James Pethokoukis

Can the US keep financing its debt?

October 30, 2009

The great Andy Busch of BMO Capital Markets sees some problems down the road:

It’s called carry, but not like currency carry. As most know, banks can fund themselves at 0.1%-0.25% as the Federal Reserve keeps Fed Funds at 0.0%-0.25%. Then banks are incentivized to find the safest, highest return they can with this cash.

Barney Frank: Let’s pack the Fed with doves

October 30, 2009

Here is Barney Frank at yesterday’s House Financial Services hearing:

I had a study done. Ninety percent of Federal Open Market Committee [dissents] are from regional bank presidents and 90 percent of the 90 percent are for higher interest rates.

Economic fears drive Pelosi’s healthcare push

October 30, 2009

First you have to realize that Mark Zandi has become the de facto chief economist for congressional Democrats. Here is a bit from his testimony yesterday to the Joint Economic Committee:

Obama’s bad economic bet may ruin Democrats

October 29, 2009

The anemic third-quarter U.S. GDP report is another indication that President Barack Obama’s economic gamble may yet fail to pay off. And that could be terrible news for Democrats heading into the 2010 midterm elections.

And after the GDP report ….

October 29, 2009

Some cold water via economist Dean Baker of the liberal Center for Economic and Policy Research:

America’s Potemkin Economy

October 29, 2009

That the US economy has stopped shrinking is certainly good news. But what kind of recovery is this? Strip out Cash for Clunkers and 3Q GDP growth came in at 1.6 percent. Also strip out slowing inventory cuts and GDP would have been just 0.6 percent. Then you have a report that the WH has overestimated the number of jobs created by the stimulus.

Harvard study: Obama stimulus should have focused more on tax cuts

October 28, 2009

Now they tell us. A new NBER paper from Harvard’s Alberto F. Alesina and Silvia Ardagna (“Large Changes in Fiscal Policy: Taxes Versus Spending”) makes the case for tax cuts over spending as stimulus:

VAT Attack! Another reason it is a bad idea

October 28, 2009

One reason many free-marketeers want to take a pass on a value-added tax is that it would only fuel bigger government via higher tax revenues. Indeed, the good folks at TaxVox find new research that helps make that case (bold is mine)”

A China reality check

October 28, 2009

Thomas PM Barnett makes good sense, as usual:

Japan’s rise and decline should serve as a grim warning to China right now.

VAT Attack! The mysterious Christina Romer and higher taxes

October 28, 2009

Christina Romer’s speech on Monday had this overlooked bit, which I put into bold: