90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
Economic Outlook: Are Happy Days Here Again?

After years of tough economic news, the economy seems to be picking up and pulling up interest rates. We look ahead at what the eventual end of rock-bottom interest rates will mean.

Federal Reserve Chairman Ben Bernanke reacts as he testifies on Capitol Hill in Washington, Wednesday, May 22, 2013, before a Joint Economic Committee hearing on "The Economic Outlook." (Manuel Balce Ceneta/AP)

Federal Reserve Chairman Ben Bernanke reacts as he testifies on Capitol Hill in Washington, Wednesday, May 22, 2013, before a Joint Economic Committee hearing on “The Economic Outlook.” (Manuel Balce Ceneta/AP)

It is a pregnant moment in the US economy.  Unemployment down a bit.  Housing up.  Stock market on a tear.  Bonds in a tizzy.  Everybody watching the Fed.  Is this, at last, the return?  The revival?  We’ve been promised “green shoots” before, and seen things flatline.

This time the optimism and evidence seems stronger, but so does a weird unease.  If this is the upturn, what happens to interest rates?  To inflation?  To the Fed’s towering balance sheet.  To your job?

This hour, On Point:  the change in the economic weather and whether this is really it… the road to good times.

- Tom Ashbrook

Guests

Robert Barbera, co-director of the Center for Financial Economics at Johns Hopkins University and author of “The Cost Of Capitalism: Understanding Market Mayhem And Stabilizing Our Economic Future.”

Martin Feldstein, Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research. He was appointed by President Obama to be a member of the President’s Economic Recovery Advisory Board in 2009.

Robert Kuttner, co-founder and co-editor of the American Prospect magazine. Senior fellow at the liberal think tank Demos. Author of “Debtor’s Prison: The Politics of Austerity Versus Possibility.”

From Tom’s Reading List

The Wall Street Journal: The U.S. Economy: Doing Better, Can It Last? – “You can make an economic forecast complicated. Or you can make it simple. Let’s do simple. How is the U.S. economy doing now? Better. What’s the near-term outlook? Cloudy. What’s the Federal Reserve going to do about it? That depends on whether those clouds give way to sunny skies or it starts to rain again.”

The New York Times: This Time, A Growing Economy Stirs Unease — “Those who see a black cloud behind every silver lining can point to plenty of negatives in a good economy. Bond investors will lose money as the value of long-term bonds declines. That will mean that a lot of people are poorer. Banks own a lot of Treasuries, and some of them could suffer as the value of those bonds decline. Perhaps rising interest rates will prompt a sell-off in the stock market. Perhaps they will choke off the recovery in housing.”

Washington Post: Interest Rates Are Rising! Here’s Why We Should Be Thrilled. – “The bond market bears had a pretty spectacular May, as the 10-year rate rose from 1.63 percent on May 1 to 2.15 percent Friday. (The price of bonds moves in the opposite direction of yields). Is it a moment of reckoning that will stamp out the recovery or presage dangerous inflation or massive losses by bond investors? Or is it something more positive? Let’s look at the evidence.”

 The Wall Street Journal: The Federal Reserve’s Policy Dead End — “Quantitative easing, or what the Fed prefers to call long-term asset purchases, is supposed to stimulate the economy by increasing share prices, leading to higher household wealth and therefore to increased consumer spending. Fed Chairman Ben Bernanke has described this as the “portfolio-balance” effect of the Fed’s purchase of long-term government securities instead of the traditional open-market operations that were restricted to buying and selling short-term government obligations.”

Please follow our community rules when engaging in comment discussion on this site.
  • Wm_James_from_Missouri

    The Emperor’s closets are empty !

    Rising prices for the same houses: False wealth.
    Paying higher real estate taxes on inflated housing prices : False wealth
    The promise of a professional career paid by debt laded students: False wealth.
    Rising stock prices on non dividend paying stocks : False wealth.
    Reshuffling of health care dollars via complex Obama-Care plan to private insurers, with no meaningful cost controls : False wealth
    Ever increasing immigration and importing of workers : False wealth
    Policing the world’s problems : False wealth
    Redirecting America’s investment dollars to China : False wealth
    Manipulation of the distribution and concentration of wealth to fewer and fewer people via The Federal Reserve Bank to private investment firms : False wealth

     
     

  • Unterthurn

    After listening to one of the recent “This American Life” episodes my question is if economists don’t include all figures like disability benefits being paid out to the unemployed in their conclusions why should we eat up their gleeful prognosis?

    • Rick Evans

      If your comment wasn’t from 7 hours ago I would think you were reading my mind.

      • Don_B1

        @Unterthurn:disqus  @disqus_iXF4ZoV23E:disqus 

        Without knowing the context of “… don’t include all figures …” I have to guess that it might be that disability benefits are different from unemployment benefits, SNAP (food stamps, etc.) and other safety net benefits that are temporary and the economists are trying to calculate the effect of the financial (or other) crisis on government spending.

        The citizens (at least most) of this country have determined that disabled people should be able to live a life, with some self-respect, aided by modest help through the government, which would be given to them regardless of the ups and downs of the economy. Therefore those expenditures should not be included in some categories of government spending.

        I can’t defend the particular issue you raise except in these general terms, but the misunderstanding, if it was one, could have come from a poor expression of the items under discussion or a mishearing of the statement, each of which happens all too often. If you can listen again to the point where the issue arose and provide more details, in particular a link would be great, I would try to help then.

        • Rick Evans

           I suggest you listen to the episode of “This American Life Unterthurn was referring to.

          Federal Disability benefits have become a new form of welfare for people who claim to be unable to work right around the time their unemployment runs out.

          States have become extremely aggressive “helping” these laid off individuals, who often lack the skills and education to find jobs, move onto this lifetime taxpayer benefit.

  • WorriedfortheCountry

    “the economy seems to be picking up”

    Is this a joke?  Every hear of a dead cat bounce?

    A recovering stock market due to Fed $85B/month pumping is not a healthy economy.

    • Don_B1

      You seem to be trying to scare people with arguments at least somewhat like Martin Feldstein, although your comment is so cryptic that it is hard to go beyond the “fear” part.

      But for those who are interested in really understanding this issue, please see Krugman and DeLong here:

      http://krugman.blogs.nytimes.com/2013/04/01/bond-bubble-brouhaha/

  • MadMarkTheCodeWarrior

    Wall Street’s fortunes are not shared with Main Street. The Walmart model has destroyed much of the American dream as they and companies like them pay their employees less than a living wage and strive to hire part time employees to reduce their responsibility to pay full time benefits. And that doesn’t even consider the devastation to American manufacturing that they ayed a key role in. The problem is not just in retail. Even universities have embraced this model by using adjunct professors who are poorly paid.

    America is wealthier than it ever has been, yet 93% of Americans have not participated in the rebound. Alas the vast majority have lost ground financially.

  • Yar

    What would happen if the top 1 percent, decided to actually “consume” all the wealth they have?  Like in the movie Brewster’s Millions, not invest but consume.  I bring this up to make the point that wealth isn’t what it appears on paper.  There isn’t enough resources in the world to convert the vast wealth reported into trash.  This is the problem with our consumer driven economy, as the common person consumes, the paper wealth is accumulated by those who produced products.  The world becomes a huge trash pile and the rich are left with all the money and nobody to buy.  Nations behave much the same.  China buys Smithfield meats just to get something for their money.  Better than holding on to the dollar as the bubble deflates or pops.  What we think is a rebound may be the beginning of a final inflationary surge to exit the dollar.  Just before a soap bubble pops the surface starts to move wildly, is this what is happening now in our economy?

