Entries Tagged as 'Economic Growth'

Romney’s Plan: One Step Forward, Two Steps Back

David Frum September 7th, 2011 at 9:30 am 83 Comments

To read Mitt Romney’s economic plan is to join a more elevated conversation. This is a document written by people who value expertise, and it shows.

It avoids overstatements and misstatements. It credits Presidents Bush and Obama for pulling the financial system back from the brink in 2008-2009. While acknowledging the role of government policy in abetting the housing bubble, the report lays the blame for the excesses of the 00s on the bankers who committed them. The report does take some partisan jabs, but they meet the truth test.

The National Bureau of Economic Research (NBER), the non-partisan research organization that determines when business cycles begin and end, tells us that the Great Recession came to a conclusion in June 2009, when the economy technically returned to the path of growth. However, if the downdraft officially ended at that juncture, that assessment is almost an artifact of NBER’s definitions and nomenclature. For the Obama Recovery is different from its predecessors. As one team of economists has put it in the colorless language of their profession, “the path of adjustment [has] exhibited important departures from that seen during and after prior deep recessions.” In plain words, we are now more than two years into an economic recovery that has been one of the most lackluster in our nation’s history.

The document has one great excellence and two major failings.

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Summer Reads: Silber on The Great Stagnation

August 17th, 2011 at 12:45 am 12 Comments

FrumForum correspondents and readers are encouraged to blog about the books they are reading this August.  Please send any entries to editor[at]frumforum.com with the subject line, treatment “Summer Reads.”

Being home under the weather for a couple of days gave me ample time to read The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, buy viagra Got Sick, sick and Will (Eventually) Feel Better, by economist Tyler Cowen. Published early this year as an ebook, it proved highly popular and was reissued as a hardcover (the form in which I read it).

It’s perhaps a third to a half the length of your standard non-ebook, and contains much thought-provoking material to richly reward the short read.

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Winners From a Cheaper Dollar

David Frum July 20th, 2011 at 11:31 pm 6 Comments

My Marketplace commentary broadcast today celebrates the US export boom.

An economy as big as the U.S. cannot export its way out of recession. But the export surge does contain promising signals of the U.S. economy of tomorrow.

The U.S. is increasing its exports to China faster than to any other country — despite China’s manipulated currency. Computer technology and foodstuffs head the list of sales.

U.S. grain exports have surged to their second best year since 1982, as the droughts in Russia and Ukraine impelled those governments to halt international sales.

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Fiscal Stimulus Didn’t Work, Now What?

July 5th, 2011 at 12:00 am 29 Comments

A report from the White House Council of Economic Advisers has indicated that the stimulus added 2.3 to 3.2 percent to gross domestic product in the first quarter relative to what it otherwise would have been. The same report indicated that the stimulus was responsible for 2.4 to 3.2 million jobs. This is being reported as good news.

What should we have expected from the stimulus? Actually, what we should have expected was stimulus. For $800 billion, of course gross domestic product had to go up in the first quarter and at least someone should have been employed. But and it is a big but, the stimulus should have reduced overall unemployment and brought private investment dollars into the economy that would have sustained any short term economic gains from the stimulus. The real benefit of stimulus, not simply increased spending, should be appearing in current economic news. It is not.

And what should a new job cost? If 2.4 to 3.2 million jobs cost $800 million, that is a cost of $250,000 to $350,000 per job. It makes one ask for a more precise accounting of the spending. Shouldn’t we have expected more jobs?  Weren’t we promised an unemployment rate of less than 8%? And there appears to be little or no sign that these jobs were not, in part, a continuation of state and city government jobs which are going to be lost in 2011 and 2012 due to state finances.

What is the solution now? Did we sell the seed corn by using up our borrowing opportunity and maxing out the nation’s debt? Perhaps.