Who hasn’t heard of Paul Krugman these days? The Nobel-winning Princeton economist and New York Times columnist has emerged as a key voice in American liberalism, and is berated by the right for his support of heavy fiscal stimulus, higher inflation and a strong social safety net.
Which makes the views espoused in a 1997 missive entitled “In Praise of Cheap Labor” rather surprising. In the article, the economist attacks opponents of globalization for their soft-hearted distaste for inhumane labor conditions in developing countries.
Is the U.S.on the road to Greece, as some politicians have proclaimed?
Most economists say the comparison is nonsense. At a towering $15 trillion, the U.S. economy is not only the world’s largest, it is also more than 50 times the size of Greece’s. This gap makes any type of comparison difficult – it would be like analyzing trends in Maryland in relation to the entire euro zone.
Another key difference: Unlike Greece, the U.S. actually controls its own currency. That means a debt default is effectively impossible. This reality, coupled with strong monetary stimulus from the Federal Reserve, helps explain why U.S. bond yields remain near historic lows despite larger deficits.
Social Security should not be part of the current negotiations over the U.S. budget – that was the message from outgoing Treasury Secretary Timothy Geithner over the weekend. During a veritable tour of Sunday shows aimed at addressing negotiations surrounding the “fiscal cliff” of expiring tax cuts and spending reductions, Geithner told ABC News’ “This Week”:
What the president is willing to do is to work with Democrats and Republicans to strengthen Social Security for future generations so Americans can approach retirement with dignity and with the confidence they can retire with a modest guaranteed benefit.
WASHINGTON (Reuters) – The global economy is on edge – and that’s without the U.S. “fiscal cliff.”
Among rich nations, the U.S. outlook remains the least troublesome. But given a recession in the euro zone and a recent contraction in Japan, that’s not saying a lot.
For the first time, Federal Reserve Chairman Ben Bernanke has given credence to the idea that America’s long-term economic potential may have been permanently scarred by the turmoil of recent years. In a speech to the Economic Club of New York, Bernanke said:
The accumulating evidence does appear consistent with the financial crisis and the associated recession having reduced the potential growth rate of our economy somewhat during the past few years. In particular, slower growth of potential output would help explain why the unemployment rate has declined in the face of the relatively modest output gains we have seen during the recovery.
Too-big-to-fail banks are bigger than ever before. But top regulators tell us not to worry. They say the problem has been diminished by financial reforms that give the authorities enhanced powers to wind down large financial institutions. Moreover, supervisors say, the new rules discourage firms from getting too large in the first place by forcing them to raise more equity than they had prior to the financial meltdown of 2007-2008.
New York Fed President and former Goldman Sachs partner William Dudley said in a recent speech:
Another week, another Greek debt deal. Third time’s a charm, EU and Greek politicians assure us. Under the agreement, Greece’s international lenders agreed to reduce Greece’s debt load by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020 through a package of steps.
Marc Chandler, head of currency strategy at Brown Brothers Harriman, points out “an under-appreciated twist to the plot”: the Greek deal has potential implications for other bailed out European states like Portugal and Ireland.
BUENOS AIRES, Nov 23 (Reuters) – Argentina’s government will
raise long-frozen utility tariffs to fund improvements for
over-stretched electricity and natural gas infrastructure in the
energy-hungry South American country, officials said on Friday.
The energy sector in Latin America’s No. 3 economy has been
beset by surging demand and limp private investment, which many
analysts attribute to low government-imposed tariffs since a
2001-02 financial crisis.
Sometimes, communication can be the art of what not to say. Federal Reserve Chairman Ben Bernanke took pains this week to make clear that the central bank’s indication that it will likely keep rates low until mid-2015 does not mean it expects growth to remain weak for that long.
By pushing the expected period of low rates further into the future, we are not saying that we expect the economy to remain weak until mid-2015; rather, we expect – as we indicated in our September statement – that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.
BUENOS AIRES (Reuters) – Public transportation in Argentina as well as grain shipments from the agricultural powerhouse halted on Tuesday for a 24-hour strike over taxes called by a union boss once allied with the government.
The work stoppage by bus drivers, train conductors and port, airline and bank workers follows wide protests held on November 8 over high crime, soaring inflation and the policy response of President Cristina Fernandez.