    • madnomad554

       You have hit on something I’ve been saying for years now. If there are so many unhappy with the 1%, then stop creating the 1%. Stop giving them your money through mass consumption. The US makes up only 3% of the world population, yet it creates 25% of the worlds garbage…embarrassing to say the least.

      But considering that per person and per household, the US has more disposable income than any body else in the world, the mass consumption isn’t likely to stop anytime soon.

  • Gary Kay

    Only a fool would believe this. History shows that we are currently between crashes. Rock bottom interest rates will continue.

    • Don_B1

      You are absolutely correct in that low interest rates will continue at least until unemployment rates fall to around or near 6%.

      The Federal Reserve’s longer-term bond purchasing has held the interest rates on those types of bonds low which has had the effect of lowering mortgage rates and thus providing some growth in the housing industry and thus some construction worker hiring. But this effort is not nearly as effective as tool normally used to stimulate the economy, the Fed’s discount rate. But the discount rate is already at near zero, because of the Liquidity Trap the current economy is in, and which Mr. Feldstein seems to ignore here and in other items he has published.

      See:

      http://krugman.blogs.nytimes.com/2013/04/01/bond-bubble-brouhaha/

      The person on this program to pay the most attention to is Robert Kuttner.

  • madnomad554

    I saw that Home Depot stock is up 120% over the last two years. I guess that means the housing industry is rebounding. But rebounding too what? Will the homeowner go back to building and buying homes that are just too big? Get a clue home owner, if you couldn’t afford that $1500 a month house payment 5 years ago, what makes you think you can afford it now or in another 5 years?

    This recession may not have happened were it not for the home owners thinking they needed 3000 sq ft to live in. Canada’s average home size is 2100 sq ft. I don’t recall them having a housing bubble.

    Average size home in 1970 was 1400 sq ft…average size in 2010 was 2700 sq ft. If wages have supposedly been flat over the past 2 or 3 decades, then why did Americans double their home sizes if wages have been flat? The bank didn’t come knock on the homeowners front door waiving a $500,000 loan in their face, rather the home owner knocked on the banks front door asking for a bigger loan…a bigger house. And where is just one homeowner willing to admit they simple bit off more than they could chew? I’ve heard no one admit that they lost their house because they built or bought too much house. The only thing I’ve heard is whining, complaining and finger pointing.

    It’s the blind leading the blind people. Tens of millions of people will go back to building or buying homes they know they can’t afford. Not because they don’t have enough money, but rather because they can’t resist living beyond their means.

      

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Caveat: Buyer choice isn’t always buyer choice.

      When I say that, I mean that it’s not really a choice when one gets to home shopping and looking at areas they want to live in (influenced largely by commuting distances and schools). The buyer doesn’t have an array housing stock in similarly locations, of similar ages, similiarly maintained and featured, with the only difference being the sq ft.

      There’s almost a “monoculture” in zoning which leads to housing not varying in size. It’s so prevalent that when someone does something else, it makes the news.

      By comparison, there is real choice in chocolate. Now that Americans have had the taste of higher strength chocolate for a generation, they’ve decided they like it enough for the chocolate makers to serve the market. , Now I can get 50%-90% cacao chocolate without having to go to a specialty importer.

      • madnomad554

        I completely disagree in saying the homeowner has no choice. During that 40 years period where home sizes doubles, family size shrank by one person. That cannot be squared by me. One can’t piss down my back and tell me it’s raining.

        BUILD A SMALLER HOUSE and less of ones income will go toward a monthly house payment. Simple economics 101. 

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Buyers can’t just choose something that’s not being built. I didn’t say “no choice”, I pointed out the very limited offerings for people who want to buy a house that isn’t just like every other house in the town or neighborhood.

          Not every homebuyer is in a position to make buying/building their home a full-time job.

          Do you know how many people are building their own homes in this country? Are you telling everyone who wants a home, “Build it yourself”?

          Do you know what percentage of homes in this country are in spanking new subdivisions over the last ~30 years? Have you ever gone to one of these home builders and said, “I want one, but make it 800 sq ft smaller?”

          • John Cedar

            Builders build whatever customers say they want. They also build larger because there is more profit in larger. There is more profit in larger because customers are willing to pay a premium for larger.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            “Builders build whatever customers say they want.”

            No, they don’t. This isn’t economics for first-graders. If one hundred people want to buy ordinary houses and four people want something different, which builders are going to go through the trouble of changing everything to serve this smaller market who wants cheaper?

            Doing that simply gets in the way of the business of getting all thge ducks in a row about siting, getting approval, financing, and selling homes in 20th century America.

            Tell me everything you know about zoning law changes in the last three generations and resulting changes in homebuilding.

          • John Cedar

            Yeah, I was talking about the 100 people not the 4 people.

            Tell me everything you know about market research that the major builders do…and the resulting changes in homebuilding.

          • madnomad554

             Yes and even though they were willing to pay, many obviously couldn’t afford those bigger homes…POP goes the bubble!!! 

          • John Cedar

            You have  connected a lot of dots there. Default rates went from one percent to five percent. So 95% could still afford what they wanted. And almost half of purchases were speculative  just prior to the peak default.

          • madnomad554

            Considering home size increased an average of 35 sq ft per year since 1970, how far was the home size going to go, were it not for the crash? If the pace had continued, the average home size would be 3035 sq ft, by 2020.

            The more I know the less I understand…  

          • madnomad554

             I was associated with the housing industry for about 13 years, hand building entry doors, stair parts and other like items. The contractor built what he believed he could sell, based on the spending habits of the typical home buyer. If the product is not consumed, then one might have to stop offering that product. I believe that because 11 of those 13 years was self employment.

            It’s just ridiculous to suggest that the contractor is dictating how much overall debt I am in. I can say “NO” to $500,000 worth of debt.

            Why were Americans not building 2700 sq ft homes in 1970? In 44 years I have lived in four states, Tenn, Texas, Vermont and Georgia. At no time have I lived in more then 1000 sq ft of living space. All by choice, dictated by no one but myself.

            If the American public/consumer cannot self regulate their finances any better than allowing someone else to dictate their personal debt, then maybe they deserve the financial hardship they are in.  

          • Don_B1

            But were you able to find the house you bought in the section of the town/city that you wanted? Did the location of your house mean long commutes or poorer schools? 

             I hope that neither applied, but for many it did.

            But otherwise you do have a point in that too many people aspired to what is commonly seen as “what a house should be” but house buyers seldom spent money on better insulation or more efficient HVAC systems; all too many went for “show” and one of those things were size, more as a vanity item than otherwise. But that is the American culture up to now.

            Fortunately there are some that have avoided that but clearly not enough. And theat common market sets hat others who might choose differently but then do not have the choice.

          • madnomad554

            “Vanity and for show”…you have hit the nail square on the head. I hope that millions of Americans learned a lesson regarding that, but I wouldn’t dare hold my breath.

            Thus far my life hasn’t produced children and probably won’t. If I’m not mistaken, home prices peaked at an average around $285,000. So many bought or built higher priced homes to create that average. It’s difficult for me to understand why a family/couple, would create the possibility of such financial peril, due to purchasing a 3,4 or $500,000 dollar home. I imagine some who chose a shorter commute and maybe what was supposed to be a better school, have went on to lose that “show and vanity” sized home. I can’t say, but I wonder what is worse for their child/children? Not having gone to the better school or going through bankruptcy and foreclosure, that could have been avoided?

            What really burns me up about this, is the unwillingness to take responsibility and stop blaming someone else for ones own financial negligence and irresponsibility. I believe America will do this to itself all over again.   

    • Rick Evans

       “I saw that Home Depot stock is up 120% over the last two years. But rebounding too what? Will the homeowner go back to building and buying homes that are just too big?”

      More likely a reaction to demand for deferred maintenance or upgrades.

  • Yar

    Money is a concept for trading work over time. By itself it isn’t real, even when backed by gold, it represents a concept that I will produce something of value and trade with you for something of value.  Money or gold is the counter not the thing of value. It it the trade which has value not the money or gold itself. Understanding the concept of money should make us invest in education for our youth, invest in our infrastructure and even curb our consumption while lowering our environmental footprints.  We reap what we sow, and consumption, just as the foolish child who spent his inheritance in the parable of the prodigal son, we act like a consumer driven economy is sustainable.  We have to change tracts, and soon.  Do we have to hit rock bottom before we will believe?

    • DrewInGeorgia

      Of course we have to “hit rock bottom” first. Even then there’s no guarantee people will learn from past disgrace. We’ll take the necessary action only after all other options have been exhausted. That’s the American Way.

    • Don_B1

      I really like the gist of what you are saying, but with two caveats:

      1) I would call the use of money as an abstraction of the barter economy, allowing a “barter exchange’ but at a distance in time and over a sort of “chain” of goods or services producers.

      2) i would note that a “consumer economy” is almost a reversion to a “barter exchange” where individuals are exchanging the goods and services they each produce, but over a wide number of individuals (and companies).

      Note that China has been growing as an exporting nation, where individuals produce primarily goods and some services for sale to people in other countries who have not sold (or been able to sell) an equivalent amount of goods to Chinese individuals. And just about every economist has endorsed the economic truth that China will have to develop the capability of more of its population to buy its own goods and services in order for it to continue to grow rapidly and not cause distortions in the world economy.

      I would like to see a discussion of what kinds of “consumer economy” make sense and

      a) how the purchase of “junk” (the definition of which is mostly in the “eyes” of the purchaser/owner) and

      b) how maybe some of the production of such “junk”

      might be curtailed or eliminated through various measures, one of which would certainly have to be taxation.

      As a starter, the cost of disposal would need to be included in the originating cost of the purchase of the good or service, to avoid the “external costs” from being passed to people who took no benefit in the generation or use of the good or service.

      I am sure that others in this forum can elaborate in hopefully productive ways, though I am sad to say that I expect that at least some will not.

  • MadMarkTheCodeWarrior

    No politician want’s to admit it but our current form of capitalism is no longer serving America. The USA is being ground down into a third world country as the number of poor and working poor grows.

    The right blames tax policy and big government and big debt for our economic woes but their memories conveniently forget that taxes were at record lows under W during a decade of decline and have not gone up much at all, while America saw prosperity under much higher tax rates during the later half of the 20th century… Back when unions had power to represent the interests of workers and corporations were not people. Despite all of the failures and corruption of unions, who can argue that greater crimes, failures and devastation has not been visited upon the American people by C level executives on Wall Street and in board rooms across America practicing vulture capitalism, outsourcing, derivatives trading, speculation in commodities, financial engineering, creative accounting and buying favorable tax codes, here and abroad.

    When leadership has no stake or interest in the success of their employees, you get sweat shops and poverty. When corporations have no interest in the health of any country you get weak weak governments, weak regulations and a race to the bottom, the price of which is the tragic deaths of hundreds of worNo politician want’s to admit it but our current form of capitalism is no longer serving America. The USA is being ground down into a third world country as the number of poor and working poor grows.

    The right blames tax policy and big government and big debt for our economic woes but their memories conveniently forget that taxes were at record lows under W during a decade of decline and have not gone up much at all, while America saw prosperity under much higher tax rates during the later half of the 20th century… Back when unions had power to represent the interests of workers and corporations were not people. Despite all of the failures and corruption of unions, who can argue that greater crimes, failures and devastation has not been visited upon the American people by C level executives on Wall Street and in board rooms across America practicing vulture capitalism, outsourcing, derivatives trading, speculation in commodities, financial engineering, creative accounting and buying favorable tax codes, here and abroad.

    When leadership has no stake or interest in the success of their employees, you get sweat shops and poverty. When corporations have no interest in the health of any country you get weak weak governments, weak regulations and a race to the bottom, the price of which is the tragic deaths of hundreds of workers that we hear of practically every week overseas, the root cause of which is nothing more complex than greed.

    • John Cedar

      What you are conveniently overlooking is that the poorest in America today live better more luxurious lifestyles than most everyone did back in those good old days you long for.

      The historic tax rates are not comparable because passive losses made them irrelevant to high income earners.

      Those union jobs that paid so well could not buy much as the televisions would cost a month of pay, their cars would cost a years pay but both had poor quality and reliability.

      As disgusting as those sweatshops are in the third world, they are still an improvement over no jobs at all.

      We live in a time when everyone has a cell phone including the kids. Where poor people are spending more on prom dresses and limousines than the upper middle class would have ever dreamed of.

      But as always, its not about what people have its about what the rich have.

      “what the gentleman is saying is that he would rather have the poor be poorer provided that the rich were less rich.”

  • nj_v2

    Another program on the economy, another opportunity for me to point out the 99% likelihood that the discussion will be underpinned by the increasingly dangerous, traditional presumption that “growth” is an unquestioned goal of the capitalist system.

    A couple of months ago, a caller did actually mention the words  steady-state economy on the air, but the notion was not taken up on the air, even briefly. 

    There’s been a lot of serious thinking recently directed at the unavoidable, troubling issues with traditional economic theorizing—finite resources, peak oil, global warming, inequalities stemming from externalized costs, ecological/environmental damage.

    Among the dozens of recent On Point programs dealing with the economy, i can’t find one that’s been devoted to seriously considering these issues in a comprehensive way. At this point, it almost seems as if there’s a willful avoidance to avoid dealing with the notion of steady-state economics and the implicit assumption that economic “growth” is always desirable, positive, and necessary.

    Again, here’s a proposed “reading list” for the program:

    http://steadystate.org/

    Perpetual economic growth is neither possible nor desirable. Growth, especially in wealthy nations, is already causing more problems than it solves.

    http://richardheinberg.com/bookshelf/the-end-of-growth-book

    Economists insist that recovery is at hand. Yet, unemployment remains high, real estate values continue to sink, and governments stagger under record deficits. The End of Growth proposes a startling diagnosis: humanity has reached a fundamental turning point in our economic history. The expansionary trajectory of industrial civilization is colliding with non-negotiable natural limits.

    http://www.upne.com/1584654953.html

    The Myth of Progress
    Toward a Sustainable Future

    In this compelling and cogently argued book, Tom Wessels demonstrates how our current path toward progress, based on continual economic expansion and inefficient use of resources, runs absolutely contrary to three foundational scientific laws that govern all complex natural systems. It is a myth, he contends, that progress depends on a growing economy.

  • ToyYoda

    Let’s hope the conversation is not hijacked by talks of mastectomies.

    • adks12020

      My girlfriend and I are in a similar position right now. We wanted to wait until next year to buy but are seriously considering jumping in right now. She works in mortgages and sees the writing on the wall.  Rates are going to rise and home prices already are. Luckily she has more money saved that I do so we can scrape enough together for a deposit even though we’ve been planning for another year of savings.

  • Shag_Wevera

    Gimme a break.  Now we’ll be screwed by interest rates.  Can’t win anymore, unless you have ALREADY won.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    I hope one of the guests will use the phrase “bond vigilantes” with all the sneer it deserves.

  • creaker

    We’re at the stage in the fight where the fighter slowly gets up after a knockdown and teeters about a bit before falling down for good.
     

  • DrewInGeorgia

    What percentage of current home purchases and new construction are single family dwellings as opposed to ‘investment’ properties?

