Larry Summers, former treasury secretary, former president of Harvard and the former head of President Obama’s National Economic Council, made waves yesterday with an unequivocal and passionate call for a new round of stimulus to address what he rightly perceives as a weak recovery for American jobs and economic activity in general. In his view, the U.S. economy is hobbled by weak demand for goods and services, compounded of course, by high unemployment.
Read moreWhy Do We Cheer for NBA Stars But Not for Bankers?
There was something dramatic and striking about the Dallas Mavericks’ victory over the Miami Heat in the NBA Finals on Sunday. No, it wasn’t the caliber of play – which was high – nor the sight of the vaunted Miami “Dream Team” falling just short of their pre-ordained championship season. Rather, it was the stark contrast of the multimillionaire players of a multi-billion dollar league arousing not the animosity but the passion of millions of fans who are almost certainly not faring as well.
Read moreThe World’s Dirtiest — and Best — Economic Crystal Ball? Iron Ore. Yes, Iron Ore.
Headlines were replete this week with talk of an imminent slowdown of the global economy. Combined with the pallid recovery of the United States and continued waves of debt crises in Europe, a lull in activity from Brazil to India to China would be trouble indeed.
Read moreHow Can Americans Get China To Do What They Want? For Starters, Shut Up
As global markets go through another week of selling and anxiousness, a new record was set yesterday: the Chinese yuan – that much maligned, politically charged national currency – hit a record high against the U.S. dollar.
Read moreWhat Can You Do To Help Greece? Go There
It now appears that Greece will once again be bailed out of its financial morass. A year ago at this time, the world was roiled by the prospect of Greece defaulting on its considerable debts, and only the reluctant decision of the leading members of the European Union – Germany most prominently among them – led to more than $100 billion in loans extended to the Greek government.
Read moreThe Shame of the Ratings Agencies: How Moody’s Blows It Again
If the economic news wasn’t bad enough after the release of yet another anemic jobs report, the highly influential global ratings agency Moody’s just announced that it was contemplating a downgrade of the U.S.’s credit rating.
Read moreMarkets Plunge Because of Greece, China, and the U.S. (Or so they say.)
Another day, another market plunge. Yesterday was notably sharp, with all major indices declining more than 2% and getting worse as the day wore on. The story du jour – and it is an axiom of market declines that there must be a story that goes with it – was that the sell-off was triggered be a toxic combination of weak U.S. economic data, more concerns about Greece and whether it would default on its debts and bring down the Eurozone
Read moreOn Launching Moneyland in the Luce Tradition
More than two years after the near-meltdown of the global financial system, “the economy” remains the story of our day.Yes, with the United States involved in wars in Afghanistan and Libya, and continued enmeshment in Iraq, traditional foreign affairs matter greatly. And yes, with the presidential elections season starting its slow-burn, politics have a central seat at the tabl
Read moreBudget Debate and the Deficit Friendly Tax Cut
Washington is entering its summer of discontent, with no resolution of the budget and debt issues that will push the federal government to the brink of insolvency in early August. Among the many divisive issues: what to do about taxes in general and corporate taxes in particular.
Read moreStimulating
After months of confusion, we are about to close a painful chapter in the economic crisis of 2008-2009. With the imminent passage of the $800 billion stimulus package combined with the roll-out of the next stages of the government-orchestrated bank bailout and recapitalization, we are about to end the talking phase and enter the doing phase. While no one can say for sure whether these plans will work, it’s certain that they will have an effect.
Read moreThe Unknowable Lightness of Being
Each month, the Federal Reserve releases its latest minutes of its last meeting along with its projections of economic activity (www.federalreserve.gov). The minutes just released indicate that its prior forecasts have been tweaked a bit, with update projections for unemployment over the next two years, GDP growth, and inflation. As new data become available, the hundreds of economists at the Fed revise and recalculate numbers, which means that any forecast rarely lasts more than a few months.
Read moreThink Commodity Prices Are High Now? Just Wait
The just-released monthly inflation report showed that prices for most goods eased a bit. The exception of course is oil, and even though oil prices globally have declined in recent weeks, most Americans are paying ever more for gasoline even as inflation overall remains statistically tame.
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Obama and the GOP's Risky Gamesmanship Over Debt Ceiling Could Spur Another Credit Crisis
It’s official: the United States government is overdrawn on its debt limit of $14.294 trillion as of yesterday. Well, not technically overdrawn, as the U.S. Treasury directed by Secretary Timothy Geithner has taken a variety of measures to forestall any actual federal defaults on its operations—which range from keeping the lights on at the Smithsonian to maintaining combat forces in Afghanistan. These accounting sleights-of-hand will delay any actual defaults to early August. But still, after months of inconclusive wrangling by both parties, a new Rubicon has been crossed.
Read moreDon’t Count on Job Growth. Bring Back the WPA!
The monthly jobs report released last week by the Bureau of Labor Statistics proved to be a pleasant surprise. Nearly 250,000 more people were employed, for a total of more than 750,000 more jobs between February and April. While these numbers are the product of complicated formulas that are never quite accurate and will eventually be revised, they do capture the trend, and the trend now is toward a slow stabilization of the job market.
Read moreChina: The Next Global Empire?
China has made huge investments in African infrastructure, Australian mining operations and natural resources across the globe. It's building a real consumer class, diversifying away from the dollar and expanding its military might. With a hold on resources, its neighbors and potentially the world marketplace, is China destined to be the next global empire?
Read moreDoing Business in China
It's the mother lode of all potential markets: China's sheer size and its sizzling growth rate are powerful attractions for businesses of all types. But it pays to look before you leap. This year the World Bank ranked China only 79th in the world for general ease of doing business. Which strategies really work for gaining a foothold in China?
Read moreIn Bernanke We Trust?
Yesterday, Ben Bernanke departed from the silent, opaque tradition of the Federal Reserve and held a press conference. The event attracted considerable attention, for its novelty as much as for its substance. But those hoping that Bernanke would do his best imitation of Willy Wonka and reveal hidden facets of humor, complexity and charisma were, to say the least, disappointed.
Read moreJob Creation in the U.S. - Zach Karabell
conomist Zachary Karabell will discusses job creation in the U.S. during the CSG 2011 Growth & Prosperity Summit. As president of River Twice Research, where he analyzes economic and political trends, Karabell challenges common assumptions ranging from global economics to environmental sustainability. With a prolific, award-winning writing career, an illustrious background on Wall Street and a doctorate from Harvard, Karabell brings a unique perspective to the discussion of globalization, the domestic and world economy, the greening of business and the shape of things to come.
Read moreAT&T and T-Mobile: A Deal That Will Create a Friendly Cellphone Monopoly
After months when markets have oscillated on the ebbs and flows of political tumult in the Middle East and natural catastrophe and near-nuclear disaster in Japan, the business world was pleasantly rocked by the announcement of a mega-deal: the planned $39 billion acquisition of T-Mobile USA by AT&T. If the deal is approved, AT&T will add nearly 35 million new subscribers and vault past Verizon to become the largest wireless carrier in the United States with about 129 million customers, surpassing Verizon’s 100 million or so.
Read moreStock Plunge, Day Two: How the Dow is Dealing with Japan
For the second day in the row, the US stock market plunged, and then bounced back. Hurt, yes, but shares were not beaten, even as investors had to worry about the double whammy of concerns of nuclear contamination in Japan and a housing report that showed new home construction plunged more than it had in 27 months. On Wednesday, the Dow Jones industrial average dropped nearly 300, before ending the day down 240 points. It wasn’t as big a bounce back on Tuesday, but we still didn’t end the day at the lows, which was a good sign.
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