James Pethokoukis

Greece and the 2010 US elections

May 7, 2010

The  290k increase in jobs is great news for the WH and congressional Democrats. The rising unemployment rate, from 9.7% to 9.9%, is not. Yes, it reflect workers moving back into the workforce, but it is still a lousy headline number. So, too, the rise in the broad U-6 unemployment number to 17.1%. The good news also gets drowned out by the big drop in the stock market and trouble with EU sovereign debt. Even if Greece’s problems do not metastasize, they still provide unsettling headlines for U.S. voters. Like something is still not right in the world. Then, of course, you still have the moribund U.S. housing market and all that evaporated net wealth. Stronger growth may be enough to keep Republicans from capturing the House and Senate, but big gains nonetheless.

US debt woes could explode in just three years

May 7, 2010

The great Jed Graham over at Investor’s Business Daily writes an important piece on America’s debt problems. It is not a long-term or intermediate-term issue, it is a short-term issue:

4 ways Congress caused the financial crisis

May 5, 2010

That bankers disdain their new Washington overlords is no surprise. To many of them, Congress is plagued by “unnerving ignorance” and a refusal to admit its own role in the financial crisis. At least that is how a controversial JPMorgan report puts it. Impolitic perhaps, but not inaccurate.

Kudlow and Yardeni on Greece

May 5, 2010

Some illumination on Greece. First, The Great One, Larry Kudlow:

Merkel and other European leaders would like the IMF to be the fiscal-discipline policeman for Greece and the rest of southern Europe. But as Nobelist Robert Mundell has argued, while the unified and fixed exchange rate of the euro currency system, along with liberalized trade, has been good for economic growth, things have broken down with the failure of the so-called fiscal-stability pact that was never enforced.

Now here is a tax bill I like, mostly

May 4, 2010

The good folks at the Heritage Foundation alert me to a House bill proposed by Republicans Jim Jordan and Jason Chaffetz: Here is what H.R. 5209 would do: 1) Eliminate the tax on capital gains; 2) Reduce corporate income tax to 12.5 percent; 3) Kill the death tax; 4) Immediate expensing of business expenses; 5) Reduce payroll tax by half for 2010.

10 reasons to be cautious on economy

May 3, 2010

I will say this: As much as I press WH officials to take a victory lap on the economy, they want no part of that — especially not with unemployment at these high levels and the evolving EU debt crisis.  David Rosenberg of Gluskin Sheff gives some more reasons for caution:

Mankiw on the VAT

May 3, 2010

A nice primer on the issues surrounding a value-added tax from Greg Mankiw. This is the key part for me:

Wealth taxes, Washington’s next bad idea

May 3, 2010

Some Democrats seem to have no problem raising the cost of capital.  Dividend taxes rates are scheduled to triple, while capital gains rates will only increase by a mere 60 percent. But as a I poke around the liberal idea factories here in Washington, I am hearing more and more about wealth taxes on the wealthy, just like they have in Europe.