    Like I’ve said before: The question is often far more crucial than the answer. I doubt the Cunningham family is singing Happy Days when they are now tenants as opposed to homeowners.
    Bet The Fonz is slinging some thumbs down right about now.

  • creaker

    There is no “going back” – unless we’re going to create another huge unsustainable bubble, which was the only thing driving our economy prior to the crash of 2008.

    • TomK_in_Boston

      But we could “go back” to a more broad sharing of the wealth with progressive taxation and corporate regulation.

      The economy never goes in a straight line, it has waves and cycles. Nothing could be more normal than a recovery following the bush crash.

      The problem is that fewer share in the recovery as reaganomics class warfare takes its toll.

      • pete18

         So how much more of the tax burden do you suggest the rich should pay? They now pay about 70%. Should it be 80%, 90% 100%? What number do you think is fair?

  • Steve__T

    I know that this is a satire news org but….

    Ben Bernanke got drunk and told everyone in the bar our economy is f@#^%!!!
    The pics seem real enough and his statements.

     http://www.theonion.com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo,21059/?ref=auto

  • Casey Reyner

    “The top 1% captured 121% of the income gains in the first two years of the recovery.”

    This is why it doesn’t feel like a recovery, the markets have recovered but not main street! The top 1% has recovered the rest of us are still in a recession.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    So we got a long term debt guy?

    Hey, just tell him that what matters the most for the deficit in 6-8 years is adding 2% to GDP now.

    And the second someone starts fanciful fretting about SOcSec and Medicare in a couple of decades or more, it’s a signal that someone’s ignoring a lot of other things the economy needs here and now. Ask the unemployed, and the people measuring demand, how little a problem that is right now. Put that in its proper place in the line.

    Go to Google and find out how much the media has hyperventilated over every “SocSec is doomed” sayer and ignored the little tweak here and there that it needs.

  • creaker

    Students with loans or needing to get loans are looking at a huge interest rate hike in just a few weeks.

  • nj_v2

    Whup, here we go…”What kind of growth is needed…?”

    • creaker

      I think we’re pretty close to the end of the infinite growth model.

      • nj_v2

        One wouldn’t have a clue about that from how this discussion is going. Seems surreal to me. 

        It’s as if the subject were modern navigation, and they’d be talking about using sextants and the stars. Total disconnect with the emerging reality.

  • creaker

    Old school economics is not going to cut it anymore.

    • nj_v2

      23 minutes in, that’s all we’ve heard so far. Disappointing.

      • DrewInGeorgia

        Disappointing but entirely predictable.

        Housing is Good.
        The Stock Market is Good.
        Life is Good.

        Those hamsters just keep on pounding that pedal don’t they?

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          I was going to make a joke about going to Fox Business News for how everything isn’t good, but I thought I’d give you a riddle:

          What’s the last thing a mainstream economist says before drowning in a stream?

          • DrewInGeorgia

            I’m stumped? No wait, that’s the forest for the trees answer…
            I give, what do they say?

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            “Don’t worry! This stream averages a foot deep!”

          • Steve__T

             Row row row your boat
            gently down the stream
            merrily merrily merrily merrily
            life’s a submarine.

    • Roy-in-Boise

      Expound please … Why is that? Because of globalization or the transition from the one age to another?

      • creaker

        Globalization is a big piece of that transition. The post WWII age is gone. No big labor, no pensions, outsourcing, positioning our immigration policies to allow the best and cheapest to compete for jobs. If you don’t a a truly valuable skill, you will be one of the peasants. Whether that’s in rural China – or the US.

  • DrewInGeorgia

    SOME of that is because people left the labor force?
    You talked a lot and said NOTHING about wage stagnation.

  • http://www.facebook.com/kyle.rose Kyle Rose

    It will look like massive dollar devaluation as money comes out of hiding to bid up the price of everything.

  • jcbauers

    The Green Shoots are real and very fragile, and it appears that Congress continues to be intent on starving them.  Refusal to nurture the growth in new industry, education, invest in infrastructure and continued inaction on addressing long term structural deficit will continue to stifle the potential growth of a strong new economic landscape.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    I want to know what each of these guests were saying about the Bush II recovery, simply to know how much to believe them now.

  • marjkramer

    I love saving but with interest rates so low it is hard to get motivated. 

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      At some point, there is an opportunity cost to saving money at today’s savings rates. That’s a subject I’d like to have dealt with on this show (or more of anywhere).

      To contrast, if someone in your position were running a corporation and faced the same “dilemma”, that board of directors might be run out by not doing anything with your capital.

  • DrewInGeorgia

    Green shoots are powerless against a commercial grade lawn mower.

    • nj_v2

      This would get my nomination for the Most Ludicrous Analogy Award (not Drew’s comment, but the term itself, which has been used a bunch of times on the program.)

      Using a biological reference in the context of a mechanistic, abstract model.

      Plants are living, part of a wider ecosystem, manufacture biomass from air and water, are interdependent with other organisms.

      • DrewInGeorgia

        Hence my comment. The only thing this show made me want to do is go pull some weeds.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    Can we have someone talk about “demand” instead of “confidence”?

  • Yar

    We can’t even define sustainable.

    • nj_v2

      The program can’t even mention it.

      • Yar

        No hard questions, is it out of ignorance or is it part of the big lie of our economy?  Read a paper, pages of sports and the stock market, like that is the source of our wealth.

  • DrewInGeorgia

    Who cares about interest rates when they can’t ‘qualify’ for a loan in the first place?

    • Rick Evans

      Interest rates matter a lot of your retirement account contains a lot of bond funds. It usually does as you get older and close to retirement.

      • DrewInGeorgia

        Retirement? What’s that? It sounds nice…

        • Rick Evans

          It’s something you should be saving and investing for if you’re working. Try Dictionary.com or Wikipedia. No, seriously.

  • http://www.facebook.com/whagist Warren H.

    It’s unsettling to hear two respected, notable economists with such divergent viewpoints on the future of the economy! It’s hard to know what to expect: if optimistic and pessimistic outlooks seem equally likely, then I’m inclined to hedge my bets and save my money

  • Steve_in_Vermont

    1/2 way through the program and, listening to both experts, has certainly
    cleared things up for me. Now my wife and I will again need to adjust to
    sleeping on a lumpy mattress.

  • http://www.facebook.com/lee.mortimer.315 Lee Mortimer

    Why aren’t you doing a program about the Bradley Manning trial? I am astounded at the lack of coverage by the mainstream U.S. media. Not one word in the New York Times. We expect better from Tom Ashbrook and On Point.

  • MadMarkTheCodeWarrior

    Have the austerity hawks  learned nothing from Europe’s devastating economic downturn caused by austerity? Last year, even the European banks were saying slow down to the politicians, you’re killing the economy with austerity.

  • creaker

    Why can’t any of these discussions entertain the notion that the underlying game has changed and what has worked before may not work anymore?

    “Communism” (aka totalitarianism labelled as communism) died under it’s own weight in its own waste. Why can’t there be an end game to post WWII style capitalism?

    We are boldly going where we’ve never gone before. But the current discussion acts like their fundamentals are set in stone for all time.

    • DrewInGeorgia

      That’s what happens when you turn a monetary system into a religion.

  • Steve__T

    How much warning do you deed?

