China and the U.S. Housing Bubble
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We often write about how China’s policy to devalue its currency, the yuan, has been a key factor in the U.S. trade deficit.
It’s not an easy issue to grasp. But economist Paul Krugman devotes an entire column to explaining why China’s devalued currency has such ramifications for our country. Here’s Krugman:
If supply and demand had been allowed to prevail, the value of China’s currency would have risen sharply. But Chinese authorities didn’t let it rise. They kept it down by selling vast quantities of the currency, acquiring in return an enormous hoard of foreign assets, mostly in dollars, currently worth about $2.1 trillion.
Many economists, myself included, believe that China’s asset-buying spree helped inflate the housing bubble, setting the stage for the global financial crisis. But China’s insistence on keeping the yuan/dollar rate fixed, even when the dollar declines, may be doing even more harm now.
Read the entire column here.
No Recovery Without Jobs. No Recovery Without Jobs. No Recovery…
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“Jobs now” was the rallying call of thousands of delegates to the recent AFL-CIO Convention in Pittsburgh, and “unemployment aid” is the cry from millions of those who find themselves unable to get work in a U.S. economy that now has six jobless workers for every one job opening. More than eight of 10 Americans (83 percent) cite unemployment as the nation’s big problem in a survey just out by Peter D. Hart Research Associates.
And yesterday in Washington, D.C., several top economists, including Nobel Prize winner Paul Krugman, all stressed that creating jobs and alleviating the pain of unemployed workers must happen quickly at the federal level—or unemployment will not fall below 8 percent through at least 2014.
That’s more than 12 million U.S. workers without jobs as America’s status quo. And that’s only the official unemployment figure. Those not counted in the official data likely would double that number to at least 24 million workers.
All those who think 24 million jobless workers is a fine way to operate the economy, raise your hands.
Krugman: Think Beyond Stimulus to New Economy
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Once the nation’s economy begins to recover; we should build a durable and broadly shared prosperity. That was the message Nobel laureate Paul Krugman brought today to the first in a series of conferences on progressive ideas to turn around the economy.
Speaking to more than 800 participants at the Thinking Big/Thinking Forward conference in Washington, D.C., Krugman said that to prevent the nation’s economic pit from becoming a permanent trench, we will need a combination of fiscal and financial policies. And that will require the government to invest in the economy in a big way to spur demand.
Krugman, who won the Nobel Prize in economics in 2008, disputed Republican claims that the best way to stimulate the economy is through tax cuts.
There’s more bang for the buck from government spending than from tax cuts.
Thinking Big About a New Economy
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Nobel Prize-winning economist Paul Krugman, Pennsylvania Gov. Ed Rendell (D) and Rep. George Miller (D-Calif.) will headline an array of economic experts and progressive leaders as they gather in Washington, D.C., tomorrow to discuss strategies for rebuilding a new and more sustainable economy.
More than 800 people are expected to attend the Thinking Big/Thinking Forward conference, co-sponsored by The American Prospect, Institute for America’s Future, Demos, and the Economic Policy Institute (EPI). In a joint statement, the conference organizers say the current economic crisis requires far more than a short-term stimulus.
The current recovery plan must be understood as a down-payment on a sustained expansion of public investment vital to building this new economy. It is time to discard the scorn for effective government that contributed to our current travails and commit to making the investments critical for our future as a centerpiece of a new economics of shared prosperity.
Even McCain’s Economist Says We Need Big Recovery Package
The economy is rolling faster and faster downhill—more 1.5 million jobs lost in the past three months—and Republican leaders in the Senate and House, along with their wacko radio talkers, are trashing President Obama’s economic recovery program.
But if action isn’t quickly taken, even darker days are ahead. Says Mark Zandi, a former economic adviser to Sen. John McCain:
Without stimulus, unemployment will rise well into the double digits, and the economy will not return to full employment until 2014.
Tomorrow, some 500 members of the community activist group ACORN, along with AFL-CIO Executive Vice President Arlene Holt Baker, will rally at 2:30 p.m. on the West Lawn of the U.S. Capitol to urge Congress to quickly pass the recovery legislation.
Krugman: Employee Free Choice Key to Economic Recovery
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In the latest issue of Rolling Stone, Nobel Prize-winning Princeton economist Paul Krugman has written an open letter to President Obama detailing the steps needed to end our economic crisis and turn the country around.
Krugman’s prescription includes quick and large-scale actions to save jobs, rebuild infrastructure and protect those whose health care, housing and retirement have been put at risk—but it also includes longer-term strategies to make sure America is “a more just and secure society.” High on Krugman’s list? In addition to health care reform and an economic recovery package, he stresses restoring workers’ freedom to form unions and bargain for a better life by passing the Employee Free Choice Act.
…you can do a lot to enhance workers’ rights. One is to start laying the groundwork to pass the Employee Free Choice Act, which would make it much harder for employers to intimidate workers who want to join a union…the legislation will enable America to take a huge step toward recapturing the middle-class society we’ve lost.
