Author Archive

The Fed Should Act on July 29

I agree with the consensus view that September 17 is the most likely date for the FOMC to make its first tweak in the Federal Funds rate in a long, long time. I also agree that this week (June 17 to be precise) is probably not on their agenda because of their promise to be […]

Trade Is Not About Counting Jobs; It’s About Making Jobs Count

I view the House vote today on trade-promotion authority, a necessary prelude to an important Asian trade deal, as a test of economic literacy. If there is anything most economists that don’t work for labor unions tend to agree on, it is freer trade. However, even if they pass the trade authority and ultimately some […]

Monetary Freedom

Okay, I confess. I usually drive under the speed limit to avoid getting stopped for driving over the speed limit. Until recently it never occurred to me that I might get stopped for driving in a manner to avoid getting stopped. Now, I wonder. The law requires banks to report customers who withdraw cash totaling […]

Our Weakening Economy Is Getting Harder To Ignore

We had two decent GDP quarters in mid-2014, and that’s about it. The 4th quarter reverted back to a 2.2 percent growth rate. The first estimate of the 1st quarter 2015 was up only 0.2 percent, but that will almost certainly be revised down into negative territory because of weak March exports. We came into […]

Productivity Is Down: Are U.S. Workers Slacking Off?

U.S. labor productivity fell at a 1.9 percent annual rate in the first quarter, the second quarterly decline in a row and the first back to back drop since 2006. According to the official release, over the past four quarters, productivity has risen at a 0.6 percent rate, just one-fourth the nation’s average since the […]

The FOMC’s Cacophony

When Buddy Holly was little, he insisted on getting on the stage with his uncle’s band and playing along with his fiddle. The unpleasant screeching caused the uncle to wax Buddy’s bow. Buddy could still play, but it didn’t bother anybody. Alan Greenspan used to wax my bow and the bows of the other Reserve […]

More on the Euro-Dollar Exchange Rate

Nineteen countries now use the Euro as their currency. Fifty states use the Dollar as their currency. While that comparison is correct, it is a bit misleading for various reasons. U.S. states are more homogeneous than Euro-zone countries. Our states share a national government, including fiscal policy. We speak a common language, sort of. We’ve […]

Dollar-Euro Parity? Let the Market Figure It Out

In recent years, in response to those who complained about our “weak” dollar and longed for “King” dollar, I have frequently paraphrased Saint Augustine on the topic of chastity. He reportedly prayed for the Lord to make him chaste, but not just yet. Likewise, I said I wanted a stronger dollar, but not just yet. […]

Let ‘Er Rip, Janet; Let’s Get It Over With

“Let ‘er rip, let it fly; Come on baby, say it, do you think I’m going to cry? .   .   . Why the drama? We don’t have to drag out this situation.” Natalie Maines of the Dixie Chicks was anticipating her boyfriend’s breaking up with her, but she could have been referring to the end […]

Current Monetary Policy: A Keynesian Distortion

One amusing thing about watching financial TV these days is that no analyst wants to be identified as Keynesian even as they use the Keynesian framework almost exclusively in their analysis. One example is their treatment of monetary policy exclusively in terms of interest rates. They never acknowledge a direct impact of the money supply […]