    The
    Congressional Budget Office has come out with a new analysis that says the ability of the Social Security disability fund to make payments may end in 2017. The estimates depend, of course, to some extent on the economy. The CBO’s 2011 Long-Term Projections for Social Security
    reports that “as more members of the baby-boom generation (that is, people born between 1946 and 1964) enter retirement, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the shortfall (in the Disability Insurance (DI)) fund will begin to grow around 2017. The fund that provides Old-Age and Survivors insurance (OASI) may not be able to make payments after 2040. laid off workers are also putting financial pressure on disability insurance as well. Some Americans are allowed to make use of the benefits from both of the Social Security programs which worsens the financing problem further. The total number of people who receive some kind of payment
    from the Social Security funds totals 56 million now. The CBO points out that this year, “Social Security’s outlays will total $733 billion, one-fifth of the federal budget; OASI payments will account for about 82 percent of those outlays, and DI “payments, about 18 percent.”

    Read more: http://www.americanthinker.com/blog/2011/08/social_security_disability_fund_is_nearly_broke.html#ixzz2VAGRBvvu

    • DrewInGeorgia

      Warnings are worth diddle when we dawdle.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    Medicare vouchers? Pfft.

    Raising the age of Medicare eligibility? Pfft.

    • TomK_in_Boston

      Pure class and generational warfare.

      Meanwhile, the recent trustees report shows the estimated  life of the medicare trust fund increasing by 2 years and the health care “cost curve” flattening dramatically. Funny how I didn’t see any happy stories in the righty media.

      If we just got our costs down to the level of the next most expensive country in the developed world (Switzerland?) medicare would be in massive surplus.

      Our only problem is the predatory private hospital and insurance corporations.

      • John Cedar

         Trust fund? That is not a very apt descriptor.

        • TomK_in_Boston

          LOL, Absolutely, the key question is what you call it.

          If the trustees had reported that the estimated life of the whatever fund had decreased by 2 years, I would venture a guess that you would not focus on the name.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            I dunno if I trust them to geek the numbers about life expectancy for recipients, a stat which must affect the fund expectancy.

            It’s been shown that life expectancy gains since the advent of SocSec have accrued mainly to the upper-middle-class and above.

          • TomK_in_Boston

            I don’t trust any long term econ forecasts. Hey, I don’t think they can predict next quarter, so 20 yrs is a joke.

            Nevertheless, if their worthless estimates are getting more positive, it probably means something is changing for the better.

            One thing I am sure of: if we could control costs like the rest of the developed world, we would have a huge health care surplus. And before the TP parrots start sqwaking, no, germans, swiss, danes, french, etc are not dropping dead from their diverse national health care plans. In fact they are living longer than us.

          • John Cedar

            It makes no difference if it will last 50 more years, it is still “An investment fraud that involves the payment of purported returns to
            existing investors from funds contributed by new investors.”

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Why don’t you ruin SocSec when the GOP is in power?

            The rest of us have some governing to get done.

  • MrStang

    Is Feldstein still touting Romney’s disastrous,, incoherent tax policy? Is he still using error-laden calculations? Please stop feeeding these massive economic, pro-corporate, pro-low wage, pro- unemployment trolls.

    Put Feldstein in a quiet corner.

    mobile.nytimes.com/blogs/krugman/2013/04/01/bond-bubble-brouhaha/

  • Jim

    there will be another storm… This time is not coming from Europe… it is coming from China.

  • creaker

    I keep getting visuals of people beating a dead horse – I can’t imagine why.

  • Ellen Dibble

    Fascinating.  People I think are trying to invest in what I’ll call personal infrastructure, re-education, health investments — not bigger houses or bigger cars.  I refer you to who I thought I heard the BBC today call Angela Miracle (Merkel), who they say is shifting the push from the European Economic Union from cutting deficits (austerity) to “structural” change.  We need that too, both governmental and private job-wise.  Education is needed to get the people to be able to do jobs that pay.  Meanwhile, we’re all about profits.  Wherever there can be profits, the elites are happy, especially if there are tax breaks (think health care), but unless the fat in America’s prosperity goes to others than those with stocks, those to whom profits are important, then we are back to a large swath of powerless and dependent people.

  • DrewInGeorgia

    The Stupor Committee…lol

  • MrStang

    Feldstein’s tax policy is an “Entitlement Program” for the rich.

    • creaker

      It’s really simple – when the rich can’t get richer from “growth” they’ll do it by actively pulling the money out of your wallet – and they will use the government to do it.

      • Steve__T

         They already are.

    • TomK_in_Boston

      The only way to reverse our  #1 problem of all the income flowing to the rich and the corporations is to increase taxes on the rich and the corporations. What could be more obvious?

      http://i.huffpost.com/gen/1159884/original.jpg

  • DrewInGeorgia

    “Green Shoots are a weed field full of low wage jobs”
    Right on caller!

  • Ellen Dibble

    I’m hearing that with fewer unemployed, the wages will go up.  That assumes these are jobs that can’t be sent to India.  How many shoe-shine kids do we need?  “Service” — not everyone can bring in physician’s and lawyer’s rates.  If you unionize the street-sweepers, I’m not sure…  I’d rather have more builders, that sort of thing.  Too many middlemen, everyone picking a little more of the profit on the way up to the stockholders — been there, done that, regret it hugely.  Think housing in 2008.

  • Davesix6

    So everyone of the guests seems to agree that employment is in horrible shape with most new jobs created being low paying and part time jobs.
    So why again is the Senate about to pass imigration legislation that will add millions more low skill workers needing a job? 

    • Steve__T

       They need more votes(money) to stay in office.

    • TomK_in_Boston

      Because they are bought by the corporations that benefit from cheap labor.

      Even better, the righties can claim they compromised on immigration, they’re reasonable people after all, while really doing what benefits their corporate bosses. 

  • MrStang

    The $ is in rents to the oligarchs and plutocrats. They are purchasing favorable tax policy with government bribes (laffer-curve pimping, trickle-down blah blah reagonromneynomics). This further concentrates wealth at the top.
    Then Feldstein talks about lack of good schools and training but he doesn’t tie that to reduced revenues for these public institutions. ENOUGH OF THESE SCOUNDRELS HAUNTING THE 47%!

    • TomK_in_Boston

      As the prez of U of Michigan said, “We were state supported, then we were state assisted, and now we’re state located”

      Wake up, people. High quality public higher ed was supposed to be nearly free in the “old” America. No student loans needed. Now that’s destroyed so the rich can continue to have ultra low taxes. Your student loan payment goes into romney’s pocket!

  • PithHelmut

    I don’t get it. We continue to wrestle with an economic system that has evolved to leave out the vast majority of important factors, ie: the middle class, the poor and the environment.  We need to overhaul the whole darn thing.  It only feeds the beast of war and voracious, insatiable greed. Other systems are possible and even simple compared to today’s dog’s breakfast and they are available now. For example we need a currency that is decentralized not directed solely by a central entity. Question: What system already exists and that favors diversity, ingenuity and innovation PLUS has been proven over billions of years to work?  Answer: Nature.  We need to follow Nature’s way – to allow full diversity and equality. While we listen to the minds that try to build upon a framework that is founded on greed and protectionism, prosperity and will not return and indeed will only send that needle downward ever further. 

  • sickofthechit

    As MadMark intones it’s long past time to remake our economic system.

    My idea is to change to an economy based partly on the fact that each of us wakes up each day with essentially the same amount of time ahead of us.  If we agree on that fact then why not go to the next step and begin to “price” our basic needs accordingly.  Health care or wellness care would cost say 8 hours per week.  So the minimum wage worker would have to “pay” about $60/week.  A lawyer making $150/hour would be “paying” the same 8 hours, it’s just that it would “cost” them $1,200/week.  An unemployed person would “pay” their time by volunteering or participating in some kind of training program.  Someone on disability can still do something, can still contribute somehow.  I call it “The Government Plan”.  Basic food and shelter could be “paid” for the same way.  charles a. bowsher

    Anytime I hear of talk of raising the retirement age to help solve Social Security funding I keep waiting for the speaker to mention the negative effect that will have on the unemployment rate….no one ever seems to make the connection. If we do increase retirement age we will need to maybe do a program where the retiring workers hours are phased out while the replacement worker is phased in to full employment.

