Posts filed under “Currency”
There has been a steady drumbeat of dissatisfaction about the post-credit-crisis recovery. No matter how much the economy improves, a good number of people insist it hasn’t. Now, in the midst of the political silly season, it has intensified as candidates pander to voters.
This is a subject near and dear to me (see this, this, this, this, this, andthis), and it came up again recently in a FiveThirtyEight column with the headline, “The Economy Is Better — Why Don’t Voters Believe It?“The column tells of a local business owner whose company is having a “record year.” Despite this, she is the leader of a local Tea Party group, whose view of the U.S. economy is, well, at war with the facts. “The Federal Reserve is devaluing the dollar” she said, despite the U.S. currency being the strongest in almost 13 years. “Inflation is too high,” even though it is running at less than 2 percent. “Taxes are too high,” even though most people pay some of the lowest effective rates in decades. And those statistics showing improvement in the economy? They are “misleading if not outright lies . . . The unemployment rate isn’t down.” Of course, at 5 percent it’s the lowest in seven years.
Some of the discontent is understandable and three important factors are at work: The benefits of the recovery haven’t been spread evenly; there is noise in the numbers; and plain old ignorance. I place these three in order of declining legitimacy. Let’s jump right in:
Continues here: Why So Many Hate This Recovery
The chart above is the Bloomberg Commodity Index. It consists of baskets of common commodities, including energy, metals, foodstuffs, softs and precious metals. After a fairly flat period in the 1990s, the index leapt upward beginning in the early 2000s. The context explains the jump: High inflation, weak dollar and low interest rates….Read More
The Effect of the Strong Dollar on U.S. Growth Mary Amiti and Tyler Bodine-Smith Liberty Street Economics, July 17, 2015 Correction: This post was updated on July 17 to replace the term “export volumes” with “real export values.” Although the terms are often used interchangeably, the term “real export values” is deemed more precise….Read More
The never ending sturm und drang over the state of Greek debt, membership in the euro zone and the potential shocks of a debt default have moved from tragedy to comedy to monotony. The solution is simple. It won’t be fast, it won’t be easy, but it will be a huge improvement for all concerned….Read More