Jerome Powell has already reached the runway. GDP and job growth are solid, and inflation is down. There is much talk these days about whether the Federal Reserve can pull off the vaunted “soft landing,” reducing inflation to its 2% target without causing a recession. It isn’t easy. Worrywarts fret over any uptick in the inflation rate, ...

Perceptions tend to lag behind reality. But inflation has been going down for a while. Now that the Iowa caucuses are over, the feeling that this is a presidential election year is more palpable. It’s a commonplace that economic conditions swing elections. Yet despite economic performance that can only be called spectacularly good, Americans ...

Inflation is lower, but some won’t be happy until prices come down too. That would be a disaster. There is a sharp disconnect between the U.S. economy’s underlying realities, which are good, and people’s attitudes about the economy, which remain sour. Why does President Biden’s economic performance get such bad marks when unemployment is ...

After preaching urgency about inflation in 2022, the chairman says the Fed is ‘in a position to proceed carefully.’ This is a tale of two Jackson Holes. Actually, there is only one Jackson Hole. It’s in Wyoming, and it’s one of the most beautiful places on earth. Every August, the chairman of the Federal Reserve Board travels there to open ...

With even less bipartisan goodwill than in 1995, America may need a nonlegislative solution. Amid the commotion over banks and the Federal Reserve, let’s not forget that the U.S. has a potential catastrophe hanging over its head: a debt crisis that could lead to default on U.S. government obligations. It may seem unthinkable, but the debt ...

We’ve gone too far with deregulation and ‘too big to fail,’ and the Fed can pause its rate hikes. Silicon Valley Bank certainly got everyone’s attention in a hurry. Outside Silicon Valley—which, broadly defined, extends beyond Northern California—few Americans had ever heard of SVB. Fewer still knew that it was running into trouble from ...

Inflation is falling fast. If the monetary hawks aren’t careful, they could fly into a recession. They came, they saw, they concurred—maybe a bit too much. I refer to the most recent meeting of the Federal Open Market Committee, which concluded on Feb. 1. FOMC members came to Washington, studied and discussed recent and prospective ...

The high year-over-year rate masks progress in the past five months. But we’re not out of the woods. Maybe we should start the new year with some good news: Inflation has fallen dramatically.No, that’s not a prediction; it’s a fact. With one month remaining in 2022 (in terms of available data), inflation in the second half of the year has ...

PRINCETON – For months, many macroeconomic observers have been likening Federal Reserve Chair Jerome Powell’s unenviable position to that of Fed Chair Paul Volcker in the early 1980s. But the differences between the two eras are greater than the similarities – and all of them make Powell’s job relatively easier. George Santayana famously ...

Inflation expectations won’t remain stubbornly high once actual inflation begins to fall, one view holds, and that’s good news for the Fed. I am often asked these days whether I think the Federal Reserve will push the economy into a recession and, if so, whether that recession will be mild or severe. The only honest answer is “I don’t ...

History shows that, with skillful decisions and some good luck, central bankers can defeat inflation without causing a recession. This week the Federal Reserve raised interest rates by 0.75 percentage point for the third time in six months, in an effort to combat inflation. The move made investors worry more about a recession, even though ...

Damage done through higher corporate rates would be offset by job-creating provisions. Senate Majority Leader Chuck Schumer pulled a rabbit out of his hat when he announced a budget agreement with Sen. Joe Manchin (D., W.Va.). But faster than you can say “supply-side economics,” Republicans gave their rote objection to any tax increase: It ...

Central bankers need to act like the tortoise, not the hare, lest they overshoot and cause a recession. Here’s a missive to both the Federal Reserve and the financial markets: As the central bank raises interest rates, remember the tortoise, the hare and Milton Friedman. In the well-known fable, the tortoise, who was methodical, not at all ...

Rather look to the Federal Reserve’s timidity and, yes, the war in Ukraine. Republicans are engaged in a cynical game of pin the inflation on the donkey. Ask them about law-breaking at the highest levels of government or threats to elections and constitutional democracy, and they are likely to reply that inflation is too high and it’s Joe ...

