Capital Commerce
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Grumpy Greenspan: New Book Hits a Bum Note
Continue reading… 0 CommentsIt's an old inside-the-beltway joke that every Washington memoir should really be subtitled: "If Only They Had Listened to Me." And it certainly looks as if former Federal Reserve Chairman Alan Greenspan's new book, The Age of Turbulence: Adventures in a New World, is yet another magnum opus in that grand literary tradition. One of the 81-year-old Greenspan's big gripes is that President Bush and the Republican Congress—by not cutting spending to match the 2001 and 2003 tax cuts—dragged the federal budget back into the red. Team Bush thus squandered the balanced-budget legacy of the so-called Committee to Save the World: Greenspan and two Clinton administration treasury secretaries, Bob Rubin and Larry Summers.
With George Bush came the tax cuts, unmatched by decreased spending, and, in the wake of September 11, still more open-handed spending.... Deficits don't matter, to my chagrin, became part of the Republicans' rhetoric.... The Republicans in Congress lost their way. They swapped principle for power. They ended up with neither. They deserved to lose.
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4 Reasons to Be Upbeat About the Economy
Continue reading… 0 CommentsBen Bernanke and the Federal Reserve will give us their take on the economy next Tuesday and will very likely cut the federal funds rate by at least 25 basis points. The risk of recession sure seems to be higher than the risk of inflation right now. Indeed, an alternative measure of inflation—one closely watched by many Wall Street pros—that is tracked by the Federal Reserve Bank of Dallas shows that prices other than food and energy rose by just 1.8 percent in July and just 2.0 percent over the past six months. Yet there are some reasons to think that while the economy may slow through the rest of 2007, such as today's iffy retail sales report, we may yet avoid a recession. (But if there is one, here is how it might affect the 2008 presidential election.)
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Yale Prof.: If Economy Tanks, Hillary and Dems Win in a Landslide
Continue reading… 0 CommentsJust how badly might a weak economy hurt Republican presidential candidates—and help Democrats—in 2008? To find out, I rang up Ray Fair, an economics professor at Yale University. He's known for his political forecasting model that incorporates economic data as a big factor in predicting which party will win the White House. Right now, Fair told me, if you assume the economy stays relatively healthy—basically buying the White House forecast—his model is predicting a Democratic win in 2008 with 52 percent of the two-party vote. But if there's a recession, then the Democrats' share would rise to 55 percent. Now Fair correctly predicted Bush would win in 2004, but with 54.6 percent of the vote rather than the 51.2 percent he actually got. Fair guesses that there is perhaps a 3-point Iraq-related penalty assessed by voters that his model isn't catching. Add that to the Dems' vote total, and you end up with a landslide for Hillary, Obama, or Edwards. Let me add this: His model certainly reflects the conventional wisdom inside the beltway. Here is the most recent take of Greg Valliere, political analyst over at the Stanford Group: "The overall message this summer is that the stars are increasingly in alignment for 2008 to be the Democrats' year, which raises this intriguing contrarian thought: Will the Democrats overplay their hand? It appears to us that only the Democrats can stop the Democrats, but we think Hillary Clinton—coached by the master triangulator, her husband—won't let that happen."
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So How Goes Bin Laden's War on the U.S. Economy?
Continue reading… 14 CommentsSix years ago, Osama bin Laden and al Qaeda weren't just attempting to bring down the twin towers of the World Trade Center. They were trying to smash the American economy as well. Here is what bin Laden himself said about his goals and motivations back in December 2001: "If their economy is destroyed, they will be busy with their own affairs rather than enslaving the weak peoples. It is very important to concentrate on hitting the U.S. economy through all possible means." And here is what al Qaeda second-in-command Ayman al-Zawahiri said in September 2002: "We will also aim to continue, by the permission of Allah, the destruction of the American economy."
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Radical Romney Tax Plan Could Be a Difference Maker in GOP Race
Continue reading… 2 CommentsYou know you might be in trouble as a political party when an archterrorist and murdering madman seems to have more thoughts about domestic policy than you do. In his recent video rave, Osama bin Laden had plenty to say about high U.S. taxes and the mortgage credit crunch. The latter issue has been all but absent from the GOP presidential campaign. As for the former, front-runners Rudy Giuliani, Mitt Romney, Fred Thompson, and John McCain have said little more than that they would extend the 2001 and 2003 Bush tax cuts on income and investments, plus keep the expanded child tax credit, instead of letting them expire at the end of 2010.
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Jobs Report Makes a 2008 GOP Win Less Likely
Continue reading… 5 CommentsYou know the "five-second rule," the one that says you can eat food dropped on the ground for five seconds and it's still good. Well, maybe, there's a five-day rule for presidential candidates. Maybe Fred Thompson can still drop right back out of the presidential race—no harm, no foul. Today's job numbers were that bad for Republicans and that good for Democrats. I mean, if you're a political junkie who likes to bet a few sawbucks now and then, it might be time to snag a few "Democratic Party Candidate to Win 2008 Presidential Election" contracts over at the TradeSports online betting site.
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GOP Debate Seemed Removed From Economic Reality
Continue reading… 2 CommentsTalk about weird. It was as if Wednesday night's Republican presidential debate hosted by Fox News was beamed in from an alternate reality— Earth 2 or something—where the economy is still booming and housing prices are still rocketing higher. Because here on Earth 1, the six-year economic expansion is stumbling thanks to a credit crunch caused by the imploding housing market.
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U.K. Offers Insight Into the Edwards Healthcare Plan
Continue reading… 0 CommentsThe dream of universal healthcare, as outlined so far in the Democratic presidential race, looks like this to me: Every American (says John Edwards) gets health insurance or at least most people (says Barack Obama). Will it mean higher government spending? Probably. But it can be paid for via higher taxes on wealthy Americans (Edwards). But who knows, maybe through greater use of technology, cost savings will be enough to avoid a tax increase (Hillary Clinton).
