Author: Norman Leahy

The “R” word” – recession. Next to “inflation,” it’s the one word that drives politicians to distraction, distortion and worse. There’s been a lot of “R” word talk in the markets lately, with recent data, such as the May consumer spending numbers, showing a slow down as inflation settles in: Consumer spending cooled to a 0.2% advance in May, the Commerce Department said Thursday. That was the smallest monthly gain this year, and down from the revised 0.6% increase in April.Following the soft spending figures, economists at S&P Global Market Intelligence cut their estimate for economic output twice [in the…

A sure sign of the political panic that high domestic gasoline prices have created inside the Biden administration comes from Treasury Secretary Janet Yellen. Yellen, former head of the Federal Reserve and an accomplished labor economist, pushed for the U.S. and other G-7 nations to impose price caps on Russian oil exports. The supposed goal: putting a dent in Vladimir Putin’s windfall oil profits, and further slowing Russia’s war economy. While the other G-7 nations demurred on a concrete cap, Yellen’s press release exposed how even an economist who should know better can get stampeded into saying some truly bizarre…

The headlines tell one story: the Federal Reserve hiked interest rates three-quarters of a percent to roughly 1.5-1.75 percent. The Fed, the narrative goes, is trying to get a handle on inflation, and prevent it from swallowing the economy. It’s not a bad storyline. One might like to think that the world’s largest economy could handle what are, still, historically low interest rates. But the U.S. economy does not operate in a bubble, no matter how much some might wish it were so. Instead, we’re as connected and dependent on the rest of the world as ever. And on that…

Public schools are facing a problem that should be getting a lot more attention. Enrollment is down more than 1.2 million since the COVID-19 pandemic began in 2020. And there are no signs those kids – and critically for public schools – the state and federal aid that follows them – are ever coming back. As former New York City Mayor Michael Bloomberg writes, this apparently permanent decline “should be causing an outcry.” And at minimum, the drop should tell educrats and politicians that: …[t]oo many public schools are failing, parents are voting with their feet, and urgent and bold…

Governments can, and frequently do, fail. Sometimes, the failures are relatively mild – long lines at the local DMV, potholes that never seem to get fixed or losing letters in the mail. That last example recently had its moment in the spotlight…in a way that exposed how governments can fail in very important, and potentially life-threatening ways. It began with a whistleblower report sent to the Food and Drug Administration (FDA) alleging a number of health issues at a baby formula manufacturing facility. The report was duly entered into the FDA’s internal mail system and…apparently disappeared. For four months. As…

The nation is in the midst of primary season, that magical time of year (for political junkies) when the major parties choose their nominees for the general election. Primaries can be rough, and sometimes, leave the supporters of defeated candidates disgruntled or even downright bitter. But what about those many millions of voters who aren’t card-carrying members of Team Red or Team Blue? They may look at the result of the major party primaries and think: “Are they serious…is this the best they can do?” For those folks, the prospect of another general election pitting what they see as lesser…

Inflation makes politicians say and do some very stupid things. That includes casting the blame for rising prices on various bogeymen in an effort to avoid criticism for policies that have fed, spread and embedded inflation in the economy. The most recent instance of political nitwittery: House Democrats will stage a vote today on legislation giving the president power to ban price gouging during declared emergencies. Take it away, Madame Speaker: “Price gouging needs to be stopped,” House Speaker Nancy Pelosi said…after announcing the bill. “This is a major exploitation of the consumer.” To which former Clinton Treasury Secretary Larry…

Abortion politics have been a constant in Americans’ political life since the Supreme Court’s 1973 ruling in Roe v. Wade.  That 7-2 decision held that a fundamental right to privacy under the 14th Amendment protects a woman’s right to have an abortion. But the leaked draft majority opinion that indicates there are (possibly) enough votes to overturn Roe and send the abortion question back to the states has taken the politics of the debate to a new level. How that unfolds is a question for another time – namely, after the court issues its decision. In the meantime, there’s a…

The federal government will spend more on defense next year. It doesn’t matter which party controls Congress – the Biden administration wants to kick spending up to $813 billion, congressional Republicans want a little more. What are we getting for all that money? According to data in a January 2022 report from the Congressional Budget Office, two-thirds of the defense budget goes to “operation and support” – which includes things like maintenance and personnel costs – and a third toward buying equipment and research and development on new systems. It’s inside that third of the budget where some of the real…

Inflation’s back, and prices for just about everything are roaring ahead at a pace Americans haven’t witnessed in four decades. But inflation does more than just raise prices. It also raises wages in order to help workers keep pace with those rising prices. It’s a vicious circle that those of us of a certain age remember all too well. We also remember how the wage and price spiral lead to a genuinely evil thing called “bracket creep.”  In simple terms, bracket creep meant that as your wages rose, so did your income. This pushed you into a higher income tax…