While the Fed has interest-rate work to do, food and energy prices will level off and supply chains will heal. The Federal Reserve is in the early stages of tightening monetary policy to fight inflation. Most Fed watchers expect 50-basis-point interest rate hikes in June and July and more after that. Quantitative tightening to shrink the ...

In the 1970s, ‘stagflation’ caught policy makers by surprise. Their successors have learned the lesson. Thursday’s surprising report on first-quarter gross domestic product may contribute to a feeling of déjà vu all over again. High inflation reminds many Americans of the unhappy 1970s, when a series of food-price shocks in 1973-74 and a ...

Powell’s post-pandemic optimism didn’t count on adverse supply shocks from the war in Ukraine. Americans don’t agree on much these days, but there seems to be one thing we strongly agree on: Inflation is far too high. A recent Gallup poll found concern with inflation easily topping the list of the nation’s economic worries. It also tops ...

Tightening is obviously necessary, but getting it right calls for caution, flexibility and humility. The Federal Reserve may be in for a series of tough calls in 2022 and, naturally, all financial-market eyes will be watching. What will the Federal Open Market Committee do? What should it do? Try putting yourself in Chairman Jerome Powell’s ...

Fed Chair Powell may have retired the term, but bottlenecks and shortages should be over soon. Inflation was a Grinch this Christmas. Economists on Team Transitory, myself included, should admit that we never thought inflation would go this high. What happened? Does high inflation still look transitory? First, the startlingly high 6.8% ...

The media loves to focus on a big number, but the bill is paid for and delivers for the American people. It’s past time that Americans heard more about what’s inside President Biden’s Build Back Better plan than about the sticker price. For starters, the budget numbers cover 10 years, a decade in which the Congressional Budget Office projects ...

Lael Brainard should get the nod in four years and be made vice chairman for supervision now. President Biden has too much on his plate. But there is one important task he should handle quickly: reappointing Jerome Powell as chairman of the Federal Reserve. Let me start by praising the other person most frequently mentioned for the post: Fed ...

The breaks on carried interest and capital gains at death should be eliminated to hit the rich. President Biden needs tax revenue to pay for his Build Back Better plan, and he wants to raise most of it by raising taxes on corporations and the rich—both of which got large tax cuts under President Trump. But congressional Democrats are ...

We may be stuck with inflation above 2%—maybe even above 3%—for a while. If you’re worried about a return to the double-digit inflation of the 1970s and ’80s, relax. There is a lot of angst these days as a result of the stunning 5% inflation rate (for the year ending May 2021) in the last consumer-price index release. We haven’t seen a ...

Among the conundrums: How do you seasonally adjust for a socially distanced Christmas? Confused about the state of the U.S. economy? It’s no wonder. One day a strong report comes in on jobs or gross domestic product. Then another data release on unfilled jobs or inflation paints a different picture. The U.S. economy is like someone who ...

Preschool and paid family leave are investments in the future in a way tax cuts for the rich aren’t. Do you remember supply-side economics? That’s the doctrine that claimed that lowering taxes (especially on the wealthy) would cause a gusher of growth and bring in more new revenue than it lost. It wasn’t true, as the Reagan and Bush tax ...

The economy is recovering at a rapid clip, thanks in large part to a $5 trillion infusion from the feds. Welcome to the Biden boom. While the first quarter of 2021 is history, the data are still coming in. “Forecasts” of real economic growth, based on partial data, now run in the 7% to 8% range. More important, there is a good chance the ...

A much bigger concern for the Fed is the real human misery caused by slack in the labor market. Was that a posse of bond-market vigilantes galloping past my window the other night—shouting “inflation is coming” like a bunch of financial Paul Reveres? We haven’t seen those guys since the 1990s. But it seems that bond traders are now rattled by ...

Some economists warn about too much spending, but too little could hurt the economy more. A big tempest is brewing in a big teapot over President Biden’s $1.9 trillion coronavirus relief plan. Republican objections are to be expected. But some of the objections come from nominally Democratic economists, led by former Treasury Secretary ...

America faces a dire public health and economic emergency, yet the usual partisan lines are being drawn in Congress as the Democratic left and the Republican right gird for battle over President Biden's coronavirus relief plan. These political partisans should be uniting to fight covid-19, not fighting each other. One of us is a lifelong ...

