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  • Extend the Bush Cuts, Then Get Rid of 'Em   (07.09.2010 21:14)

    Peter Orszag, New York Times
    The nation faces a nasty dual deficit problem: a painful jobs deficit in the near term and an unsustainable budget deficit over the medium and long term. This month, the Senate will be debating an issue with significant implications for both "” what to do about the Bush-era tax cuts scheduled to expire at the end of the year. In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may...

  • An Interview with Author Michael Lewis   (07.09.2010 20:41)

    Jaime Lalinde, Vanity Fair
    TopicsFeatured PostsContributorsArchivePhotograph by Jonas Fredwall Karlsson.In the October issue of Vanity Fair, Michael Lewis investigates the cause of the Greek financial crisis, one that translates to nearly a quarter-million dollars for each working Greek citizen. In V.F.’s April 2009 issue, Lewis examined the financial disaster in Iceland, winning Loeb and Overseas Press Club awards for his report. Lewis differentiates the two crises in this month’s article, writing, “In Greece the banks didn’t sink the country. The country sank the...

  • Job Report Wows Wall St, Fails Main Street   (07.09.2010 20:22)

    Dan Dorfman, Huffington Post

  • Obama Motors' Ill-Timed Initial Public Offering   (07.09.2010 20:14)

    Shikha Dalmia, Reason
    Media Inquiries and Reprint...

  • Wall Street Needs Off-the-Charts September   (07.09.2010 20:10)

    Michael J. Moore, Bloomberg

  • The Great Myth of Exponential Growth   (07.09.2010 19:46)

    Martin Hutchinson, Asia Times
      1. Married to the mob 2. Inspectors miss the flight to Kyrgyzstan 3. China makes its North Korea move 4. New case for US reparations in Laos 5. Combining the worst 6. Old Korea...

  • The Bears Better Be Prepared for Blastoff   (07.09.2010 19:41)

    Jim Cramer, TheStreet
    Editor's note: This is the first of a four-part special by Jim Cramer. Here are part 2, part 3 and part 4. All of the posts first appeared earlier Tuesday on RealMoney. Click here for a free RealMoney trial, and enjoy incisive commentary all day, every day. After an exhaustive look at every chart in the S&P Trendline's Daily Action Charts, my takeaway is that the bears will have to push the market back this week, because soon we'll see so many breakouts that the bears will be like Custer. Then it could be all over, and the market could rally 10%. There's so much on...

  • If High Tech Isn't Hiring, Who Will?   (07.09.2010 19:37)

    Catherine Rampell, New York Times
    For years the technology sector has been considered the most dynamic, promising and globally envied industry in the United States. It escaped the recession relatively unscathed, and profits this year have been soaring. "I apply for everything I can find, but there are just not that many jobs," said Rosamaria Carbonell Mann, a software engineer. But as the nation struggles to put people back to work, even high-tech companies have been slow to hire, a sign of just how difficult it will be to address persistently high joblessness. While the labor...

  • Time to Scrap the Fusty Old P/E Ratio?   (07.09.2010 19:33)

    Ben Levisohn, Wall Street Journal

  • Why Gold Is Wall Street's Best Kept Secret   (07.09.2010 18:19)

    Drew Mason, Minyanville
    Remember meThe information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to...

  • Four Rather Unexpected Economic Bright Spots   (07.09.2010 15:58)

    Nin-Hai Tseng, Fortune
    FORTUNE -- Good economic news has been hard to come by lately, but not all is doom and gloom in America these days. The end of summer ushered in a few signs of progress in some of the unlikeliest corners of the economy. They are no guarantee that the good times are around the corner, but they do provide a helpful reminder that this slow recovery is exactly that: a recovery.Fortune highlights four bright spots, and assesses what kind of a lasting impact they might have on the economy.Farming a recoveryOf all the industries impacted by the recession, U.S. agriculture remains relatively...

  • The New Young Investor: Shunning Stocks   (07.09.2010 15:56)

    Hibah Yousuf, CNNMoney
    NEW YORK (CNNMoney.com) -- When 18-year-old Robert White decided to jumpstart his retirement plan, he invested his life savings of $25,000 into an aggressive mutual fund.Little did he know that just five years later, he would make a complete 180 and join the ranks of a new group of young investors who have become so risk averse by the wild market swings that they'd rather park their money in safety zones, like CDs or Treasurys.Today, only 22% of investors under the age of 35 say they're willing to take on a substantial level of risk, according to the Investment Company Institute....

  • It's a Season For the Bears On Wall Street   (07.09.2010 11:42)

    Irwin Kellner, MarketWatch
    Sign inBecome a MarketWatch member todayIrwin Kellner Sept. 7, 2010, 12:01 a.m. EDT · Recommend (3) · Post: View all Irwin Kellner "º "¹ Previous ColumnEconomy needs more confidence, less angstFirst Take "ºBanks need to come clean on prop trading By Irwin Kellner, MarketWatch PORT WASHINGTON, N.Y. (MarketWatch) -- By rising last week the stock market may be setting itself up for a decline later on. Last week's gain by the Dow...

  • On Economy, Obama Shoots From the Hip   (07.09.2010 11:38)

    Irwin Stelzer, Weekly Standard
    Tuesday,September 7, 2010 Partisanship Isn't Enough (but It Is Essential) Reflections on the Glenn Beck rally. BY Harvey Mansfield September 13, 2010, Vol. 15, No. 48 Read more Morning Jay: Dem Triage, White House Partisanship, and more... ...

  • Smart Stimulus Will Fix Unemployment Problem   (07.09.2010 11:31)

    John Nichols, Nation
    The new unemployment figures are damned disappointing -- from a social, economic and political standpoint.The president should scrap his cautious talk about compromise and bipartisanship. It's time to take a side.She's supposed to know something about technology. But millionaire Senate candidate Carly Fiorina seems to be most interested in subdividing the net so that her pals can make money.  The official jobless rate rose from 9.5 percent to 9.6 percent in august. That’s a modest increase, but the trajectory is in precisely the wrong direction for a country...

  • Time to Sweep Economists Off Thrones   (07.09.2010 11:27)

    Gideon Rachman, Financial Times
    COLUMNISTS Breadcrumb trail navigation:By Gideon RachmanPublished: September 6 2010 20:08 | Last updated: September 6 2010 20:08When Paul Krugman, a Nobel prize-winning economist, clashed with Niall Ferguson, a famous historian (and FT contributing editor), over how best to respond to the economic crisis, Prof Ferguson's response was humorously humble. "A cat may look at a king," he wrote, "and sometimes a historian can challenge an economist."You have viewed your allowance of free articles. If you wish to view more, click the button below.

  • Oracle: The Larry, Mark and Safra Show Begins   (07.09.2010 11:24)

    Adam Lashinsky, Fortune
    Oracle's hiring of ousted HP CEO Mark Hurd sends two signals: Larry Ellison doesn't plan on calming his executive suite -- and IBM is even more in his sights.On paper, everything is right about Mark Hurd becoming co-president of Oracle (ORCL). He is the operational yin to CEO Larry Ellison's innovative yang. Once the innovators of Silicon Valley looked down on the business people who knew how to  make budgets, manage people and market their brilliant inventions. Now the technical geniuses recognize those other types are needed.Hurd is the ideal foil to Ellison. He was an...

  • Bad Economic Medicine Begets Bad Economic Times   (07.09.2010 11:15)

    Steve Forbes, Forbes

  • To Decrease Unemployment, Let Wages Fall   (07.09.2010 11:10)

    Kevin Hassett, Bloomberg

  • Insiders Give Away Thoughts When Buying   (07.09.2010 11:07)

    John Dorfman, Bloomberg

  • 'Stimulus' Cures Will Make Things Worse   (07.09.2010 10:57)

    Alan Reynolds, New York Post

  • Millions of U.S. Workers Are Underemployed   (07.09.2010 10:52)

    Don Lee, Los Angeles Times

  • Europe's New Economic Dividing Line   (07.09.2010 10:47)

    Anne Applebaum, Washington Post

  • What Really Happened to Lehman?   (07.09.2010 10:43)

    Andrew Ross Sorkin, New York Times
    What really happened? A week from Tuesday will be the second anniversary of Lehman Brothers’ bankruptcy and the ensuing panic that helped spawn the deepest recession since the Great Depression. Yet two years on, a mystery remains about the fateful weekend before Lehman’s fall. Last week, during the Financial Crisis Inquiry Commission’s final hearings, entitled “Too Big to Fail,” two competing versions of events were revisited about the last frantic 72 hours of Lehman’s life: That the government did not have the legal...

  • How the Obama Economy Got Us to 1.6 GDP   (07.09.2010 10:09)

    Editorial, Wall Street Journal

  • Defeatism Takes Hold In the US   (06.09.2010 13:23)

    Ambrose Evans-Pritchard, Daily Telegraph
    Accessibility links Monday 06 September 2010 | Ambrose Evans-Pritchard feed Advertisement Website of the Telegraph Media Group with breaking news, sport, business, latest UK and world news. Content from the Daily Telegraph and Sunday Telegraph newspapers and video from Telegraph TV. Enhanced by...

  • The U.S. Economy is Presently 1938 Weak   (06.09.2010 12:38)

    Paul Krugman, New York Times

  • Media Hurricane Earl Ravages the East Coast Economy   (06.09.2010 01:21)

    Bill Frezza, RCM
    Category 4, 2, no ... 1, Media Hurricane Earl battered businesses up and down the East Coast Labor Day weekend as weather forecasters, media provocateurs, and incumbent politicians kicked up a howling blow that destroyed the hopes of tourist trade businesses struggling to survive Recovery Summer.A typical warning from ABC News: "Hurricane Earl is on a collision course with the East Coast and Americans from the Carolinas to Cape Cod are bracing for the worst hurricane to hit the area in almost 20 years." Uh-huh. And why are we cancelling our Labor Day plans, boarding up windows,...

latest news

  • Oil falls below $74 on EU bank debt worries   (08.09.2010 11:20)

    Oil prices skidded below $74 a barrel Wednesday in Asia as traders followed regional stocks down on reports European banks may be saddled with more debt than previously estimated.Benchmark oil for October delivery was down 40 cents at $73.69 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The

  • China's Hu calls for stable ties with US   (08.09.2010 10:21)

    Trying to smooth over recently rocky relations before he visits Washington, Chinese President Hu Jintao told aides to U.S. President Barack Obama on Wednesday that he wants to see healthy and stable ties between the two countries.The meeting between Hu and a White House economic policy official and deputy national security adviser was unusual

  • Hermine's remnants head north after storm weakens   (08.09.2010 09:52)

    It's power spent, what was left of Tropical Storm Hermine was making its way north Wednesday, having drenched parts of northeastern Mexico and south Texas before weakening.Remnants of the storm that was downgraded to a tropical depression Tuesday night could spread as far north as Oklahoma and Kansas in the coming days.The storm brought winds

  • Court: Judges can demand warrant for cell locales   (08.09.2010 09:51)

    Judges have the right to require warrants before police get cell phone records that could suggest a customer's likely location, a U.S. appeals court ruled Tuesday in a novel electronic privacy case.The Pennsylvania case involves the government's interest in records that show a caller's location during past calls. Cell phone tower records can

  • Semiconductor-equipment maker shares sink   (08.09.2010 09:51)

    Shares of several companies that make semiconductor equipment dropped Tuesday after a Barclays Capital analyst lowered ratings and earnings estimates due to weaker global demand for chips.The analyst, C.J. Muse, wrote in a research note that he expects share prices for the sector to reach a low in the fourth quarter.He cited falling pricing for

  • HP sues ex-CEO Hurd over new job at rival Oracle   (08.09.2010 09:51)

    Hewlett-Packard Co. is suing Mark Hurd, the chief executive it ousted last month, to stop him from taking a top job at rival Oracle Corp.The lawsuit, filed Tuesday in a California state court, came a day after Oracle hired Hurd as co-president to help lead the database software maker's efforts to lure business away from HP. HP claims that Hurd

  • MetroPCS Wireless to raise $500M in debt sale   (08.09.2010 09:51)

    Pre-paid wireless provider MetroPCS Wireless Inc. said Tuesday it is selling $500 million of senior notes due in 2018 and use the proceeds to buy back other debt in a move to trim its interest payments.The company, a subsidiary of MetroPCS Communications Inc., said it will use the proceeds plus cash on hand to buy back $500 million of senior notes

  • Oracle's Ellison gets pay package worth $70M   (08.09.2010 09:51)

    Oracle Corp. founder Larry Ellison, one of the world's richest people, drew a pay package worth about $70 million during the company's most recent fiscal year.That's down 17 percent from $84.5 million the year before, according to an Associated Press analysis of Oracle's securities filings.The drop in overall compensation, including a smaller base

  • Japan machinery orders up 8.8 percent in July   (08.09.2010 09:20)

    Japan's machinery orders, a key gauge of future business investment, rose the most in seven months, a sign that companies are more confident in the economic recovery.The 8.8 percent jump in July from June was the second straight month of increase as solid overseas demand bolstered corporate sentiment, according to government figures released

  • Dollar sinks to 15-year low against Japanese yen   (08.09.2010 09:20)

    The U.S. dollar sank to a new 15-year low against the yen on Wednesday as investors continued to buy the Japanese currency as a safe haven for their money amid uncertainty about the global economic recovery.The dollar sank to 83.32 yen in afternoon trade in Tokyo. It fell to 83.79 yen overnight in New York trade. Last month, the dollar went below

  • Asia stocks down on Europe debt worries, yen surge   (08.09.2010 09:20)

    Most Asian stock markets slid Wednesday, pressured by the yen hitting a fresh 15-year high and new concerns about European banks after a report they may have more risky government debt than thought.Japan's benchmark Nikkei 225 stock index dropped 214.73 points, or 2.2 percent, to 9,011.27. China's benchmark Shanghai Composite Index shed 0.5

  • German exports slightly lower on month in July   (08.09.2010 08:50)

    Official data show that German exports dipped by 1.5 percent in July compared with the previous month but were still up a strong 18.7 over the same month last year.The monthly drop reported by the Federal Statistical Office on Wednesday followed two months of big gains. Strong exports helped push the German economy — Europe's biggest — to

  • Explosion at Pemex refinery kills 1 in Mexico   (08.09.2010 04:21)

    An explosion at Mexico's third-largest refinery Tuesday killed one worker and injured 10, the state-run oil company said.The blast at the Cadereyta refinery outside the northeastern city of Monterrey was caused by a leak in a hydrogen recirculation compressor, Petroleos Mexicanos, or Pemex, said in a statement.Pemex said the injured workers were

  • Lawmakers agree on some Mich. budget principles   (08.09.2010 03:21)

    Michigan's legislative leaders and Gov. Jennifer Granholm's administration agreed in concept Tuesday on ways to balance the state budget, a significant step toward getting a final plan in place by an Oct. 1 deadline.Legislative leaders and Granholm recently have worked on plans that include spending cuts of about 3 percent for most state agencies,

  • Gates, Buffett to sell giving to China's richest   (08.09.2010 02:51)

    Microsoft Corp. co-founder Bill Gates and billionaire investor Warren Buffett plan to sell the art of giving to China's super rich in a visit later this month that's already sparked some soul searching among the world's second-largest number of billionaires.Reactions to Gates and Buffett's trip have been swift and varied: One prominent Chinese

  • Ind. panel's proposal would expand `net metering'   (08.09.2010 02:20)

    A proposed expansion of Indiana's rules dictating which owners of wind turbines and other renewable power systems get credit for excess power they generate is drawing early support from clean energy advocates.The draft "net metering" rule would boost the state's power cap for renewable power units and expand it to all customer classes served by

  • Rollins fires CEO's son after lawsuit over trusts   (08.09.2010 01:51)

    Pest and termite control company Rollins Inc. said Tuesday it has fired the CEO's son, Glen Rollins, who was executive vice president of the company and president of subsidiaries including Orkin.The company said Glen Rollins and his siblings have also recently filed a lawsuit against their father, CEO Gary Rollins; their uncle, chairman R. Randall

  • Semiconductor-equipment maker shares sink   (08.09.2010 01:51)

    Shares of several companies that make semiconductor equipment dropped Tuesday after a Barclays Capital analyst lowered ratings and earnings estimates due to weaker global demand for chips.The analyst, C.J. Muse, wrote in a research note that he expects share prices for the sector to reach a low in the fourth quarter.He cited falling pricing for

  • Pa. capital city's debt mounts amid political feud   (08.09.2010 01:51)

    Pennsylvania's financially troubled capital city is trying to avoid painful budget cuts while city leaders feud over how to deal with a staggering debt that is threatening to drag the city into bankruptcy.With Harrisburg's newly elected mayor and city council at odds, the city is taking the rare step of skipping a $3.3 million general obligation

  • Barclays, Oracle, Idenix are big movers   (08.09.2010 01:51)

    Stocks that moved substantially or traded heavily Tuesday on the New York Stock Exchange and Nasdaq Stock Market:NYSEBarclays PLC, down $1.15 at $19.13The British bank said its head of investment banking will take over as CEO from John Varley, who guided Barclays through the credit crisis.Biovail Corp., up $2.29 at $26.25The drug maker's potential

articles

  • Obama's New Stimulus Won't Stimulate   (08.09.2010 10:44)

    Leadership: The Obama administration's latest idea for "stimulating" the economy is - you guessed it - more spending. Is this just a campaign ploy, or is the White House ruining the economy on purpose? The president's latest plan calls for another $50 billion in stimulus for infrastructure. As the White House puts it, this represents a "bold vision for renewing and expanding our transportation infrastructure - in a plan that combines a long-term vision for the future with new investments." But why in the world do we need another stimulus when we're not even...

  • The Real Debacle At Ground Zero   (07.09.2010 21:43)

    Plans to build a Muslim community center near the site of the former World Trade Centers have stoked a nationwide controversy and brought Ground Zero back into the national spotlight again in recent weeks. But the storm that the mosque plans have generated obscures the real failings at the site, where some 3,000 people (most of them workers in the Twin Towers) died in the Sept. 11. Nearly a decade after the attacks, we are still several years away from the first office tenants moving back in and commerce resuming on a site that was the commercial heartbeat of Lower Manhattan. Although the...

  • Employment, Where Art Thou Employment?   (06.09.2010 01:25)

    The statistician John Tukey once said: "An approximate answer to the right problem is worth a good deal more than an exact answer to an approximate problem." For the national economy, the right problem of concern these days is jobs. To deal with the problem, the answers we need require reasonably accurate employment data. How exact or approximate are the official data on employment? The job numbers reported monthly by the U.S. Bureau of Labor Statistics (BLS) and publicized by the mass media give the superficial appearance of precision. However, a statistician would say that the...

  • Media Hurricane Earl Ravages the East Coast Economy   (06.09.2010 01:19)

    Category 4, 2, no ... 1, Media Hurricane Earl battered businesses up and down the East Coast Labor Day weekend as weather forecasters, media provocateurs, and incumbent politicians kicked up a howling blow that destroyed the hopes of tourist trade businesses struggling to survive Recovery Summer.A typical warning from ABC News: "Hurricane Earl is on a collision course with the East Coast and Americans from the Carolinas to Cape Cod are bracing for the worst hurricane to hit the area in almost 20 years." Uh-huh. And why are we cancelling our Labor Day plans, boarding up windows,...

  • Another Labor Day, Little Labor Cheer   (03.09.2010 03:11)

    WASHINGTON-Another Labor Day is about to arrive, and once again, organized labor in the United States has little to cheer about. Unemployment is high, union membership has fallen to 7 percent of the private sector labor force (down from 15% a quarter century earlier). Despite Democratic majorities in both houses of Congress, labor is unlikely to win passage of the Employee Free Choice Act, its heavily-lobbied bill to take away the secret ballot in elections for union representation. EFCA would also impose compulsory arbitration resulting in a mandatory two-year contract if the newly-unionized...

  • The Business of America Is Business   (02.09.2010 03:22)

    Corporate profits are at all-time highs and bond rates in the Treasury market are virtually at record lows. That's a good combination for stocks, and it helped trigger a 255 point rally in Wednesday's trading. What's more, a surprisingly positive read on the ISM August manufacturing report delivered a strong blow to the double-dip recession pessimism that has plagued investors for many months. Without question, the jobs picture is going to remain cloudy. There's just too much uncertainty over the economy and the tax-and-regulatory threats coming out of Washington....

  • Fact, Fiction, Fantasy and Foolishness   (01.09.2010 16:28)

    We all know the facts: the economy is weak, job growth is anemic, a whiff of panic is in the air and the powers that be have little to offer in the way of solutions, except for more of the same failed policies. We also know that Treasury Secretary Timothy Geithner's recent Op-Ed piece in The New York Times, in which he extols the current "economic recovery," should be #1 on the best seller list - category "Fiction" - or, at the very least, be included in creative writing classes at the nation's colleges and universities this fall. And it is apparent to all,...

  • Book Review: Andrew Ross Sorkin's Too Big To Fail   (01.09.2010 16:03)

    The financial struggles of 2008 led to myriad books on why the crack-up occurred, and many have been reviewed here. Andrew Ross Sorkin, a writer for the New York Times, approaches what happened differently.  He has written a very interesting behind-the-scenes account of the people within government and finance who saw the crisis up close. For those interested in what went down behind closed doors, Sorkin's Too Big To Fail is essential. Thanks to his global access to the individuals involved, the interested...

  • How Corrupt Is the Muni-Bond Business?   (01.09.2010 00:22)

    When the Securities and Exchange Commission charged New Jersey with fraud last month for failing to disclose certain fiscal dealings to bond buyers, observers were quick to note that this might be the first of several actions from the agency, which has established a new, 30-person unit to pursue corruption in municipal finance. But to anyone who follows the business, the SEC's move must seem the equivalent of a Hail Mary pass. That's because the undermanned, often-outgunned agency, whose oversight of the muni business is limited by Congress, has launched other initiatives over the...

  • Obamanomics Failing to Create Jobs   (31.08.2010 18:58)

    With thousands of young college graduates moving in with parents and returning Iraq War veterans facing long-term unemployment, President Obama is scrambling for cover. Irresponsible spending, largesse for big banks and subsidies for a broken health care system have busted the budget and failed to create jobs. Economists expect the Labor Department to report on Friday the economy lost another 80,000 jobs in August after shedding 131,000 jobs in July. Completion of the Census accounts for most of the loss, but the report will demonstrate that rewarding Democratic Party academics with new high...

  • It's a Good Time to Index Taxes On Capital   (31.08.2010 14:49)

    The Modeled Behavior blog has been taking nominations for the 4% Club, which it describes as "An elite group of economists, pundits, and politicians" who want the Federal Reserve to raise its inflation target from 2%. Its members tend to the left side of the political spectrum, but not exclusively; one of the loudest champions of a higher inflation target is Scott Sumner, a right-of-center economics professor at Bentley University. Some of the four-percenters have expressed annoyance and consternation about persistent inflation-hawkishness at the Federal Reserve, even in light of a...

  • The Fed Can't Fix An Overtaxed Economy   (31.08.2010 03:08)

    Monetary Policy: With the economy seemingly headed for a big slowdown or even a double-dip recession, it's tempting to demand that the Fed print more money. The only problem is, it won't work. Fed chief Ben Bernanke, speaking last week at the central bank's annual Jackson Hole meeting, promised that the Fed would do "all that it can" to keep the economy from falling off the table and to stave off deflation. But he fell short of promising concrete action. Indeed, he pointedly noted, "central bankers alone cannot solve the world's economic...

  • 1.6%: Weak GDP Does Not a Weak Economy Make   (30.08.2010 17:15)

    At present there's quite a lot to criticize President Obama about when it comes to his administration's economic policies. But with regard to last Friday's Gross Domestic Product (GDP) revision which allegedly points to a weakening economy, the anger should center on what a worthless number GDP is, as opposed to Obama's admittedly limited worth as an economic strategist. One editorial that decried the revised number and the President's surely unfortunate policies noted a big drop in new home sales and weak manufacturing data as symptoms of those policies. It went on...

  • Why the Faltering Recovery?   (30.08.2010 10:21)

    The logic of the economic recovery isn't working -- or, at any rate, not well. By that logic, over-borrowed Americans would repay loans and replenish depleted savings, creating a temporary drop in consumer spending and economic activity. But once savings increased and debt declined, consumer buying would strengthen. It would replace the Obama stimulus program. Hiring would improve; the recovery would become self-sustaining. We're still waiting. Just last week, economic growth for the second quarter was revised down to a meager 1.6 percent annual rate. Why is the recovery faltering?...

  • Seeking An Honest Social Security Fix   (29.08.2010 23:19)

    "It's easy to criticize Social Security but how would you fix it?" ask defenders of the most popular middle class entitlement ever invented by a German dictator. Here's how. Rest easy, this is not another fruitless rant about privatization. Congress will never get its sticky fingers out of the Social Security cash flow, so there's little chance that money forcibly taken from employees' paychecks will end up in individually owned retirement accounts. Privatization will occur only for people smart enough to realize that FICA deductions are just another tax that...

  • The CBO Promotes a Stimulus Fantasy   (29.08.2010 23:19)

    On August 27, 2010, the BEA reduced its estimate for 2Q2010 GDP growth from 2.4% to 1.6%. This is far lower than the 3.7% growth seen in 1Q2010, much less the 5.0% growth reported for 4Q2009. Total employment declined by 495,000 during the three months ending in July. Opinion polls show that more Americans believe in UFOs than believe that "stimulus" helped the economy. Yet, despite the mounting evidence, the Administration, most Democrats in Congress, and many economists are clinging to "stimulus" the way Obama once accused some Americans of clinging to guns and...

  • Will a Market Rally Follow Rep. Boehner's Message?   (27.08.2010 23:41)

    It's a bit too early for House Republican leader John Boehner to measure the drapes and pick out new wallpaper. But the Intrade pay-to-play prediction markets are now showing a 76 percent chance of a GOP House takeover in November, along with a 60 percent probability that Republicans will capture at least seven new Senate seats. So Boehner's lengthy broadside attack on Obamanomics at the City Club of Cleveland this week takes on special meaning. Headlines following the speech were all about Boehner's call for the resignation of Obama policy generals Larry Summers and Timothy...

  • The Dangers of Big Government Debt   (27.08.2010 10:41)

    Finance: Warnings about America's impending financial car wreck are being sounded, loud and clear. The only question is whether those driving the car will slam on the brakes before it's too late. No doubt alarmed at the headlong plunge into fiscal irresponsibility by both the White House and the Democrat-dominated Congress, Wall Street is starting to fret that the recklessness could touch off another financial crisis. On Thursday, Standard & Poor's said action is needed soon if the U.S. is to keep the much-coveted AAA bond rating that lets the government borrow in...

  • Ask Unemployed How the Stimulus is Working   (26.08.2010 15:09)

    WASHINGTON - How well is the stimulus working? This week saw disappointing data in durable goods orders and housing, prompting some economists to predict a double dip recession. Yet on Tuesday the nonpartisan Congressional Budget Office issued a report showing that the American Recovery and Reinvestment Act of 2009 increased the number of people employed by between 1.4 and 3.3 million people in the second quarter of 2010 and lowered unemployment by 0.7 to 1.8 percentage points. CBO concludes that without the Recovery Act unemployment, which stood at 9.5% in July, might exceed 10% and possibly...

  • The Hidden Truth About the Bush Tax Increases   (26.08.2010 01:25)

    The debate rages over whether our country can afford to extend the Bush tax cuts for the rich. Progressives argue that the ballooning Federal debt is a legacy of these tax cuts. There is one unreported flaw in this argument. As data from the IRS show, George Bush did not cut income taxes. He increased them. In fact, Bush increased income taxes not only for the rich but for at least half of all tax filers. Only the poor paid less income tax under George Bush than under Bill Clinton. WHAT? Go to the IRS website and add up the numbers for yourself. During the eight...

  • Munis: Another Bailout Waiting to Happen?   (25.08.2010 15:28)

    One sign of a potential bubble is that market makers come to believe that they are insulated from risk. The housing market, for instance, inflated as banks made increasingly riskier loans which Fannie Mae, Freddie Mac and private investors snapped up in mortgage-backed securities, which took the loans off lender balance sheets. Another sign of a bubble is that the market froth inevitably produces a significant upswing in fraud as new players race to get in on the action at any cost. As investors who were short the mortgage market will tell you, the rampant cheating which came to characterize...

  • Geithner and Summers Must Go   (25.08.2010 10:45)

    Leadership: It's not unusual, especially in a lousy economy, for an opposition leader to call for the resignation of an administration's economic team. Still, President Obama would be wise to follow John Boehner's advice. Let's face it: Treasury Secretary Tim Geithner and National Economic Council Director Lawrence Summers have not performed competently in their jobs. They have come up with one Rube Goldberg solution after another to solve our problems but have instead left us with the prospect of a double-dip recession, trillion-dollar deficits as far as the eye can see...

  • Obama's Housing Policies Are Killing Growth   (24.08.2010 23:51)

    Excluding the current recession, the ten since WWII have lasted on average 11 months - the longest lasting 16 months. At 32 months and counting, this one appears radically different. That has prompted pundits to ask - "what's different this time?" Many have answered: President Obama's economic policies. But pundits are missing one crucial piece of the puzzle - Obama's housing policies. These policies have stunted the spending of tens of millions of consumers who continue to pay high interest rates on unsecured mortgage balances which, absent those policies, would have...

  • New Jersey's Pension Misdeeds Are Real, But Not Unusual   (24.08.2010 10:10)

    Last week, the SEC charged New Jersey with defrauding bond investors by failing to disclose the unsound financing of its public employee pension plans. The case was settled without a fine or actions against individuals -- New Jersey simply promised not to do it again. New Jersey egregiously misrepresented its financial state to investors. But some of the things it did to make its pensions look better-funded than they really were (and justify sweeter benefits) are not unusual -- indeed, the rules on public pension accounting are so loose that states are often tempted to cook the books...

  • The Housing 'Solution' Is No Solution At All   (24.08.2010 00:37)

    "I recommend no policy and propose no plan" - Joseph Schumpeter In his 2008 book, The Ascent of Money, financial historian Niall Ferguson offered up to readers the essential observation that property is "the English-speaking world's favourite game." He went on to point out that "No other facet of financial life has such a hold on the popular imagination." Despite the fact that the world - and in particular the English-speaking world - is obsessed with housing and home ownership, there still exist economists and money managers who feel that our government...

  • The U.S. Housing Fetish Hurts the American Dream   (23.08.2010 11:32)

    The question of what to do about Fannie Mae and Freddie Mac -- the two government-created enterprises that have backed massive loans to the housing market -- involves much more than finance or real estate. It marks the end of an era. The relentless promotion of homeownership as the embodiment of the American dream has outlived its usefulness. Historically, the pursuit of homeownership dates to the Great Depression of the 1930s, notes historian A. Scott Henderson of Furman University. In some ways, it's a great success story. In 1940, 44 percent of households owned a home; by 1985, the...

  • Barney Frank Comes Home to the Facts   (21.08.2010 04:17)

    Can you teach an old dog new tricks? In politics, the answer is usually no. Most elected officials cling to their ideological biases, despite the real-world facts that disprove their theories time and again. Most have no common sense, and most never acknowledge that they were wrong. But one huge exception to this rule is Democrat Barney Frank, chairman of the House Financial Services Committee. For years, Frank was a staunch supporter of Fannie Mae and Freddie Mac, the giant government housing agencies that played such an enormous role in the financial meltdown that thrust the economy into...

  • Dr. Keynes Killed the Patient   (20.08.2010 14:20)

    A morbidly obese gentleman labored into Dr. Hayek's office suffering from severe chest pain. The patient also complained that he was unable to consume his usual 10,000 calorie-per-day diet; in fact, he was feeling so sick that he could barely scarf down 9,000 calories. He noted that his love for food remained as strong as ever, but his body just wasn't keeping up with his demands. After having a thorough look at the patient, the good doctor could not find anything wrong outside of the patient's extreme portliness. After a moment of reflection, he delivered to his...

  • U.S. Should Take a Page Out of Canada's Housing Playbook   (20.08.2010 13:51)

    Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan didn't invite me to the "Future of Housing Finance" conference they co-hosted in Washington earlier this week, but that didn't stop me from trying to come up with a fix for our broken housing finance system. As usual, I tried to reduce the problem to a riddle: "There are two nearly identical adjacent houses-one to the north and one to the south. They are each wood-framed 3 bedroom 2 and ½ bath homes built in 1995 on half acre plots. The northern house has always been and now is financed by a...

