I've stated repeatedly that a massive amount of stimulus has been required to generate GDP growth of just 2.0%-2.5% annually since the end of the Great Recession (June 2009). We have further said that the removal or reversal of some of these stimulants will be a tough hurdle for the economy to overcome.
The dollar began its ascent against other major world currencies in mid-2014. The move higher was fast and furious, but the greenback ran into some resistance beginning in the middle of March.
Since I agree with the vast majority of what Bernstein has to say, let me pick on three areas where I have some disagreement. The first is the discussion of the initial financial crisis that Bernstein stepped into at the start of 2009 as one of Obama's advisers.
Balancing the budget through reduced spending and increased revenues, ending the vast expansion of the Federal Reserve's balance sheet and normalizing interest rates, are all necessary actions in the effort to right the economy in the face of the Great Recession.
We shouldn't be giving up on monetary policy, which for the past few years has been pretty much the only game in town as far as economic policy goes. Instead, we should be looking for a better balance between monetary and other growth-promoting policies, including fiscal policy.
If the Fed holds interest rates too high for too long, it can slow economic growth and trigger a recession. It did precisely this, intentionally and to good effect, in the early 1980s to tame exceedingly high inflation rates.
While many policies will be needed to improve the situation of the poor and middle class, there are three simple ones that could make a big difference: a more competitive dollar, a Federal Reserve Board committed to full employment and a financial transactions tax to rein in Wall Street.
When it comes to what goes on in the marble corridors of the Federal Reserve, Americans tend to be suspicious. For different reasons, both the right and the left have challenged Fed policies aimed at bolstering the economy in the wake of the Great Recession.
The incessant parsing and analysis of each and every Fed utterance is becoming quite comical. God love Steve Liesman and Mark Zandi, but are they really adding much value by trying to read between the lines of each statement from each Fed member?
Low interest rates were supposed to be a short-term crutch, but have instead become the staple of a years-long feast for the 1 percent. It's time for the Fed to end the festivities, remove the crutch and let the partiers take their losses so we can move forward as a nation, all 100 percent of us.
The March job numbers came in somewhat worse than most analysts had expected. The slower job growth was largely attributable to unusually bad weather in late February and early March, but most of the commentators seem to be missing this fact. Many are warning that the economy might be weaker than they thought. These warnings from commentators are in fact good news. They are good news first because it is almost certainly true that the economy is weaker than these analysts thought. Many had been making silly pronouncements about a new American boom that was not based in any real understanding of the economy. It's always best when the people who are determining economic policy have some idea of the actual state of the economy. The other reason the warnings are good news is that they may slow down the Federal Reserve Board's rush to raise interest rates.
The Fed has intimated that it will raise interest rates at some point later this year after more than a half-decade of easy money. But the March jobs report suggests that the swift appreciation of the U.S. dollar is starting to cut into job growth.
Next time you hear someone blabbing about how robots are going to take away our jobs, tell them to can the science fiction and get back to the real world. The immediate threat to jobs is the folks on the Federal Reserve Board who want to raise interest rates.
The market's response to Wednesday's economic data was somewhat perplexing at first blush.
U.S. financial markets have been highly volatile but with little to show for investors, as opposed to traders, who make their best livings from pointless volatility, for all the swaying back and forth since the start of 2015.
We can argue whether it's a good thing or a bad thing that a small, unelected group of bankers is in complete control of all meaningful economic outcomes. But let's at least face the reality that they are. That said, can't we at least get a full audit of what they're doing?