ECONOMIC TRENDS
Postwar Trends in Economic Well-Being in the United States, 1959–2004
Levy Economics Institute of Bard College – Report - February 2009 – 17 pages
http://www.levy.org/pubs/lmw_feb_09.pdf
“The Levy Institute Measure of Economic Well-Being (LIMEW) is a more comprehensive measure than either gross money income or extended income because it includes estimates of public consumption and household production, as well as the long-run benefits from the ownership of wealth… The authors find that median household well-being grew rather sluggishly over the 1959–2004 period compared to the annual growth rate of per capita GDP. They note the crucial role of net government expenditures, and therefore call for the Obama administration’s fiscal stimulus package to improve the broader economic well-being of the poor and the middle class, while also creating jobs.”
Brian K. Bucks, Arthur B. Kennickell, Traci L. Mach, and Kevin B. Moore
Changes in U.S. Family Finances from 2004 to 2007: Evidence from the Survey of Consumer Finances
Federal Reserve Bulletin - February 12, 2009 – 56 pages
http://www.federalreserve.gov/pubs/bulletin/2009/pdf/scf09.pdf
“Data from the 2004 and 2007 SCF show that median income barely changed, while mean income rose substantially, an indication that income gains were much greater for families in the uppermost part of the distribution. Although overall both median and mean net worth increased strongly over this period—17.7 percent and 13.0 percent, respectively—these measures declined for families at the bottom of the wealth distribution.”
Report Card for America’s Infrastructure
American Society of Civil Engineers - January 28, 2009 -
http://www.asce.org/reportcard/2009/grades.html
The study is an assessment by professional engineers of the nation’s status in 15 categories of infrastructure. In 2009, all signs point to an infrastructure that is poorly maintained, unable to meet current and future demands, and in some cases, unsafe. A healthy infrastructure is the backbone of a healthy economy. In these challenging times, infrastructure is essential to reviving the nation’s fortunes, and in maintaining our high quality of life, concludes the study.
Thomas I. Palley
After the Bust: The Outlook for Macroeconomics and Macroeconomic Policy
Levy Economics Institute of Bard College – Public Policy Brief - January 2009 – 28 pages
http://www.levy.org/pubs/ppb_97.pdf
“Change” was the buzzword of the Obama campaign, in response to a political agenda precipitated by financial turmoil and a global economic crisis. According to the author, the neoliberal economic policy paradigm underlying that agenda must itself change if there is to be a successful policy response to the crisis. Mainstream economic theory remains unreformed, says Palley, and he warns of a return to failed policies if a deep crisis is averted. Since Post Keynesians accurately predicted that the U.S. economy would implode from within, there is an opportunity for Post Keynesian economics to replace neoliberalism with a more successful approach.
U.S. Metro Economies: The Engines of Economic Recovery
U.S. Conference of Mayors and the Council for the New American City - January 2009 – 19 pages
http://usmayors.org/77thWinterMeeting/documents/usmer-report-200901.pdf
The key findings include: unemployment will rise in metro areas in 2009, shrinking GDP, growing unemployment nationwide, regional impacts, metro areas are essential to national economic recovery.
James Kvaal, Ben Furnas
Recession, Poverty, and the Recovery Act - Millions Are at Risk of Falling Out of the Middle Class
Center for American Progress – Report – February 11, 2009 - 8 pages
http://www.americanprogress.org/issues/2009/02/pdf/recession_poverty.pdf
“The American economy is in a recession that is 14 months old, and the downturn appears to be growing deeper and more severe. Approximately 1.8 million Americans lost their jobs in the past three months alone—nearly 20,000 a day. Helping struggling families is not only the right thing to do in hard times; it is also one of the most cost-effective ways to fight the recession.”
ECONOMIC CRISIS : STRATEGIES FOR CHANGE
White House Releases State by State Numbers; American Recovery and Reinvestment Act to Save or Create 3.5 Million Jobs
The White House – February 17, 2009
http://www.whitehouse.gov/the_press_office/White-House-Releases-State-by-State-Numbers-American-Recovery-and-Reinvestment-Act-to-Save-or-Create-35-Million-Jobs/
This site offers links to tables and fact sheets outlining the impact of the American Recovery and Reinvestment Act. The estimates are derived from an analysis of the overall employment impact of the American Recovery and Reinvestment Act conducted by Christina Romer, Chair of the Council of Economic Advisers, and Jared Bernstein, Chief Economist for the Vice President, and detailed estimates of the working age population, employment, and industrial composition of each state.
Jason Bordoff, Lael Brainard, Carola McGiffert, Isaac Sorkin
Strengthening American Competitiveness: Regaining Our Competitive Edge - Four Priorities and 20 New Ideas
The Brookings Institution – Paper - February 2009 – 28 pages
http://www.brookings.edu/~/media/Files/rc/reports/2009/02_american_competitiveness_brainard/02_american_competitiveness_brainard.pdf
“If we are going to provide opportunities for all Americans going forward, we need to make the right investments today to rebuild American competitiveness by investing in our people, infrastructure, ideas, and green transformation. This paper addresses this central challenge for the United States.” They “lay out the fundamentals of a competitiveness agenda through descriptions of specific policy proposals by leading experts on how to invest more robustly in infrastructure, people, ideas and green transformation.
