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Time to Raise Taxes?
Tweet Share on Facebook November 28, 2006 CommentRobert Rubin, Treasury secretary under President Clinton, recently told the Washington Economic Club that "you cannot solve this nation's fiscal problems without increased revenue." Oh, and in case you think that Rubin, a noted deficit hawk, might have been talking about imaginative ways to accelerate the economy–thus raking in more tax revenue–that's not quite what he had in mind. "I think if you were to increase taxes right now, you would have probably about zero negative effect on the economy," Rubin said in response to a question from the high-powered audience. Rubin didn't specify which taxes he was talking about, such as income taxes or capital-gains taxes or dividend taxes.
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Handicapping the Next Recession
Tweet Share on Facebook November 27, 2006 Comment (19)Before you buy that plasma TV for the family room or splurge on an 80-gig iPod for your office "secret Santa" party, it might be nice to know if the economy is about to tank (And nothing like today's triple-digit drop in the Dow to give one the shakes.) No surprise; forecasting such downturns is tough.
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What to Do if the Economy Tanks
Tweet Share on Facebook November 22, 2006 Comment (2)The White House has offered a pretty upbeat assessment of the economy heading into 2007: steady 3 percent growth, falling inflation, and continued low unemployment. But what if Team Bush is wrong? What if the U.S. economy slips into a recession or a period of sluggish growth with rising unemployment in 2007, perhaps because of the housing implosion? What should be done about it? To find out, I E-mailed some smart thinkers–all of whom also write must-read blogs. Here is what they told me.
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Slowing Economy Could Be Much Worse
Tweet Share on Facebook November 21, 2006 Comment"White House warns of slowdown ahead"–that's the headline that CNN.com gave to this afternoon's news that the Bush administration (specifically the Council of Economic Advisers, the Treasury Department, and the Office of Management and Budget) had lowered its economic growth forecast for this year and 2007.
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Global Business Leaders Fret About Protectionist America
Tweet Share on Facebook November 17, 2006 CommentIt's common wisdom that most of the world is crazy-go-nuts about the Democrats taking control of Congress. Not that folks are so wild about Nancy Pelosi or Harry Reid, in particular. It's just that President Bush is so amazingly unpopular that any time he takes some lumps, it's greeted with cheers by many overseas. So I was a bit surprised to read this opening sentence in a note out today by Stephen Roach, chief economist over at Morgan Stanley: "The world is nervous about the implications of America's stunning political upheaval."
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Did Bush Win by Losing?
Tweet Share on Facebook November 9, 2006 Comment (18)President Bush's subdued showing at his press conference Wednesday was nothing like his rather peppery performance right after he won re-election in 2004. Could it have been all just an act? Maybe Bush is actually better off having lost the House and apparently the Senate than with the GOP narrowly holding them. Hard to believe–and unless he has Morgan Freeman-esque acting skills, Bush doesn't appear to believe it himself. But the guys at Macroeconomic Advisers, an economic consulting firm with great inside-the-beltway connections, sure do. Here is the firm's contrarian take on the election outcome:
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A Few Observations on the Big Democratic Win
Tweet Share on Facebook November 8, 2006 Comment (1)— Yesterday's elections results bring to mind this quote from a recent story I wrote about the impact of a Democratic congressional victory. As a Bush administration official put it then, "The president is going to be a veto machine."
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Online Betting Markets Predict Dems Take House; GOP Holds Senate
Tweet Share on Facebook November 7, 2006 Comment (1)With the first polls closing at 6 p.m. in the eastern parts of Tennessee and Kentucky and the network exit surveys beginning to slowly leak into the blogosphere, here are the latest election odds — as of 5:40 — from the TradeSports and Washington Stock Exchange online betting markets.
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The Latest Election Odds
Tweet Share on Facebook November 7, 2006 Comment (101)A lot of political junkies–particularly those on Wall Street–love to check out TradeSports, a Dublin-based betting market. There, they can see the latest odds on U.S. elections as well as the chances of various events taking place, such as capturing Osama bin Laden or airstrikes against Iran and North Korea.
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Why Day Traders Love Elections
Tweet Share on Facebook November 6, 2006 CommentWhat will tomorrow's elections mean for the markets and economy? To be honest, most investors, analysts, and economists I talk to are more concerned about 1) what the Federal Reserve will do next, and 2) what the eventual spillover from the bursting housing bubble will be to the rest of the economy. (Of course, many of these guys still check the betting markets and political websites throughout the day.)