The Covid relief bill is a down payment on what Joe Biden can do to help avoid a recession. The year is almost gone—and 2020 won’t be missed. The future looks brighter thanks to some truly amazing scientific work, but a thoroughly vaccinated America is probably six to nine months away. To limit the damage while getting from here to there, we ...

Senate Republicans resist passing a new bill, even though it’s needed and politically expedient. It is distressing that good economic policies often make bad politics and therefore aren’t adopted. Examples abound, including carbon taxes to combat climate change and broadening the tax base by closing loopholes. This is sad but familiar turf. ...

Consider the externalities: We each choose whether to isolate or wear a mask, but all society bears the costs. The U.S. government’s disastrous failure in dealing with the coronavirus pandemic is a tragedy in many acts—from the Centers for Disease Control and Prevention’s initial errors with test kits and masking, to a know-nothing president ...

Consumers don’t venture out if they feel unsafe. To avert a double-dip recession, crush the virus. These days there is a cruel disconnect between the economic news, which is looking up, and the pandemic news, which is wretched. But if the U.S. doesn’t bend the pandemic curve soon, the economy may slip back into recession. While it’s a very ...

The economy is still at risk. Here are two options for repurposing the additional $600 benefit. As the House and Senate begin to formulate the next emergency fiscal package, a debate is brewing over what to do about the more-generous unemployment benefits included in the Cares Act—especially the $600 addition to everyone’s weekly ...

‘I won’t think about that now. I’ll think about that tomorrow.’ The crisis is today’s urgent priority. Ever since the Federal Reserve and Congress embarked on their extraordinary monetary and fiscal responses to the pandemic, I have been asked two sorts of questions repeatedly. First, is running such a massive federal budget deficit wise? Is ...

The federal government should act to maintain private payrolls to the maximum extent possible. Can we please stop talking about “reopening” the U.S. economy? Probably not, because President Trump owns the national megaphone and won’t relinquish it, and the media have latched on to the term. But it is a lousy metaphor. For one thing, there is ...

Until we know the extent of the epidemic, people will avoid going out and spending money. When people asked me a few months ago about the probability of a recession in 2020, I said 10% to 20%. A week or two ago, I was up to 40% to 50%. Now I’m at 90% and rising. The biggest worry is that consumer spending will fall off a cliff as Covid-19 ...

Instead, tell how Trump’s policies on health, climate, immigration and more will erase recent gains. It’s now clear that the 2020 election will be between Donald Trump and . . . well, some Democrat. It’s also clear that the president’s campaign will emphasize the strong real economy—notwithstanding the recent market drop. Good news on jobs ...

Its long-awaited policy review, expected this year, should also reconsider the 2% inflation target. Predicting the Federal Reserve’s interest-rate decisions is a loser’s game. But I’ll make one 2020 forecast with confidence: The Fed will release its long-awaited “review” of monetary policy strategy, tools and communications—probably by June. ...

Most economic objections apply to the income tax as well. But 16th Amendment permits the latter. The idea of a wealth tax has been in the news of late, mainly because of campaign proposals from Sens. Bernie Sanders and Elizabeth Warren. Commentators mostly paint the issue in stark black or white: A tax on wealth is either a marvelous ...

As the rich have gotten richer, U.S. tax policy became more regressive. Here’s a short test of your value judgments. (There’s no right answer.) If free markets start dishing out increasingly unequal pretax incomes, should the government ignore it, mitigate it by making the tax system more progressive, or exacerbate it by making the tax system ...

Before Bill Clinton, such browbeating was the norm. Powell has endured Trump’s assaults with dignity. Two and a half cheers for my friend (that’s a disclosure) Jay Powell, chairman of the Federal Reserve Board. I’ll come back to the half, but the two cheers are for the exemplary way he has conducted himself in office. That includes most of ...

Many voters find their trade policies, Medicare for All and the Green New Deal too radical. In my book “Hard Heads, Soft Hearts” (1987), I bemoaned that it was difficult to be both a Democrat and an economist. Democrats, I wrote, often advocated economic policies that were well-intentioned but softheaded. Yes, ends matter, but so do means. ...

