James Pethokoukis

$10 trillion for clean energy? Maybe a bit overambitious

October 6, 2009

Working for the International Energy Agency must be hoot. Where else can you recommend a $10 trillion investment and kinda-sorta be taken seriously? From the WSJ:

Obama and the VAT: Now it’s Pelosi’s turn

October 6, 2009

You can add House Speaker Nancy Pelosi to the group of Democrats or Obama allies (John Podesta, Paul Volcker, Roget Altman) calling for a value-added tax. (I predicted all of this days ago.) Here is Pelosi (via The Hill):

Is America stuck with high unemployment?

October 5, 2009

Is there a “new normal” for the American labor market? Are the days of an unemployment rate of just 4 to 5 percent a thing of the past?

A second stimulus?

October 5, 2009

A NY Times story by my pal John Harwood hints at a second stimulus package may be brewing:

When the US labor market will begin to recover

October 5, 2009

Ed Yardeni has been crunching the numbers:

Based on the previous two cycles, employment might recover within the next 11-21 months after June, or between May 2010 and March 2011! It fell 289,000 during the 11 months following the recession trough of March 1991 and 1.08mn during the 21 months following the November 2001 trough. So far, it is down 768,000 from June through September. A similar analysis suggests that the unemployment rate should peak 15-19 months after June, or sometime between September 2010 and January 2011!

Obama, the Un-Reagan when it comes to the dollar and stocks

October 2, 2009
David Goldman notices the tight relationship of the dollar and the stock market, comparing it to the Reagan years.
We have only had one period in which the dollar and the stock market were so correlated, and that is in 1983-1984, the beginning of the great Reagan stock market rally. The world bought the dollar and sold the US economy, before the Mundell twist (tight money and lower marginal tax rates) kicked in and the Reagan recovery began. Now we have the opposite: The dollar is selling off in tight correlation with rising stock prices, again with rising stock prices. Think of Obama as the un-Reagan: rather than a monetary squeeze hurting stocks, monetary easy is helping stocks, as the world goes to the great American fire sale assets. We’ve had an un-rally, and now it’s going undone. … This is a unique situation: never before has the US stock market traded as if it were a banana-republic equity market reprices to the dollar. Now the stock market is repricing to a basket of alternatives to the dollar. That doesn’t spell the end of the dollar as a reserve currency, at least not for the foreseeable future. As former Fed chairman Paul Volcker told Charlie Rose last night, there’s no alternative to the dollar. Bt that’s for now. Keep it up, and the world will eventually find a substitute for the dollar.

Is the US labor market broken?

October 2, 2009

US unemployment has been far worse than economists would have expected given the magnitude of GDP decline. Has something structurally changed with the American labor market? An interesting angle on this from Brian Wesbury and Bob Stein of First Trust Advisers:

September jobs report: -263,000, unemployment at 9.8 percent

October 2, 2009

The silver linings here are tough to find, at least according to this summary from IHS Global:

VAT Attack! Greenspan: Raise taxes with a value-added tax

October 2, 2009

At the Atlantic magazine symposium I am attending, former Federal Reserve chairman again said he thinks taxes are going up and that a value-added tax would be the “least worst” way of doing it.  This dovetails nicely with what I wrote yesterday:

John Taylor on the Lehman anniversary

October 1, 2009

From his blog:

Two weekends ago the big news was the one-year anniversary of the Lehman Brothers bankruptcy and the ensuing panic. But when you look at the data, the real one-year anniversary of the panic is closer to now.