James Pethokoukis

A global green war on the wealthy?

July 7, 2009

This report from my Reuters colleagues is a stunner:

WASHINGTON, July 6 (Reuters) – To fairly divide the climate change fight between rich and poor, a new study suggests basing targets for emission cuts on the number of wealthy people, who are also the biggest greenhouse gas emitters, in a country. Since about half the planet’s climate-warming emissions come from less than a billion of its people, it makes sense to follow these rich folks when setting national targets to cut carbon dioxide emissions, the authors wrote on Monday in Proceedings of the National Academy of Sciences. … The study suggests setting a uniform international cap on how much carbon dioxide each person could emit in order to limit global emissions; since rich people emit more, they are the ones likely to reach or exceed this cap, whether they live in a rich country or a poor one. …  Is this a limousine-and-yacht tax on the rich? Not necessarily, [author] Chakravarty said, but he did not rule it out: “We are not by any means proposing that. If some country finds a way of doing that, it’s great.”

Face it, America is spending way too much

July 6, 2009

Sure, raise taxes. But you’ll never be able to raise them enough to deal with America’s huge future liabilities. Some excerpts from a new report by Morgan Stanley economist Richard Berner:

Looks like the Fed is taking its foot off the gas pedal

July 6, 2009

From Gluskin Sheff economist David Rosenberg:

At the same time, it looks as though the Fed is now in the process of snugging monetary policy. We don’t hear from the inflation-ists that the central bank has actually been allowing its bloated balance sheet to lose some weight in recent weeks and that the growth rate in the once-red-hot monetary aggregates is shrinking and the monetary base is also shrinking. Over the last 13-weeks, the monetary base has contracted at a 23% annual rate (!), M2 growth has softened to a 1.4% annual rate and MZM has slowed to a mere 4.6% annual rate.

Unemployment a leading indicator?

July 6, 2009

No, says economist Mike Darda of MKM Partners:

At no time in history — from the deflationary wipeout of the 1930s to the inflationary recessions of the 1970s and early 1980s, to the balance sheet downturn of 1990-1991, to the bursting equity bubble and the 2001 recession — was the labor market or the unemployment rate a leading indicator of either the business cycle or stock market trends.

The politics and economics of a second stimulus plan

July 6, 2009

I would doubt whether the WH thinks a second stimulus works for them politically or economically: