Central Banker Heaven

I have finally reached the point where people are quoting me from the old days, but they have no idea they are doing so. They don’t know who I am (or was) so they don’t know it’s me they are quoting. Ten years after retiring from the Federal Reserve, I have reached exalted status of […]

Our International Trade Deficit–Down This Month, Up This Year

A graph of the U.S. international trade deficit in goods and services over the past two years by the Bureau of Economic Analysis shows no discernable change, although the surrounding commentary says that the deficit actually increase by $5 billion from June 2013 to June 2014. The latest month, however, showed a reduction of the […]

The Employment Cost Index–Not Inflationary

The Economic Cost Index for the second quarter got quite a bit of attention last week, probably more than it deserved. It increased 0.7 percent, up from the first quarter increase of below 0.4 percent. it was taken by many commentators on the financial networks to portend higher inflation. Indeed, many of them referred to […]

Happy Birthday Milton Friedman

Today is the 102 anniversary of the birth of America’s greatest economist, Milton Friedman. He was not only the “fastest gun in the West” as my professor and Friedman’s student, Richard Timberlake, put it, referring to his intellectual firepower and debating skills. He was also one of the most influential in changing our lives for […]

My New Paradigm Frog

The highlight of my almost 14 year tenure as President of the Federal Reserve Bank of Dallas and member of the FOMC was the “new paradigm” economy in the second half of the 1990s. During that time, I often used the analogy of boiling a frog to illustrate the positive changes in the economy that […]

Whoopie GDP

Well, real GDP finally hit a 4 percent growth rate in the second quarter; so, naturally, the Dow ended the day down. This is why I don’t claim to be a forecaster, and, when I’m forced into it, I try to update it often. While I could quibble—for instance, inventory accumulation accounted for 1.66 percentage […]

The President’s Minimum Wage Proposal

This morning I heard President Obama bragging on the June jobs report. Moving on to what further could be done to improve the jobs situation, he mentioned his proposal to increase the minimum wage. I’m sorry I have to paraphrase here, but I couldn’t pull over and write down his exact words; so I ask […]

Go Economy Go!

This morning’s employment report showed an old-normal, wide-spread increase in payroll employment of 288,000, with nice upward revisions in April and May totaling 29,000 jobs. This raised the average employment gains over the past three months to 272,000. The unemployment rate in June fell to 6.1 percent from 6.3 percent in April and May. The […]

Exporting Energy

I’m afraid the phrase “too soon old, too late smart” applies to me. To that should be added “too late informed.” I’m always discovering new information about topics I thought I knew thoroughly. Take Jerry Lee Lewis, for example. I’ve been a lifelong fan, and he is still my go-to guy when I seek nostalgia […]

The Foreign Trade Imbalance

People like me, who studied economics in the old days, learned that foreign trade imbalances were financed by passive capital flows, but that market forces would tend to correct significant trade imbalances, either through changes in the exchange rate or equivalent changes in internal income, output, prices, etc. However, sometime between then and now, capital […]