I am not worried about the deficit. It is big enough to take care of itself. – Ronald Reagan
Archive for April, 2011
Saturday April 30, 2011 -
Saturday, April 30th, 2011Op-Ed: Imagining a world without the dollar By Barry Eichengreen
Saturday, April 30th, 2011
Washington Post
http://www.washingtonpost.com/ …
By Barry Eichengreen
BARRY EICHENGREEN IS A PROFESSOR OF ECONOMICS AT THE UNIVERSITY OF CALIFORNIA AT BERKELEY and the author of “Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System.”
April 27, 2011
The dollar doesn’t have many friends these days. The greenback has lost 12 percent of its value against foreign currencies since the chaotic period after the failure of Lehman Brothers in 2008, and nearly 5 percent since the end of 2010.
Economists are debating the end of the era of the dollar, while news organizations paint the dollar as a 98-pound weakling. Our so-called “fiat” currency, backed only by the full faith and credit of the government, no longer commands respect. So wouldn’t we be better off without it?
Imagine you woke up tomorrow and the dollar had vanished. The Federal Reserve was out of the business of supplying money. How would you go about your affairs?
The obvious answer is that life would become one big swap meet. It would be like your local farmers market, except that instead of a vendor selling carrots in exchange for dollars, she would have to trade them for the onions in the neighboring stall or for the paring knife of the cook with no vegetables at all….
Realistically, our currency needs could be met only by another large economy, and Canada might be too small an issuer of currency. But the only other potential candidates — Europe and China — both have drawbacks. …
In a world without dollars, it follows, the right to issue notes would have to be limited to a set of regulated entities — call them banks. …
Critics of the dollar are having a field day. But when I think about our current monetary arrangements, I am inclined to paraphrase Winston Churchill on democracy: Ours is the worst possible system, except for all the others.
Tyranny of the Central Bankers By Dean Baker
Saturday, April 30th, 2011
The worst economic downturn in 70 years has failed to change the behavior of central bankers. Recent decisions to maintain inflation rate targets at the expense of employment and output only highlight the need to hold central bankers more accountable for how they manage the economy.
By Dean Baker
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Technorati Tags: Central Bankers,banking
Floridians’ consumer confidence falls for third straight month
Saturday, April 30th, 2011
GAINESVILLE, Fla. — Consumer confidence among Floridians dropped for a third consecutive month — falling to 68 in April — as the economy struggles because of domestic budget woes, soaring gas prices and international unrest, according to a new University of Florida survey.
http://news.ufl.edu/2011/04/26/cc0411/
BLS: Metropolitan Area Employment and Unemployment Summary, March 2011
Saturday, April 30th, 2011
Metropolitan Area Employment and Unemployment Summary, March 2011
http://www.bls.gov/news.release/pdf/metro.pdf
"Unemployment rates were lower in March than a year earlier in 317 of the 372 metropolitan areas, higher in 44 areas, and unchanged in 11 areas, the U.S. Bureau of Labor Statistics reported today. Fourteen areas recorded jobless rates of at least 15.0 percent, while eight areas registered rates of less than 5.0 percent. Two hundred sixty metropolitan areas reported over-the- year increases in nonfarm payroll employment, 101 reported decreases, and 11 were unchanged. The national unemployment rate in March was 9.2 percent, not seasonally adjusted, down from 10.2 percent a year earlier. In March, 112 metropolitan areas reported jobless rates of at least 10.0 percent, down from 166 areas a year earlier, while 65 areas posted rates below 7.0 percent, up from 44 areas a year earlier. El Centro, Calif., recorded the highest unemployment rate, 24.6 percent in March; three other areas had rates above 20.0 percent. Among the 14 areas with jobless rates of at least 15.0 percent, 12 were located in California. Lincoln, Neb., and Bismarck, N.D., registered the lowest unemployment rates, 4.1 and 4.2 percent, respectively. A total of 219 areas recorded March unemployment rates below the U.S. figure of 9.2 percent, 150 areas reported rates above it, and 3 areas had rates equal to that of the nation."
Blog: Putting lipstick on the pig By Robert Reich
Saturday, April 30th, 2011
A new bipartisan deficit-reduction plan may sound benign, but it’s just a prettied-up version of Paul Ryan’s scheme
Salon
By Robert Reich
ROBERT REICH, A PROFESSOR OF PUBLIC POLICY AT THE UNIVERSITY OF CALIFORNIA AT BERKELEY, was secretary of labor during the Clinton administration. He is also a blogger and the author of "Aftershock: The Next Economy and America’s Future." …
April 29, 2011
If you can’t sell the pig, figure Republicans, put lipstick on it and maybe no one will notice. Add some perfume and maybe you’ll even attract enough Democrats to get it enacted.
A Senate proposal by Republican Bob Corker of Tennessee and Democrat Claire McCaskill of Missouri would save $7.6 trillion over 10 years. How? By capping federal spending at 20.6 percent of gross domestic product within a decade. That’s down from 24.3 percent now.
This is the Ryan plan with lipstick. The Ryan plan puts spending at 20.25 of GDP in 10 years. By comparison, spending under Republican President Ronald Reagan from 1981 to 1989 averaged 22 percent of GDP at a time when no baby boomers had retired.
As a result, Corker-McCaskill would have the same dire result as the Republican plan: According to an analysis by the Washington-based Center on Budget and Policy Priorities, Corker-McCaskill would require "enormous cuts" in Medicare and Medicaid and other programs, and likely force similar policy changes to the entitlement programs that Ryan has proposed….
The Corker-McCaskill spending cap would also make it impossible for government to boost the economy in recessions….