He can’t fire Powell, so he’s sending over dreadful nominees to make the chairman’s job harder. You might have noticed that President Trump is waging war on the Federal Reserve. That in itself is nothing new. In 1966, Lyndon Johnson invited Fed Chairman William McChesney Martin down to his Texas ranch to barbecue him. George H.W. Bush attacked ...

The FSOC, created by the Dodd-Frank Act of 2010, doesn’t have enough power to do the job right. This month the Federal Reserve hosted a conference in Chicago, to which it invited a list of academic and nonacademic experts on monetary policy (I was one) to advise it on strategy, procedures and communications. The backbone of the conference ...

Tax cuts and deregulation are juicing GDP, but we’ll pay the price for his presidency in other ways. In recent weeks, any number of commentators have taken note of what might be called the “paradox of polling” under President Donald Trump. Specifically, the president gets high marks from the public for his handling of the economy but low ...

The logic of American health care precludes other options, from single payer to an employer mandate. Believe it or not, America may be debating ObamaCare yet again. “Repealing but not replacing”—a terrible idea, you may remember—has come bouncing back like a bad penny. This time the effort is judicial rather than legislative, but it will run ...

The vibrancy and magic of capitalism are entirely compatible with a strong social safety net. If this be socialism—oh, never mind. It is now clear that the Republican trope for the 2020 campaign will be that the Democrats are a bunch of socialists. That’s ridiculous, of course. But sadly, a tiny number of Democrats are playing right into ...

The current expansion may soon be America’s longest, and neither inflation nor tariffs are likely to stop it. You’ll soon be hearing a lot more from President Trump about the magnificent performance of the U.S. economy. That’s because the long expansion that started in June 2009 is approaching, and will likely break, the all-time longevity ...

Unelected technocrats are exactly the type of people you should want making monetary-policy decisions. Who would you trust with the nation’s monetary policy, Donald Trump or Jerome Powell? One is a bombastic, narcissistic former real-estate developer who thinks interest rates should always be lower than they are—unless Barack Obama is ...

He’d strengthen labor unions, fortify pensions, raise estate taxes and reduce income equality. President Trump’s famous slogan, “Make America Great Again,” was always an insult to the nation. Isn’t it great now? MAGA harks back wistfully to a presumptively better time when America was a whiter nation with fewer immigrants, when few women ...

For much of the past six months, I’ve tried to ignore the political ascent of Donald Trump. Too horrible to be true, I assured myself. But the unthinkable has happened, and Mr. Trump is now the likely nominee of the Republican Party. So what might a Trump presidency bring? To be frank, the most horrifying aspects of Trumpism are not his ...

China is not as big a deal as investors think, and their reading of oil prices is economically strange. You have probably noticed that U.S. stock prices have fared poorly of late—and the S&P 500 closed on Wednesday at 1859, down almost 13% from its July 2015 high. You have probably also noticed that the biggest daily drops seem to occur either ...

Some bond traders were teenagers the last time the Fed increased interest rates. You’re in a pretty strange place when the phrase “lift-off” evokes images of the Federal Open Market Committee rather than of Cape Canaveral. But here we are, with all financial eyes fixed on the Fed and most market participants expecting the first increase in ...

Without the emergency measures of 2008-09, the U.S. economy would be far worse off today. The publicity surrounding former Federal Reserve Chairman Ben Bernanke’s memoir prompts a look-back at the stunning array of policy responses promulgated by the Fed, Congress and two administrations to avert catastrophe during the financial crisis in ...

A common theme in this election: The economic system is unfair. And it is. Here’s how to fix it. It’s been a pretty weird presidential campaign so far. Donald Trump, who prides himself on escaping debts via bankruptcy and firing people for fun on television, leads the Republican field even though his policy positions—other than walling ...

September? December? Next year? That doesn’t matter as much as how swiftly rates increase after the first hike. As the September meeting of the Federal Open Market Committee approaches, all financial eyes and ears seem fixated on one question: Will the Federal Reserve raise ...

Three essential problems remain, and leaving the eurozone may be the answer. The modern Greek tragedy isn’t over—after an interlude, there will be more acts. The deal struck with European leaders on July 13 will, with luck, avert an immediate financial collapse. But three underlying problems remain: Greece must escape from the current ...

Sure, it balances the budget by 2024. How? With fuzzy math that hides costs and by eliminating ObamaCare. Something momentous—sort of—happened last month, but you may not have heard about it. Both the House and the Senate passed a budget resolution for fiscal 2016, which starts on Oct. 1. That’s a step, though only a step, along the long ...

The healthy 2.6% a year from 1995-2010 has since been an anemic 0.4%. What’s scary is that we don’t know why. Are you worrying about America’s recent dismal productivity performance? You should be. Productivity gains are the wellspring of higher living standards, and the well has been running pretty ...

Core inflation has been stuck between 1.3% and 1.7% since mid-2012, and isn’t forecast to reach 2% until 2017. As the Federal Reserve’s Open Market Committee prepared to meet last month, no one was wondering what the Fed would do. Everyone knew it would do nothing. There would be no rate hikes, no balance sheet ...

The House is using ‘dynamic’ scoring for tax cuts but not for spending. Is consistency too difficult? Tax cuts have been the lodestar of Republican economic policy ever since the Reagan revolution. The central tenet of supply-side economics is that lower marginal tax rates reduce the disincentive effects of taxation, thereby augmenting ...

Republicans add extraneous provisions to must-pass bills. Obama threatens a veto. Rinse and repeat. In the classic movie “All About Eve,” the iconic Bette Davis character warned everyone to “fasten your seat belts. It’s going to be a bumpy night.” In the strange world of federal budgeting, 2015 is shaping up to be a bumpy year. After two years ...

The biggest threat may come from proposals to limit the central bank’s ability to act as a lender of last resort. Welcome to 2015. On the Chinese calendar, it will soon be the Year of the Sheep. On the financial calendar, it looks like the Year of the Fed. Let’s hope the Fed doesn’t ...

One way to keep bankers from behaving badly is to hit them in their pocketbooks with penalties that affect bonuses. Maybe someone should launch a reality show called “Bankers Behaving Badly.” Because too many of them are. That’s the conclusion of William Dudley , president of the Federal Reserve Bank of New York, one of America’s most ...

Since 2010 U.S. productivity has grown at a miserable rate. And no one, not even the Fed, seems to understand why. A cottage industry on Wall Street tries to forecast the Federal Reserve’s policy decisions. The Fed, in turn, bases its policy on how it thinks the economy will perform. The cottage industry, of course, knows that; so it is ...

Germany isn’t such a success story. Its GDP growth is a paltry 2.2% over 2008-13. Time for Merkel to budge. Usually I don’t gripe about other countries’ economic policies—at least not on this page. It’s their own business. Besides, there is normally more than enough bad policy right here at home. But I have to make an exception for ...

After sending hawkish signals in July, the Federal Open Market Committee has softened its tone. The battle at the Federal Open Market Committee is now on. Score the previous meeting in late July for the inflation hawks, but last week's meeting went for the doves, who are more worried about jobs. I haven't discussed the meetings with any ...

Inequality and poverty take a toll on the productivity of the workforce. Policies to reduce both can be pro-growth. You hear a lot of talk these days about the ill-effects of income inequality in the United States. Even Standard & Poor's got into the act earlier this month with a well-publicized report on "How Increasing Income Inequality ...

Legislation in pursuit of 'transparency and accountability' has little to do with either. The House Financial Services Committee held a hearing on Federal Reserve reform on July 10. The hearing didn't get much press attention. But it was remarkable. While the House can't manage to engage on important issues like tax reform, immigration reform ...

The gap between top and bottom is clear. Not so clear is whether shaving the top is the best way to help the bottom. The attention that's been showered on Thomas Piketty's best-selling tome, "Capital in the 21st Century," has been something to behold. Pikettymania has raised public awareness of inequality in the U.S. as no one has managed to ...

The central bank cannot execute a perfect exit from its post-crisis policies, but it does know how to do it. We are in the dog days of Fed-watching now, but the boredom won't last long. Once the Federal Open Market Committee (FOMC) announces a few more $10-billion-a-month "taperings" of asset purchases, the financial markets will fixate ...

Incredibly, the faulty credit-rating system that helped cause the last financial crisis hasn't been fixed. Do you remember the financial crisis of 2007-09? (I imagine so.) Do you remember that one of its chief causes was a mountain of egregiously high credit ratings assigned by the rating agencies? (Maybe not.) Do you remember that Congress, ...

Obama's proposal to expand the Earned Income Tax Credit would inspire more people to join the labor force. The release of the president's budget was once a monumental day on the economic policy calendar—an event that policy wonks and market participants waited for with bated breath, that garnered huge press attention, and that kicked off ...

The pro-growth effects of the law's lower health costs will swamp any antigrowth effects from a lower labor supply. The political echo chamber reverberated loudly last week after a new Congressional Budget Office report allegedly projected that cumulative job growth over the next 3-10 years could be 2 million-2.5 million lower because of ...

Despite the scarcity of jobs, unemployment benefits were cut off for 1.3 million people. Another 3.6 million are next. Fifty years ago in his first State of the Union address, President Lyndon Johnson declared an "unconditional war on poverty." Who would have thought, back in 1964, that the government would desert to the other ...

Don't only drop the interest paid rate paid on banks' excess reserves, charge them. Unless you are part of the tiny portion of humanity that dotes on every utterance of the Federal Open Market Committee, you probably missed an important statement regarding the arcane world of "excess reserves" buried deep in the minutes of its Oct. 29-30 ...

Returning to the status quo ante is not an option for a humane, efficient society. The botched rollout of the Patient Protection and Affordable Care Act (commonly called the ACA or "ObamaCare") has been an unmitigated disaster. Choose your favorite adjective: horrible, embarrassing, inexcusable. They ...

Despite a glimmer of progress on Thursday, the doomsday scenario is all too plausible. While I get more cynical about politics every year, I keep concluding that I'm not cynical enough. It's happened again.

Congress could long see two deadlines looming ahead: a partial government shutdown on Oct. 1 if no budget was passed, and a potentially cataclysmic collision with the national debt ceiling if that limit wasn't raised in time. I'll get to the economics shortly, but first ...

A good-though-weak law sinks under the weight of special-interest lobbies. Next Sunday marks the fifth anniversary of the fateful day that investment bank Lehman Brothers filed for bankruptcy, signaling the start of a frightening financial meltdown. It's a good time to ponder how the U.S. economy was nearly brought to ruin. But will we? Or are ...

Her long record displays consistently good judgment, especially in the crisis years. I read in the papers, including this one, that Ben Bernanke is ready to hang up his spikes, and that the search for a replacement for the estimable Federal Reserve chairman is down to two candidates: Larry Summers and ...

U.S. growth would be more robust if we didn't confuse short-term stimulus with long-term reform. On the proverbial list of top 10 reasons for poor economic policy, politics occupies about the first six places. But around seventh or eighth place there is a conceptual confusion that sounds pedantic but is highly consequential. I refer to the ...

One idea: tax a company's repatriated profits at a superlow rate, based on the increase of its wage payroll. Do you sense an air of complacency developing about jobs in Washington and in the media? After all, the story goes, the U.S. economy has been creating an average of 194,000 net new jobs per month over the past six months. And despite ...

Do we really want Congress to decide which creditors to pay and which ones to stiff? Have you heard about H.R. 807, the "Full Faith and Credit Act," passed last Thursday by the House of Representatives? That's what I thought. So let me explain why you should be against it.

Republicans, especially House Republicans, have been using the national debt ceiling as a kind of cudgel to gain advantage in the budget wars. This game of chicken got a bit scary in August 2011 when the country came within a hair's breadth of defaulting on the national ...

Credible numbers, sensible priorities—with a less partisan Congress,this would look like a reasonable compromise. Better late than never. As it turns out, much better.

On Wednesday morning, President Obama released his proposed budget for fiscal year 2014, which begins this October. The president is supposed to deliver his budget in early February, but hey, given the pace at which Congress works, who's counting? The important thing is: ...

By paying less interest on excess bank reserves, the Federal Reserve would reduce its liabilities. Then it could sell an equal amount of assets.

Last month, a flurry of ill-informed speculation swept through the markets: TheFederal Reserve might start backing away from its program of large-scale asset purchases ("quantitative easing"), or maybe even begin to raise the federal funds rate, before the end of the year. ...

Alan Blinder '67, the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at the Woodrow Wilson School, will discuss his recently released book, "After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead," (Penguin Press HC, 2013), at the Woodrow Wilson School on Thursday, March 7, 2013, at 4:30 ...

This may be hard to believe after so many years of bad news, but the federal budget picture is improving. Cheer up, America. Yes, it's February. But spring training has begun, the days are growing longer, the weather is getting warmer, and—are you ready for this?—the federal budget picture ...

HEGEL once wrote, “What experience and history teaches us is that people and governments have never learned anything from history.” Actually, I think people do learn. The problem is that they forget — sometimes amazingly quickly. That seems to be happening today, even though recovery from the economic debacle of 2008-9 is far ...

If the borrowing limit isn't raised, then spending would contract by 6% of GDP, followed by a swift recession.

Despite its dismal approval rating, Congress deserves thanks for at least not driving the economy over the fiscal cliff. Let me state unequivocally that the New Year's Day deal was a lot better than the alternative, no doubt. ...

Does 11% unemployment sound good to you? That's where we're headed if Congress doesn't hurry.

Dear Congress, Please don't drive our economy off the fiscal cliff. ...

The U.S. economy is improving. After the worst recession since the 1930s, healing takes a long time.

'Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." When John Adams penned those words in 1770, he probably didn't anticipate modern presidential campaigns, where ...

Why do many business people fail in government? Because there's no bottom line—and compromise is obligatory.

Mitt Romney bases his case for being president on his evident success in business, where he made a fortune as CEO of Bain Capital. But are business achievements important, or even relevant, to the presidency? ...

The British have a plan to reward banks that extend credit. It might work here.

The Olympics aren't the only thing happening across the pond these days. The Bank of England is about to launch a creative "Funding for Lending Scheme" to boost bank lending. Importing this British product to America would require some adaptations to the U.S. system, plus ...

If the Fed reduces the reward for holding excess reserves, banks will have to find something else to do with their money, like making loans or putting it in the capital markets..

The U.S. economy could use another boost, and it won't come from fiscal policy. Can the Federal Reserve provide it? ...

Legions of construction workers remain unemployed while we drive our cars over pothole-laden roads. Does this make sense?.

A debate now rages in Europe over whether fiscal austerity—that is, higher taxes and less spending—helps or hinders growth. That's progress of sorts. Not long ago, European policy makers seemed stuck on the notion that austerity promotes growth. Yes, we were supposed to ...

The economy is too shaky to go cold turkey. We need more stimulus now and deficit reduction later.

Can we talk about the federal budget deficit? Better yet, can we think about it? For there has been a lot more talking than thinking. One persistent point of confusion arises from the radically different macroeconomic effects of larger budget deficits in the short and long ...

As tax cuts expire and spending falls, the economy will be hit with a 3.5% decline in gross domestic demand..

At some point, the spectacle America is now calling a presidential campaign will turn away from comedy and start focusing on things that really matter—such as the "fiscal cliff" our federal government is rapidly approaching. ...

Texas ranchers are saving exotic wildlife. Anti-hunting groups want to put them out of business..

In this space last month, I suggested enacting some modest tax cuts and spending increases, sharply targeted at job creation, and coupling that with substantial future deficit reduction—enough to pay the bill many times over. It's an abstract idea. But a specific case in ...

Blame Teutonic efficiency for what ails Europe. The other countries just can't compete.

All financial eyes are fixed on the euro. Europe's common currency actually has two gigantic problems. The debt and banking crisis hogs all the attention because of its immediacy, plus the high drama of all those summit meetings. But the other, slower-acting ...

Eliminating the biggest deductions and exclusions is extremely unlikely, and flatter rates alone won't make the tax system any simpler. It would, however, make it far less progressive.


Next year must be divisible by four because the flat tax, one of the hardy perennials of bad tax policy, has come bouncing back like a bad penny. The flat tax is typically marketed as a way to achieve drastic tax simplification—something virtually everyone favors, at least ...