t mine. Cita also said that…

EVERYONE WHO WATCHES the financial news channels and reads the generally depressing economy stories in the daily press knows one thing: Trillions of dollars of wealth have been destroyed as the stock market continues its descent from the stratosphere. What they can’t figure out is why American…

MEXICAN PRESIDENT VICENTE FOX barnstormed the United States last week, urging American businessmen to support some sort of amnesty for the three million Mexicans illegally working and living in this country. And to put pressure on his American counterpart, Fox addressed rallies of his countrymen…

LET'S LEAVE to the diplomatic hair-splitters the question of whether "very sorry" constitutes an apology. And let's agree that not everyone who favors preserving preferential trade treatment for China is a greedy capitalist, insensitive to China's appalling human rights record and its recent…

LET'S LEAVE to the diplomatic hair-splitters the question of whether "very sorry" constitutes an apology. And let's agree that not everyone who favors preserving preferential trade treatment for China is a greedy capitalist, insensitive to China's appalling human rights record and its recent…

WITH ALL EYES focused on the president's efforts to push his tax cuts through Congress, little attention is being paid to what we economists call microeconomic policy -- more (un)popularly known as regulation. That lack of interest in a coherent underpinning for policy proposals is already evident…

London

LONDON BRITISH PRIME MINISTER Tony Blair comes to America this week to meet our new president, and the P.M.'s team is worried. Blair's fondness for Third Way schmoozing with Bill Clinton, his justified gratitude for the role Clinton played in stitching together a semi-peace in Ireland, and his…

THE FULL PLATE for which Bill Clinton is famous usually consists of a jumbo order of McDonald's fries. The full plate that he has left for George W. Bush may prove less easily digestible.

BILL CLINTON came to Washington riding the early stages of a recovery from a mild recession, and he leaves at what appears to be the end of the phenomenal era of economic growth that characterized his eight years in office, during which the real net worth of American households increased by upwards…

Buried deep in a recent issue of the Wall Street Journal is an interview with venture capitalist Bill Davidow. As the crash in the value of Internet companies sours investors and fills the financial pages with tales of impending doom, Davidow has taken to reminding all who will listen, "There was a…

Brighton, England

EARTH DAY IS UPON US, and by way of celebration the publisher of Al Gore's 1992 self-styled "personal journey . . . in search of a true understanding of the global ecological crisis" has decided to reissue an unchanged version of the book. This decision should make George W. Bush a lot happier than…

With the price of gasoline in some parts of the country headed towards $ 2 a gallon this summer, the hotel industry worried that such prices will deter Americans from piling into their SUVs for a family vacation, the airline industry hiking fares to cover the rising cost of jet fuel, and truckers…

Bournemouth, England

While Congress and the president very publicly squabble over whether to give us back some of our tax money, a sum equal to at least four times next year's non-Social Security surplus is up for grabs in a little-noticed part of the economy. Consumers stand to pocket at least $ 20 billion, unless…

Larry Summers is smart. Too smart to work as a temp. Which is what he would be if he had agreed to replace Bob Rubin as Treasury secretary for the waning months of the Clinton administration with no assurance -- too strong a word in this administration; perhaps "indication" is more apt -- that he…

The reaction of the political establishment -- Democratic and Republican -- to Pat Buchanan's decision to have another run at the White House is both amusing and worrying. First, the amusing part. After months in which political discourse consisted of discussing what the meaning of "is" is, it is a…

In light of the conclusion of the Senate trial of the president, the editors of THE WEEKLY STANDARD asked 22 writers, thinkers, and political actors the following questions: "President William Jefferson Clinton has been impeached and acquitted. What have we learned? What should we do now?"

There is a new "Big Idea" abroad in the land -- no, in the world. "The United States and President Clinton's administration are at the forefront of an important transformation taking hold in the wealthy democracies of Europe and North America," writes E. J. Dionne in the Washington Post. Why, this…

TO HEAR BILL GATES and Microsoft partisans tell it, antitrust chief Joel Klein is a wild-eyed radical, determined to destroy the capitalist system by making success and bigness crimes. If not a radical, Klein is a reactionary, they say, in the grip of antique economic doctrines forged in the age of…

Sandy Weill and John Reed are on a roll. The merger of their companies, insurance giant Travelers and banking colossus Citicorp, has now received the blessing of the House, which passed a banking deregulation bill in May that would legalize the deal. True, the bill squeaked through by only one…