June 30, 2015 is the date that Greece finally defaulted on its debt burden. Technically, Greece is "in arrears", not default (yet). But this is a fine distinction. Greece cannot pay its bills. It is broke. Greek banks are closed, government controls have been imposed on the movement of capital, and ordinary people in Greece are restricted to a daily ATM withdrawal limit of 60 Euros, about $70. This date marks the end of a five year process in which the leaders of Greece and the European Union postponed, but could not find a solution to the simple fact that Greece has more debt than it can ever repay. Hopefully, July 1, 2015 will mark the start of a process to heal the economy of Greece, and reform institutions to make it less likely another country will end up in the same mess.
In this Greek drama there are no good guys, only bad guys. That has been part of the reason a solution to the debt problem has been so difficult to find. Each side has a partially legitimate reason why the other side is to blame for the current mess. Greek governments are certainly at fault. They borrowed and spent money they could not repay. They are accountable for such irresponsible governance. But even worse, the Greek government engaged in unethical and possibly criminal behavior. Greece (until 2009) had hidden from the world the true financial condition of its budget deficits, which were worse than previously acknowledged.
The banks who loaned Greece much more money than it could repay are also accountable for their own irresponsible behavior. Banks have a duty to perform "due diligence". In plain English, they have a duty to their shareholders to make sure that borrowers will use the loan for responsible purposes, and that the borrower is very likely to be able to repay the loan. Due diligence would have uncovered the financial trickery that Greece used to hide their true budget deficits. But banks were eager to look the other way, perhaps because bank regulations made it more profitable to loan money to the Greek government than to make commercial loans to an enterprising business. more >>
Former President George W. Bush is now enjoying a higher favorability rating than President Barack Obama, a new survey has revealed, and shows that Americans' opinion of Obama has continued to decline.
The CNN/ORC poll, released on Wednesday, noted that 52 percent of American adults who responded to the survey have a favorable impression of Bush, while 43 percent have an unfavorable view. The former president's public image has improved significantly since leaving office, seeing that back in 2009 only one-third of respondents said they have a positive opinion of him.
Obama, however, now has only 45 percent of America's approval, while 52 percent disapprove of the job he has been doing in office. The rise in the disapproval rating cross party lines. more >>
This Friday the Labor Department will release the Jobs Report for May. The monthly Jobs Report is based on data from a survey of 60,000 households and from a separate survey of business establishments. The Bureau of Labor Statistics uses the data to estimate the unemployment rate and the number of jobs added to the economy in the just ended month. They also revise the estimates made for the prior two months to take into account more complete information.
Last month's report for April was an estimated gain of 233,000 jobs, but March was only 85,000 additional jobs. It takes over 150,000 additional jobs per month to absorb the growth in the labor force as young workers enter the work force and older workers retire. We can hope that the progress seen in April will continue in May and beyond.
When the jobs report is released on Friday morning, there will be instant analysis on Wall Street and again on the Sunday talk shows. Pundits will discuss the political and economic implications of whatever the outcome turns out to be. As a student of the economy, this is all interesting to me. But sometimes we need to step back from the instant moment to gain perspective. The graph below illustrates my point. more >>
Speaker John Boehner recently made headlines by joining the growing chorus among conservatives on Capitol Hill calling for a "wind down" of the Export-Import Bank of the United States (Ex-Im) – signaling he might be open to a plan by U.S. House Republicans to bring the New Deal-era program of economic cronyism to an end.
The statement came before the April 30 joint Financial Services-Oversight hearing, in which Ex-Im Bank Chairman Fred Hochberg was questioned about the bank's politically motivated international handouts and the 31 ongoing fraud investigations.
Boehner joins a large number of conservative lawmakers calling for the bank's end. House Majority Leader Kevin McCarthy, Majority Whip Steve Scalise and House Ways and Means Committee Chairman Paul Ryan have all expressed their desire to "break the bank," as have six Republican presidential candidates: Senators Ted Cruz and Marco Rubio, and Governors Bobby Jindal, Mike Pence, Scott Walker and former Governor Jeb Bush. more >>
I entered the workforce in the 70s, before the Reagan Revolution, when marginal federal income tax rates on wages still reached as high as 70%. Newly married, we were a two-income household subject to federal income taxes, New York State income taxes, and New York City income taxes. Inflation was rampant, which caused my salary to rise noticeably each year. A little arithmetic confirmed what my paycheck already told me; more than half the increase in my modest, early career income was eaten up by higher taxes.
This is not another complaint about too high taxes or a grasping government (well, maybe just a little complaint). I bring up my good fortune to pay high marginal tax rates for my entire working life to make a point. Long ago, and for every year since that first epiphany, I have thought that I would feel a whole lot better about paying taxes if only I had some influence in how my money was spent. Maybe you've had the same thought. Wouldn't you like to have a say in how your hard-earned dollars get used, instead of seeing your money swept away each paycheck into that black hole of taxes known as Washington, DC?
Our largest expenditure each year, by far, is the share of earnings that goes to our national government. Like me, you probably carefully consider how to spend each available dollar left over after taxes. But not a peep is allowed from us mere taxpayers about how to spend the money we have to pay to Washington. Give a donation to a charity, and you will get back a nice note of thanks. Give as much to a charity as you pay to Washington, and you will get even greater expressions of appreciation. But even though you may pay a quarter or a third of your earnings to Washington, don't expect a thank you note from your government for the "contribution" you made to society this past year. Instead, powerful politicians with a sincere and straight face claim that some (you?, me?) are not paying their "fair share". Apparently, the 45.7% share of the total individual tax burden that is paid by the top 1% of taxpayers is still not a "fair share". more >>
Christian blogger Matt Walsh ripped into fast-food workers who reportedly rallied in some 230 American cities for a $15 minimum wage this week, and has declared, rather bluntly, that they don't deserve it.
"You earnestly believe — indeed, you've been led to this conclusion by pandering politicians and liberal pundits who possess neither the slightest grasp of the basic rules of economics nor even the faintest hint of integrity — that your entry level gig pushing buttons on a cash register at Taco Bell ought to earn you double the current federal minimum wage," said Walsh in an op-ed published in The Blaze addressing the fast-food workers.
"I want to talk to those of you who actually consider yourselves entitled to close to a $29 thousand a year full time salary for doing a job that requires no skill, no expertise, and no education; those who think a fry cook ought to earn an entry level income similar to a dental assistant; those who insist the guy putting the lettuce on my Big Mac ought to make more than the Emergency Medical Technician who saves lives for a living; those who believe you should automatically be able to 'live comfortably,' as if 'comfort' is a human right," he continued. more >>