James Pethokoukis

The budget deficit examined

August 31, 2010

Nice chart from Jim Glassman over at JPMorgan on why we have a such a giant budget deficit:

An obvious tax cut

August 31, 2010

Josh Barro of the Manhattan Institute give a wonderful explanation of the wisdom of indexing capital gains taxes for inflation. Here is  a taste:

Are tax cuts on the Obama autumn agenda?

August 31, 2010

I would love to think so. And I know some folks on Wall Street would love to believe. But there are few signs that Obama will change course on taxes.  Here is White House economic adviser Jason Furman:

U.S. deficit forecast masks true scope of problem

August 19, 2010

If America ran its books more like a business, the real state of its finances would be clearer. U.S. budget scorekeepers now predict a $1.34 trillion deficit for 2010, a tad less than forecast in March. Still, it’s an enormous gap. And the headline number lowballs the shortfall.

America’s Optimist-in-Chief

August 19, 2010

Economist Robert Brusca sums up today’s terrible economic news pretty well:

The day that optimism died. It has a time. It is sort of official: August 19, 2010. … The weak LEI is only bad news of the sort we have been getting. The rise in the jobless claims number posts a 500K number and makes the backtracking official and really bad.  …  But the report that disturbs me most is the Philly MFG index. The Philly index is actually a very good business cycle index. It does this job better than the ISM for some reason I can’t explain. … Optimism has died and there is a reason.  Things are not getting better at even the same rate. Those seeing the economy as getting better are in a distinct and shrinking minority.  … Brace yourself. I’m sorry to be the bearer of this bad news. This is not what I had expected.  I don’t know how much it will shake markets but I’d eventually expect something that can be measured on the Richter scale.

The future of Fannie and Freddie? None

August 19, 2010

Bond guru Bill Gross warned on Tuesday that without U.S. government guarantees, only mortgage bonds backed by super-safe loans, would interest him. He frets too much. The funeral of Fannie Mae and Freddie Mac may be coming, but housing support from D.C. will live on. The key question is how much.

Why only 41 percent of Americans approve of Obama’s job performance

August 18, 2010

The latest Gallup numbers are not good for the White House or congressional Democrats. The overnight tracking has Barack Obama’s approval-disapproval rating at 41 percent-52 percent. Based on the Rahm Emanuel formulation that for every point below 50 percent, the Dems lose five House seats, it looks like the GOP will take the lower chamber. This bit from a Weekly Standard piece I did pretty much explains it:

Are Fannie and Freddie really worth it?

August 18, 2010

CNBC’s John Carney nails it right on the head:

Defenders of Fannie and Freddie insist that their role in making mortgages cheaper is vital to the market and expanding home-ownership.

Yeah, states have plenty of fat to cut

August 18, 2010

It may be long past time that US state and local governments start watching their pennies a bit more closely. As new research from George Mason University has found (bold mine):

How U.S. stimulus is being exported

August 18, 2010

Interesting to see if any politicians pick up on this argument from former Morgan Stanley economist Andy Xie: