James Pethokoukis

Maybe not a jobless recovery?

November 13, 2009

Some interesting analyst from the St. Louis Fed:

What was unique about the jobless recoveries, say DiCecio and Gascon, is that the preceding recessions were structural ones. 75% of jobs lost in the 1990-91 recession and 50% of the losses in the ’01 recession were suffered by the manufacturing sector. That number is down to 25% during this recession. The assumption here is that it’s easier for service workers to find jobs in the growing service economy than for former manufacturing workers to make the shift into the service sector. And that makes sense to me.

Is Washington making unemployment worse?

November 11, 2009

Yes, says U. of C. prof Casey Mulligan:

Labor market distortions have gotten progressively worse during this recession. The federal minimum wage, for example, was increased once shortly before the recession began, a second time in the summer of 2008, and yet again this summer. The housing collapse has also had multiple harmful effects, such as impeding families who might want to move out of some of the hardest-hit regions toward areas where the economy is doing better.

12 reasons unemployment is going to (at least) 12 percent

November 11, 2009

Gluskin Sheff economist David Rosenberg, formerly of Merrill Lynch, thinks the unemployment rate is going to at least 12 percent, maybe even 13 percent. Optimists, Rosenberg explains, underestimate the incredible damage done to the labor market during this downturn. And even before this downturn, the economy was not generating jobs in huge numbers. If he is right, all political bets are off. I think the Democrats could lose the House and effective control of the Senate.  I think you would also be talking about  the rise of third party and perhaps a challenger to Obama in 2012.

A different take on Buffett’s new bet

November 3, 2009

Michael Mandel of BW doesn’t think the Oracle’s purchase of Burlington Northern Santa Fe should be interpreted as a positive economic sign:

A tale of two economic recoveries

November 3, 2009

Which one do you believe? John Hussman sketches them out:

1) One possibility, which is clearly the one that Wall Street has subscribed to, is that the recent downturn was a standard, if somewhat more severe than normal, post-war recession; that the market’s recent strength is an indication that it is looking forward to a full “V-shaped” recovery, and that the positive print for third-quarter GDP is a signal that the recession is officially over. Applying the post-war norms for stock market performance following the end of a recession, the implications are for further market strength and the elongation of the recent advance into a multi-year bull market.

Larry Summers: Tax increases won’t hurt economy

November 2, 2009

Here is Obama economic guru Larry Summers at the Economic Club of New York: “I don’t find there to be much evidence that suggests that raising top marginal tax rates from 35 to 39 percent that will be implicit in the repeal of the Bush tax rates will do substantial damage to incentives in the economy.”

Economic fears drive Pelosi’s healthcare push

October 30, 2009

First you have to realize that Mark Zandi has become the de facto chief economist for congressional Democrats. Here is a bit from his testimony yesterday to the Joint Economic Committee:

And after the GDP report ….

October 29, 2009

Some cold water via economist Dean Baker of the liberal Center for Economic and Policy Research:

America’s Potemkin Economy

October 29, 2009

That the US economy has stopped shrinking is certainly good news. But what kind of recovery is this? Strip out Cash for Clunkers and 3Q GDP growth came in at 1.6 percent. Also strip out slowing inventory cuts and GDP would have been just 0.6 percent. Then you have a report that the WH has overestimated the number of jobs created by the stimulus.

VAT Attack! Another reason it is a bad idea

October 28, 2009

One reason many free-marketeers want to take a pass on a value-added tax is that it would only fuel bigger government via higher tax revenues. Indeed, the good folks at TaxVox find new research that helps make that case (bold is mine)”