Economy

We Can’t Buy Our Way Out of a Recession

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Black Friday is over. This year, there were many news stories of hope and optimism that consumers would rush out and buy, buy, buy. The broadcast news stations sent their local correspondents to talk with mall owners and department store managers to get their forecast. The ones I saw used their interviews to plug discounts, […]

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3 Positive Effects From the Recession

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The recession has been bad on almost everyone. The unemployment rate, though down last week, is in double-digit figures. The government is spending a ton of your money to stimulate the economy, with mixed effects. The financial industry and housing market have both been in shambles. When it comes to how everyday people manage their […]

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What’s the Real Unemployment Rate?

The country got a bit of good news late last week when the unemployment rate dropped to 10%, with the economy losing only 11,000 jobs and revised numbers for September and October lower than originally estimated. While the news was able to push stocks up a bit for the week as more investors see this […]

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Why the Health Care Reform Bill Won’t Control Costs

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For the first time, all but the smallest employers will be required to provide health insurance coverage to the workers, thanks to a bill passed in the House of Representatives (“House Democrats promise health-care victory as Republicans remain opposed to bill,” Washington Post, Nov. 8, 2009). The requirement is new, but the bill perpetuates the […]

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Why Economists Are Wrong About Job Numbers

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President Obama is hoping to signal his concern about the growing ranks of the unemployed and focus on longer term strategies to improve the job market by holding a job summit, according to the Washington Post (“Obama calls for White House summit on job creation“). It is a worthy goal, but reducing the unemployment rate […]

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It’s Time to Stop Paying Attention to Inflation

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The October report of the Consumer Price Index (CPI), published by the Bureau of Labor Statistics, showed an increase of one tenth of one percent in the general price level from August to September. Publishing a monthly index provides several ways to look at price changes and inflation. The monthly CPI can be compared with […]

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For Highly Skilled Positions, High Wages Are Needed

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I have heard people say that the director/general manager/CEO/boss should have a higher salary than the people he or she manages. It may not be a universal thought, but in America, high wages carry prestige, which many agree brings authority. Economists commonly reject any idea that your wage depends on prestige or confers authority. In […]

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How the Minimum Wage Increase Really Affects Job Numbers

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The minimum wage went up to $7.25 an hour on July 24th, a 10.7% increase over last year, as the last of a three-year planned increase passed by Congress. Since inflation is reported at 3.8% for the year the real wage — actual buying power of the minimum wage — went up for 2009. The […]

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The Recovery Can’t Come Without Job Creation

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Recently, the Wall Street Journal ran a story titled “More Signs Point to Economic Recovery” where it reported that “[an] expansion of manufacturing growth in consumer spending and improved home sales indicated Thursday that the U.S. economy is on the mend.” While spending is up, the claim that the economy is on the mend ignores […]

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Why Can’t the Government Get Out of Debt?

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The United States Treasury will lose borrowing authority sometime in October when the national debt reaches the legislated ceiling passed by Congress. Treasury Secretary Geithner will have to ask for an increase, which Congress will grant, but he is bracing for the usual politics. Many in Congress use the opportunity to make government debt their […]

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Transportation Isn’t Really Open to Free Enterprise

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Shortly after taking office, President Obama announced plans for government spending that calls for “billions of dollars to rebuild roads and bridges, modernize public schools, and construct wind farms and other alternative sources of energy.” He didn’t say much about railroads, but it is common to ignore the differences between America’s highways and railroads. ‘ […]

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Can a National Risk Pool Save Health Insurance?

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President Obama, in a prime time address to Congress, pledged to reform health care in America. All types of insurance are supposed to let people pay premiums into a risk pool that generates a reserve fund to pay losses. Insurance companies employ mathematicians to analyze actuarial data on mortality — accidents, sickness, disability, retirement and […]

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To Create Jobs, Industries Must Transform

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The decline of the American Textile industry is well documented. In 1990, there were 928,000 people working in just the apparel industry; by 2008 it was down to 198,000. The decline is more than double the jobs lost in the automobile industry. Most of us see our clothes marked “Made in China” or some far […]

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