Tag Archives: US/Global Economics

Tariffs and Monetary Policy: Moral Hazard and Rent Seeking President Trump’s threat to impose tariffs on Mexico over immigration has pushed Federal Reserve Chair Jay Powell to say that if the tariffs lead to economic growth slowing, the Fed will cut interest rates.  While the bump may be about to end, this announcement was followed by a  solid global surge of stock markets on June 4 followed by smaller increases the next day.  This sets up a moral...

ISM manufacturing and residential construction spending trends continue May data has started out where April left off, with continuations of trends in both manufacturing and construction. First, manufacturing: it is still expanding, but at a much lower rate than last summer’s red hot numbers. The overall ISM manufacturing index declined a bit to 52.1, but the leading new orders sub-index rose slightly from 51.7 to 52.7: Looking forward to Friday’s...

From Brad. My bold To Franklin Delano Roosevelt, 1 February 1938 Private and personal Dear Mr. President, You received me kindly when I visited you some three years ago that I make bold to send you some bird’s eye impressions which I have formed as to the business position in the United States. You will appreciate that I write from a distance, that I have not revisited the United States since you saw me, and that I have access to few more sources of...

The sources of the next recession While we are waiting for the ISM May manufacturing survey and construction spending data to be released later this morning, both of which will give us important clues to Friday’s jobs report, let me write down some thoughts on the nerdy question I ruminated about this weekend: what is the most likely source of the next recession? I should start by noting that I remain on “recession watch” for later this year, as in, a...

by Joseph Joyce The Rise and Fall of FDI After the global financial crisis,  international capital flows contracted, especially bank lending in Europe. Foreign direct investment (FDI) by multinational firms, however, provided a steady source of external finance, particularly for emerging market economies. The McKinsey Global Institute has calculated that the global stock of FDI increased from 46% of world GDP in 2007 to 57% in 2016 ($25 trillion to $41...

A Tariff Laffer Curve? Douglas Irwin is a very good economist. Let’s highlight his Historical Perspectives on U.S. Trade Policy: The Civil War marked the beginning of a long period of high U.S. tariffs. These tariffs served the dual purpose of raising revenue for the federal government and keeping out foreign goods, ostensibly for the protection of U.S. labor and business. After the war, tariffs (which generated roughly half of government revenue)...

Kenneth Thomas (an AB contributor) was quoted April 7  in the Journal a second time on the general question of how to solve the problem of subsidy bidding wars.  Unfortunately it is behind a paywall…but worth pointing to…  WSJ.COM Opinion | Pass a Law to Combat Rent-Seeking Congress could invoke the Commerce Clause to limit destructive competition over corporate subsidies. ...

North Korean Near-Famine Leads To Dead Nuclear Negotiators It has not been officially reported by the North Korean govt, but long running rumors are now being reported by various  serious media that Trump’s big pal Kim Jong Un has recently killed the top 5 officials of his govt who set up his  failed summit with US President Trump. According to sources I watch there has been a massive crop failure this year in the Democratic Peoples’ Republic (DPRK)....

Art Laffer is Not an Economist  Can The Hill be more wrong? President Trump will award the Presidential Medal of Freedom, the nation’s highest civilian honor, to economist Arthur Laffer, the White House announced Friday. The president will honor Laffer on June 19 for his contributions to economic policy. The White House described Laffer as “one of the most influential economists in American history” in announcing the award. OK the Idiot-in-Chief did say...

by New Deal democrat Weekly Indicators for May 27 – 31 at Seeking Alpha My Weekly Indicators post is up at Seeking Alpha. There was a touch of weakening across several timeframes. The economy is just weak enough that continuing trade and tariff tantrums could take a slowdown and do enough damage to make it a downturn. As usual, clicking over and reading should be informative for you, and helps me just a little bit for the effort I put into the work....