The Progressive Case for Abolishing the Corporate Income Tax
Reform of the corporate income tax is shaping up to be one of the big issues facing Congress in 2017. Republicans are pushing for big cuts in the corporate tax rate. Most observers seem to assume that conservatives and progressives will be at swords points over those cuts, but they should not be. There is ... Read more
Is US Fiscal Policy About to Go Procyclical, Yet Again? How Can We Tell?
As 2017 begins, the US economy is in the middle of a boom, or at least a boomlet. The official unemployment rate is at or below its target level, stock market indicators are hitting all-time highs, and the Fed is starting to get serious about raising interest rates. All this is reflects the expectation of ... Read more
One Chart Shows Why the Odds Keep RisingThat the Fed Will Raise Rates
Will policymakers at the Fed raise interest rates at their December meeting? Wall Street oddsmakers increasingly think they will. One simple chart shows why. The chart tracks the economy’s progress toward the central bank’s target of “stable prices and maximum employment.” The Fed’s rate-setting Federal Open Market Committee (FOMC) has operated under this so-called dual ... Read more
A Lesson in Unintended Consequences: How Clinton’s Policies Would Raise Effective Tax Rates for the Middle Class
Hillary Clinton is often said to be a policy wonk, deeply enmeshed in specifics and details, but that may be a mischaracterization. In some ways, her approach seems disturbingly superficial, skipping one perceived problem to another with little attention to their underlying causes. In some cases, Clinton seems to have paid little attention to the ... Read more
How Occupational Licensing Undermines Labor Fluidity
A healthy economy requires a fluid labor market. Even when total employment and output are stable, the labor market is in constant motion. Jobs disappear when firms close or downsize. Other jobs appear when new firms open or old ones expand. People move freely from one job to another in search of career advancement or ... Read more
What Does the Unemployment Rate Measure? Labor Market Slack or the Social Stress of Joblessness? Why Does it Matter?
The unemployment rate published monthly by the Bureau of Labor Statistics is one of the most widely watched of all economic indicators. But why? What does it really measure? The news media, politicians, and voters tend to see the unemployment rate as an index of the social stress of joblessness. There is ample evidence to ... Read more
Does the Social Safety Net Provide Enough Incentive to Work?
One of the most common criticisms of social safety net programs is that they discourage work. As House Speaker Paul Ryan has put it, they risk becoming a “hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.” ... Read more
The Great Bipartisan War on Free Trade
Like most economists, I am strongly inclined toward free trade. I cringe to see the way free trade is under attack, from both parties, during this primary season. The two populist candidates are the worst offenders. Bernie Sanders, whom I support on many other issues [1] [2] [3], goes off the rails when it comes ... Read more
Sanders is Right, the US Needs a Healthcare System More Like Those in Europe
Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. “The United States is the only major country on earth that doesn’t guarantee health care to all people,” he says, “And we end up spending far, far more per capita on health ... Read more
Marco Rubio Would Leave Economic Policy Rudderless
Stabilizing the national economy is one of the federal government’s key responsibilities. Is that too much to ask? OK, then, can we at least ask that the government not make things worse when instability strikes? Not if you’re Marco Rubio. Sooner or later an oil price meltdown, a banking crisis, or a Chinese hard landing ... Read more
