The first lesson from the pandemic is that nobody knows anything. The next thing to know is that we are in a recession, a really bad one. If you think that this recession is solely caused by the pandemic (“supply shock”) you would be wrong. Every recession needs a trigger to set it off. In 2008 it was mainly the Lehman Brothers failure. This time the pandemic trigger is unique but it will, like all previous recessions, expose underlying weakness in the economy.
I’m going to make predictions about 2020—a fool’s errand for sure. But this fool’s guess is probably just as valid as anyone else’s—I do follow economic trends. Being diligent readers, you will save this article and pull it out on January 1, 2021 to see if I was right. It will be fun.
Even though I have said this before apparently no one was listening so I have to say it again* because every time a new tax reform bill is proposed, the same clichés are trotted out and most of them are wrong. The purveyors of these clichés know they are wrong but they don’t care because they are trying to manipulate you to their ends. And, people fall for them.
Here is what the polls say about what Americans think about taxes (Gallup, Pew Research): (more…)
If economists are so smart, why are they always wrong?
When I took Econ 101 and 102 as a young college student back in antediluvian times the textbook we were assigned was Paul Samuelson’s Economics: An Introductory Analysis. This book is the all-time best selling economics textbook and is still around today (19th ed.).
I had the 1961 edition. In it, Samuelson, a prominent Keynesian economist who won the Nobel prize in economics, predicted that the economy of the Soviet Union would overtake the U. S. economy in 23 years (by 1984). Even as late as the 11th edition (1980), Samuelson stood by his prediction. (more…)
Bankrate.com’s most recent survey on savings reports that only 41% of Americans had enough savings to cover a $500 unplanned expense. Which means 59% didn’t. Before you jump off a cliff, this doesn’t mean they can’t pay their bills—many have access to credit in one form or another. And, it doesn’t necessarily mean these people are poor—but they are spending more than they make and are struggling to maintain their lifestyle.
The issue here is not wealth inequality. There always has been and will be “inequality”. The fact that some people are wealthier than most people is not relevant. If the top 1% are living fabulously well that doesn’t mean they are doing so at the cost of the rest of us. It means they are better at creating wealth and jobs than the rest of us. This is about how bad economic policies are hurting Main Street.
On Inauguration Day Donald Trump was sworn in as the 45th president of the United States of America. His inaugural address was stern, painting a bleak vision of America, yet promising to resurrect America from its “carnage”.
The paramount theme of his address, which will be the defining issue of his administration, was to revitalize America by protecting it from foreign competition. He will metaphorically wall off America. “From this day forward, it’s going to be only America first, America first.” “We will follow two simple rules; buy American and hire American.” (more…)