James Pethokoukis

What Ben Bernanke is telling Congress about Ron Paul’s Fed audit plan

August 3, 2009

This bit from the WSJ‘s interview with John McCain caught my eye:

“You have no idea the pressure I was under,” he says. “I remember being on the phone with President Bush, Vice President Cheney, the Treasury secretary and [Fed Chairman Ben] Bernanke. They assure me the world financial system is going to collapse if I don’t vote for the bill. So I do the impetuous and rash thing by saying, look, I have got to go back to Washington and see how I can help. And by the way, so did Obama—but it was McCain that was the impetuous one. Obama came back to Washington.” Mr. McCain grumbles, “He was at the White House with me. But he wasn’t impetuous.”

Cash for clunkers is Obamanomics in microcosm

August 3, 2009

Think of “cash for clunkers” as a sort of bizarro twin of that “bucks for banks” program from last autumn. You know, the one where Congress authorized $700 billion to keep financial clunkers on Wall Street up and running.

Higher growth vs. rising unemployment

August 3, 2009

Two fun factoids:

1) During the past two recessions, the unemployment rate kept rising for 15 months (1990-91 downturn) and 19 months (2001 downturn) after the recession officially ended, according to the National Bureau of Economcic Research.  If that happens now, we are looking at rising joblessness right smack into Election Day 2010.

6 economists on why Ron Paul’s Fed audit idea is wrong

August 3, 2009

I asked a half dozen economists who are very concerned about Federal Reserve independence what they thought about Rep. Ron Paul’s bill to audit the Fed. This was my specific question: “Given that Congress can already grill the Fed chairman during Humphrey-Hawkins (and occasional other congressional appearances), how would a GAO audit really threaten Fed independence in practical terms?”

Libertarian economist disagrees with Ron Paul’s plan to audit Fed

August 3, 2009

I just got this email from an economist with strong libertarian leanings who also thinks that Ron Paul’s plan to audit the Fed is a bad, bad idea:

Why Team Obama thinks your taxes are going up

August 3, 2009

The White House can try and walk back from the comments yesterday by Geithner and Summers, but don’t buy it. Pretty much — like 99.9 percent — of center-left economists think Americans don’t pay enough in taxes to support the modestly-large welfare state/military superpower that they seem to prefer. And by not enough, I mean $500 billion to $1 trillion a year too little.

Will GDP pop in the third quarter? If so, will Obama smile?

August 3, 2009

That is the case being made by the always-great Ed Yardeni (bold is mine):

If nothing changes during Q3, real GDP will be up 4.6% during the quarter. This isn’t our forecast. It is arithmetic. If there is no change in final sales to consumers, business, governments, and foreigners, and if nonfarm inventories are unchanged, that’s how much real GDP will increase. This is because nonfarm inventory investment was minus $144.4bn (saar) during Q2. If it is zero during the current quarter, real GDP will surge. The inventory investments component of real GDP has been negative for five consecutive quarters, the longest stretch since Q1-2001 through Q1-2002. … By the way, during the first quarter of the last 10 economic recoveries, real GDP rose 5.8% on average, with a high of 17.2% during Q1-1950 and a low of 1.4% during Q4-2001.