This year, America is commemorating the 150th anniversary of the end of the American Civil War. The “Siege of Petersburg (Va.),” which began in the summer of June 1864, intensified so that by March 25, 1865, the U.S. Army under General Ulysses S. Grant blocked all supplies to Petersburg and forced Confederate General Robert E. Lee to abandon the defense of Petersburg and Richmond and flee southwest along the Appomattox River.
In his State of the Union address on Jan. 20, President Barack Obama never used the word “poor” and only used the word “poverty” once, which was in the context of fighting “extreme poverty” globally, in emphasizing the recent Ebola outbreak in West Africa.
In 1954, when the U.S. Supreme Court ruled on Brown v. Board of Education, the Gross Domestic Product (GDP—the value of all goods and services produced in the United States) per capita of the United States stood at $15,745. In September of that year, a young man, the Rev. Dr. Martin Luther King Jr., became pastor of Dexter Avenue Baptist Church in Montgomery, Alabama. In December 1955, Rosa Parks refused to give up her bus seat, and the Montgomery Bus Boycott would be launched. Soon everyone would know who Dr. King was and what the Montgomery Improvement Association was.
We should all congratulate President Barack Obama for pulling the education debate into the 21st century, or perhaps dragging it into the late 20th century, by proposing access to free education through at least an associate's degree. But this merely restates the obvious.
Just after the new year, the American Economic Association and experts in the various other economics specialties met in Boston. Many of the sessions are small conversations among a narrow band of economic inquiry. But some sessions include key economic policymakers who, when speaking to their “own,” are sometimes candid about how economists are viewing the policy dilemma of this global slump.
This week, Federal Reserve Board (Fed) Chair Janet Yellen testified to Congress as part of the requirements of the Humphrey-Hawkins Full Employment Act. The testimony gives Congress an opportunity to hear and assess the Fed’s thinking on economic policy.
In her assessment of the labor market, Yellen clearly stated the labor market is getting better but shows many signs of weakness.
This week, Janet Yellen made her second major speech as chair of the Federal Reserve Bank. Again, her talk as chair is fresh air compared with what is typically heard from Fed chairs. During her first speech in April in Chicago, she actually called out the names of specific unemployed workers—putting a human face on the real effects of Fed policy.
This time of year college students cram for final exams. They get graded in a very stark right-or-wrong fashion. Splitting the difference between a bad guess and the right answer is not rewarded. Unfortunately, Washington is locked in such a crazy struggle. Five years after Wall Street’s fall, the economy still is more than 1 million payroll jobs short of where things stood at the last peak of the labor market. Median household income is still below the peak, meaning more than half of America's households are behind where they were five years ago. The poverty level of America’s children is higher, and state and local revenues only recovered last fiscal year, leaving hundreds of thousands of fewer teachers and larger class sizes for our children. Our nation’s total output is more than $1 trillion less than where it would be if we could get to full employment. Clearly, the right answer to this set of problems is for massive government action to kick start the economy to address the woes of the American people.
This week, President Barack Obama delivered an address, starting a dialogue on how the long path to America’s current level of inequality has led us to the wrong place. The president said that Americans’ frustration with Washington is “rooted in the nagging sense that no matter how hard they work, the deck is stacked against them.” His timing coincided with the nationwide spread of strikes by fast-food workers, showing they cannot wait for Washington to act on raising minimum wages. Unfortunately, the day also saw the loss of Nelson Mandela, a world-class standard bearer for justice. The passing of Mandela is a time to reflect on how the world can change if people just stand up, eventually justice wins out.
The estimates have come in that the federal government shutdown cost upward of $25 billion to the economy. That is shoe one. The other shoe about to drop is from the short-term nature of the budget deal itself. This is going to set up another rocky fourth quarter for the economy.