  • Ellen Dibble

    One of the panel — I think Feldstein — was saying that “the elites” are obsessed with reducing the national debt, by which he means using austerity in the national budget.  I don’t think he said by increasing corporate or inheritance or capital gains taxes.  This brought me to a full stop, since it has seemed to me the ones most adamant about bringing down the national debt are the ones who thought the TARP was appalling, not, for instance, those who were unambivalent about the unpaid wars of the 2000s, or the Medicare pharmaceutical piece from Bush that did not bargain for the best deal.  The debt in the 2000s was not a big millstone around their necks then.  The ones who seem most insistent about small government and deficit reduction seem to be those right in the middle where the tax breaks are scarcest.  You could be railroaded by the IRS into having a large house and start feeding on the Schedule A deductions, but still it seems that what is “ours” is being flat out taken, say to catch the banks when they fall flat on their faces.  These are not the elites, those with lobbyists and pricey accountants, it seems to me.  It takes a certain kind of person to want blind austerity, people with radical impatience perhaps, without a fine understanding of the interdependence of the public and private in American life.  Is that a picture of our elite?  I hope not.

  • djbernstein2

    The situation that you are describing is fundamentally exploitative. As jobs become more insecure, the employee/employer power relationship becomes more imbalanced. The inequity in income distribution is a reflection of this. The worker is no longer considered one of the legitimate vested interests in the corporation or, for that matter, in the American economy.

  • c touzel

    This new model is merely one which is descriptive of what is currently already occurring but is bolstered by rationalizations for that reality. What is really being described is the increasing precarity with which individuals must contend under modern capitalism, and that system’s indifference to it. Truly another step in the triumph of the market over humanity. This sort of precarious form of employment is nothing new to those at the bottom of the economic ladder. This is a glamorization of human expendability. 

  • Markus6

    It’s amazing that people in this forum are so absolutely negative about the economy. I too think that 16T in dept, the fed’s actions, real unemployment and all the rest are pretty dire. But there are some significant positives. 

    This must be a fun group to be around. 

  • MrStang

    David Cay Johnston -
    ” The authors begin with a point I have been making
    since before my book Perfectly Legal in 2003: Under
    current government rules, an ever-greater share of
    economic resources must flow to the top over time
    because those rules subtly redistribute upwards. As
    the authors put it in their paper:
    There was a fall in the top 1 percent share in
    2008‐2009, but a rebound in 2010. This would
    be consistent with the experience of the
    previous economic downturn: Top income
    shares fell in 2001‐2002, but quickly recovered
    and returned to the previous trend in 2003‐
    2007.
    This trend is also seen in Britain, but not so much
    in countries that have higher tax rates on top
    incomes, rules that allow workers to bargain
    through unions, and other policies that America
    had in the New Deal era that ended with Reagan. As
    the authors write:
    To us, the fact that high‐income countries with
    similar technological and productivity
    developments have gone through different
    patterns of income inequality at the very top
    supports the view that institutional and policy
    differences play a key role in these
    transformations. Purely technological stories
    based solely upon supply and demand of skills
    can hardly explain such diverging patterns.”

    http://www.nationalmemo.com/inequality-rising-all-thanks-to-government-policies/

  • MrStang

    More from David Cay Johnston article –
    “… Saez has shown that in the two years of recovery
    for which we have data, 2009 to 2011, 121 percent
    of the income gains went to the top 1 percent. That
    means the 99 percent saw its share of the national
    income pie sliced more thinly.
    These gains were so highly concentrated that 40
    percent of all the increased income in our nation of
    314 million went to fewer than 16,000 households.
    On the rise of CEO and other executive pay, while
    that of most workers is flat to falling, the authors
    find that “tax cuts may have led managerial
    energies to be diverted to increasing their
    remuneration at the expense of enterprise growth
    and employment.”
    In plain English, that means some executives are
    lining their own pockets at the expense of the
    enterprises they run. In a country where they can
    keep most of their increased pay because of tax
    rate cuts, executives have an incentive to focus on
    their wealth, while if tax rates were at pre-Reagan
    levels, pushing for much higher pay results in much
    less personal after-tax gain.
    Cuts in gift and estate taxes, the authors show, also
    fuel inequality as those who chose their parents
    with an eye towards wealth do better than those
    born to less-wealthy parents.”

    http://www.nationalmemo.com/inequality-rising-all-thanks-to-government-policies/2/

  • Mary Bell Lockhart

    Hello, folks, out here in middle America we’re getting weary of talk equating the economy to Wall Street. We see that the stock market growth is the same old speculators, doing the same old fake investments that before long will lead to another crash. We see that the housing market rebound is mostly due to the same old speculators that also caused the crash. Here’s things that would help the real economy: A tax on stock transactions. Raise taxes on the highest marginal incomes and tax carried interest like other income. Government investment in education, infrastructure, and alternative energy. Comprehensive immigration reform. Elimination of corporate tax loopholes. Raise the minimum wage. Raise or eliminate the cap on income subject to Soc Sec withholding

    • TomK_in_Boston

      Excellent list. In closing corporate loopholes, I’d be sure to ax any that facilitate offshoring. It must be recognized that “American” corporations that don’t mfgr in the USA are not American.

      Funny how the common sense items on your list are almost never mentioned by our legislators or media, huh?

    • OnPointComments

      Same old liberal pablum:  get even more money from those individuals and corporations that are currently paying federal taxes (both income and social security taxes), and expand government to be even bigger than it currently is. 

      • TomK_in_Boston

        Same old low-information talking points from the voodoo econ crowd. The effective tax rate on the rich has been falling since WW2, so it’s rather pathetic to refer to asking them for “even more money”.

        http://upload.wikimedia.org/wikipedia/commons/e/e8/US_high-income_effective_tax_rates.png

        • OnPointComments

          From 1979 through 2009, the average tax rate for the top 1% has decreased by 18%; the average tax rate for the bottom 40% has decreased by 65% for the same period.

          • Steve__T

             links, proof of any creditable  statistical data to back that up?

          • OnPointComments

            Here’s the link:
            http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456 
             
            but I doubt proof means much to some — facts don’t get in the way of liberal ideology.

          • Mary Bell Lockhart

            No, name calling e.g.,”liberal ideology” can’t get in the way of facts.  Just where do you think the 1% GOT their money? – answer, from the rest of us and the government.

          • http://read-write-blue.blogspot.com/ RWB

            Are you claiming they stole it?

          • Mary Bell Lockhart

             Sure, by many means most of which are legal.  Overcharges, high interest rates, theft of wages, low wages, etc.,

          • Steve__T

             Thanks for the link. The facts are your math is incorrect.

          • OnPointComments

            I know.  The bottom 40% has a negative tax rate.

          • Steve__T

            And a 4.6% raise in SS tax Edit: And thoe are considered at poverty levels

          • Whatnowdog

             I make a little above average and paid 19% on just Fed income tax when Romney paid  14%. I paid SS tax on  all of my income. They keep raising the sales tax which hits the bottom the most. Yes  the tax check for 19% on $100 million income is huge  compared to 19% on a lot lot less then $100 thousand for most people but most of that goes to paying for the basics.

  • bagsc

    There’s one measure of when the ‘green shoots’ are coming up: U-6.  We’re still at 13.9% underemployment vs. 7.9% in December 2006.  We can’t rely in ‘wealth effect’ growth from housing or stock bubbles – we need a middle class.  This isn’t just rhetoric, we have a measure to observe and Washington has failed to make any positive impact on it since 2008.

    And fixing the deficits is simple: Bowles-Simpson.  But neither Democrats nor Republicans are adult enough to take a bipartisan, pre-packaged solution and implement it.

  • StilllHere

    It costs the Japanese government 24% of its revenues just to pay the interest on its debt at current rates. If the average interest rate rises to just 2.2%, then it will take 80% of revenues to pay the interest. What’s the lesson?

  • belacquanatta

    The hope of a growing economy seems to rely much on the falling unemployment rate and the rising housing market. It seems also a common admission that much of this falling unemployment, aside from those who left the labor force, is occurring mostly in precarious, low-wage service jobs. We also agree in general that the manufacturing jobs, which provided growth and stability for the economy in the past are, pretty much gone. And, considering globalization (outsourcing) and automation, it is assumed that those jobs are not coming back, at least in numbers significant enough to influence the rate of unemployment.If so many people are getting only low-wage jobs, and so many of them are also underwater on their mortgages, who is responsible for this growth in the housing market? While there is so much talk about the rise in home sales, there seem to be general lack of more detailed information about the housing market (maybe I’m just not paying enough attention). Is it these same low-wage workers who borrow from banks, betting on the prospect of future employment at more stable, high-income jobs? Are homes being built for, and banks lending to these low-wage workers, with the same speculation that they can afford them? I think you guys did a program about “rentership society” a while ago. Perhaps these houses are being bought in bulk by firms or rich individuals speculating on rising prices, renting them out in the meanwhile.I get the feeling that all this growth is standing on very shaky and unsustainable ground.

    • Whatnowdog

       The home sells seems to be going to speculators that plan to rent the homes. The individual buyer is getting out bid.  I have seen what happens to neighborhoods with a lot of rentals they go downhill.  As prices on these homes rise they will come back on the market as a flip which will keep hurt sell prices.

  • Question_authorities
  • http://www.facebook.com/people/Nigel-Jessen/100001918780098 Nigel Jessen
  • Trond33

    I think the pundits, media and politicians place too much emphasis on short-term metrics, like the stock market numbers.  The oversight is a number of long-term structural issues and crisis the U.S. faces.  So many numbers are fudged in the U.S., such as the unemployment rate.  It is collective sticking of one’s head in the sand.  

    Structurally so many aspects of the U.S. economy are unsustainable, from an educational system that is failing to produce graduates prepared for the jobs at hand to the eroding sustainability of a materialistic lifestyle underpinned by petroleum.  The U.S is only now coming to terms with global warming, a decade after the rest of the world.  As a country, the U.S. is dangerously lagging in planning for a changing world, embracing green technology or planning infrastructure for a world with $8 per gallon gas prices.  Planning by public and private institutions are still ongoing as if it is the 1970′s, 80′s or 90′s.  The realities of 30 or 50 years into the future is drastically different from what the outlook was in the past.  It is the inability of the U.S. to tackle the big picture that dictates that we are upon an economic “turn around” is only an illusion.  Failure of leadership is placing the U.S. in an increasingly dangerous situation.  One needs to look no further than the Pentagon, who rates global warming as a national security threat.  The entrenched powers to be have failed The People for 30 or 40 years now, it is time we demand more from political and business “leaders.” 

  • http://www.facebook.com/profile.php?id=1091744903 Tracy Estabrook Boal

    First half of the conversation was kind of pointless anxiety over the Fed’s possible actions. There’s no way that the Fed is going to suddenly pull out of the support business and allow interest rates to sky rocket and the bond markets to collapse. They aren’t stupid. So the inevitable unwinding is unlikely to get rolling for a while yet, and it’s likely to occur in tiny baby steps over a long period. If the economy is strong, the unwinding will cause a few crappy months of ‘no place to hide’ investment returns; the gold bugs will briefly feel vindicated; and then things will re-allocate themselves more normally again.

    Over the next decade, though, the topics addressed in the second half of the show are much more important and more substantive than Fed policy, which can adjust to conditions of inflation, etc. We need decent-paying jobs, and we need long-term deficit reduction plan, but NOT short-term austerity. We need to spend money RIGHT NOW investing in all the usual long term stuff like education, scientific research, and infrastructure that pays off in the long run. We’ll never see the money to do that this cheap again. At least everyone on the panel agreed on that point. Too bad the politicians won’t agree on it.

  • Whatnowdog

    I hate to break it to the Guests but the only thing that will save the US economy long term is manufacturing and natural resources. The service economy just cuts the pie smaller and smaller as the money changes hands.
    Yes service jobs accountants and sales and bankers etc are necessary as grease in the gears but they only put money in their pocket and they save money for their client but they don’t add to the total wealth.
    Look at the small town that lost all the mill and manufacturing jobs to Asia and they have a Walmart. All the wealth left in the town is being moved out of the town to stock holders and Asia. 

  • HonestDebate1

    What is on the horizon for business? More regulations, more taxation, and more Obamacare. That means fewer full-time jobs, fewer employees and offering no benefits. Maybe that will help families struggling to make ends meet. Or a robust energy policy that will help keep energy cost down, do we have one of those? Where are we pinning our hope? The Labor Force Participation Rate continues to plummet in a universe of fewer jobs available with fewer people even bothering to look for them. Do the math and it translates to a lower unemployment rate. How long can that farce be believed? I suppose now that the new normal is a eightish rate, 7% seems like a dream despite the reality that it’s plum awful. Twoish percent GDP is another new normal. As is a corrupt as hell IRS fixin’ to manage your health care with tens of thousands of brand new agents. What could go wrong? 

    There is no recovery because that implies we can go back, I think we’re past that point now. A Democrat House in 2014 will be the final nail… but there’s already a fair mount in the lid. No, happy days are gone. We are not seeing a recovery, just the adjustment to the new normal in a fundamentally transforming America.

    • pete18

       But wait, didn’t you hear? Now it’s a GOOD thing that health premiums are going to go up under Obama Care:
      http://www.forbes.com/sites/theapothecary/2013/06/03/democrats-new-argument-its-a-good-thing-that-obamacare-doubles-individual-health-insurance-premiums/?partner=yahootix

    • jefe68

      You better mount up an head for them hills.
      I hear some IRS folks is coming for you.
      They will be armed, so you better load up on ammo.
      Gunfight at the mendacity coral.

      • HonestDebate1

        That’s just weird.

        • jefe68

          Yeah, weird man…

          • 1Brett1

            Now, jefe, I’m sure HD1 can see an alternative universe in his magic mirror showing a world with less regulation, less taxation, and no Obamacare where employers lavish their abundant full-time workers with amazingly high salaries and lots of benefits. I’m sure so many companies are sitting around going, “damn you, Obama, and here I was just going to hire a bunch more people, make everybody full-time, lavish them with incredible pay, and load them up with benefits!”

            I’m sure many companies are bursting at the seams with business and money to expand, and would have provided their employees with great health insurance, but now that they are being told to provide health insurance, they have instead decided to simply shut down their businesses…

            [sarcasm]

          • HonestDebate1

            I agree with everything exec[t the last bracketed word.

          • 1Brett1

            Well, it IS your unalienable right to be naive! Our Creator (if there is one) granted you those rights; our founders did not draft those in the Declaration of Independence; and, no, they are not enumerated in the Constitution…and, of course, we all know an “unalienable” right is a more powerful right than an “inalienable” one; the founders said so by changing “inalienable” to “unalienable” at the last minute, so, well, you know, that has been debated and proven in every history discussion in, well, history…I mean it’s well known everybody turned to Jefferson and said, “Thomas, you are such a Democrat with a capital D, dude, change yer inalienable to unalienable and get right with God or whatever!” So, suffice it to say God gave you free will to be naive and not have that able to be taken away by communists and whatnot!

