Recent news about Pfizer’s and Moderna’s progress synthesizing a Covid-19 vaccine has been met by an understandably ebullient global reaction. According to the CDC, the first batch will be available to Americans before the end of 2020. Analysts believe that positive news about the vaccine – and really, how could the news be better? – explains much of the most recent surge in stock prices. More substantively, if the optimism were well founded it would not be unreasonable to expect …
Inflation? Really?
November 25, 2020Last week my interest was aroused by an article written by Martin Wolf in the Financial Times (November 18th) in which he discusses a recent book by Charles Goodhart and Manoj Pradhan. In the article he provides a number of reasons why we might expect higher – possibly much higher – inflation in the coming years. And an article in today’s Wall Street Journal by David Harrison similarly suggests that, following successful introduction of a Covid-19 vaccine, widespread and pent-up …
Debt, More Debt, and Yes, Even More Debt
November 22, 2020In August of this year, Nobel laureate Joseph Stiglitz and Hamid Rashid warned that a global debt crisis was looming. And just last week, Zambia became the sixth country this year – after Argentina, Belize, Ecuador, Lebanon, and Suriname – to default on its sovereign debt when President Edgar Lungu’s government failed to make a $42.5 million interest payment that was due. Under normal circumstances one sovereign default is newsworthy; the latest announcement merely underscores what a strange year it has …
The Regional Comprehensive Economic Partnership: Why It Should Matter to Us
November 18, 2020Just two days ago, 15 Asia-Pacific nations agreed to what is arguably the most important trade deal in history. Known as the Regional Comprehensive Economic Partnership (RCEP), it will unite the 10 countries from the Association of Southeast Asian Nations (ASEAN) – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam – with Australia, China, Japan, New Zealand, and South Korea to create the largest trade bloc in the world. With its members accounting for about one-third …
Free Market Capitalism is a Pernicious Oxymoron
November 15, 2020Reading Neil Irwin’s article this morning in the New York Times really raised my hackles. It is one of those faux-centrist pieces that tries both to applaud and to censure capitalism for its response to the global pandemic. One statement in particular gets my goat. Here he is discussing the “advance purchase agreement” between Pfizer and the Federal government over Covid-19 vaccine research: But it [the above agreement] speaks to a deeper reality the pandemic has revealed — both what is amazing about …
The Lender of Last Resort
November 11, 2020There is a high stakes political fight looming over whether to extend the emergency loan programs put in place this past Spring by the Federal Reserve and the Treasury Department, in response to the economic fallout from the coronavirus pandemic. While it appears that the Fed might be amenable to continuing the lending programs beyond their December 31st deadline, Treasury Secretary Steven Mnuchin is feeling pressure from Republicans to allow the programs to expire. The interesting twist here is that …
Election 2020: More Questions than Answers
November 8, 2020That Joe Biden was elected the 46th president of the United States should hardly come as a surprise. To say that the incumbent has done nothing over the past four years to merit reelection would be grossly misleading in its understatement. So, why is there such a pervasive feeling of cognitive dissonance among Biden voters? It is almost as if the election outcome itself were an afterthought, even if an immense relief. Quite simply, the fact that Trump garnered over …
Why Economic Stimulus?
November 4, 2020We tend to cringe whenever the U.S. Treasury Department announces that it must borrow more than it had expected, since it only means that the U.S. government is adding to its already massive debt problems. Yet its announcement that it expected to borrow “only” $617 billion during the 4thquarter of 2020, considerably less than the $1.22 trillion they estimated earlier, is anything but good news. Nor is the government’s recent announcement that it would require about $1.1 trillion less than had been expected …
The 3rd Quarter GDP Report
November 1, 2020On Thursday, the Commerce Department announced that U.S. GDP had grown 7.4 percent in the 3rd quarter of 2020, which amounts to 33.1 percent at an annualized rate. The White House did not hesitate to trumpet the news, calling it the Great American Recovery. To call such an account hyperbole would be an understatement. Not only is it very far from “great,” calling it “a recovery” is also highly questionable (we must, however, concede that it is American). It is …
Lesser-Evilism and the Vote of the Century
October 18, 2020Ok, perhaps calling it the vote of the century is overstating things, but there is no question that November 3rd looms as a historic moment, whatever the outcome. Let me begin by stating the obvious: President Donald Trump is a repugnant, despicable, pathetic, vainglorious, and shameless human being. That someone like this could be elected president is a travesty and an unspeakable embarrassment. That such an eminently impeachable clown could survive his first term in office speaks for the insufferable …