Paul Krugman: The Economic Fallout

 By PAUL KRUGMAN

The New York Times

2016-11-09T00:42:44-05:0012:42 AM ET

It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?

Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.


Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.

Trump kills TPP, giving China its first big win

By Ishaan Tharoor January 24 at 1:00 AM

The Washington Post

President Trump signed an executive order on Monday ending the United States' participation in the Trans-Pacific Partnership, a sweeping trade pact negotiated with eleven other nations. It was neither ratified by American lawmakers nor expected to pass a vote in Congress. But Trump chose to kill it anyway with an executive action, underscoring how different he is from his Republican predecessors — and some of the party's current leaders — who embraced free trade and preached the dogma of open markets.

He also handed China its clearest opening yet to tilt the geopolitical balance in Asia in its favor.

Draghi Urges German Patience on Inflation as Euro Area Heals

by Piotr Skolimowski
19 January 2017

Mario Draghi called on Germany to be calm as the European Central Bank keeps pumping stimulus into the euro area, saying rising inflation will eventually bring higher interest rates for savers.

“As the recovery will firm up, rates will go up as well,” the ECB president told reporters in Frankfurt on Thursday after the Governing Council reaffirmed its intention to keep its bond-buying program going until at least the end of the year. Asked about German criticism of the strategy, he said “the honest answer would be: Just be patient.”

Record Capital Outflows Push Euro Toward Parity With Dollar

Higher interest rates in the U.S. are drawing money out of the eurozone

The Wall Street Journal

By MIKE BIRD
Updated Dec. 20, 2016 5:32 p.m. ET

More money has left eurozone financial markets this year than at any time in the bloc’s history, helping drive the euro toward parity with the dollar for the first time in 14 years.

The eurozone had its largest-ever net outflows in the 12 months to September, data from the European Central Bank showed Tuesday.

Eurozone investors bought €497.5 billion ($516.5 billion) of financial assets, such as stocks and bonds, outside the bloc in that period. Global investors, meanwhile, sold or let mature €31.3 billion of eurozone assets during the year. Together, that adds up to a net outflow of €528.8 billion, the most since the single currency was introduced in 1999.

What Good Are Economists?

Robert J. Shiller

http://www.project-syndicate.org/commentary/are-economists-good-by-robert-j--shiller-2015-01

NEW HAVEN – Since the global financial crisis and recession of 2007-2009, criticism of the economics profession has intensified. The failure of all but a few professional economists to forecast the episode – the aftereffects of which still linger – has led many to question whether the economics profession contributes anything significant to society. If they were unable to foresee something so important to people’s wellbeing, what good are they?

Fed Completes Rule Limiting Banks’ Size

Bars Acquisitions That Result in a Firm Holding Over 10% of Financial-Sector Liabilities

By SCOTT PATTERSON and  VICTORIA MCGRANE

Updated Nov. 5, 2014 3:52 p.m. ET

The Wall Street Journal

WASHINGTON—Bank regulators took a step toward curbing the ability of large financial institutions to get bigger as Washington continues trying to lessen the risk giant firms pose to the U.S. economy and taxpayers.

The Federal Reserve on Wednesday finalized a rule, mandated by the 2010 Dodd-Frank financial law, that generally prohibits banks and other financial firms from buying or merging with rivals if the deal would result in the combined firm holding more than 10% of all liabilities in the financial system.

How to Read President Obama's New Budget

BROOKINGS

By: David Wessel

The first trick: Skip the rhetoric. ("This budget takes critical steps to grow our economy, create jobs and strength the middle class....") Do what the pros do: Go directly to the tables.

Next week President Obama is expected to send Congress his new budget. It's a huge, sprawling document; last year's was 2,476 pages in four volumes. Because no one can absorb all that instantly, here's an insider's guide to the budget for fiscal year 2015, which begins Oct. 1, 2014.

Natural Big Lies

FEBRUARY 24, 2014, 1:27 PM  46 Comments

Paul Krugman

The New York Times

I’ve been doing some more Fed transcript readings, and noticing how implausible everyone found it that what did happen, could happen. And I have a small insight as I remember the days of bubble denial. It involves a violation of Godwin’s Law, but in a good cause.

Stocks slip as Fed rate talk spooks some investors

By Associated Press, Thursday, February 20, 2:04 AM

NEW YORK — Stocks fell Wednesday as investors were left uneasy by news that some Federal Reserve policymakers were willing to start raising short-term interest rates sooner than previously expected.

The market was mixed most of the day, then turned lower after 2 p.m., when the Fed released the minutes from its January policy meeting.

The minutes revealed that some policymakers “raised the possibility that it might be appropriate to increase the federal funds rate relatively soon.”

Strategies for sustainable growth

The Washington Post

By Lawrence Summers, Published: January 6

Lawrence Summers is a professor and past president at Harvard. He was Treasury secretary from 1999 to 2001 and economic adviser to President Obama from 2009 through 2010.

