September 15, 2010 – Views on the Global Economy: Your Daily Briefing
Headlines
Republicans unveil plan to make Bush tax cuts permanent (Washington Post)
Japan Acts to Weaken Its Currency (New York Times)
Production in U.S. Probably Cooled as Automakers Scaled Back (Bloomberg)
Wilbur Ross, Carlyle to Buy Troubled Irish Bank (CNBC)
Euro-Zone Inflation Slips (Wall Street Journal)
Small Business Bill
Bill to aid small business advances in Senate
Andy Sullivan and Donna Smith, Reuters, September 14, 2010
The small business bill, a long-stalled package of lending incentives and tax breaks, is one of the last chances Democrats have to show voters they are working to create jobs and help the economy recover from its worst downturn since the 1930s.
U.S. Small-Business Index Increases for First Time Since May, Survey Shows
Courtney Schlisserman, Bloomberg, September 14, 2010
While expectations for the economy and sales improved, both measures were still in “recession territory,” the report said, which explains why the outlook for hiring and capital spending at small companies weakened last month. More jobs and increases in consumer spending are needed to bolster the recovery.
Courtney Schlisserman, Bloomberg, September 14, 2010
While expectations for the economy and sales improved, both measures were still in “recession territory,” the report said, which explains why the outlook for hiring and capital spending at small companies weakened last month. More jobs and increases in consumer spending are needed to bolster the recovery.
Europe
EU proposes curbs on ‘Wild West’ trading
BBC, September 15, 2010
The European Commission has published draft rules on trading in complex financial products, saying it currently operates in a “Wild West territory”.
BBC, September 15, 2010
The European Commission has published draft rules on trading in complex financial products, saying it currently operates in a “Wild West territory”.
Is The German Eagle a Grey Swan?
John Butler, The Daily Reckoning, September 14, 2010
While the several sovereign debt crises in the euro-area have taken markets largely by surprise-thus leading them to be labeled as unforecastable, “Black Swan” events-we see a potentially much greater risk ahead, that Germany, at some point, will reconsider its commitment to the bail-out framework agreed with other EU states in May.
Economic Data Support View of Slowdown in Europe
Jack Ewing, New York Times, September 14, 2010
A gauge of German investor sentiment fell more than expected this month, while industrial production in the euro zone was flat in July, according to reports released Tuesday that reinforced perceptions that the region’s economic recovery had peaked well before output recovered to precrisis levels.
The Dollar
Dollar Falls Broadly; Talk Of Fed Action Might Be Weighing
Bradley Davis, Wall Street Journal, September 14, 2010
Some analysts pointed to a Goldman Sachs Group, Inc. (GS) conference call, during which Goldman said the Fed could announce a new asset-purchase program to kick-start a moribund U.S. economy, as contributing to the dollar’s weakness.
Bradley Davis, Wall Street Journal, September 14, 2010
Some analysts pointed to a Goldman Sachs Group, Inc. (GS) conference call, during which Goldman said the Fed could announce a new asset-purchase program to kick-start a moribund U.S. economy, as contributing to the dollar’s weakness.
U.S. Dollar falls Against All Major Currencies on Stronger Economic Reports
James A. Hyerczyk, ForexHound, September 14, 2010
The friendly data helped ease investor concerns about the outlook for the global economy, making them more willing to buy riskier assets. Increased appetite for risk drove up demand for stocks and commodities while encouraging the liquidation of assets considered safer, such as the U.S. Dollar.
Ideas for Economic Growth: More From Ezra Klein’s Series
Moving the U.S. economy out of first gear
Heather Boushey, Center for American Progress, September 14, 2010
Excerpts: Congress should seriously consider Obama’s proposal to increase infrastructure spending by $50 billion to invest in roads, rails and runways. We should also put our national service programs “on steroids” to give our youngest workers useful job experience and an opportunity to give back to their communities. Finally, boost demand through unemployment benefits.
Heather Boushey, Center for American Progress, September 14, 2010
Excerpts: Congress should seriously consider Obama’s proposal to increase infrastructure spending by $50 billion to invest in roads, rails and runways. We should also put our national service programs “on steroids” to give our youngest workers useful job experience and an opportunity to give back to their communities. Finally, boost demand through unemployment benefits.
Unemployment…Kills?
Two graphs that should really scare us
Ezra Klein, Washington Post, September 14, 2010
So a 25-year-old worker whose firm went under in 2008 will still be earning less than the guy in the office park across from him whose firm barely rode out the recession. We tend to think of employment as being binary: You have a job, or you don’t. But it’s more complicated than that. Losing a job has lingering effects, and not just on income. It also raises your risk of death going forward.
Ezra Klein, Washington Post, September 14, 2010
So a 25-year-old worker whose firm went under in 2008 will still be earning less than the guy in the office park across from him whose firm barely rode out the recession. We tend to think of employment as being binary: You have a job, or you don’t. But it’s more complicated than that. Losing a job has lingering effects, and not just on income. It also raises your risk of death going forward.
We’ve Been Saying This for a While
The U.S. Needs a New and Improved New Deal
Mark Thoma, The Fiscal Times, September 14, 2010
This recession has been particularly unkind to labor markets, and indications are that a full recovery of employment is still years away. But even after the recession finally ends, worrisome structural trends that were present before the recession began will continue to cause considerable uncertainty for working class households. There was a time when employers provided employment, health and retirement security in return for employee loyalty, but the social contract of bygone days has faded in the face of globalization and other pressures.
A Citizen-Based Social Contract
Michael Lind, New America Foundation: Next Social Contract Initiative
At the beginning of the 21st century, American society finds itself in dramatically new conditions. Globalization, an aging population, the transformation of the economy and daily life by new technologies from the Internet to biotech-these and other trends are revolutionizing the world around us. But while circumstances change, the collective goal of Americans remains the same: a nation in which citizens share in the general prosperity as workers and owners of property. Achieving that old goal requires new methods suited to the new era in which we Americans find ourselves. It requires a new American social contract.
Chart of the Day
From the Center on Budget and Policy Priorities:
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