Economics

The Fed’s Taperwork

By on 12.18.13 | 4:58PM

The Federal Reserve Board of Governors announced today that they would begin a taper of monthly bond purchases made as part of quantitative easing policy. The taper, or reduction, is slight—a decrease in monthly asset purchases from $85 billion to $75 billion, or a little more than 10 percent, which would begin in January.

While some analysts did not expect the Federal Reserve to taper any time in the near future,  there were hints in Janet Yellen’s testimony before the Senate Banking Committee last month that the Fed was pleased with progress they perceived in the economic indicators they used to determine whether to scale back on asset purchases. Recent jobs numbers were probably one of the major indicators the Fed relied upon in their decision.

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Recap from the Tweet-up with Nansen Malin

By on 12.17.13 | 4:37PM

On Monday at 2 pm, The American Spectator hosted a tweet-up with Nansen Malin, who currently works as the Washington State Director for Americans for Prosperity. She has held prominent positions in Washington State politics and nationally is one of the most followed conservatives on Twitter, with over 600,000 followers.

Here’s what we learned from our Twitter discussion with @nansen about what the Affordable Care Act means for Americans.

Less access, longer waits:

Chris McCoy ‏‪@ChrisYMcCoy 

Do people think Insurance ‪#Obamacare or otherwise = good care? Seems CARE will be reduced as Dr's flee practices ‪@nansen ‪@AmSpec ‪#TAS

Nansen Malin ‏‪@nansen

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Dissenting on the Budget Deal

By on 12.12.13 | 12:23PM

Ross Kaminsky leads the lineup this morning with a thoughtful piece on Rep. Paul Ryan’s and Sen. Patty Murray’s budget deal. Allow me to voice my dissent.

Kaminsky asks in his headline “A bad deal compared to what?” The answer is: current levels of sequester spending. Here’s the Wall Street Journal with a distilled outline of the plan:

In the interest of achieving the simple goal of keeping the government funded, the two parties staked out a narrow slice of common ground—a set of fee increases and spending cuts in future years that allowed a modest increase in spending in the next two years. But neither party had to swallow hard to accept something it opposed; neither claimed any big policy trophies.

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Finally, Someone Says It: Stop Extending Unemployment Benefits

By on 12.9.13 | 11:12AM

Yesterday, on Fox News Sunday, Senator (and likely presidential hopeful) Rand Paul (R-KY) came out against further extension of unemployment benefits, saying that ongoing extensions do a "disservice" to workers. Yes, they do that, as well as offering a disservice to taxpayers.

But in an era where Republicans are so desperate not to seem "mean" that they too often act like "Democrats-lite," this direct opposition to never-ending unemployment benefits is a breath of fresh air.

Sen. Paul pointed out that incenvitizing people to be unemployed for a longer time causes them to become less desirable as employees (as people who have been out of work for longer, and thus further out of touch with business, technology, or just a work ethic.)

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Fast Food Workers Rally for Dramatic Wage Increases

By on 12.6.13 | 3:10PM

One week after a slew of protests and rallies at Walmart stores, organized by anti-Walmart groups seeking to disrupt the massive retailer’s Black Friday business, protesters are now directing their attention at fast food chains and organizing to call for a $15 working wage.

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The Takeaway from Today’s Jobs Report

By on 12.6.13 | 11:19AM

Today's jobs report has some good signals for the economy, and some cautionary notes.

The media's takeaway, of course, is that the unemployment rate dropped to 7 percent and 203,000 jobs were added.

This is the third of four months that have seen at least 200,000 jobs added, though the month prior to that – July 2013 – only saw 89,000 jobs added.

CNBC notes the participation rate, which has been around a 35-year low for some time, ticked up in November – which means more people are looking for work. However, the report cites the positive change in the employment-to-population ratio as an improvement that partly reflected the return to work of furloughed federal government employees.

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Breaking Down Illinois’ Pension Crisis

By on 12.5.13 | 11:08AM

Illinois’ pension problems are big—far bigger than the $100 billion funding gap the legislature said it tackled earlier this week with a new set of reforms. The funding gap is actually double that—well over $200 billion—when calculated on a fair-market basis.

Illinois is committed to fully funding the actuarial liability (and some are encouraging the system to sue the state should the government not pay it). This is one of the reasons the state is in such a hole—they are well behind on payments, and those payments are calculated based on the overly optimistic expectation that they will earn 8 percent a year on investments.

The new law proposes to save $160 billion over 30 years with the following reforms:

a)    Curtail cost of living adjustments for retirees on a sliding scale.

b)   Offer a 401(k) option for employees.

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Fourteen Genius Ideas Brought to You by the Huffington Post

By on 12.2.13 | 3:52PM

Is it American “exceptionalism” to take exception to these ideas? If so, I’m happy to admit my guilt.

The author, HuffPo writer Maxwell Strachan, implores his readers thusly in his opening:

You may think the U.S. is the greatest nation in the world, but let’s all admit it would be a whole lot greatester (sic) if we adopted some of these genius ideas, many of which are already law in other countries:

Here are some of the “best and brightest” of those ideas.

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Nota Bene: Use Fiscal Responsibility

By on 11.25.13 | 4:11PM

I’ve seen the term “fiscal responsibility/irresponsibility” thrown around on the airwaves and the Internet for some time now, even applied to the spending habits of individuals. For example, it isn’t uncommon to see something like “we, as a household, need to be fiscally responsible” or “we need to teach our kids to be fiscally responsible.”

If people who say this mean—in some abstract sense—“we need to do our part and pay our taxes on time” or “we need to teach our kids how to be a good taxpayer” (i.e. we need to be responsible to the fisc) then they get a pass. But no one means this. Instead they mean “we can’t be spendthrifts.”

Pardon me for semanticizing, but this is just wrong. Etymologically the word has always meant “of or relating to the public or imperial treasury.” Governments are fiscally responsible or irresponsible; the people at home aren’t—they’re either prudent or profligate.

That is all.

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Crisis in Education: Tuitions Up, Revenues Down

By on 11.23.13 | 7:29PM

The Wall Street Journal reported yesterday that half of American colleges and universities are not able to generate enough revenue to beat inflation. “For 44% of public and 42% of private universities included in the survey, net tuition revenue is projected to grow less than the nation's roughly 2% inflation rate this fiscal year,” reported the WSJ, citing a report from Moody’s. Also, more than a quarter of public universities are seeing net decreases in revenue.

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