If every silver lining comes wrapped in a dark cloud, housing could be the economy's next big head-ache. Just recently, the Labor Department reported a hefty 308,000 increase in payroll employment for March and also revised upward previous figures so that monthly job gains have averaged 108,000 since September.
It may seem a bit unnatural, but more and more of our social problems and complaints stem from our affluence, not our poverty. Secretary of Health and Human Services Tommy Thompson made that point last week--unintentionally, to be sure--when he announced that obesity now rivals smoking as the largest cause of premature death.
In 1962, Emmet John Hughes published a memoir of the Eisenhower presidency titled "The Ordeal of Power." Hughes, a prominent journalist who had served Eisenhower as a speechwriter, admired the president as a person and for his role as the commanding general in Europe during World War II.
It may ultimately be said of Alan Greenspan that he enjoyed his finest hour just when the public admired him least. Let's recall that only a few months ago, the shaky economic outlook inspired fears of deflation--a general decline in prices caused by too much supply (of unemployed workers, unused fiber optics and lots more) chasing too little demand.
The economist Charles Kindleberger died the other day at 92, just when the world most needs his panoramic vision. Kindleberger was a cheerful skeptic of all the mathematical models that define modern economics and have, not incidentally, disconnected it from the real world.
The war in Iraq is, in at least one respect, rewriting history. Few relationships are more established than the connection between war and debt. The first organized government borrowing dates to the 12th century, when Italian city-states (Venice, Genoa, Florence, Milan) needed to defend themselves.
"Importantly, the favorable underlying trends in productivity have continued... [providing] support of household incomes."--Alan Greenspan, chairman of the Federal Reserve Board, in congressional testimony, Feb. 11, 2003We go through these fads--these fixations with certain economic statistics, which are imbued with immense significance--and productivity remains one of them.
We all know that the telecommunications industry is an economic mess. Since 2000, the equipment firms (the Lucents and Nortels) have cut 500,000 jobs, says Matthew Flanigan of the Telecommunications Industry Association, because capital investment by their customers--the Verizons and Sprints--has dropped 56 percent.