James Pethokoukis

Forecasting the Bush tax cuts

August 17, 2010

Wall Street’s conventional wisdom is that markets like political gridlock — but not if inaction means hitting a weak economy with a big tax hike. When Congress returns from vacation, it needs to deal with the expiring tax cuts signed by President George W. Bush. The Obama deficit panel, however, could limit any extension of them.

Black Wednesday and the 2010 midterms

August 11, 2010

I think we can officially declare Recovery Summer dead. Here is today’s tale of the economic tape.
Here is IHS Global:

Once more on Blinder-Zandi and the Obama stimulus

August 10, 2010

Great piece by Lawrence Lindsey in The Weekly Standard on the stimulus bill and the recent Blinder-Zandi analysis of it:

Poll: Americans dubious of government forgiving mortgages

August 9, 2010

Superpollster Scott Rasmussen apparently noticed my recent column:

A new Rasmussen Reports national telephone survey finds that:

1. 58% oppose a proposal to have the federal government forgive a portion of the mortgage debt owned by troubled homeowners.

Soak the rich?

August 9, 2010

It worries me when I hear folks, mostly liberals, speak fondly of the 1950s economy and its 90 percent marginal tax rates. In this piece, James Surowiecki advocates soaking the super-rich:

Ezra Klein: Welcome to the Recovery

August 9, 2010

WaPo blogger Ezra Klein yet again comes rushing to the defense of the Obama administration by making the case that the economy is pretty much as good as can be expected given the nature of the financial meltdown and recession.

Can mortgage relief become a free-lunch stimulus?

August 5, 2010

And while we are on the topic of mortgages, I wrote this piece for Reuters Breakingviews yesterday:

Obama’s August (Housing) Surprise, Part 2

August 5, 2010

The Treasury Department has officially denied it is planning the mother of all mortgage bailouts. And I have no reason to doubt Team Geithner. But of course that assumes that the whole idea was not being cooked up by the White House political team (Rahm and Ax) and not the good folks at Treasury. During the financial reform debate, banking lobbyists continually complained that Geither and Summers had been usurped by R&A in policymaking. And I have gotten zero pushback from the WH. Food for thought. More to come.

An August Surprise from Obama?

August 5, 2010

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

U.S. should shun hair-of-the-dog housing plan

August 4, 2010

Is it time for another “free” lunch? One Wall Street idea to boost U.S. growth is for the government to loosen rules so millions more Americans can refinance mortgages, thereby freeing up cash for spending. A desperate Washington might be tempted, but should think twice. It’s too reminiscent of how the economy first fell into trouble.