  • Barney Frank: Fannie & Freddie Must Go   (19.08.2010 10:30)

    Housing: After years of dissembling and denial, Rep. Barney Frank has finally come out. He now says bankrupt government mortgage giants Fannie Mae and Freddie Mac "should be abolished." Better late than never. 'There were people in this society who for economic and, frankly, social reasons can't and shouldn't be homeowners," Frank said in an interview with the Fox Business Network and sounding a lot more like an elephant than a donkey. "I think we should, particularly, stop this assumption that you put everybody into homeownership." After years of...

  • The Benefits of Immigration   (19.08.2010 09:43)

    WASHINGTON -- The United States and Canada are the only two industrialized countries that confer automatic citizenship on babies born within the countries' borders, even if their parents are not citizens. In the United States, this is a constitutional right. The Fourteenth Amendment states that "all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States ..." Yet some Republicans want to deny citizenship to children born here to illegal immigrants, by changing or reinterpreting the Fourteenth Amendment. Is...

  • The U.S. Isn't Greece, and That's a Problem   (17.08.2010 23:34)

    The dollar's domination of the world's monetary system has tremendous consequences for the U.S. economy and fiscal policy. Yet leading officials and commentators in Washington repeatedly overlook this effect when grappling with economic news. "Deficit fears don't appear to bother the bond market," was the headline on the front page of the Washington Post in June. The article implied that our creditors are naive for accepting low returns on Treasury bonds because America is running the risk of being hit with a debt crisis similar to what happened in Greece, whose...

  • When Government Gives Defaulters a Pass   (17.08.2010 23:22)

    The problem was predictable. The government rolled out a massive mortgage rescue program, and some homeowners who could afford to pay their mortgages based on the terms that government was offering decided instead to walk away from the loans, sometimes after stringing the government along and living rent free for a time. Frustrated, government overseers of the bailout program controversially decided to start suing some of those who default to stop the problem from getting worse. This is an apt description of Washington's current Home Affordable Modification Program, or HAMP. With Fannie...

  • Lessons From the Summer's Economic Swoon   (17.08.2010 03:07)

    The economy is suffering from something like a summer swoon. In the words of business columnist Jimmy Pethokoukis, the recovery summer has gone bust. We all know this from the sloppy statistics coming in for jobs, retail sales, and most recently manufacturing. But market-based indicators are telling the same story. Let's start with the Treasury bond market. Yields have fallen to 2.6 percent today from 4.1 percent last April. Decomposing this Treasury rally shows that real yields have dropped 79 basis points, which is a signal of lower economic expectations. Meanwhile, inflation...

  • Happier Public Union News from New Jersey   (17.08.2010 03:00)

    Here's a change of pace from the usual doom-and-gloom news on municipal-worker relations: a number of towns in New Jersey have been reaching agreements with their local police unions that cut costs while avoiding layoffs. Last week, the Newark Star-Ledger reported on at least six towns where unions agreed to give-backs in exchange for a no-layoff promise. This is a good trend, but state lawmakers -- and those elsewhere in the country -- can do more to expand it. Layoffs are usually the worst way for governments to save money on personnel costs. They disrupt the provision of government...

  • Getting a Loan in the Checkout Line   (13.08.2010 20:50)

    NEW YORK (TheStreet) -- As big banks have stepped away from consumers with less-than-perfect credit, the companies that sell those consumers goods appear ready to step right in. From Wells Fargo (WFC) to American International Group (AIG), the financial industry has taken a giant leap away from the so-called "consumer finance" business -- a term that often refers to a lender's least profitable customers. The trend began more than two years ago when subprime problems first became clear, but has increased recently for two reasons. Some institutions are in the midst of...

  • A Small Price For Jobs   (13.08.2010 11:23)

    Rx For Recovery: A new study from the Democratic Congress claims that keeping the Bush tax cuts is too expensive. What's too costly, though, is the economic price of adding to the tax burden of job creators. Congress' revenue estimate shop boasts the lofty title of Joint Committee on Taxation, but a better name would be the Static Statisticians Association. The JCT on Wednesday released an analysis projecting that Republicans' wishes to extend all of the expiring Bush tax cuts would add $36 billion more to the federal budget deficit next year than President Obama's plan to...

  • Congress Decides to Help Its Own   (12.08.2010 17:40)

    WASHINGTON-Although private sector employment has declined by 7.8 million since December 2007, on Tuesday President Obama signed into law the Education Jobs and Medicaid Assistance Act, a bill that would spend $10 billion on state and local government workers and $16 billion on state Medicaid payments. Not a penny for the private sector. The $26 billion will be funded primarily by higher taxes beginning in 2011 on multinational corporations ($10 billion over the next decade) and cuts to the Food Stamps program in 2014 ($12 billion). No one seriously thinks that the Food Stamps cuts will...

  • Our Exhausted Monetary Policy Arsenal   (11.08.2010 11:10)

    Monetary Policy: After meeting Tuesday, the Federal Reserve signaled that it believes the economy isn't performing as well as it should. But there's not a whole lot left that the Fed can do. A government can "stimulate" a dead economy in only two ways. One is to print money and risk inflation - monetary policy. The other is to cut spending and lower taxes - fiscal policy. Unfortunately, as the results of Tuesday's Fed policy meeting show, we've pretty much exhausted our monetary policy arsenal. Starting in December 2008, the central bank slashed interest rates to...

