Economy & Budget

Last week’s Department of Labor announcement of the drop in unemployment showed signs of life in the economy, driven in part by a booming U.S. housing market that has been on a roll for several quarters. 

New homes mean new materials from foundation to roofing, and this is creating a lot of jobs for the manufacturers and distributors of those materials throughout the supply chain. The robust kitchen and bath cabinetry industry alone is an estimated $7 billion industry, according to data from the Kitchen Cabinet Manufacturers Association.

Good news, right? 

Unfortunately, this market growth could be stalled and reversed by a direct attack on U.S. manufacturing created by just six companies in a dubious government play to change the dynamics of an important commodity to this industry. 

The JOBS Act has the potential to help entrepreneurs finance their small and emerging growth businesses through “crowdfunding,” but only if we get the costs right. In the year since the measure was signed into law, online technology platforms have continued to successfully disrupt the costs of fundraising, necessitating a reevaluation by the Securities and Exchange Commission of some components of the law before completing the regulations.  

Main Street merchants, still reeling from the economic devastation of the Great Recession, are one step closer to fair and equal treatment in the collection of sales taxes, thanks to the Senate’s recent passage of the Marketplace Fairness Act. The law, which passed with bipartisan ease, is long overdue and aims to rectify a distorted marketplace that gives online retailers an unfair edge over their brick-and-mortar competitors.

However, it faces a steep uphill battle in the U.S. House of Representatives, and has already been tarnished by grossly inaccurate characterizations by the lobbyists for the online retailers whose ability to avoid paying any sales tax has put an untold number of small businesses, with no Internet presence, out of business. The legislation is neither a new tax nor a tax increase. Rather, at its core, the bill is about making competition between all merchants — whether online or over the counter — fair and equitable.

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Over the last few days, politically driven critics have called on the president to abandon his support for changing the way the government indexes provisions in the budget to inflation by switching to “chained CPI.” Looking beyond politics, we’re here to say that these critics’ arguments are wrong on their merits.

As economists from opposite ends of the political spectrum, we would strongly urge the president and leaders in Congress to continue to support moving to chained CPI, which represents the most accurate available measure of inflation and cost-of-living increases. Switching to this more accurate measure of inflation represents the right technical, fiscal and retirement policy — and policymakers should not delay any further in making this improvement.

After trying private negotiations, bipartisan commissions, informal “gangs” and a supercommittee, the search for a long-term federal fiscal plan has come full circle back to where it started — regular order under the budget process in Congress.

Amid all the controversies gripping Congress, certainly we should all be able to agree that the full faith and credit of the United States — the very trust the public has when it loans money to the government — should not hang in the balance every time there’s a fiscal debate in Washington. 

America faces an alarming growth gap — a gap between where our economy is in the present recovery compared with where our economy should be in an average recovery. 

The Export-Import Bank of the United States (Ex-Im) is a vital tool to promote economic growth through exports and level the playing field for manufacturers in the United States in the face of aggressive foreign export credit agencies. With 95 percent of consumers living outside of the United States and fierce global competition, we must continue to use every tool available to grow exports in order to create jobs and grow our economy. Read more...

Should a national poll ever be conducted asking parents if their children were ready to be completely independent at age 18 the results would likely show most Americans answering in the negative.
 
That’s because if you ask any parent they’ll tell you they’ve all gotten a call from there 19, 20 or 21 year old asking for extra money while attending college or perhaps needing a place to stay while they look for work after completing their degree. 
 
The results would probably show higher negatives if parents polled were asked should their children be on their own at age 18 after suffering instability at home, changing multiple schools throughout their youth or experiencing extensive physical, emotional and sometimes sexual abuse.

Whether it’s sequestration, the budget crisis or the debt ceiling debate, America continues to kick the can down the road on problems large and small. Most Americans have reached the point where they just roll their eyes when they hear about the latest dysfunction out of Washington.
 
But it’s time to pay attention because Washington’s dysfunction is making America dysfunctional.
 
Economists such as Stanford’s Nicholas Bloom have recently traced the link between policy uncertainty and the reluctance of businesses to make long-term commitments. This means that people aren’t hiring and workers aren’t working as a direct consequence of our elected leaders’ inability to work together.