3:20 PM, Aug 28, 2014 • By MICHAEL WARREN
At the Washington Post, Christopher Ingraham demonstrates through one chart "why it feels like the recession never ended." Here's the chart, with part of Ingraham's explanation below:
From the start of the recession in 2007 to today, the average price of the things you buy - clothes, food, housing - has risen by 15 percent. This, in itself, isn't a problem at all. The problem is that wages haven't kept pace with that increase. In fact, for all but the top wage earners, real (inflation-adjusted) earnings are actually down over the same period.
Let's put it another way. Say that you're a median wage earner, right in the 50th percentile. And let's say that in 2007 you could buy a week's worth of groceries for $100. Fast forward to today: those exact same groceries cost $115, but you only have $112 dollars in your pocket.
Read all of Ingraham's post here, in which he also points out that pessimism about the permanence of the Great Recession is up.
Not many candidates for office, Republican or Democrat, have made an argument about how to solve the problem of price inflation and stagnant wages. This, despite the political opportunity demonstrated by a recent poll that found 75 percent of Americans are concerned about inflation. But at least one candidate for Senate, Republican Jeff Bell of New Jersey, senses an opening.
“No one in Washington wants to talk about the cause of this problem -- least of all my opponent, Cory Booker," said Bell in a statement responding to the Post article. "I am running for U.S. Senate because I know the cause of this problem and I have the solution. The reason why goods are more expensive but wages are being crushed is because of the Federal Reserve’s zero interest rate policy. My solution is to restore the value of the dollar by tying the dollar to gold. This will reign in the Fed and curb inflation, while bringing jobs and growth back to the economy."
As Andrew Ferguson writes in the current issue of THE WEEKLY STANDARD, Bell has so far focused his entire campaign against Booker on the Democrat's implicit support for the Federal Reserve's monetary policy. And on Wednesday, the Bell campaign released its first ad, a 30-second radio spot, touting his plan to return to the gold standard. You can listen to the ad here, which is running on two New York radio stations.
Majority don't trust Fed to fix it.1:01 PM, Aug 25, 2014 • By MICHAEL WARREN
Things are getting more expensive, and the American people know it. A new poll from Rasmussen Reports found three-quarters of Americans say they are concerned about inflation, with 81 percent saying they are paying more for groceries and 71 percent saying they expect to pay even more for groceries a year from now. Here's more:
12:00 AM, Aug 2, 2014 • By IRWIN M. STELZER
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 replaced by a growth rate more consistent with past recoveries. The government also revised its estimate of a 2.9 percent decline in the economy in the first quarter to a less-disastrous drop of 2.1 percent. But hold the bubbly. Put the quarters together and the -2.1 percent first quarter combined with the +4 percent second quarter means that the tepid growth rate that has characterized the economy for too long was essentially unchanged in the first half of the year.
7:59 AM, Jul 22, 2014 • By GEOFFREY NORMAN
There is a fairly robust debate about inflation going on these days. Is there too much? Not enough? Any at all? And just how much is too much? Can we hit the Goldilocks sweet spot?
4:16 PM, Jun 27, 2014 • By GEOFFREY NORMAN
There has been a long stagnation following the “Great Recession.” No good news there. Lots of unemployment, hence no competition for labor and, thus, no increase in incomes. But … at least there is no inflation. That, anyway, is what we are told by the engineers with their handles on the economy’s throttles. The Federal Reserve, in fact, would like to see some more inflation.
12:00 AM, May 10, 2014 • By IRWIN M. STELZER
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 Long Island Sound. So all is well in the housing market.
And a higher interest rate?12:00 AM, May 3, 2014 • By IRWIN M. STELZER
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 because it drives the president’s approval rating down is good politics I leave to politicians, “that insidious and crafty animal, vulgarly called a … politician, whose councils are directed by the momentary fluctuation of affairs,” as Adam Smith put it.
12:00 AM, Apr 5, 2014 • By IRWIN M. STELZER
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 over the markets, poised to raise interest rates, got it wrong. She has her heart set on keeping rates low enough to eliminate “slack,” borrowing a term often used by Mark Carney, governor of the Bank of England. And “slack” is a many-dimensioned concept when applied to labor markets.
12:00 AM, Apr 13, 2013 • By IRWIN M. STELZER
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 long will Ben Bernanke’s Fed keep printing money to keep interest rates close to zero? Finally, will Washington do what the president asks and get out of the way of an economy “poised for progress”?
8:01 AM, Aug 10, 2011 • By WILLIAM KRISTOL
A businessman and investor for whose judgment I have the highest regard sends this email about yesterday’s Fed announcement: