Writing good policy is very much like seeing a skilled internist. First, the doctor decides that you really are sick. Next, he determines exactly what's wrong. Only then does he choose an appropriate prescription. Too much of policymaking ignores these steps, opting instead to focus on what the…
Writing good policy is very much like seeing a skilled internist. First, the doctor decides that you really are sick. Next, he determines exactly what's wrong. Only then does he choose an appropriate prescription. Too much of policymaking ignores these steps, opting instead to focus on what the…
CNBC defends its performance at the last Republican debate by saying that candidates should be able to answer tough questions. Indeed they should. So, using the format of the CNBC questions to Republicans, here are some tough questions to ask Democrats at the next debate:
Americans feel—with a good deal of justification—that the political establishment has been serving them poorly for roughly the last quarter-century. Policy has generally been driven by a need to give instant gratification to the 24-hour news cycle at the expense of solving long-term problems. We’ve…
The latest craze in the presidential campaign is to ask the contenders (on the Republican side) whether they would have invaded Iraq if you knew what you know now. The answer is supposed to be obvious. Jeb Bush got himself into some trouble by answering the more important question, which is where…
Two weeks ago the Commerce Department released its final estimate of Gross Domestic Product for the second quarter. That marked five years since the recession ended—a period of massive experimentation with expansionary fiscal and monetary policy. While those policies were doubtless well intended,…
The conventional wisdom among the chattering class about the Republican field is that voters face a choice between “electability” and “ideology.” But a careful look at elections since the end of World War II suggests that is not the case. What most pundits think of as “electable,” a safe candidate…
At the start of every economic downturn in memory there has been a chorus of voices saying that recovery is just a matter of “confidence.” Supposedly all we have to do is pick ourselves up and “not talk ourselves into a recession.” Politicians, particularly those in power, are the ones who adhere…
It’s easy to get caught up in the details of the political battle of the day over the nation’s economic and fiscal health—after all, that’s what we do in Washington. Unfortunately, many of our decision-makers and opinion leaders possess the skills required for political infighting in greater…
Fed chairman Ben Bernanke concedes that, while necessary, a new large purchase of government bonds by the Fed to help cover the deficit will not completely solve our problem of slow growth. Many in the markets and around the world express the same sentiment in a more negative way—saying this latest…
One of the standard accoutrements of the decision making process in the West Wing is the three-option "decision memorandum." The memo itself is drafted by the national security adviser, the National Economic Council director, or the assistant to the president for domestic policy, depending on the…
Barack Obama met his President's Day deadline for getting a stimulus bill to his desk. As soon as it was passed, the administration started backpedaling on how stimulating it will actually be. Instead of January's projection of 4 million jobs and unemployment peaking in the third quarter of 2009,…
Elections have consequences. That is what democracy is about after all. Barack Obama is correct when he states that his victory last November gives him the right, or more specifically the power, to have things his way when it comes to handling the nation's economic challenges.
When it comes to fighting recessions, there's a tendency to see "fiscal stimulus" packages as wasteful, as a form of "throwing money at the problem." The critics have a point. But the conclusion that therefore we should do nothing is also wrong. Instead, careful attention should be paid to the…
The U.S. government's efforts at containing the financial crisis have to date been aimed at shoring up institutions and households that are in trouble. Several hundred billion dollars have been injected into troubled financial institutions, with more on the way, and a whole array of negotiated…
Just over a week ago the collapse in credit markets forced the secretary of the Treasury to assemble a bipartisan group from both houses of Congress to sell a record-setting government-bailout plan of the financial industry. Trouble was no such plan existed at the time of the meeting. He set off a…
AMONG THE LIST of virtues that conservatives believe in are security, efficiency, and the facilitation of private commerce. Although just the name "Federal Deposit Insurance Corporation" is enough to conjure up images of big government, in practice the FDIC provides a function that conservatives…
Friends and tradesmen, not to mention clients, have all been asking me the same question in the past few weeks. Is this 1929? Are we headed for a depression?
LAST THURSDAY NIGHT Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke stood surrounded by the bipartisan leadership of Congress to announce that a consensus had emerged that drastic action was needed to save our financial system. On Saturday the first vague details of that action began…
Television viewers would have been hard pressed to find media commentary in the last few days that was, on balance, favorable to Republican Vice Presidential nominee Sarah Palin. It ranged from the appallingly biased on MSNBC which ran a "Breaking News" subheading as McCain was about to introduce…
Should the United States drop into a historically memorable economic downturn in the near future--a clearly possible if far from certain event--economic historians will likely cite July 11, 2008, as a critical date. It will be not unlike October 28, 1929, which we know today as Black Monday. I…
America has not had a nationwide housing crash since the 1930s. At one point during that calamity, an estimated 60 percent of all mortgages were in technical default. The rather primitive housing credit system of the time, which relied on five-year balloon mortgages, certainly exacerbated the…
Eight months from now America will have its first president in nearly five decades with zero executive branch experience at the federal or state level. The shock to the new occupant of the Oval Office will be profound. Within a matter of weeks he will have to fill about 1,500 jobs and propose a…
LIKE EVERYONE ELSE IN AMERICA, I am the biological product of a variety of waves of immigration to this continent, including some pretty early ones. Some of my ancestors were the first Europeans to cross the Hudson River from New Amsterdam and settle in the wilds of what is now New Jersey. But more…
LAST YEAR AMERICANS SPENT--on consumption, investment, and government--$1.06 for every dollar we earned. We balanced our collective checkbook only by selling assets we owned and by borrowing directly from foreigners, including institutions like the People's Bank of China, to whom one might prefer…
IT'S BEEN SEVERAL MONTHS since I last thought about Benjamin and Elizabeth. It hit me as our older children were headed off to school. Elizabeth would have been in first grade in our local elementary school and Ben would be getting on the bus in September headed to kindergarten. Had it not been for…
As Washington confronts the financial crisis in Asia and a deteriorating global economic situation, two policy camps have stepped forward with solutions. Unfortunately, neither the Economic Nationalists of left and right nor the administration and its good-guy internationalists are proposing a…