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Punishing China: Congress Parties Like It’s 1929
Tweet Share on Facebook June 13, 2007 CommentBack then: "Debacle Inevitable, Wall St. Now Says" was a front-page headline in the New York Times on Oct. 27, 1929, just three days after the now-infamous of "Crash of '29" that augured the upcoming decade of economic catastrophe. But that death dive was merely the dramatic climax to a more orderly sell-off that had been ongoing since late March of that year. Market commentators of the time tended to blame the decline on interest rates—in particular, they focused on a rise in margin rates and a possible rate hike by the Federal Reserve.
Little attention was paid by stock seers to the progress of a tariff bill that was making its way through Congress. On March 25, in fact, President Hoover had received a report from the House Ways and Means Committee on commodity tariffs that indicated little opposition to such a protectionist bill. Although the newly inaugurated president vowed he would never sign such broad legislation, he ended up doing just that. Hoover signed the Smoot-Hawley Tariff Act in June 1930.
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Main Street's Good News Is Wall Street's, Too
Tweet Share on Facebook June 12, 2007 CommentI really hate the classic Main Street/Wall Street division. It ignores the investor class. About half of all Americans own stock, either directly by owning individual shares or indirectly through a mutual fund. So there's a lot of overlap there.
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Would a Market Meltdown Spur Protectionism?
Tweet Share on Facebook June 8, 2007 Comment"If we get a recession, then all bets are off," is how David Smick, who provides political analysis to hedge funds, described to me the chances of the new Congress passing harsh protectionist legislation targeting China. He predicted more jawing than action unless there was some external macro event as a catalyst.
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What (Fred) Thompsonomics Might Look Like
Tweet Share on Facebook June 7, 2007 Comment"Like Reagan without the new ideas," is the slam the New York Observer puts on likely Republican presidential hopeful Fred Thompson in its new issue, and anyone watching the former U.S. senator and Law & Order actor perform on last night's showing of CNBC's Kudlow & Co. would probably never ask him to play a policy wonk in a film. Thompson mostly stuck to general, tried-and-tested GOP themes during the interview. (Excerpts of the chat can be found at host Larry Kudlow's must-read blog.) About the only aspect of domestic economic policy that seemed to really fire Thompson up was corporate taxes, which he wants to cut—especially after Kudlow informed him that countries in "old Europe" were already slashing theirs.
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GOP Debate: Giuliani's Libertarian Health Reform
Tweet Share on Facebook June 6, 2007 CommentEvolution, gays in the military, and Scooter Libby all got plenty of time in last night's GOP debate in Manchester, N.H. (What, no questions from CNN moderator Wolf Blitzer about protecting Earth from an asteroid strike, "big love" marriage, or the upcoming Sopranos finale? America needs to know!) But Social Security reform was never mentioned, and there was virtually no talk about what the next president could do to juice the long-run growth potential and competitiveness of the U.S. economy—you know, the things that will help us raise our standard of living, deal with the tidal wave of entitlement debt, generate the technological innovation necessary to deal with climate change, and give us the resources to crush the jihadists.
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Will Hillary's High-Tech Agenda Work?
Tweet Share on Facebook June 5, 2007 CommentHillary Clinton recently released what she calls her "innovation agenda, 1.0." Although America "is still an innovation superpower," Clinton admits, her proposals will "renew the nation's commitment to research; help create the premier science, engineering, technology, and mathematics workforce; and upgrade our innovation infrastructure." Here are the highlights of what she wants to do, followed by my analysis:
1) Establish a $50 billion "strategic energy fund" to devise ways to make the United States energy independent and reduce the threat of global warming.
2) Increase the basic research budgets 50 percent over 10 years at the National Science Foundation, the Department of Energy's Office of Science, and the Defense Department, with more focus on the physical sciences and engineering, high-risk research, and E-science initiatives that link Internet-based tools, global collaboration, supercomputers, high-speed networks, and software for simulation and visualization.
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Parsing Last Night's Democratic Debate
Tweet Share on Facebook June 4, 2007 CommentThree points about last night's Democratic debate in Manchester, N.H.:
1) Imagine a Democratic presidential debate about foreign policy where Iraq was never mentioned. That was pretty much the case at last night's candidate face-off when it came to domestic policy. Little was said about the long-term direction of the U.S. economy and what could be done to make it more innovative, competitive, and productive—the keys to raising our standard of living as we compete with China and India in the 21st century. Out of roughly 20,000 spoken words, mentions of "innovation," zero; "competitive," one (Richardson); "productivity," zero; "trade," six (Kucinich); "growth," one (Dodd); "China," six (Dodd, Kucinich, Richardson); "India," none; "middle class," three (Edwards, Clinton); "technology," three (Dodd, Obama, Richardson).
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Thompson: Top GOP Cheapskate?
Tweet Share on Facebook June 1, 2007 CommentThere's going to be a GOP presidential debate next week in New Hampshire, and it may be the last one before Fred Thompson jumps into the race. Now, as the pundits always point out, the last person to win the White House whose previous political job was U.S. senator was John F. Kennedy back in 1960. But this year, there are loads of senators or ex-senators in the mix, including Thompson, John McCain, Sam Brownback, Hillary Clinton, John Edwards, and Barack Obama.
