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2011
05/24/2011
On the Heels of Revolution, Economic Realities Arrive
Five months after the long winter of Middle East repression was broken by the unexpected Arab Spring that saw the rapid overthrow of long-entrenched rulers in Tunisia and Egypt and uprisings in Libya, Yemen, Bahrain and Syria, the initial giddiness and euphoria have dissipated.
Such raw emotions, after all, can only be sustained for so long before the mundane and complicated realities of everyday life reassert themselves. Now those realities will be staring the leaders of the Group of 8 in the face in Deauville, France, as rudely and as stolidly as if they were seated at the conference tables.
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05/10/2011
Don't Count on Job Growth. Bring Back the WPA!
The monthly jobs report released last week by the Bureau of Labor Statistics proved to be a pleasant surprise. Nearly 250,000 more people were employed, for a total of more than 750,000 more jobs between February and April. While these numbers are the product of complicated formulas that are never quite accurate and will eventually be revised, they do capture the trend, and the trend now is toward a slow stabilization of the job market.
But it is stretch to claim – as many have – that we are seeing the flickering of substantial job growth. The unemployment rate actually rose, to 9.0%, because as more people use up their 99 weeks of unemployment benefits and reenter the workforce, they are finding jobs difficult to come by. Recent reports look decent only because most of the past three years have been so dismal, with millions of jobs lost and millions more having to pare back hours and wages. 250,000 new jobs a month barely suffices to keep pace with new people entering the workforce. This isn't meaningful job creation; it's the absence of significant job loss.
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05/30/2011
America's Corporate Tax Fiasco
Washington is entering its summer of discontent, with no resolution of the budget and debt issues that will push the federal government to the brink of insolvency in early August. Among the many divisive issues: what to do about taxes in general and corporate taxes in particular.
But where the ideological divisions over individual taxes are sharp and clear—with Republicans and Tea Partiers opposed to all increases and Democrats and the Obama administration committed to rolling back the Bush-era tax cuts on the wealthy, the lines are muddier when it comes to corporate taxes. That doesn't make resolution any easier, but given the unequivocal destructiveness of American corporate tax policy, the solution should be clear.
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05/15/2011
Risky Gamesmanship Over the Debt Ceiling
It’s official: the United States government is overdrawn on its debt limit of $14.294 trillion as of yesterday. Well, not technically overdrawn, as the U.S. Treasury directed by Secretary Timothy Geithner has taken a variety of measures to forestall any actual federal defaults on its operations—which range from keeping the lights on at the Smithsonian to maintaining combat forces in Afghanistan. These accounting sleights-of-hand will delay any actual defaults to early August. But still, after months of inconclusive wrangling by both parties, a new Rubicon has been crossed.
This impasse is an escalation of a similar imbroglio over this year’s budget, but this time, both Republicans and Democrats are playing with real fire. A government shutdown was averted in early April, but that would have been resolved through public outrage within days, and with little real-world effects. A government default, however, would have consequences so severe that not only are the tactics of the Republicans destructive, but the response of the White House and President Obama smacks of rolling the dice with the universe.
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05/10/2011
Risky Gamesmanship Over the Debt Ceiling
The U.S. is officially overdrawn on its $14 trillion debt limit, but Republicans and Obama are still playing politics with the serious issue of default. Beltway myopia and overheated rhetoric could trigger another worldwide credit crisis, warns Zachary Karabell.
It’s official: the United States government is overdrawn on its debt limit of $14.294 trillion as of yesterday. Well, not technically overdrawn, as the U.S. Treasury directed by Secretary Timothy Geithner has taken a variety of measures to forestall any actual federal defaults on its operations—which range from keeping the lights on at the Smithsonian to maintaining combat forces in Afghanistan. These accounting sleights-of-hand will delay any actual defaults to early August. But still, after months of inconclusive wrangling by both parties, a new Rubicon has been crossed.
more