12:01 AM, Oct 17, 2015 • By IRWIN M. STELZER
The next president of the United States will likely wish he or she weren’t.
Barack Obama will have willed his successor a Middle East dominated by a coalition of Russia, Syria, Iraq and a nuclear-arming Iran. China will have ramped up its military to make our aircraft carriers vulnerable to its missiles. Vladimir Putin will have proved NATO incapable of coping with Russia’s expansion. And the price of oil will be rising as Russia and Saudi Arabia realize that there is nothing odd about continuing to kill each other’s allies, while at the same time colluding to cut oil production to drive prices back to $100 per barrel. Great Britain will have completed its ongoing realignment of its trade and policies with those of China, among other things supporting the replacement of the dollar with the renminbi as the world’s reserve currency. America will stand alone. Well, not quite alone: It will be a member of something the previous U.S. president called “the international community.”
On the domestic front, the next president will face a world economy bereft of any growth drivers. A sampling of the headlines that will be awaiting the new president’s daily arrival in the Oval Office;
· “Policy Makers Skeptical on Ability to Prevent Another Financial Crisis”. The New York Times.
· “Gloomy global outlook stalks finance ministers”. Financial Times.
· “Global Economy Yields Few Bright Spots”. The Wall Street Journal.
Then there is the domestic news. “As U.S. Infrastructure Creaks, Congress Dithers.” And “Consumers shutting down as US economy deflates,” with many telling pollsters that they are planning to rein in their inner-spender. Just as Obama blamed George W. Bush for the economy’s poor performance during his eight years in office, the next president will complain that Obama passed to him a poisoned chalice, which includes continued brawls over the debt ceiling, the inability of the top brass of the Federal Reserve Board to agree on monetary policy, and an economy that continues to travel in the slow lane, with predictions of growth well below 2 percent for the rest of his term.
Which some economists contend is an inevitable consequence of excessive debt, and that until that burden is eased rapid economic growth is beyond our reach. One example: many wealthy Americans have decided to pay down debt rather than spending their rising incomes – ill-gotten gains according to Sanders and Clinton – to stimulate the economy. The University of Michigan’s Survey of Consumers reveals that 15% of high-income households, the one-third of all households with annual incomes of $90,000 or more, reduced their outstanding debt last month. After all, the volatile stock market is not exactly an inviting place in which to put money, witness lack of investor interest in some planned initial public offerings (36 percent fewer I.P.O.s priced this year than at the same time last year) , and the cancellation or delay of others (Albertson, Neiman Marcus).
Which leaves it to the business community to step up its spending if the economy is to grow at more robust rate. But businesses are reluctant to do that. They are facing some of the consequences of the policies the new incumbent favored when merely a candidate for the office he or she now occupies:
· higher taxes as a result of a coordinated international crackdown on tax avoidance programs that enable major corporations (Apple, Google, Starbucks et al.) to find congenial havens for their profits;
· rising labor costs due to increased legal minimum wages (Walmart profits due to fall by 12 percent) and mandatory generous paid maternity leave; pressure to create less stressful work schedules (Amazon, fast food franchisees) and a better work:life balance (investment banks); and skills shortages (home builders, trucking companies); and
· demand too weak to justify building new plants and buying equipment.
Instead of such investments, companies are using their cash piles to finance a new wave of corporate mergers in the media, beer, equipment, health care, software and other sectors. These aggregations, if they succeed – which is far from certain if history is any guide – are more likely in the near term to result in layoffs than in new construction and jobs.
5:07 PM, Oct 15, 2015 • By MARK HEMINGWAY
So Bernie Sanders, who wants to make college education "free," just tweeted out the following:
When Republicans became the party of growth and tax cutsOct 12, 2015, Vol. 21, No. 05 • By FRED BARNES and MORTON KONDRACKE
In 1970, the year after Jack Kemp had retired as quarterback of the Buffalo Bills, he was elected to the House from a district covering the Buffalo suburbs. He was 35. His chief concern was the suffering of his Rust Belt constituents, beset by plant closings and high unemployment. In 1973, he proposed a business-friendly tax cut, followed by another titled the Jobs Creation Act. Neither passed. Kemp, a phys. ed. major at Occidental College, had taught himself economics. He had read Ludwig von Mises, Friedrich Hayek, and Milton Friedman, the masters of free-market economics.
A winning tax reform.
Sep 28, 2015, Vol. 21, No. 03 • By FRED BARNES
Some Republican presidential candidate was sure to come along with a credible tax reform plan to erase tax loopholes, preferences, and special breaks, broaden the tax base, and lower rates. Now Jeb Bush has done it. This marks a departure point in the GOP race.
The left blames economic woes on everything except its hero president.Sep 14, 2015, Vol. 21, No. 01 • By STEPHEN MOORE
Two weekends ago, the Federal Reserve Bank of Kansas City held its annual monetary conference in Jackson Hole, Wyoming. The left flew in hundreds of protesters donning green T-shirts that demanded “Higher Wages for America” and chanting, “We’re Fed Up.” The crowd was an assortment of college kids on their summer break, disgruntled middle-aged teachers, senior citizens, and blue-collar union members. Think Occupy Wall Street.
12:01 AM, Aug 22, 2015 • By IRWIN M. STELZER
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, whatever that phrase might mean when applied to an economy other than one in the throes of an irreversible Margaret Thatcher-style revolution.
Calls out Fox News for "propagating" wrong narrative about poverty.12:45 PM, May 12, 2015 • By MICHAEL WARREN
Barack Obama says part of the problem with continued poverty in America is misplaced middle-class resentment of the poor, fueled by false media narratives. The president made his remarks at a summit on poverty Tuesday afternoon at Georgetown University in Washington.
7:18 AM, May 9, 2015 • By IRWIN M. STELZER
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 are the price of labor.
12:01 AM, May 2, 2015 • By IRWIN M. STELZER
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.
4:34 PM, Apr 29, 2015 • By IKE BRANNON
Bob: I've got an idea for a new government program to help homeowners.
March 18, 2015, edition.11:03 AM, Mar 18, 2015 • By IRWIN M. STELZER
Clinton Makes Trouble For Cuomo
Until Hillary Clinton decided to destroy 33,000 allegedly personal e-mails, all was quiet on the document-retention front in her selected home State of New York. Governor Andrew Cuomo was quite happy with the secrecy provided by his own refusal to send written memos or e-mails, and the practice followed by his staff and state agencies (at his insistence) of destroying e-mails older than 90 days. No footprints. Which is the way the famously secretive Cuomo likes it.
Striking the right balance. Feb 9, 2015, Vol. 20, No. 21 • By CHARLES WOLF JR.
President Obama can’t run again, as he noted in the State of the Union last month, but he sought to use his address to set the tone for the 2016 campaign. His repeated references to “middle-class economics” were tactful code, speaking in front of a Republican-controlled Congress, for that perennial Democratic favorite, the inequality debate.
The Republican Congress and the middle class.Feb 2, 2015, Vol. 20, No. 20 • By IRWIN M. STELZER
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.