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Economy Keeps Rising From the Mat
Tweet Share on Facebook January 12, 2007 CommentCall it the Rocky Economy–as in Rocky Balboa. During 2006, the U.S. economy took a beating (a 38 percent rise in gasoline prices, 100 basis points in Fed rate hikes, the end of the housing bubble) and got knocked hard to the mat (gross domestic product growth fell from 5.6 percent in the first quarter to 2.0 in the third). But now it looks as if the Rocky Economy is back on its feet and throwing haymakers. (OK, a merciful end to the over-the-top cinematic boxing analogy.)
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Why Tauscher Is a Target
Tweet Share on Facebook January 11, 2007 Comment (1)Hockey fans used to joke that Wayne "the Great One" Gretzky won so many MVP awards (nine overall) that the National Hockey League should have changed the award's name from the Art Ross Trophy to the Wayne Gretzky Trophy–and given it to the second-most-valuable player each year.
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Vilsack Talks Trade
Tweet Share on Facebook January 10, 2007 CommentChatted about globalization and trade with Tom Vilsack, the outgoing two-term governor of Iowa and aspiring candidate for the 2008 Democratic presidential nomination.
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Nixing a Social Security Compromise
Tweet Share on Facebook January 9, 2007 CommentDon't bet on some grand compromise between President Bush and Congress to reform Social Security. There's been plenty of conjecture of late that Bush might agree to a plan that would raise the payroll-tax income limits as one way of returning the social insurance program to long-term solvency. Any reform plan would have to make its way through the Senate Finance Committee, which will be chaired in the new Congress by Montana Democrat Max Baucus. He's a guy the White House thought at one point might be a vote in favor of Bush's plan to carve out personal savings accounts as a way to make Social Security a better deal for younger workers.
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The Fed Looks to Stay Frozen
Tweet Share on Facebook January 5, 2007 CommentFriday's great payroll and wage numbers–the economy added a better-than-expected 167,000 jobs last month as earnings rose 0.5 percent–marked a real blow to the "hard landing" economic scenario that sees the economy slowing to near-recession levels because of the housing downturn. As long as this economy keeps creating jobs and boosting wages, consumers are likely to continue spending, thus keeping the economy rolling. It's a virtuous circle, so to speak, that makes it unlikely that the Federal Reserve–on ice since last June–will feel the need to cut interest rates anytime soon. As a research note from Action Economics puts it:
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Betting on a Liberalized China
Tweet Share on Facebook January 5, 2007 CommentInvestment firm Goldman Sachs recently sent out a self-congratulatory report marking the fifth anniversary of "our launch of the BRICs concept."
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The Democrats' Possible $2 Trillion Tax Increase
Tweet Share on Facebook January 4, 2007 CommentIt looks like House Democrats are aiming to fulfill their promise to restore pay-as-you-go–or pay-go–budget rules in the new Congress. On Friday, the House will vote on a provision (PDF) that would not allow consideration of any bill that increase the deficit via new entitlement programs or tax cuts. Such a step would "represent a significant step toward a return of fiscal responsibility," according to the liberal Center on Budget and Policy Priorities.
