After the Great Depression, Democrats ran against Herbert Hoover for 30 years—and with great success. Even though Hoover’s policies were anything but market-oriented—he greatly raised spending, taxes, and tariffs in response to the 1929 Wall Street crash—Republicans took the fall for Hooverism. It wasn’t until Ronald Reagan that free markets were fully politically rehabilitated.Read more
I just bought a bottle of Waterman’s ink for $11.34, tax included. The bottle contains 50ml, or less than two ounces, of black ink. This makes ink far more expensive than wine, even quite superior wine. I would have complained—or at least exclaimed—about the price, but the man who sold it to me was so pleasant and so knowledgeable about fountain pens that he quite took the whine out of my sails.Read more
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:Read more
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.Read more
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.Read more
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.Read more
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.Read more
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.Read more
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”?Read more
"How anti-war members of Congress hope to capitalize on Bin Laden's death."
Niall Ferguson: "The Fed may deny it, but Americans know that prices are rising. Inflation is back."Read more
The Ben Bernanke word cloud: "For bonus points try to find the word 'jobs' in there."Read 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.Read more
Since the beginning of 2009, oil prices have almost tripled, gasoline prices are up about 50 percent, and basic food prices, such as corn, soybeans, and wheat, have almost doubled around the world. Cotton and copper prices have reached all time highs; major rises in sugar, spice, and wheat prices have been creating food riots in poor countries, where basic goods inflation is rampant. That inflation is in part financed by the flood abroad of excess dollars created over the last couple of years by the Federal Reserve.Read more
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