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.
The economy acts as predicted. Except when it doesn’t. May 5, 2014, Vol. 19, No. 32 • By IRWIN M. STELZER
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 forecasts . . . highlight continued fragilities”—which, translated, means: “Our forecasts were wrong because we didn’t foresee weaknesses in various economies.”
How long can dinosaur industries stave off the inevitable?Apr 21, 2014, Vol. 19, No. 30 • By IRWIN M. STELZER
"The dinosaurs surviving the crunch” was how Stephen Sondheim described women living an outdated lifestyle and grimly aware that “everybody dies.”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 trying to beat the hooded man with a scythe, aided by their regulators.
The latest Bradley Lecture.1:42 PM, Apr 6, 2010 • By MATTHEW CONTINETTI
Irwin Stelzer delivered a thought-provoking and entertaining lecture yesterday evening at the American Enterprise Institute. You can watch it here.
Stelzer argues that conservatives need to deal with the hand the financial crisis has dealt them, by supporting policies that encourage competition (like antitrust), include the cost of negative externalities in the price of goods (like a revenue-neutral carbon tax), and deal intelligently with problems of market failure (like a Financial Consumer Protection Agency). The talk is the result of Stelzer's search for a "neo-orthodox" approach to economics that cheers capitalism as the best way to create wealth and allocate goods and services, while also acknowledging that the system creates inequalities and inefficiencies and negative externalities. That search has taken place in the WEEKLY STANDARD, and the Hudson Institute, in articles like these. Highly recommended.
Reality bites.12:00 AM, Feb 6, 2010 • By IRWIN M. STELZER
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 all of these things and more, the deficits projected by the president are simply unsustainable, and would drive the combination of federal, state and local government debt to well over 100 percent in 2020 -- a level that most observers believe will stifle economic growth.
A new paper by Carmen Reinhart and Kenneth Rogoff, professors of economics at the University of Maryland and Harvard University respectively, covers the experience of 44 countries over 200 years and concludes, “Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes…. Seldom do countries simply ‘grow’ their way out of deep debt burdens.” If you are the worrying sort, add to these your answer to a question put by Larry Summers, now the president’s economic adviser but at the time free to speak his mind, “How long can the world’s biggest borrower remain the world’s biggest power?” Efforts to reach Mr. Summers to obtain his current answer to his question proved unavailing.
Sometimes more certainty is worse.12:00 AM, Jan 30, 2010 • By IRWIN M. STELZER
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.
Ben Bernanke has been confirmed for another term as chairman of the Federal Reserve Board. But confirmation came at a price -- the further dilution of the Fed’s independence. The leader of the Senate Democrats, Harry Reid, says that in return for his support Bernanke has promised to ease credit further. How that is possible with interest rates already effectively at zero, and printing presses working overtime to turn out dollars, is unclear. And it is unclear how the Fed chairman could have made such a promise while at the same time repeating his commitment to begin withdrawing central bank support from the mortgage market.
Protectionism is not the solution.12:00 AM, Jan 16, 2010 • By IRWIN M. STELZER
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 recovery.
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