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March 1 (Bloomberg) — The U.S. Transportation Department will lay off 2,000 employees today, halting construction projects, reimbursements to state governments and highway safety programs, according to a statement. Employees will be furloughed without pay because a funding measure stalled in Congress, the department said in a statement today. The affected workers are in the Federal [...] The core Consumer Price Index fell for the first time since 1982–0.1%–in January. Economists are lauding this deflation as a good thing on the theory that it gives the Fed more flexibility: in keeping interest rates low, as they have been doing, they don’t have to worry about inflation. I’m not sure what they mean [...] Comments on President Obama’s State of the Union Speech
I will say that President Obama is pretty good at this speech stuff. Remember last year when Professor Obama said that the adults are now in charge and we’re going to clean up the mess the kids made? This year had a much different tone. At [...] President Obama used his bully pulpit on Thursday to chastise banks and bankers while announcing a punitive tax on them to assuage an angry populace. Is his rage against the big paydays justified? Not for the reasons he [...] By Jeff Harding. This video was sent to me by Dan Mitchell at Cato. Dan presents an excellent summary of why government spending is harmful to the economy and prosperity. Whether or not it results in deficits, the greater the spending by government as a percentage of GDP, the greater is the negative impact on the economy. One [...] Jeff Harding. I don’t mean to keep picking on Japan. But, they are the textbook case of why Keynesian economics doesn’t work. Actually, now that I think about it, they are the textbook case of why Austrian free market economics works. I have set them up as the poster child for bad policies. They have had [...] By Jeff Harding. In order to understand the present state of the U.S. economy you have to understand that there are two things happening at once. For the most part they are in conflict with each other, in that one track can negatively impact the other. Lest I be accused of putting out conflicting information, there is evidence that [...] By Jeff Harding Good news is breaking out all over it seems. The housing market is finding a bottom and in some key markets prices are rising. The Case-Shiller report, the National Association of Realtor’s median price report, and the Federal Housing Finance Agency (FHFA) price indexes all report gains in sales and home [...] By Jeff Harding Japan has the world’s second largest economy so we need to pay careful attention to what they are doing. The Q2 numbers just came out and real gross domestic product grew 0.9%, an annual pace of expansion of 3.7%. There are many commentators and economist already calling Japan’s recession at [...] By Jeff Harding Just in case you missed this, Neil Bardofsky, the guy in charge of auditing TARP and related programs, said yesterday that “U.S. taxpayers may be on the hook for as much as $2.37 trillion to bolster the economy and bail out financial companies.” This includes all obligations by the Fed and Treasury, including [...] By Jeff Harding This is what I have been saying about Keynesian fiscal stimulus for the last year: when it doesn’t work, its advocates come up with excuses such as we didn’t do enough, we didn’t do it soon enough, intervening events thwarted the efficacy of this policy. Etcetera, etcetera. WASHINGTON — Vice President Joe Biden [...] By Jeff Harding The numbers for inflation/deflation came out today. U.S. annual inflation slid deeper into negative territory in May as consumer prices posted their largest annual decline in almost 60 years. Still, a slight rise from the prior month and an increase in core prices that exclude food and energy support the growing sentiment at [...] Jeff Harding Friday’s Wall Street Journal’s Econ Blog reported on a speech Obama economic adviser Larry Summers gave to the Council on Foreign Relations. John Maynard Summers It was a very revealing speech: a detailed rationale for the Administration’s policies and actions. What is most revealing about it is that Summers’ view of economics and [...] By Jeff Harding WASHINGTON — President Barack Obama said Monday he was “not satisfied” with the pace of the economic-stimulus effort and called for cabinet members to accelerate the spending in the weeks ahead, countering criticism of his economic strategy. The White House offered no new details Monday on how it would speed up [...] By Jeff Harding The new unemployment numbers came out today and they were significantly below what most economists had been expecting: 345,000 versus an estimate of 520,000. Pretty good news. The downside is that the overall unemployment rate is up to 9.4% from last month’s 8.9%. This is the 17th straight month of rising unemployment since [...] By Jeff Harding Nassim Taleb, “Mr. Black Swan” is affiliated with Universa, a hedge fund in Santa Monica. Those of you who have followed this blog are aware that Taleb’s books, including The Black Swan, have made a huge impact on the investment world through his ideas on investment risk. I think his analysis has been brilliant. And [...] By Jeff Harding I have been saying that there are no “Green Shoots” of recovery-yet. You can review my previous articles demonstrating that the concept of green shoots is wishful thinking, here, here, and here. Please don’t think of me as a Cassandra bringing only bad news; I try to see [...] By Jeff Harding I received an interesting comment to my Mr. Sunshine article from Hans Palmstierna at Saving Capitalism. I suggested that we will see more deflation before we see inflation. Hans said: I would argue that the “nominal” bottom is soon here. With the money now flowing at full speed (M1 at around [...] By Jeff Harding Here’s the latest data on the economy: Personal consumption [consumer spending] in March fell at a seasonally adjusted rate of 0.2% compared to the month before, the Commerce Department said Thursday. It was the fourth decline in six months. Spending increased a revised 0.4% in February; originally, spending was seen up [...] |
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