            If you wish to naively believe everything in my post would be true except my sarcasm, no man can take that away from you. 

            [satire]   

          • HonestDebate1

            Wow, evidently I hit a nerve.

          • 1Brett1

            No, you just have a lot of nerve. It’s interesting how much you delude yourself into thinking about your importance in a such a bloated way. I often make jokes out of the absurd, and your silly argument about “unalienable” vs. “inalienable” was ridiculous.

          • HonestDebate1

            It’s not about me.

          • 1Brett1

            I guess you’ll continue to dance around the fact that you made a claim you can not support by any evidence…okay, but thanks for one of your typical platitudes, further evidence of who you are and how that is contrary to who you pretend to be.

          • pete18

             A lot of dancing around about the history of god given rights but not much on why Greg is naive (except that Brett disagrees with him).

          • 1Brett1

            You tend to insinuate yourself into others’ conversations…but it appears one can’t account for your lack of reading comprehension. It was clear why HD1 (don’t call him Gregg -no, wait, he only says that to liberals) in my view has a naive opinion of business…

            However, I’m not the least bit interested in having any kind of conversation with you and your repugnant partisanship, just so you know; so FO, as they say. 

          • HonestDebate1

            You seem to be under the impression we were having a conversation.

          • HonestDebate1

            It was amazing to me to see the reaction to the “in” vs. “un” thing. It was a throw away line from another commenter who actually was familiar with the issue. I became clear to me that what was offensives the notion that our rights don’t come from government. That single distinction enunciated in our founding documents is profound.

            Government doesn’t grant us the right to freedom of religion or speech, it says : “Congress shall make no law…”. It doesn’t give us the right to protect ourselves its says our rights “shall not be infringed”. The limits are on government.

          • Ray in VT

            “It became clear to me that what was offensive is the notion that our rights don’t come from government.”

            It’s a good thing for Brett and I that we have you here to tell us what we think.  My objection is the promotion of some supposed great distinction between two words that have the same definition, despite a lack of historical evidence.  I think that it is just more poor historical understanding.

          • HonestDebate1

            Who cares what word they used? The intent was clear either way, our rights come from our creator. Do you agree or not?

          • Ray in VT

            So now the word is not important?  I thought that it was super important?

          • pete18

             I’m replying to your comment
            below here so it won’t appear as a vertical “Disgust” sentence:

            “You tend to insinuate yourself into others’ conversations”

            Silly me, I thought this was a public comment forum.

             

             “It was clear why HD1 in my view has a naive opinion of business…”

             

            Clear to you yes. It’s clear to me that
            you have a naïve view of the impact of Obama’s policies on business. Two
            opinions, neither of which are an argument. You were indulging in some self-satisfied
            sarcasm for the benefit of others who share your view. I was indulging in some
            self-satisfied commentary on the emptiness of your last two posts.

             

            “However, I’m not the least bit
            interested in having any kind of conversation with you and your repugnant
            partisanship.”

             

            Myopic pot calling kettle black.

             

            “so FO, as they say.”

             

            Must have hit another nerve.

          • HonestDebate1

            The IRS really is going to manage your health care. Businesses really are dropping coverage and cutting back hours. Energy prices really are not going down. And on and on, everything I wrote is true. It’s serious stuff. That you come back with some creepy irrelevant caricature is weird. It does not move discourse forward. It is not honest debate.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    Nope.

    You should refuse to be cornered into “the only way to fix it is for me, my barista, and a multimillionaire pay the same rate.” I know I’m not gonna accept that as a “deal”.

    Because the flat tax is the wet dream of a lobbyist with rich clients who simply wants the rest of us to give up fighting for the idea of properly progressive taxes. I ain’t giving them that victory.

    • pete18

       What do you propose the rich pay that would make things “fair.” The top 10% already pay 70% of the tax burden. That is already overly progressive. What percentage should they pay? Give us a number.

  • MrStang

    Avik Roy is a meretricious tool. This bunch of lies has been debunked
    http://www.newrepublic.com/node/113362

  • pete18

    And of course there is the “unexpected” raising of costs on the insurance plans of the young because of Obamacare: http://www.thedailybeast.com/articles/2013/06/04/obamacare-rate-shock-how-big-is-it-does-it-matter.html

  • StilllHere

    We’re losing out to the rise of Asia.  We can either beat them at their own game or continue to bleed.  Hobbling our businesses doesn’t seem like the best idea.

  • pete18

    Oh happy days:

    “The expected U.S. “Great Recovery” hasn’t
    materialized and the economy has fallen short of even normal growth,
    according to a forecast released Wednesday. The second-quarter UCLA Anderson Forecast
    said the growth of real gross domestic product – meaning the
    inflation-adjusted value of goods and services produced – is too small
    to help the nation climb out of its slump.”

    “Leamer said that while jobs are being
    created, “the tepid growth continues to obscure the nation’s most
    fundamental problems: too much government spending funded with too much
    borrowing, too little national savings to cover late-in-life health care
    issues and too many workers lacking the skills to compete in the modern
    economy,” according to a University of California, Los Angeles press
    statement.”

    http://hosted.ap.org/dynamic/stories/U/US_ECONOMIC_FORECAST?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-06-05-09-31-43

ONPOINT
TODAY
Sep 2, 2014
U.S. Sen. Mitch McConnell, R-Ky., talks with Mark Wilson, event political speaker chairperson, with his wife Elain Chao, former U.S. Secretary of Labor, at the annual Fancy Farm Picnic in Fancy Farm, Ky., Saturday, August 4, 2012. (AP)

Nine weeks counting now to the midterm elections. We’ll look at the key races and the stakes.

Sep 2, 2014
Confederate spymaster Rose O'Neal Greenhow, pictured with her daughter "Little" Rose in Washington, D.C.'s Old Capitol Prison in 1862. (Wikimedia / Creative Commons)

True stories of daring women during the Civil War. Best-selling author Karen Abbott shares their exploits in a new book: “Liar, Temptress, Soldier, Spy.”

RECENT
SHOWS
Sep 1, 2014
Pittsburgh Steelers outside linebacker Jarvis Jones (95) recovers a fumble by Carolina Panthers quarterback Derek Anderson (3) in the second quarter of the NFL preseason football game on Thursday, Aug. 28, 2014 in Pittsburgh. (AP)

One outspoken fan’s reluctant manifesto against football, and the big push to reform the game.

 
Sep 1, 2014
This Friday, Aug. 22, 2014 photo shows a mural in in the Pullman neighborhood of Chicago dedicated to the history of the Pullman railcar company and the significance for its place in revolutionizing the railroad industry and its contributions to the African-American labor movement. (AP)

On Labor Day, we’ll check in on the American labor force, with labor activist Van Jones, and more.

On Point Blog
On Point Blog
Our Week In The Web: August 29, 2014
Friday, Aug 29, 2014

On hypothetical questions, Beyoncé and the unending flow of social media.

More »
Comment
 
Drew Bledsoe Is Scoring Touchdowns (In The Vineyards)
Thursday, Aug 28, 2014

Football great — and vineyard owner — Drew Bledsoe talks wine, onions and the weird way they intersect sometimes in Walla Walla, Washington.

More »
Comment
 
Poutine Whoppers? Why Burger King Is Bailing Out For Canada
Tuesday, Aug 26, 2014

Why is Burger King buying a Canadian coffee and doughnut chain? (We’ll give you a hint: tax rates).

More »
1 Comment