Last month I argued that the U.S. and global economies may be in a period of secular stagnation in which sluggish growth and output, and employment levels well below potential, might coincide for some time to come with problematically low real interest rates. Since the start of this century, annual growth in U.S. gross domestic product has averaged less than 1.8 percent. The economy is now operating nearly 10 percent, or more than $1.6 trillion, below what the Congressional Budget Office judged to be its potential path as recently as 2007. And all this is in the face of negative real interest rates for more than five years and extraordinarily easy monetary policies.

Among American workers, poll finds unprecedented anxiety about jobs, economy

By Jim Tankersley and Scott Clement,

Tuesday, November 26, 2:03 AM E-mail the writers

The Washington Post

CHESTER, Pa. — The alarm rang on John Stewart’s phone at 1:10 a.m. Up at 1:30, he caught one bus north into Philadelphia a little after 2 and another bus, south toward the airport, half an hour after that. He made it into work around 3:25 for a shift that started at 4, for a job that pays $5.25 an hour, which he cannot afford to lose.

Around the World, Inflation Is Falling to Levels Not Seen for Years

The New York  Times

November 15, 2013

By FLOYD NORRIS

AMERICAN inflation, which has seemed to some conservative economists to be an impending threat ever since the Federal Reserve began to buy large quantities of government securities, appears to be falling to levels lower than any seen in recent years. There are similar declines in many European countries.

Job Gap Widens in Uneven Recovery

Split in Employment Market Undermines Broader Economic Rebound

By BEN CASSELMAN CONNECT

The Wall Street Journal

Updated Nov. 11, 2013 9:45 p.m. ET

America's jobs recovery is proceeding on two separate tracks—a pattern that is persisting far longer than after past economic rebounds and lately has been growing worse.

Despite three years of steady job gains, and four years of economic growth, many Americans have yet to experience much that could be described as a recovery. That sort of pattern isn't unusual in the aftermath of a recession, but it usually eases as growth picks up steam.

Puerto Rico: Greece in the Caribbean

The Economist

Stuck with a real debt crisis in its back yard, America can learn from Europe’s Aegean follies

Oct 26th 2013 |From the print edition

IT WILL not be long till Congress and the White House start squabbling again about the budget in Washington, DC. But before they create another artificial debt crisis, Barack Obama and his Republican opponents ought to pay some attention to a real one 1,500 miles to their south-east.

Addicted to the Apocalypse

By PAUL KRUGMAN

The New York Times

Once upon a time, walking around shouting “The end is nigh” got you labeled a kook, someone not to be taken seriously. These days, however, all the best people go around warning of looming disaster. In fact, you more or less have to subscribe to fantasies of fiscal apocalypse to be considered respectable.

And I do mean fantasies. Washington has spent the past three-plus years in terror of a debt crisis that keeps not happening, and, in fact, can’t happen to a country like the United States, which has its own currency and borrows in that currency. Yet the scaremongers can’t bring themselves to let go.

ObamaCare's Black Box

Why the exchanges are worse than even the critics imagined.

The Wall Street Journal

Updated Oct. 17, 2013 8:59 p.m. ET

The White House set low expectations for the Affordable Care Act's October 1 debut, so anything remotely competent should have seemed like a success. But three weeks on, the catastrophe that is Healthcare.gov and the 36 insurance exchanges run by the federal government is an insult to the "glitches" President Obama said were inevitable.

Jim DeMint: We Won't Back Down on ObamaCare

Fighting a law that is unfair, unworkable and unaffordable is reasonable and necessary.

The Wall Street Journal

By JIM DEMINT

Oct. 17, 2013 6:27 p.m. ET

Now that the government shutdown has ended and the president has preserved ObamaCare for the time being, it's worth explaining why my organization, the Heritage Foundation, and other conservatives chose this moment to fight—and why we will continue to fight. The reason is simple: to protect the American people from the harmful effects of this law.

Republicans’ hollow defeat

The Washington Post

By Eugene Robinson, Friday, October 18, 3:23 AM

President Obama’s victory this week was as complete and devastating as Sherman’s march through the South. But there is no early sign that the zealots of the anti-government far right have learned the lessons of their defeat — which means that more battles lie ahead.

Global finance chiefs ready defenses ahead of Fed exit

By Anna Yukhananov and Alonso Soto

WASHINGTON | Sat Oct 12, 2013 4:58pm EDT

(Reuters) - Global finance chiefs on Saturday told the IMF to stand ready to aid emerging market economies that could be destabilized by a sudden flight of capital when the U.S. Federal Reserve and other central banks back away from ultra-loose monetary policies.

The International Monetary Fund's governing panel, after a semi-annual meeting, acknowledged the risks posed by a transition toward more normal policies in advanced economies, and it urged nations not to delay preparations.

Detroit, the New Greece

The New York Times

July 21, 2013

By PAUL KRUGMAN

…, the truth was that Greece was a very special case, holding few if any lessons for wider economic policy…