And forecasts in general
The Administration released its budget proposal yesterday. Others have dissected the implications [1] [2] [3]. Here I want to focus on the Administration forecast.
The forecasts, and comparisons against alternatives, are presented in Table 2-2 of the Analytical Perspectives of the Budget.
Have a Valentine’s message you want to send to the Fed? Justin Wolfers and Binyamin Applebaum collect some of the proposals from Twitter:
NPR’s Planet Money: You had me at QE1.
Michael McKee: The sight of you fills me with irrational exuberance.
Annalyn Censky: Our love isn’t transitory baby, it’s gonna be exceptional for an extended period.
NPR’s Planet Money: I’ll be your lover of last resort.
Via Mike Shedlock, this item from MarketWatch caught my eye:
Newt Gingrich said that if elected president, he’d name [James] Grant to help run a commission looking at a possible return to the gold standard. And Ron Paul said, if elected president, he’d go all-in and name Grant– one of Wall Street’s best-known gold bugs– as the new chairman of the Federal Reserve….
“Unfortunately, I haven’t heard from Mr. Romney yet,” joked Grant when I called on him in his offices down on Wall Street. “I’m sitting by the phone, I’m ready.”
I presume that Grant would be advising any would-be policy-makers who listen to him the sort of thing that he wrote in 2010:
The classical gold standard, the one that was in place from 1880 to 1914, is what the world needs now. In its utility, economy and elegance, there has never been a monetary system like it.
I thought it would be worthwhile reviewing some of the reasons why I disagree with Grant on this point.
Deficit Hypocrisy Watch
The WSJ editorial page last Thursday remarked upon:
“…the worst fiscal record of any President in modern times…”
How could we boost American employment and GDP? One philosophy is to try to do more of what’s already working.
Last week I had the opportunity to attend an IMF conference (organized by Olivier Blanchard, Krishna Srinivasan, and Hamid Faruqee) focusing on the critical issue of assessing the sources of the pre-crisis imbalances in systemically key countries. The proceedings also had a forward looking component, highlighting the difficulties of determining when external imbalances are problematic. The conference proceedings are here.
Actually, not even the footnotes — just the text accompanying data releases (in this case it’s the second paragraph, in a box, of the release). Although, I must admit, this long rant by FoxForum contributing writer Noel Sheppard just made me laugh and laugh and laugh, thus making an otherwise bleak Monday brighter. From “CNN’s Crowley Does Two Segments on Jobs Numbers Without Mentioning Plummeting Participation Rate”
Last week’s data suggest that the U.S. economic recovery is continuing to gain some strength.
Employment growth accelerates along several dimensions: nonfarm payroll, an alternative measure of nonfarm payroll, private employment, hours, and civilian employment (report here). However, JEC vice chairman Brady (JEC-Republicans) states in a press release: “Job Numbers Mask Underlying Job Weakness.”
Several observers have noted that exports have increased substantially since the President made his commitment to doubling exports. [1] The most recent GDP release confirms improvement in the net exports to GDP ratio (ex. oil imports) and real exports, and a BEA release from a month and a half ago confirms a rebound in manufacturing value added.