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6 Reasons We Won't Get a Recession
Tweet Share on Facebook September 28, 2007 Comment (5)After perusing the blizzard of U.S. economic data that we've gotten this week, you could easily—and quite plausibly—draw this megaconclusion: The Federal Reserve will cut interest rates again, inflation is under control, and while the economy is weakening, it won't slip into recession. Here is the evidence:
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Forget Clintonomics--This Is Mondalenomics
Tweet Share on Facebook September 27, 2007 Comment (7)If you've a hankering for higher government spending and higher taxes—and I know plenty of people who do—you most likely got a bellyful at last night's Democratic debate in Hanover, N.H. Here are a few takeaways:
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Why 2008 Is Looking Like 1992 for Republicans (Update No. 1)
Tweet Share on Facebook September 26, 2007 CommentAn interesting bit from Democratic political consultant Mark Mellman (via The Hill) that plays into my thesis that the economic slowdown—even if the economy reaccelerates after a quarter or two—is mega-bad news for Republicans next year:
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Capital Gains Taxes and Innovation
Tweet Share on Facebook September 26, 2007 CommentInvestment adviser Kurt Brouwer puts in his two cents, via his outstanding Fundmastery blog, about my recent post concerning capital gains taxes and innovation:
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Giuliani Willing to Consider Raising Social Security Taxes
Tweet Share on Facebook September 26, 2007 Comment (1)In an Associated Press interview, Rudy Giuliani refused to rule out raising taxes to save Social Security. As the AP quotes Giuliani:
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Diving Dollar Is a Vote of No Confidence
Tweet Share on Facebook September 26, 2007 CommentHere's the deal with the falling dollar: Over the long run, a country's currency reflects its economic strength. When the U.S. economy boomed in the '80s and '90s, so did the greenback. So when the greenback is tumbling, I prefer to go beyond short-term factors such as whether the Federal Reserve is cutting interest rates or what the near-term inflation outlook is. Perhaps the deep factor at play here is a global vote of no confidence in the direction of American economic policy. First, you have a Congress that is tilting protectionist. As Morgan Stanley's Stephen Roach writes in a New York Times column this week:
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Wall Street Wisdom: Hillary Wins It All
Tweet Share on Facebook September 25, 2007 Comment (1)Some key 2008 takeaways from the latest research by Greg Valliere, politics guru at the Stanford Group, a Wall Street institutional research firm:
- A president with approval ratings as low as President Bush's always gets replaced by someone from the other party.
- The immigration debate may hurt the Republicans badly with Hispanic voters in key states such as Florida, Colorado, New Mexico, and Arizona.
- Ohio appears to be a solid "blue state" after the GOP was wiped out there in last year's election.
- Hillary Clinton will be the de facto Democratic nominee after the February 5 "Super Duper Tuesday" primaries in 20 states.
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Inflation, Gold, and Iran
Tweet Share on Facebook September 25, 2007 CommentNo sooner had the Federal Reserve cut interest rates than the inflation hawks began squawking that Bernanke and company had blown it and inflation was sure to worsen. And not without some plausible reasons.
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Why Americans Really Are Getting Richer
Tweet Share on Facebook September 24, 2007 CommentIt's an interesting little factoid. The median American house has grown by some 40 percent over the past generation. Yet to hear some economists tell it, that huge home enlargement somehow has happened just at the same time that the average worker has seen no increase in his real, inflation-adjusted wages. That means no increase in his standard of living—at least as measured by his take-home pay. (Of course, living in a bigger house filled with flat-screen TVs, iPods, laptops, Wiis, and carpet-cleaning robots could be taken as de facto signs of a higher standard of living. Plus, those wage numbers ignore nonwage compensation such as healthcare benefits and 401(k) programs).
But here's the thing: If one readjusts wage growth for the likely fact that government inflation numbers have continually overstated inflation, guess what? You find that real wages have grown by around 40 percent over the past generation—matching the increase in home size. Here is how Northwestern University economist Robert Gordon calculated the numbers for me during an E-mail exchange earlier this year:
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Capital Gains Taxes, Venture Capital, and Innovation
Tweet Share on Facebook September 24, 2007 Comment (1)Plenty of Democrats, including presidential candidates Barack Obama and John Edwards, are talking about rolling back the 2003 capital-gains-tax cut. Here is an interesting piece of analysis looking at capital-gains taxes and the venture capital industry from economic consultant Gerard Jackson:
