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What If Ford Had Won in 1976?
Tweet Share on Facebook December 28, 2006 Comment (2)A swing of just under 12,000 votes in Delaware and Ohio and Gerald Ford would have beaten Jimmy Carter in 1976. Could Ford have done a better job dealing with the economy than President Carter? It may not seem like it would have been such a tall order, given that the Carter years were plagued by terrible stagflation. (The "misery index"–the unemployment rate plus the inflation rate–averaged a horrific 16.3 under Carter.)
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A Corporate Tax Cut to Help Workers?
Tweet Share on Facebook December 27, 2006 Comment (30)Here's one idea to boost workers' wages: Cut corporate taxes. As a recent study by the nonpartisan Congressional Budget Office concluded, workers bear 70 percent of the tax burden. And a 72-country study by the conservative American Enterprise Institute found that higher corporate taxes push down workers' wages.
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Is Bush Going to Raise Taxes?
Tweet Share on Facebook December 21, 2006 Comment (25)Some quick thoughts–with plenty more to follow in coming weeks–on the odds of President Bush's raising taxes to help bolster Social Security's long-term solvency. Ever since the midterms, Washington has been buzzing about the possibility of Bush cutting a deal with Democrats that would raise or eliminate the current $97,500 cap on income subject to payroll taxes–all as part of a comprehensive reform package.
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5 Reasons to Buy a Big Screen
Tweet Share on Facebook December 20, 2006 Comment (21)Tired of strolling through Wal-Mart or Costco with your family and salivating over those sub-$2,000, 50-inch flat screens–but not buying? (I've only heard about this strange phenomenon, of course.) Worried that the housing recession or higher energy prices might still tank the economy and the 60-month expansion? Fear not. There are plenty of good economic reasons to feel secure in finally laying out the big cash for the plasma.
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Are the Dems Already Wimping Out?
Tweet Share on Facebook December 19, 2006 Comment (98)It's a truism that there's often a big bipartisan gap between campaign rhetoric and governing reality. So it was with a little surprise that I read this analysis of the new Democratic majority in Congress, courtesy of the political analysis team at Prudential Financial:
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China Policy Isn't Just About the Yuan
Tweet Share on Facebook December 15, 2006 CommentWhat, maybe you expected Treasury Secretary Hank Paulson to come home from China with a pledge from Beijing to let the yuan strengthen, say, 30 or 40 percent against the dollar? If so, you were probably disappointed with the results of this initial "strategic dialogue" meeting between American and Chinese economic policymakers. Instead, China merely agreed to make its currency more flexible. Then again, if you expected dramatic results, you've probably never done business in China. Any U.S. salesperson or marketing executive with experience there surely understood just where Paulson was coming from when he said that the two groups of officials "agreed on many principles" and that the talks fostered "mutual understanding and trust."
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Consumers Put Coals in Pessimists' Stockings
Tweet Share on Facebook December 14, 2006 Comment (17)It's not as if the housing slowdown isn't hurting the economy; it certainly is.
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Bush and Congress May Address AMT
Tweet Share on Facebook December 13, 2006 Comment (25)Don't expect any blockbuster legislation, such as major tax or entitlement reform, over the next two years–not with a presidential election looming in 2008. (Look for Social Security and extending the Bush tax cuts to be major issues in the race for the White House.) But what might get passed? One hard-to-escape issue is the alternative minimum tax. It will cost about $45 billion to keep millions of Americans from getting pinched next year. How will Congress pay for the temporary patch?
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What About Spending Inequality?
Tweet Share on Facebook December 12, 2006 Comment (25)While Democrats and liberal think tanks have been raising the volume over the issue of growing income inequality, less has been said about spending inequality. Now, you're probably well aware that your investment banker brother-in-law spends more than you do–darn those fat year-end bonuses!–but that makes sense since he earns more than you do. But what's interesting is knowing whether or not his spending is growing relative to your spending. As it happens, the Labor Department has recently released its 2005 Consumer Expenditure Survey. Delving into the numbers, I compared consumer spending in 2001 vs. 2005, looking at spending by various quintiles. In 2001, per-person spending in the top 20 percent was $24,879 vs. $16,817 in the second quintile, $14,264 in the third quintile, and $12,041 in the fourth quintile. (Think of the second, third, and fourth groups as the broad middle class.) Next, I compared the 2001 numbers with the 2005 numbers.
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Cut Corporate Taxes to Boost Wages?
Tweet Share on Facebook December 8, 2006 CommentToday's jobs report showed that average hourly earnings rose 0.2 percent in November, boosting the 12-month increase in earnings to 4.1 percent–the highest level since 2001. And last month's earnings report showed that average weekly earnings are up a robust 3.2 percent during the past year, taking inflation into account. But these data points are probably going to do little to cool concern about stagnant wage growth. Overall, it's been flat since mid-2003–though if you drill down a bit, you find that the average hourly wages fell 3 percent from June 2005 to September 2005. Since then, they've made up that loss with a couple of cents to spare.
