Stephen Metzger

Savings Rates and Long Term Economic Health

Excellent article. One the few I have seen that links the automatic stabilizers to DPI, thus by implication, to the income impact of unemployment. The breakdown of salaries and wages by industry is also lends insight into where we are in the economy at this point.

You Can Spend Your Way Out of a Recession

This article is really simplistic to the point of obfuscation. Pump priming does not get you out of a recession if it does not trigger a resumption of on-going, pre-recession expenditures by the private sector. History has shown that it doesn't. Tax reductions (not tax rebates) will get you out of the recession because they put in place a higher permanent income stream. History has shown they do work. The "borrow your way out debt" issue is a complement to the pump priming scheme. If the one doesn't work, the other one won't either.

The Economic Impact of the G20 Ending Oil Subsidies

This is a one-sided and very disappointing article. Hidden energy subsidies? Could you be more explicit and name them, please? $1 trillion in costs annually associated with fossil fuels? That I find very hard to believe and certainly does not pertain the United States. Green energy jobs? Non-existent without subsidies!! Mr. Rickman has, seemingly, taken the current administration's energy policy and simply regurgitated it. Energy independence? When you close off offshore drilling and ANWR, how can you seriously be interested in energy independence? Skating on the thin ice of subsidized greenery is not only precarious but downright dangerous. There is only one rational objective in this travesty and that is to bring down America. All aspects of this pathetic and dangerous administration point to this purpose.

A U.S. Dollar Crisis in the Making

An excellent article. Refreshing to see hard-nosed data brought to bear on market movement and its implications. Sets the stage for further data watching and focus on what data to watch.

White House Planning Climate Strategy Release for Third Week of September

The 800 pound gorilla in the energy picture is natural gas. This is quite obvious to anyone vaguely familiar with energy markets. It appears that the Obama administration will systematically cage the gorilla, attempting to ignore the clear advantages that this fuel would bring to the market. Any sort of new hydrocarbon supply is anathema to current policy makers, as it will increase steeply the amount of tax-payer subsidies required to keep the so-called green energy investment afloat. In my view the Obama continues to seriously jeopardize the prospects for economic growth and national security. I keep asking, "Whose side is he on?"

Why a Repeat of the Great Depression Is Unlikely

Data fed into a computer model, and presto! peace breaks out between the U.S. and Iran? Why am I not overwhelmed by this argument? The points about the lack of parallelism to the 1930s are well taken, however. We have another problem, pointed out by many analysts, which the potential for significant inflation. Then, as advocated by Obama supporters, George Soros and Warren Buffet, the Fed must be prepared to drastically raise interest rates. Now, if this scenario plays out, we might indeed have increased similarities to the 30s.

Is Toyota Losing Ground in the Electric Vehicles Race?

"Others find that argument a little disingenuous and more than a little semantic: unless a driver is willing to limit herself to the Volt's 40-mile electric-only range, she's going to have to use gas to get around." She? Use of the third person feminine form is bad grammar, although oh, so PC. She will still be ensconced in her SUV, while he will be the forefront of early adapters.

Monetary Policy: It's About Money Supply

I am also confused with your prescription to "raise interest rates a tad before it's time to ease monetary policy in any meaningful way". MinAkkar20 makes the point well in the St. Louis Fed graph indicating the gigantic buildup of excess reserves in the system. Are we not in the midst of a Keynesian liquidity trap? At what point and in what way will a triggering of an avalanche of new lending occur leading to hyperinflation?

Is U.S. Starting a Trade War?

It is depressing to see the ignorance of many of the respondents to Mr. Brouwer's article. His example of California vs. Michigan is meant to describe the economic benefits of trade and they, as he says, are fully applicable to international trade. You cannot hide this fact by saying the difference is that we are Americans and those others are "fereners". Trade restrictions only benefit special interests, placate the ignorant, and lower living standards. And, Mr. Brouwer is also right in comparing current trends with those of the 1930s. We are repeating the same mistakes of that decade in both domestic and international policy. Of course, we have a President who has little understanding, much less appreciation of American history--even recent history. (Nothing important occurred until he was born, and even then, some very unimportant things happened, because he was only nine years old.)

Is U.S. Starting a Trade War?

Your suggestions amount to the same thing: A restriction on trade. We are repeating the errors of the 30s at home and abroad. Bring on the war (I don't mean trade war).


On Jun 23 02:58 PM Valley Boy wrote:

> According to this author, we are supposed to outsource our manufacturing
> labor and consume and import foreign products. How bright is that?
> No, this activity or attitude cannot be stopped but it can be taxed.
> Some kind of revenue-neutral, carrot-and-stick taxation strategy
> could be brought to bear against what some consider free trade.
> Free for whom? A tax reduction of an equivalent amount should be
> granted to those manufacturers keeping their work within the borders
> of this country and employing legal citizens.

TALF Is Starting to Make Me Mad

Perhaps I am missing something, but Mr. Cohan appears to shift gears midstream in this article. First, he pushes the idea that we need a good recession to readjust our expectations and reset the economic software, so to speak; but then in an interesting exposition of TALF concludes that the scheme may be worth it afterall.

If, however, the economy remains fundamentally weak and pessimistic expectations prevail, the new wave of securitized issues will ultimately fail. As the government loans are no recourse loans, as Mr. Cohan points out, then taxpayers will again be called upon to bail out the government and the Fed.

I don't think you can simply talk about financial markets and the various schemes that are put together to resurrect credit markets without talking about the real side of the economy, especially the impact of potential new taxes on individuals and corporations either directly or indirectly. Ultimately, the benefits of TARP and TALF are squarely dependent on economic growth, and I don't see this as any sort of a priority in this administration.

White House Report: GM Volt Is Not Ready for Prime Time

I would look askance at any report from the Obama administration. The market should decide the fate of lithium ion batteries, not government agencies. Moreover, the troubles of GM and Chrysler have little to do with lithium ion batteries. There is a real disconnect in the logic of this article.

The Federal Reserve Has Failed Its Economic Mission

I read through most of the article and the first few of the responses that came up afterward. The article is convoluted and succeeds in obfuscating the issues by combining the relevant with the irrelevant. The responses, on the other hand, suggest the article lit a fire under a little band of Marxists (i.e., dangerous fools). Unfortunately, the little band has its man in the White House. I suggest we are moving not so much in the direction of the Soviet Union but rather in the direction of Argentina.

Sick of Hyperbolic Rubish

I suppose everyone will agree that the monetary side of the economy needs fixing, even BO. The auto industry aside, BO seems intent, however, on destroying the real side of the economy. That, as much as or more than the banking crisis, is pushing the market into the doldrums. I am surprised that Mr. Lee does not understand the process of discounting future expected returns.

Orwellian Finance: Is 1984 Happening in 2009?

Ron Paul would have been far more acceptable and successful as a presidential candidate had he been able to discern that terrorists are, in fact, a real threat--just as Hitler and Stalin were. Orwell would not have denied this, and, of course, he fought against the latter two dictators. Otherwise, it's a great piece. I am tempted to distribute it to my classes in basic micro and macro economics.