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Why Elizabeth Warren Will Benefit Wall Street
Tweet Share on Facebook September 16, 2010 Comment (2)Global banking regulators recently decided to toughen the rules on banks, requiring them to hold more capital against their assets, to prevent another financial panic like the one that mushroomed in 2008. The new requirements will cut into profitability, since banks will have less money to lend and less leeway to gamble. Yet instead of falling in value, financial stocks rose after the announcement. The new rules, it turned out, made investors feel more comfortable about banks, not less.
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How to Tell When the Recession's Really Over
Tweet Share on Facebook September 15, 2010 Comment (9)We all know what a tough recession feels like. It's the recovery that's mystifying.
Most economists think the recession technically ended a year or so ago, when the economy started growing again after shrinking for five quarters out of six. But a year's worth of "recovery" hardly feels like it. Unemployment, at 9.6 percent, is painfully high, and companies show little interest in hiring. That leaves nearly 15 million unemployed Americans wondering what to do next. Overall, Americans have lost $12 trillion in home equity, investments, and other forms of net worth. We're ready to rebuild and go back to work, but instead of picking up steam, the economy seems to be stalling, possibly headed for a dreaded double-dip recession. The prolonged malaise could cost Democrats dearly in the upcoming midterm elections.
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Why Tax Hikes For the Wealthy Are Inevitable
Tweet Share on Facebook September 13, 2010 Comment (30)Thanks to Herbert Hoover, it's considered insanity to raise taxes during an economic downturn. Three years into the Great Depression, Hoover sought to close a mushrooming federal deficit by passing the Revenue Act of 1932, which boosted income taxes on most earners and pushed the top rate from 25 to 63 percent. If economists agree on anything, it's that cutting people's disposable income in the midst of the depression made things dramatically worse, not better. Franklin Roosevelt committed the same sin a few years later, hiking a slew of taxes to pay for Social Security and other things—triggering a fresh downturn in 1937, just as the economy seemed poised to recover.
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4 Signs the Job Market is Finally Improving
Tweet Share on Facebook September 10, 2010 Comment (4)Economists call it an inflection point. Out in the real world, it doesn't feel like much, but it has to happen before things get better. And it might be happening now.
[See 11 ways to plan for a double-dip recession.]
As everybody in America knows, we've got a scary jobless problem. The unemployment rate is 9.6 percent and might cross 10 percent again before it starts to go down. Weak hiring is the single biggest problem in the economy, dragging out the housing bust, depressing spending, and even threatening to trigger a second bout of recession. Nobody's sure how to boost hiring, and the Democrats seem likely to suffer big losses in the November midterms due to the lousy job market and all the other woes it's causing.
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Why the Rich Need the Poor
Tweet Share on Facebook September 9, 2010 Comment (28)Call it the revenge of the underclass: Even if you live in a gated community, have a bulging bank account, and enjoy bulletproof job security, you cannot escape the woes of the nation's have-nots.
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Why Obama Doesn't Need to Woo Big Business
Tweet Share on Facebook September 8, 2010 Comment (7)Those poor CEOs. After clawing their way to the top and laying off millions to survive the recession, they've been forced to endure harsh rhetoric out of the White House and criticism of their lavish pay. President Obama has derided them as greedy "fat cats." Now that hits them where it hurts. Congress has targeted their companies for new taxes. An "anti-business" mentality emanates from Washington, as a chill whips through America's golf and yacht clubs.
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How Obama Blew Stimulus II
Tweet Share on Facebook September 8, 2010 Comment (20)It might stimulate the chattering class and rouse his political foes, but President Obama's latest economic proposals won't do much to create jobs or boost incomes any time soon.
Obama knows this.
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Video: Why Raises Are a Thing of the Past
Tweet Share on Facebook September 7, 2010 Comment -
3 Ways Obama Could Boost Hiring
Tweet Share on Facebook September 3, 2010 Comment (19)Nearly three years after the recession began, President Obama wants to pass a jobs bill. It's not his first jobs bill, but the others—including the big $800 stimulus plan from 2009—haven't quite done the trick. So Obama is pushing for new tax breaks and cheap, government-backed loans for small businesses, with the hope that easier credit and a bit more take-home pay will spur them to hire more workers.
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Video: Why Housing Is Still So Bad
Tweet Share on Facebook September 3, 2010 Comment
Rick Newman
The global economy is mysterious, even scary. Chief Business Correspondent Rick Newman connects the dots. In addition to his writing for U.S. News, Rick is the co-author of two books: Firefight: Inside the Battle to Save the Pentagon on 9/11, and Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail.
Read Rick's latest blog entries here.
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