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1930s posts

NYT's Krugman to President-elect Obama: Think big

Posted Nov 11th 2008 4:00PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession, Financial Crisis

New York Times (NYSE: NYT) columnist and Nobel Prize-winning economist Paul Krugman argues, in so many words, that, indeed, the United States must go back, to get to the future.

Krugman's advice for President-elect Barack Obama? Think big. Contrary to selected, conservative arguments about President Franklin D. Roosevelt's New Deal, the reason the New Deal had limited, short-term success was the fact that FDR's economic policies were too cautious, he said.

The New Deal: new life

The New Deal's long-term success and achievements, including the structural changes to the U.S. economy (including Social Security and bank deposit insurance), have proved to be both durable and essential, most economists, including Krugman, agree.

Hence, President-elect Obama should think big from the get-go, Krugman says, and avoid the mistaken belief that 'government spending made the Great Depression worse,' and Obama should move forward with a large fiscal stimulus to put people back to work, for work that needs to be done in these United States.

Continue reading NYT's Krugman to President-elect Obama: Think big

Despite stock rout and more U.S. debt, dollar is firm (so far), except vs yen

Posted Oct 10th 2008 4:50PM by Joseph Lazzaro (RSS feed)
Filed under: International Markets, Forecasts, Recession, Financial Crisis

Twenty five trillion dollars in global market capitalization wiped out. At least $500 billion -- and most likely in excess of $1 trillion added to the United States' national debt. The Fed has loaned money to corporations, added massive liquidity to banks, cut interest, and the U.S. Treasury may invest directly in private banks, if it doesn't nationalize them.

And the currency of the nation primarily responsible for the global financial crisis -- the dollar -- how has it fared?

The dollar has been firm, for the most part, even rising against the euro and British pound. However, the dollar has fallen against Japan's yen. As of Friday at 2:35 p.m. EDT, the dollar had risen 2 cents versus the euro to $1.3382 and 1.5 cents versus the pound to $1.6947, but had fallen one-half yen to 99.33.

Continue reading Despite stock rout and more U.S. debt, dollar is firm (so far), except vs yen

Could U.S. economy, American people tolerate more government intervention?

Posted Sep 5th 2008 5:08PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Other Issues, Politics, Presidential Elections, Recession

Could the U.S. economy tolerate, and, equally significant, will the American people push the nation's chief executive, the president, in the direction of more government intervention?

The view from here is: probably not. Everything in the American ethos and culture speaks against it.

Unlike in France, where the French Government is simply, "France," Americans, for the most part, view their government -- save defense spending -- usually as part of the problem, not the solution. 'Government is best which governs least' is a longstanding Americanism. And most investors/readers know about candidates who say they want to "get the Washington bureaucrats off the backs of the American people" and "clean up the mess in Washington!"

Americans are anti-central government, and they are anti-state (they generally dislike the limited federal government that exists). In the United States, it is always private first, public second.

Continue reading Could U.S. economy, American people tolerate more government intervention?