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Steven Rattner: The Housing Market Is on Fire. It Doesn’t Need More Fuel.
Posted: July 29, 2021 at 07:00 PM (Thursday)

On Wednesday the Federal Reserve tiptoed ever so slightly toward reducing its efforts to pump liquidity into the financial system. It did so through brief references that might best be characterized as beginning to talk about talking about tapering its vast bond purchases that stimulate the economy. Yes, the coronavirus has reared its ugly ...


Glenn Harlan Reynolds: No, Karen, we’re not masking again
Posted: July 29, 2021 at 06:25 PM (Thursday)

A winning GOP message for 2022 & beyond. The Centers for Disease Control and Prevention's latest confused pronouncement about masks is another blow to the embattled agency, whose track record hasn't been exactly brilliant. For months, the CDC has married a god-awful communications strategy with a determination to cater to the most ...


William Haseltine: How to End the Pandemic
Posted: July 29, 2021 at 10:25 AM (Thursday)

BOSTON – Even with effective vaccines, the coronavirus and its new variants will continue to subject us to successive epidemic waves. Returning to normal life ultimately will require a multi-layered strategy featuring vaccines, prophylactics, public-health measures, and deeper global cooperation. The United States has now entered its fifth wave ...


Greg Ip: The West Embraces State Subsidies, a Policy Throwback, to Counter China
Posted: July 29, 2021 at 09:41 AM (Thursday)

“Industrial policy,” an approach long criticized as inefficient, is being adopted by the U.S. to fund sectors such as semiconductors. The U.S. and its allies have long pressed China to stop helping favored industries with subsidies, government preferences and other interventions. Now they are now beginning to copy it. Last month, the U.S. ...


Alexander Salter: Is Inflation Really a Problem?
Posted: July 29, 2021 at 09:01 AM (Thursday)

Inflation is the current hot topic in macroeconomics, to the extent anything in macroeconomics can be "hot." Financial, economic, and political commentators are in a tizzy over price increases. Even Fed Chairman Jerome Powell is starting to sound concerned, if his recent testimony before the Senate Banking Committee is any indication. We take ...


Bill Dudley: The U.S. Treasury Market Still Needs Fixing
Posted: July 29, 2021 at 07:58 AM (Thursday)

The Fed's new repo facility is a good first step, but not enough.The market for U.S. Treasury securities is a lynchpin of global finance, providing funds for the government, a safe place to park money and a benchmark for interest rates everywhere. Yet on too many recent occasions, this crucial market has malfunctioned, unnerving investors ...


Tom Cotton: The BLM Effect
Posted: July 29, 2021 at 06:30 AM (Thursday)

How a poisonous ideology has made cities more dangerous. Last year, our nation experienced the largest single-year increase in murder in American history and endured some of the worst riots in a generation. It's no coincidence that this appalling death and destruction surged at the same time as the virulently anti-law-enforcement "Black ...


Peter Morici: America’s baby drought poses a risk to our prosperity and security
Posted: July 29, 2021 at 06:00 AM (Thursday)

Without enough babies a civilization cannot survive. That’s an issue feminism has yet to address. The COVID pandemic has hit women in the workplace hard. They serve in many public-facing positions that were at least temporarily lost, and school closures exacerbated already difficult child-care challenges. Equally disquieting, the ...


Arthur Brooks: What Immigrants Know About Happiness
Posted: July 29, 2021 at 06:00 AM (Thursday)

The act of migration involves taking risks in pursuit of a meaningful reward, and having faith in the future. Everyone should try to live more like that. The most vitriolic immigration debates tend to be unhappy affairs all around. One side favors looser restrictions on immigrants, typically because of the misery they endure in their home ...


Bill Dudley: Biden Should Cut a Deal to Keep Powell at the Fed
Posted: July 29, 2021 at 05:00 AM (Thursday)

Appointing Lael Brainard to supervise banks could shore up support among progressive Democrats. Federal Reserve Chair Jay Powell faces a personal kind of employment challenge: Two important Democratic senators, Sherrod Brown and Elizabeth Warren, are saying that he has been too soft on bank regulation, putting pressure on the Biden ...


Betsy McCaughey: Why are health agencies hiding deadly infection raging in hospitals?
Posted: July 28, 2021 at 06:59 PM (Wednesday)

The pandemic has made it amply clear that public-health officials have a problem communicating the truth – when they don't outright lie. They seem to think people don't deserve to know. At the dawn of the COVID crisis, they told us we didn't need masks, instead of admitting there was a mask shortage. But their failings don't stop with COVID. ...


Review & Outlook: The Federal Reserve’s Big Inflation Miss
Posted: July 28, 2021 at 06:55 PM (Wednesday)

If you bet on the central bank’s price forecasts, you lost. The Federal Reserve employs hundreds of economists whose job is assessing the American economy. So it is remarkable that the Fed is so wrong so often in its economic forecasts. The latest big miss has been its failure to anticipate this year’s surge in ...


Jeanna Smialek: Federal Reserve Keeps Rates Unchanged but Cites 'Progress’ Toward Its Goals
Posted: July 28, 2021 at 03:10 PM (Wednesday)

The central bank held policy steady. But it made the clearest hint yet that it will soon begin to shift from emergency mode. The Federal Reserve kept interest rates unchanged on Wednesday and said it would continue buying large quantities of government debt, but suggested that it could slow those purchases before long if the economy continues ...


Jed Graham: Federal Reserve Cites Progress In Step Toward Tapering
Posted: July 28, 2021 at 02:16 PM (Wednesday)

The Federal Reserve maintained its ultra-easy policy, as expected, on Wednesday, but signaled it's getting closer to tapering asset purchases. After the 2 p.m. policy statement, the stock market, though mixed, didn't seem at all phased by the Fed's modest step. The Fed's new policy statement noted that policymakers had set a threshold ...


Willem Buiter: Is the US Economy Running Out of Slack?
Posted: July 28, 2021 at 11:50 AM (Wednesday)

NEW YORK – Given the unprecedented nature of the COVID-19 pandemic and its effects on labor markets, there is a spirited debate over whether the US economy is close to returning to its full potential. If it is, the US Federal Reserve is at risk of falling behind the curve. How much slack is there in the US economy? In economics, the "gap ...


Kevin Erdmann: How the Fed Should Be Helping Housing
Posted: July 28, 2021 at 06:30 AM (Wednesday)

And how our history with inflation can serve as a useful guide. As the nation navigates out of the COVID recession, the high inflation of the 1970s can serve as a useful guide for our monetary policy. Not because today's high inflation puts us in the same situation, but because the supply shocks in the oil markets of four decades ago have ...


John Tamny: $9 Reading Glasses, $16 Sunscreen, and the Genius of Economic Growth
Posted: July 28, 2021 at 12:30 AM (Wednesday)

As what you're presently reading is being typed, your typist is wearing a $9.99 pair of reading glasses purchased last week at Safeway. These are +1.25 glasses, after the +1.00 pairs stopped working very well. Roughly five pairs of glasses are about to meet their demise thanks to increasingly farsighted eyes that require more powerful lenses. ...


Marcus Ashworth: Beijing's Crackdown Ruins July for Investors Everywhere
Posted: July 27, 2021 at 07:01 PM (Tuesday)

China's regulators are trying to calm markets but there will be ramifications around the world. It's going to be a nervous summer. Forget your plans for a quiet, relaxing summer. The stock markets of the world's second largest economy are tumbling; and when Chinese equities turn bearish, it can be brutal. At one point during Hong Kong trading ...


Review & Outlook: First Use the Spare Covid $1 Trillion
Posted: July 27, 2021 at 06:42 PM (Tuesday)

A GAO report shows how much relief cash remains unspent. Congress has spent so much money in the past year that the recipients are having a hard time using it. That’s the news from a Government Accountability Office report last week that more than $1 trillion of federal pandemic relief has yet to ...


Allison Schrager: How Behavioral Economics Views Mask Mandates
Posted: July 27, 2021 at 03:38 PM (Tuesday)

The risk calculation has changed with Covid; reverting to early-pandemic responses won’t help the U.S. get vaccinated. Just when we thought we were almost done, Covid-19 cases are surging. The world may have one of the most effective vaccines ever developed, but not everyone is taking it and so we remain susceptible to the delta variant. ...


