James Pethokoukis

Katrina? Gulf spill may be Obama’s Iranian hostage crisis

May 28, 2010

The analogies have been flowing almost as fast as the oil from the Gulf seabed. The BP spill is Barack Obama’s Katrina. Or maybe it is his 9-11. Pick your disaster of choice. But however you want to classify it, the expanding oil slick is a mess for the White House:

Why austerity won’t fix global budget mess

May 26, 2010

Bond guru Bill Gross makes this point:

Tougher sovereign budgets produce government worker layoffs, pay cuts, reduced pension benefits and a drag on consumption and the ability of the private sector to accept an attempted hand-off from fiscal authorities. Recession becomes the fait accompli, and the deficit/GDP ratio moves ever higher because of skyrocketing risk premiums and a plunging GDP denominator. In many cases therefore, it may not be possible for a country to escape a debt crisis by reducing deficits.

5 reasons why “Son of Stimulus” is a bad seed

May 26, 2010

The American Jobs and Closing Tax Loopholes Act? Really? Even by the disingenuous standards of Capitol Hill, calling the $174 billion spending package making its way through the House “a jobs bill” takes some real moxie.

5+ questions for Matt Ridley, author of ‘The Rational Optimist: How Prosperity Evolves’

May 25, 2010

Matt Ridley’s new book, “The Rational Optimist: How Prosperity Evolves,” notices that, yes, things are getting better. And they will continue to do so as long as humans innovate.

How Greek debt crisis could save America

May 24, 2010

It’s absurd. Uncle Sam is likely to run up an additional $11 trillion in debt over the next decade. But Washington only replies with minor budgetary tweaks. First, the Obama administration says it wants to freeze some domestic spending for three years. Then it creates a new healthcare entitlement program “paid for” through tax increases and unlikely spending cuts. Next up, the Obama administration creates a deficit reduction panel that not even its members think will work. And now the Obama administration wants new “rescission” authority to cut billions from congressional spending bills — excepts it’s “trillions” that are the problem. None of these measures favorably alters the budget’s perilous trajectory.

New Obama budget knife a dull blade

May 24, 2010

If I was a U.S. taxpayer or holder of U.S. Treasuries, I would not take much comfort from President Barack Obama’s proposed Reduce Unnecessary Spending Act. Points for effort, I suppose. But fast tracking and streamlining the current fiscal process that allows the White House to submit proposed budget cuts from spending bills would do little.

Mind the (budget) gap

May 24, 2010

This Strategas chart shows just how badly things have gone off track:


The danger of small banks

May 24, 2010

Binyamin Appelbaum of the NYT tries to simply things for me:  “Broadly speaking, there were two ways for the federal government to respond to the financial crisis. The Obama administration chose more regulation.”

Why Larry Summers may not make it until 2011

May 24, 2010

David Warsh dismisses reports that Larry Summers may stick around longer than many in Washington expect:

Will seniors nix spending cuts to fix deficit?

May 24, 2010

My pal Bruce Bartlett says U.S. demographics support his position that America will need massive tax increases rather than massive entitlement cuts to get its fiscal house in order: