Over the past month, America’s largest companies reported their earnings for the first quarter of the year. These quarterly reports provide as much insight into our economy as any of our leading indicators. And these results, if read correctly, highlight once again the bifurcated world we live in. Our gross domestic product is growing about 2.5 percent a year for now, but that masks a vast divergence, not between the 1 percent and the 99 but between what works and what does not. What this earnings season demonstrates is that capital and companies are thriving, along with tens of millions of people connected to those worlds, while labor and wages are not. But that is not how it is being interpreted.
The Edgy Optimist
Events unfolded rapidly in Boston this week, from the bombing on Monday to release of photos of the suspects on Thursday to the citywide manhunt for one brother and the killing of the other. While we now know that the two young men are ethnic Chechens who spent time in Kyrgyzstan, we know nothing as yet about why they did what they did.
In a world increasingly framed by economic debates, the phrase “the laws of economics” has become ever more prevalent. As the U.S. Senate prepares to unveil a new immigration bill, much of the discussion centers on the economics of illegal immigration and the incentives for employers to hire undocumented workers. Said a recent Barron’s article: “Immigration policy is a game governed by classic economic rules, especially by Say’s Law, which says supply creates its own demand … Whether the new applicants are seeking stoop-labor jobs in California’s Central Valley or high-tech jobs in Silicon Valley, the laws of economics dictate the outcome: more immigration.”
We think of spring as a time of cherry blossoms and renewed hope, as we slough off the depths of winter and ease into the warmer months. These bright days seem a strange time to encounter the by-now widely circulated warnings of impending doom by Ronald Reagan’s budget director, and current gadfly, David Stockman.
While tiny Cyprus teeters on the brink, dominating much of the news, and elusive peace in the Middle East remains in the headlines, there is another battle going on — the latest in a long war that is shaping our planet far more than the events in Nicosia or the West Bank. Food and water are essential to human existence, yet in the last few decades the ability to increase food supply by technological means has stirred fear and passion. Cyprus’ woes may come and go; the food wars are going nowhere.
Paul Ryan unveiled the House Republican budget this week with an ominous yet familiar warning: “America’s national debt is over $16 trillion.” Having stated the problem, he then offered a solution, one which differed only marginally from what he’s offered the past two years. Namely: restrain government healthcare spending on Medicare and Medicaid, reform the individual tax code, close loopholes, lower corporate taxes, and promote natural gas and energy independence. The goal? A balanced budget by 2023 that will ensure “the well-being of all Americans…and reignite the American dream.”
Is China about to collapse? That question has been front and center in the past weeks as the country completes its leadership transition and after the exposure of its various real estate bubbles during a widely watched 60 Minutes exposé this past weekend.
Everyday, we are treated to a new peril: Today we have sequestration, a word not much in anyone’s lexicon until recently. The mandated cuts to the federal budget, $85 billion by last count, will further stunt anemic economic growth, or so economists and the Congressional Budget Office guesstimate. The prognostications surrounding the sequester have been grim, with White House Chief of Staff Denis McDonough warning of a “devastating list of horribles,” ranging from severe travel snafus to the end of vital education programs.
Why the U.S. would be lucky to become Japan.
By Zachary Karabell
Over the past few years, it’s become ever more common to hear comparisons between the United States and Japan. They are not favorable. They come in the form of dark warnings that the current policies of the United States will lead to a fate similar to Japan’s over the past 20 years: stagnant growth with no end in site.
President Barack Obama made the middle class the focus of his State of the Union address on Tuesday. He was lauded by some as fighting for jobs and opportunity, and even for launching a “war on inequality” equivalent to President Lyndon B. Johnson’s 1960s War on Poverty. He was assailed by others for showing his true colors as a man of big government and wealth redistribution.