Recent data pointed to the willingness of households and businesses to resume spending in May. Personal consumption outlays on goods and services increased 8 percent in May, retracing nearly 40 percent of the plunge over the previous two months. Especially encouraging was the bounce back in purchases of big-ticket durable goods, such as motor vehicles … Continue reading Encouraging Signs
The National Bureau of Economic Research (NBER)—the semiofficial arbiter of business cycles in the United States—has officially determined that the longest postwar expansion came to an end in February. In other words, the COVID-19 recession got going in March. No surprise there. Of more interest now is whether a turnaround has begun and are we … Continue reading Has the Recovery Begun?
Since mid-March, the M1 measure of the money stock has grown $900 billion—an increase of more than 20 percent over just two-and-a-half months. If it kept this pace, M1 would double in a year. Accompanying this, the Federal Reserve has injected massive amounts of liquidity into our economy by purchasing more than $2-1/2 trillion of … Continue reading Any Signs of Inflation Yet?
Each day, it seems, the stock market moves closer to its February peak. After a late-winter plunge that erased roughly $7 trillion in household wealth, the S&P 500 index has recovered nearly all of those losses. Are investors in the market oblivious to the ongoing damage from COVID-19? What about the upheaval over the death … Continue reading Has the Market Gotten Ahead of Itself?
On June 4th, I joined Simon Brace and Ratio Christi South Africa to discuss my latest book, Capitalism Versus Socialism: What Does the Bible Have to Say? Please feel free to click on the red button below to re-watch the event. View youtube stream The slides from the presentation are available for download below. Presentation … Continue reading Ratio Christi: South Africa Meeting
What do Pier 1 Imports, JC Penney, Gold’s Gym, and Cinemax have in common? All are well-known businesses that have filed for bankruptcy recently—casualties of COVID-19. Not so well known are the family-owned restaurants down the street, the owners of the local gyms, and the Uber drivers. Are these canaries in the coal mine, only … Continue reading Sorting Through the Pain
I have always believed that there is a God. I grew up in a family with strong Norwegian Lutheran roots on my mother’s side. My grandmother was a victim of polio and lost at least three children, but she had an infectious spirit that seemed to inspire everyone she met. I know that she prayed … Continue reading Faith and Economics
Each week we learn about the new job losses caused by the COVID crisis. Through the first part of May, the number of people who had lost their jobs and had filed for unemployment insurance had accumulated to 36 million—22 percent of the labor force. Many others have faced cutbacks in hours worked. The job … Continue reading What Are We Learning About the Economic Decline?
Over recent decades, the United States has in small steps extended the socialization of risk. We have become more responsive to those experiencing losses that threaten their livelihood. This has taken the form of growing assistance to those hit by natural disasters—tornados, earthquakes, hurricanes, and floods. It has also taken the form of coverage of … Continue reading Socializing Risk
Heating up is the issue of whether the next COVID-19 bill to be considered by Congress will include massive assistance from the federal to state and local governments, especially those most strapped. If enacted, this will involve the federal government borrowing even more in the credit market to be able to achieve the transfer. Why, … Continue reading Why is the Federal Government the One to Pay for This?