Weak U.S. economic growth continues to be discouraging. But it’s worth taking a look at a few places where things going well for America.
Author Archives: James_Hamilton
California economist says real US debt $70 trillion
Or so claims a recent headline. But that’s not what I actually said, as I try to clarify below.
Winding down Fannie and Freddie
From the Daily Herald:
Speaking Tuesday in Arizona, President Obama endorsed the bipartisan efforts of [Senator Bob Corker (R-TN) and Senator Mark Warner (D-VA)] to wind down Fannie Mae and Freddie Mac as a first step in making certain that the nation does not suffer again through a housing finance crisis.
“For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag,” Obama said in Phoenix. “The good news is that there’s a bipartisan group of Senators working to end Fannie and Freddie as we know them. I support these kinds of efforts.”
Let me explain why I also endorse these recommendations.
More on the next Federal Reserve chair
The Financial Times has published some further discussion on who should be the next Fed Chairman.
Brad DeLong argues for Larry Summers, and
I make the case for Janet Yellen.
Econbrowser recession indicator index up to 30.5%
The BEA released today its comprehensive national account revisions, according to which real GDP grew at a 1.7% annual rate in 2013:Q2. Although this was above the 1.1% rate that many analysts were expecting, the new estimates also revise down the growth rates that were previously reported for 2012:Q4 and 2013:Q1, with the growth rate over these quarters now estimated to have been 0.1% and 1.1%, respectively, down from the 0.4% and 1.8% figures that had been reported last month.
The case for Janet Yellen as Federal Reserve chair
I wanted to express some of the reasons why I feel that Janet Yellen would be an outstanding choice to head the Federal Reserve.
Worries about China
Paul Krugman is among those starting to be concerned about an economic downturn in China. Here are my thoughts on this issue.
Brent-WTI spread disappears– for now
On Friday the benchmark crude oil traded in the central United States (West Texas Intermediate) sold for the same price as the benchmark European crude (Brent). That’s the first time that’s happened in almost three years. But I don’t expect the situation to persist.
Off-balance-sheet federal liabilities
Here’s the abstract for a paper I recently completed on Off-Balance-Sheet Federal Liabilities:
Much attention has been given to the recent growth of the U.S. federal debt. This paper examines the growth of federal liabilities that are not included in the officially reported numbers. These take the form of implicit or explicit government guarantees and commitments. The five major categories surveyed include support for housing, other loan guarantees, deposit insurance, actions taken by the Federal Reserve, and government trust funds. The total dollar value of notional off-balance-sheet commitments came to $70 trillion as of 2012, or 6 times the size of the reported on-balance-sheet debt. The paper reviews the potential costs and benefits of these off-balance-sheet commitments and their role in precipitating or mitigating the financial crisis of 2008.
What follows is a brief summary of the paper.
The all-powerful Fed
The conventional wisdom is that the big jump in interest rates since the beginning of May is the result of a poorly conceived or poorly communicated shift in policy by the U.S. Federal Reserve. The conventional wisdom is wrong.