At the peak of economic boom times in 2000, the U.S. child-poverty rate reached a historic low of 16.2 percent. Even then, UNICEF ranked the United States as having the second highest child-poverty rate out of 26 rich countries. The United States had a child-poverty rate twice Germany’s, five times Sweden’s, and nearly ten times Denmark’s. The only country scoring worse than the United States was Mexico.
Regular order. For the past few months, it’s been a Republican byword, the potential cure to all that ails Washington. “The right process is the regular order,” Alabama Senator Jeff Sessions, the ranking Republican on the Budget Committee, said in a statement this past January. “A second term presents the opportunity to do things differently, and in the Senate that means a return to regular order,” Senate Minority Leader Mitch McConnell said on the Senate floor earlier this year. “I believe that it’s time to do regular order,” House Speaker John Boehner told ABC News in March.
The ceaseless parade of commissions, super committees, and gangs of six and eight could be traced back to the lack of a Democratic budget for these regular-order evangelicals. After all, Senate Democrats hadn't even managed to propose a budget since the first year of Barack Obama's presidency.
A familiar tale: In a small country on the Mediterranean rim, the government chooses to solve an economic crisis by enacting an austerity budget. Regressive taxes will rise. Aid to families will be cut. Less will be left of the welfare state built decades ago. The novice finance minister promises this will heal the economy.
As the people of that unhappy land say: Happy are those who believe.
Two 21-year-old college students sit down in a coffee shop to study for an upcoming test. Behind the counter, a barista whips up their double-shot lattes. In the back kitchen, another young adult washes the dishes and empties the trash.
These four young adults have a lot in common. They are the same age and race, each has two parents, and all grew up in the same metropolitan area. They were all strong students in their respective high schools. But as they enter their third decade, their work futures and life trajectories are radically different—and largely determined at this point.
Do you remember Mitt Romney’s election-year promise to create 12 million jobs during his first term? It came in for a fair amount of criticism, not because it was too ambitious—and thus unattainable—but because it was banal. Twelve million was the baseline for job creation over the next four years. Absent a major economic shock, the U.S. economy would have created that many jobs regardless of who was president.
As we trudge through the swamp of disappointment that characterizes Dodd-Frank implementation, the liberal commentariat has lately seized upon a new meme; Wall Street lobbyists are responsible for gutting Dodd-Frank behind closed doors. Big-pocketed firms deploy phalanxes of clever lawyers and influence peddlers that easily outpace reformers, ensuring that the regulations ultimately written are sufficiently de-fanged to allow the financial industry to conduct their business with few, if any, restrictions. The lobbyists, and mostly the lobbyists alone, bear responsibility.
The main item of business before JP Morgan Chase’s annual shareholder meeting, which will convene today in Tampa, is whether JPM CEO Jamie Dimon will be stripped of his additional post as chairman of JPM’s board of directors. A range of institutional investors concerned about the over-concentration of power atop the nation’s most powerful institutions, and upset by the $6 billion loss JPM took last year at its London trading desk, won roughly 40 percent shareholder support last year to separate the two positions. This year, they hope to do better, even though the bank’s public-relations offensive on Dimon’s behalf has made the prospect of winning a majority more difficult.
To consider the life story of development economist turned moral philosopher Albert Hirschman is to appreciate that no other generation is likely to accumulate the experience of the European émigrés to America who came of age just before World War II, survived it, and went on to contribute to the political and scholarly foundations of postwar civilization. Of that generation, nobody did so with more range and grace than Hirschman.
If you’re looking for the personification of the Washington economic establishment, you could do a lot worse than Fred Bergsten. National Security Council economics deputy under Henry Kissinger (at age 27), then head of the international desk and the monetary portfolio in Jimmy Carter’s Treasury Department, and from 1981 through last year the founding director of the Peterson Institute for International Economics, Bergsten has been a forceful advocate for what used to be called the Washington Consensus: an unflagging belief in the virtues of free trade and fiscal discipline.
Kathleen Knauth has had a rough school year. The principal of Hillview elementary, near Buffalo, New York, has spent so much time typing teacher evaluations, entering data, and preparing for standardized testing, she barely had a minute to do what she used to do in her first 12 years of being a principal—drop in on classes, address parents’ concerns, or get to know students. When a school social worker stopped by her office a few months back to get Knauth’s take on which children might need her help, she realized she had hit a new low.
“Normally I’d say, ‘This one’s grandma is seriously ill. This child is going through a huge custody battle. This one has clothes that are too small. I could reel off six to eight things,” says Knauth. “But this year, I had nothing.”
One aspect that defines our current economy is that things are happening that shouldn’t be happening. I don’t mean that things are happening that are illegal or immoral. (Well, some of them are immoral, but that’s not what I mean.) Rather, things are happening that defy economic logic—a slippery term that really means, the economic patterns of roughly the past half-century.
The first such logic-defying thing is that corporate profits are soaring even as corporate revenues limp along. The quarterly reports of S&P 500 corporations for the first three months of 2013 are almost entirely in now, and they show profits rising by more than 5 percent even while revenues have risen by less than 1 percent. Seventy percent of these companies—the largest publicly traded U.S. firms—exceeded the analysts’ profit projections. On the other hand, 60 percent came in under the projections for their sales.