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Ask Sallie Who Will Win the Midterms
Tweet Share on Facebook October 27, 2006 Comment (28)Today's GDP number was the last big economic report before the election. But that top-line number showing that growth slowed to 1.6 percent from May to September vs. 2.6 percent in the previous quarter isn't the one to watch–at least not if you are trying guess what voters will be thinking on November 7. Drill a little deeper and you'll find that:
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Wall Street's Take on the Midterm Elections
Tweet Share on Facebook October 26, 2006 CommentWhat is Wall Street's perspective on what might happen November 7? Here are the key takeaways from a Prudential Securities conference call held yesterday by the firm's Washington research term.
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Bernanke's 12 Big Words
Tweet Share on Facebook October 25, 2006 Comment"Going forward, the economy seems likely to expand at a moderate pace." Those dozen words constitute almost the entire difference in the Federal Reserve's policy statement today and the one issued last month. (This statement also downplays energy prices as a source of inflation.) And like last month, the Fed's Open Market Committee decided to leave short-term interest rates alone.
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Is Good Economic News Good for Democrats?
Tweet Share on Facebook October 24, 2006 Comment (13)So which game is the chairman of the White House's Council of Economic Advisers playing? In a newspaper interview published today, Edward Lazear said that the housing slowdown will affect "a very significant chunk" of the economy's growth in the third quarter–3Q GDP comes out Friday–and that the slowdown is "going to hit us."
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The Budget's Missing $240 Billion
Tweet Share on Facebook October 23, 2006 CommentBy all accounts, Republicans—including President Bush—are going to start talking up the economy big time as a way of improving their chances of holding on to one or both houses of Congress. And there's a lot of meat to their argument, what with the Dow Jones industrial average climbing to new highs and unemployment at the lowest levels of the Bush presidency. But if there is one area that even die-hard Republicans kvetch about, it's spending. As budget expert Brian Riedl of the conservative Heritage Foundation points out, federal spending has jumped 45 percent since 2001, with defense and homeland security accounting for less than one third of the increase. Education has increased 137 percent, international spending 111 percent, and health research and regulation 78 percent.
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A GOP Surprise Courtesy of Investors?
Tweet Share on Facebook October 20, 2006 Comment (19)If you go by the political betting markets—not to mention those devastating polls—the GOP has about the same chance (30 percent or so) of keeping House of Representatives under Republican control as the United States does of catching Osama bin Laden or of bombing Iran by the end of next year. (But it has twice as good a chance as Joey Lawrence does of winning Dancing With the Stars, natch!) Yet there goes White House political adviser Karl Rove this week predicting the GOP will hold both the House and the Senate. (A veteran Washington watcher and money guy snarked to me, "I wonder if this is the same version of Rove that predicted an easy victory for Bush in 2000 and had him taking a victory lap in California.")
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Why Wall Street Doesn't Fear Speaker Pelosi
Tweet Share on Facebook October 19, 2006 CommentIt seems ever more likely that the Democrats will capture one or possibly both houses of Congress. But the Big Money crowd on Wall Street seems as if they couldn't care less. The Dow Jones industrial average is up 2.3 percent since the Mark Foley scandal broke, an event reversing a monthlong buildup of GOP political momentum. That, even though studies show investors–including this new one out of Stanford and Wharton business schools–tend to prefer Republicans over Democrats.
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An Economic Agenda for Republicans
Tweet Share on Facebook October 18, 2006 CommentNo matter what happens on November 7, America is going to end up with a de facto divided government. Even should the GOP keep control of the House and Senate, it would likely be by the narrowest of margins. Most analysts think voters should expect nothing but gridlock for the next two years. So for the heck of it, I asked a couple of pretty smart guys–one on the left, one on the right–what their dream economic agendas would be for the Democrats and Republicans, within broad political reason.
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An Economic Agenda for Democrats
Tweet Share on Facebook October 17, 2006 CommentIf the public-opinion polls and online betting markets are correct, Democrats will be running one or both houses of Congress come Jan. 3, 2007. But if that moment does arrive, will their congressional leaders find themselves repeating the famous question asked at the end of the 1972 Robert Redford film The Candidate, "What do we do now?" Let me quote from an E-mail I recently got from Jacob Hacker, a Yale political science professor and author of The Great Risk Shift, a new book in which he identifies growing income volatility as the prime cause of widespread worker angst. His bleak take on the Dems' economic agenda in the upcoming 110th Congress: "One thing that's clear is that Democrats are focusing right now on taking down the GOP and very little on what they might do once elected–which may work as an electoral strategy but is going to leave them with a pretty blank slate if they actually win one or both houses."
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Should Uncle Sam Help Domestic Manufacturers?
Tweet Share on Facebook October 16, 2006 Comment (14)A recent study from the National Association of Manufacturers claims that the competitiveness of domestic companies is being hurt by rising "structural costs." Problem areas include taxes, employee benefits, litigation expenses, and energy prices. As the NAM figures it, U.S. manufacturers are at a 31.7 percent cost disadvantage vs. foreign rivals. That's up from 22.4 percent in 2003. "The sharp rise in these nonwage costs represents a significant and long-term problem for our nation's manufacturers and America's economy," said John Engler, the NAM's president and former Republican governor of Michigan, when the report was released.