Norbert Michel: Price Controls Do Not Work – Even In Credit Markets
Posted: July 27, 2021 at 02:55 PM (Tuesday)

Many people believe that conservative members of Congress reliably protect private markets from government intervention. History has proven otherwise, especially when it comes to credit markets. In 2017, for instance, a Republican-controlled Congress had the chance to repeal the Durbin Amendment, but chose not to do so. Special-interest ...


Michael Milken: Covid Is the 21st Century’s Sputnik
Posted: July 27, 2021 at 12:58 PM (Tuesday)

The space race spawned Darpa. The pandemic proved we need an agency for health innovation. America’s leadership of business, science and culture seemed unassailable in 1957. With less than 6% of the world’s population, the U.S. produced close to 40% of global economic output, according to a United Nations survey. Scientists working in the U.S. ...


Davis Soderberg: Woke CEOs are undermining the democratic process
Posted: July 27, 2021 at 12:53 PM (Tuesday)

A focus on so-called 'ethical investing' allows C-suite business executives to play politics. One petty tactic seen too often in modern politics is a finger-pointing game to decide which party is "pro-democracy" and which is the "threat to democracy." Former President Trump has often been the golden target in the left's "threat to democracy" ...


Adam Millsap: Worried About High Prices? Blame Public Policies That Stifle Innovation
Posted: July 27, 2021 at 10:22 AM (Tuesday)

Prices are going up. The year-over-year consumer price index (CPI) hit 5.4% in June, which is more than forecasters expected. Even when food and energy are removed, prices are up by 4.5% over the last 12 months, meaning everyone's dollars buy less stuff. Increases in demand and higher costs are two common reasons prices rise. Public policy ...


Stephen Roach: China's Animal Spirits Deficit
Posted: July 27, 2021 at 08:29 AM (Tuesday)

NEW HAVEN – The Chinese government has taken dead aim at its dynamic technology sector, the engine of consumption-led economic rebalancing. The authorities' recent actions are symptomatic of a deeper problem: the state's battle to control the energy of animal spirits could sap the confidence of households and businesses. When it comes to ...


Gary Shilling: Workers Are Gaining at Expense of Shareholders
Posted: July 27, 2021 at 07:00 AM (Tuesday)

The supply of labor will be constrained for years to come, eating into profits unless companies can find a way to boost productivity. We just learned from the Centers for Disease Control and Prevention that life expectancy contracted by 1.5 years in the U.S. in 2020, the biggest decline since at least World War II. Covid-19 has killed ...


Paul Jossey: Bitcoin Gets ESG’d
Posted: July 27, 2021 at 06:30 AM (Tuesday)

The promise of a decentralized financial system is worth a moderate increase in energy consumption. The Environmental, Social, Governance (ESG) movement is coming for Bitcoin and a host of other cryptocurrencies. This latest iteration of the corporate-responsibility movement has successfully captured public companies and forced a shift ...


Mohamed El-Erian: Fed Will Punt on the Economy, Inflation and Asset Prices
Posted: July 27, 2021 at 05:30 AM (Tuesday)

Chair Jerome Powell must deal with growing dissension within his ranks and intensifying expectations for cutting back on bond purchases. With few expecting the Federal Reserve to begin tapering when it announces the outcome of its latest policy deliberations on Wednesday, the focus of economists and market participants will be not only on hints ...


Review & Outlook: A New National Climate Army
Posted: July 26, 2021 at 06:37 PM (Monday)

Democrats want to pay young Americans to tell you how to behave. As the U.S. recovers from a pandemic, with workers in services and manufacturing in short supply across the economy, here’s what no one sensible thinks America urgently needs: a huge new federal Civilian ...


Steven Malanga: Better Red Than Taxed
Posted: July 26, 2021 at 02:24 PM (Monday)

As government revenues rebound, GOP-led states are cutting taxes while Democratic states ponder increases. Last year, states facing economic shutdowns projected staggering budget deficits and appealed to Washington for financial help. They got it in the form of hundreds of billions of dollars from the American Rescue Plan. But tax revenues ...


Jeanna Smialek: Inflation Has Arrived, but Washington Isn’t Racing to Limit Price Pops
Posted: July 26, 2021 at 02:20 PM (Monday)

Policymakers, now more attuned to the costs of choking off growth early, are sticking by a patient approach as prices rise. Inflation has long been the boogeyman haunting the nightmares of economic policymakers from both parties – and controlling it has been a top economic priority. But as the economy reopens from pandemic shutdowns and ...


Chris Jacobs: A Socialist Chairs the Budget Committee
Posted: July 26, 2021 at 12:49 PM (Monday)

Sanders’s ‘pragmatic’ proposal would spend $1 trillion more on healthcare without any cost cuts. President Obama sold the Affordable Care Act by claiming it would reduce the average family’s healthcare costs by $2,500 a year. Instead, premiums have risen unabated, and healthcare spending has grown as a portion of the economy. But a dozen ...


Lee Ohanian: As inflation and government debt surge, Washington is ignoring our most critical economic crisis
Posted: July 26, 2021 at 12:30 PM (Monday)

Economic crises of all sorts loom on the horizon, ranging from high and rising federal debt, to high and rising inflation, to unsustainably high and rising housing costs. But the most important crisis we currently face is one you never hear about: historically low labor productivity growth. Raising productivity growth is crucial. If we don't ...


Paul Gruenwald: Game on for Green Growth
Posted: July 26, 2021 at 11:57 AM (Monday)

NEW YORK – Countries in a sustainable world will still have opportunities to grow, trade, innovate, and move up the value chain to secure a brighter future. But they will need to realize these opportunities in an economy that is at one with nature, not external to it. Research into economic growth has a long and distinguished history, but ...


Tim Worstall: Progressive poverty programs aren't finding takers
Posted: July 26, 2021 at 10:54 AM (Monday)

Amid the pandemic, last December, Congress started offering money to help cover unpaid rent. So far, the government has managed to spend 6.5% of the allocated resources on that generous rent-coverage offer. Only 1 in 10 families eligible for the new child tax credit is currently signed up. A similar failure to pick up the money afflicts ...


Joel Zinberg: A Defeat for Dr. Leviathan
Posted: July 26, 2021 at 06:30 AM (Monday)

A recent ruling from the D.C. Circuit reaffirmed that the FDA may not regulate the practice of medicine. A recent ruling by the D.C. Circuit Court of Appeals in a seemingly obscure case has important implications for limits on the Food and Drug Administration's regulatory reach and for the freedom of physician–patient relationships. The case ...


Allison Schrager: The Dearth-of-Safe-Assets Era Is Over
Posted: July 26, 2021 at 06:30 AM (Monday)

Why a glut of Treasuries and other "risk-free" investments could be an even bigger problem for the economy. The safe-asset shortage is over. Should we worry? A safe asset is any asset that you can sell at any time and be sure to get your money back. That often means short-term government treasuries or bank deposits. Hence, when demand ...


Scott Minerd: A better way to pay for infrastructure investments
Posted: July 26, 2021 at 12:05 AM (Monday)

There is plenty to like about the proposed infrastructure plan of Joe Biden’s administration: who does not want better roads, clean water and faster broadband to binge on Netflix? But while the ends are laudable, it is the means to get there that are more politically contentious. As in, how to pay for the $1tn wish list?There are only so ...


Nicole Gelinas: Biden's inflation-boosting spending will undo policy goals
Posted: July 25, 2021 at 07:45 PM (Sunday)

"Inflation would eventually undo the good things the government is trying to do." Will President Biden's $4.2 trillion, 10-year spending package cause inflation? The number to look at isn't the consumer price index, which is up 5.4 percent over the year, twice as high as the average 2.1 percent over two decades. There's an even more ...


Judy Shelton: No, Inflation Isn’t Good for Workers
Posted: July 25, 2021 at 04:32 PM (Sunday)

The public understands that nominal wage gains are an illusion when the cost of living keeps rising. An odd notion seems to have taken hold in Washington: that the Federal Reserve’s easy monetary policy is good for workers. Near-zero interest rates are being hailed as the key to higher wages—even as consumer prices are increasing at the ...


Robert Mulligan: Monetary Policy Since the Great Recession
Posted: July 25, 2021 at 01:02 PM (Sunday)

After the 2007-2009 financial crisis, the Great Recession it precipitated, the exceptionally sluggish recovery, and now the pandemic recession, the U.S. has essentially entered a new macroeconomic environment. For most of the 2010s there was a general consensus that inflation was not too much of a problem. This very complacency has now set ...


Niall Ferguson: The World’s Cascade of Disasters Is Not a Coincidence
Posted: July 25, 2021 at 03:00 AM (Sunday)

A pandemic, fires, floods, popular unrest — it’s an intertwined pattern seen throughout history and even in the Bible. "It never rains, but what it pours," sang Judy Garland to Mickey Rooney in 1938, memorably describing what happens "if Lady Luck should happen to desert you." "The same thing happens in life," the song goes on. "But on a very ...


Komal Sri-Kumar: Housing and "Transitory" Inflation
Posted: July 25, 2021 at 02:24 AM (Sunday)

As the Federal Open Markets Committee meets next week, Chairman Jerome Powell has to decide what to say about the staying power of inflation at his press conference on Wednesday. There is little to suggest that he will deviate significantly from his past statements that the large price increases of recent months are temporary and largely due ...


Julian Lee: $3 a Gallon! Who Can Do Something About Gas Prices?
Posted: July 25, 2021 at 01:00 AM (Sunday)

The U.S.’s emergency oil stockpile is twice as big as it needs to be. Now would be a good time to put some of it on the market. With warnings against overseas travel firmly in place, that summer road trip is looking more attractive. It's also looking more expensive. Perhaps the U.S. government should look at what China is doing to ease rising ...


Larry Kudlow: Woke Budgeting Emerges as More Than an Abject Failure
Posted: July 24, 2021 at 03:56 PM (Saturday)

Here we are on Friday night and let me say — go woke, go broke. According to the Congressional Budget Office, through June, total federal debt in the hands of the public is $21.7 trillion. Total debt itself, which includes intergovernmental transfers (like Social Security trust funds), comes to $28.5 trillion. So, call it 100% of GDP. It’s a ...


Review & Outlook: Taking the 'Bi’ Out of Bipartisan
Posted: July 23, 2021 at 06:30 PM (Friday)

Are Republicans getting any policy victories from the infrastructure deal? Senate negotiators still haven’t released the details of their bipartisan infrastructure deal, though it could come to a vote on the floor as early as next week. What’s striking about the deal so far, however, is that by all appearances this will be the most ...


Paul Krugman: What Inflation Risks and My Intermittent Fasting Have in Common
Posted: July 23, 2021 at 10:41 AM (Friday)

Like many people, I put on some pounds during the pandemic. Not catastrophic – I kept working out, and I think my cardio fitness has held up. But I was doing a lot less walking than normal, and also, in retrospect, engaged in too much comfort eating. So now I'm doing what has worked for me in the past: going hungry, with restricted calories, ...


Kaushik Basu: The Changing Map of Economics
Posted: July 23, 2021 at 10:25 AM (Friday)

NEW YORK – The global economy and capitalism are at a crossroads, owing to the COVID-19 pandemic, climate change, the rise of digital technology, and the changing nature of labor markets. Understanding this new world will require major breakthroughs in economic thinking, and closer scrutiny of some of the discipline's core assumptions. ...


William Luther: Will Cash Soon Be Obsolete?
Posted: July 23, 2021 at 10:05 AM (Friday)

Calls for the US to adopt a central bank digital currency (CBDC) appear to be growing. China launched a digital renminbi in April, leading many to worry that the US is falling behind. Other countries will no doubt follow. Arguments in support of CBDCs often relate to cash, since the former would function as an alternative to the latter. ...


Cale Clingenpeel and Tyler Goodspeed: Setting the Record Straight on Wealth Inequality
Posted: July 23, 2021 at 06:30 AM (Friday)

In recent years, growth-oriented policies have reduced inequality. For years, Democrats have told us that inequality is the most pressing problem facing our nation. National media outlets have regularly echoed this point, often blaming Republican policies as major contributing factors. But you might have noticed that it has been a while ...