Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.
President Obama is convening a summit of CEOs at the White House, revealing a reelection strategy similar to Latin American leaders in the 1970s and 80s, when fiscal irresponsibility ultimately resulted in sovereign debt failures.
Friday, analysts expect the Commerce Department to report the deficit on international trade in goods and services was $44.0 billion in October or 3.6 percent of GDP. The trade deficit and crippled regional banks starve U.S. businesses of the customers and capital needed to create jobs and fire up growth.
Debating tax cuts and deficit reduction both parties are blind to facts and deaf to reason. President Obama and his Democrats stubbornly argue the economic recovery will collapse if $40 billion in long-term unemployment benefits are not approved. Yet, they reason a $60 billion annual tax increase on families over $250,000 will not impose a greater loss in spending and economic growth.
After we back out health care and social services, which are largely gov't funded, the private sector is not creating permanent jobs--none, zero, nada. After health care, social services and temp services are backed out, the private sector lost 24,000 jobs. Ugh! So much for the gradual recovery.
Friday, economists expect the Labor Department will report the economy added 168,000 jobs in November, enough to hold unemployment steady at 9.6 percent and far less than should be expected 17 months into an economic recovery. To win re-election President Obama must improve on those numbers.
The EU bailout for Irish banks failed to quell financial markets. Borrowing costs for Portugal, Spain and others continue to rise, because structural problems created by the euro and single European market remain unaddressed and more crises are inevitable.
Growth is too slow and unemployment is kept unacceptably high by surging imports, especially from China and Germany, which enjoy undervalued currencies.
Ben Bernanke is right. Germany shouldn’t blame easy money in the United States for the world’s woes. Currency mercantilism in China and elsewhere is causing a mess—especially in the United States.