  • The Job-Training Charade   (10.08.2010 21:17)

    Even as the ranks of the unemployed and of those no longer looking for a job grow, the media are suddenly discovering more and more businesses which say they want to hire workers but can't find enough qualified people. The Wall Street Journal earlier this week featured the stories of manufacturing companies having a tough time getting applicants with the right expertise to fill skilled jobs. A few weeks ago a technology headhunter from Silicon Valley created a stir when he said he couldn't fill some job searches despite the still growing ranks of the unemployed. Economists,...

  • The Conspiracy Against Economic Growth   (10.08.2010 21:00)

    On July 11, Erskine Bowles, co-chairman of President Obama's Debt and Deficit Commission, made the following statement in a speech to the National Governors' Association annual meeting in Boston:"We can't grow our way out of this. We could have decades of double-digit growth and not grow our way out of this enormous debt problem."Mr. Bowles' assertion was widely reported. If you Google it, you get 2430 hits. The mainstream media treated it as a statement of the obvious, something that no reasonable person could disagree with. No one in the elite media said,...

  • Text of FOMC statement   (10.08.2010 20:38)

    Following is the full text of the statement from the Federal Reserve's Federal Open Market Committee issued on Tuesday following a one-day meeting on monetary policy: "Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures...

  • Tax Reform Can Alleviate State Budget Crises   (10.08.2010 00:39)

    The July jobs report, which showed growth in private payrolls more than offset by shrinking public payrolls, has set off new concerns that fiscal tightening will hinder the economic recovery. Governments, still facing anemic revenues despite the growing economy, are running out of stopgap measures like stimulus funds and are laying off employees. How can this be avoided? I have written in the past about one factor that leads to government layoffs -- unwise contracts and overly stringent labor rules that take other cost-saving options off the table. Governments that are empowered to freeze...

  • For the Economy's Sake, No Quantitative Easing   (10.08.2010 00:12)

    With the Fed supposedly in crisis mode ahead of today's meeting, much ink has been spilled in advance about what a Fed lacking any economic resources can do to "jumpstart" the economy. Many, including money manager Jonathon Trugman, have called for another round of "quantitative easing" from our central bank. The Fed may well grant Trugman's wish, but like all its other naïve efforts to "fix" the economy, this won't work. Instead, it will make things worse. Trugman's view is that if the Fed enters the market to buy Treasury and...

  • How Obama Should Fix the Economy   (09.08.2010 18:59)

    To accomplish robust growth and lower unemployment to pre-recession levels, President Obama must temper his impulse to tax and regulate, and stop appeasing China and Wall Street.The Bush years were better than he admits, and a lot better than his policies promise. The 24 months prior to the financial crisis, unemployment was less than 5%. Now, Treasury Secretary Geithner and liberal intellectuals advising the president say 10% unemployment is the new normal, tutelage to China is inevitable, and Wall Street financiers deserve obscene bonuses for engineering it all. The pre-crisis prosperity...

  • Taxes, Fertility and Economic Growth   (09.08.2010 10:36)

    Among the government's most interesting reports is one -- published by the Agriculture Department -- that estimates what parents spend on their children. The latest version finds, not surprisingly, that the costs are steep. For a middle-class husband-wife family (average pretax income in 2009: $76,250), spending per child is about $12,000 a year. Assuming modest annual inflation (2.8 percent), the report estimates that the family's spending on a child born in 2009 would total $286,050 by age 17. A two-child family would cost about $600,000. All these estimates may be understated...

  • Make the '03 Tax Cuts Permanent, But Curb the Enthusiasm   (09.08.2010 10:12)

    The stock markets have shown some strength in recent weeks as word has come out that some Democrats in the Senate aren't eager to see the 2003 tax cuts (including those enjoyed by top earners) expire. This shift in Washington signals increased rationality within the political party possessing the power to make the cuts permanent, plus markets are perhaps also cheered by this development signaling an end to the Obama legislative plan. Here's hoping Congress does in fact make the '03 reductions law, but if so, investors and citizens more broadly would be wise to curb their...

  • The Economic Story Is Going the Wrong Way   (08.08.2010 20:16)

    With the disappointingly soft jobs report for July, and a faltering recovery overall, is Team Obama getting ready for some sort of new, liberal-left, Keynesian, big-bang stimulus package? Will they be desperate to "do something"? Already there are rumors of an August surprise (to use the phrase of business columnist Jimmy Pethokoukis) where Fannie Mae and Freddie Mac forgive underwater mortgages held by millions of Americans. And with state and local government jobs having fallen 169,000 year-to-date, perhaps the Democratic Congress and the White House will seek an even bigger...

  • Not In 25 Years, Social Security Is Bankrupt Now   (08.08.2010 20:05)

    This just in from the trustees that issue the annual report on the health of those two pillars of the modern entitlement state: Medicare and Social Security. For the first time in its history the Social Security program will pay out more money than it takes in. This watershed event will occur this year, to the tune of $41 Billion dollars. Under any rational accounting standards this makes the Social Security program bankrupt. And that's right now, not in 25 years when the so-called Trust Fund becomes insolvent. You see, most pension programs hold income producing assets in their...

  • Washington Wages War On Investment   (06.08.2010 01:51)

    Will higher tax penalties on investment really spur jobs and faster economic growth? Most commentators would say no. It's really a matter of economic common sense. But Tim Geithner says, Yes! Speaking to a group in Washington this week, the Treasury secretary said that extending tax cuts for the wealthiest Americans would imperil the fragile economic recovery. He argued that government needs the revenues from those top-end tax hikes. So failure to raise taxes would harm growth. And then he went on to say that the trouble with the wealthy is that they save more of their tax breaks than do...