Trevor Houser, Shashank Mohan, and Robert Heilmayr
A Green Global Recovery?
The Peterson Institute - Policy Brief – February 2009 – 21 pages
http://www.petersoninstitute.org/publications/pb/pb09-3.pdf
“The authors consider twelve proposed "green" stimulus programs and examine the economic, environmental, and energy-security costs and benefits of these proposals using the Energy Information Administration's National Energy Modeling System and the Bureau of Economic Analysis's RIMS II multipliers.”
Gerald W. Scully
Will the $800 Billion-Plus Stimulus Plan Bring Economic Recovery?
National Center for Policy Analysis - Brief Analysis - February 10, 2009 – 2 pages
http://www.ncpa.org/pub/ba/ba643/
“Banker greed and Wall Street are blamed, but government policies over the last 25 years are the root cause of the current financial crisis”.
Restoring the Economy: Strategies for Short-term and Long-term Change
U.S. Congress Joint Economic Committee - Hearing - February 26, 2009
“This hearing explored the short-term actions that are being taken to restore the economy to create a functioning credit system, and the long-term actions that must be taken to prevent the recurrence of this kind of financial disaster in the future.”
Roger C. Altman, Chairman and CEO, Evercore Partners, Inc.
Joseph Mason, Professor of Economics, Louisiana State University
Adam Posen, Deputy Director, Peterson Institute for International Economics
Paul Volcker, Chairman, President’s Economic Advisory Board
Derek Scissors and J.D. Foster
Two Lost Decades? Why Japan’s Economy Is Still Stumbling and How the U.S. Can Stay Upright
The Heritage Foundation – WebMemo – February 23, 2009 – 5 pages
http://www.heritage.org/Research/AsiaandthePacific/upload/wm_2307.pdf
“A heated and important debate is underway as to how America should respond to its financial crisis and the deepening recession. Another lesson from Japan is that, if the U.S wants to secure long-term prosperity and the future of American leadership, it must also be concerned about the next two decades. If the U.S does not fundamentally change its tax, spending, and regulatory policies, this nation risks replaying Japan's two lost decades, with all that entails.”
HOUSING
Meeting Multifamily Housing Finance Needs During and after the Credit Crisis
Harvard University - Joint Center for Housing Studies – Policy Brief - January 2009 – 28 pages
http://www.jchs.harvard.edu/publications/finance/multifamily_housing_finance_needs.pdf
The study contends that the policymakers must recognize the important differences between single-family and multifamily financing and take steps to ensure an adequate supply of capital to the multifamily sector during and after the economic crisis. The paper details the growing importance of rental apartments and points to a looming liquidity crisis that could seriously impair the sector, leading to a critical housing shortage.
Jordan Rappaport
The Affordability of Homeownership to Middle-Income Americans
FRB Kansas City - Economic Review - Fourth Quarter 2008 – 31 pages
http://www.kansascityfed.org/Publicat/ECONREV/PDF/4q08Rappaport.pdf
“From 1971 through mid-2007, the nominal national sales price of housing grew almost eightfold. Controlling for inflation, this represented a near doubling in the relative price of housing. The retrenchment in prices that began in 2007 has so far remained small compared to the earlier increase.”
Homeowner Affordability and Stability Plan Fact Sheet
U.S. Department of the Treasury – Fact Sheet - February 19, 2009
http://www.ustreas.gov/news/index2.html
The Homeowner Affordability and Stability Plan is part of the President Obama’s broad, comprehensive strategy to get the economy back on track. The plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. In doing so, the plan not only helps responsible homeowners on the verge of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs.
House Prices and Bank Loan Performance
FRB San Francisco – Economic Letter – February 6, 2009 – 4 pages
http://www.frbsf.org/publications/economics/letter/2009/el2009-06.html
“A number of studies have shown a strong link between house price depreciation and defaults on residential mortgages. This Economic Letter reports on new research which looks at the performance of commercial banks and finds further evidence on this link. The study also finds that the performance of land development and construction loans is even more sensitive to house prices than the performance of residential mortgages, consistent with very high delinquency rates on the former set of loans. At the same time, the study finds little evidence that spillovers from falling house prices have materially affected the performance of other types of loan categories at commercial banks.”
FISCAL AND TAX POLICIES
New Approaches to Addressing Long-Term Fiscal Responsibility
Brookings – Statement by members of the Brookings-Heritage Fiscal Seminar – February 19, 2009
http://www.brookings.edu/opinions/2009/0219_fiscal_responsiblity_sawhill.aspx?emc=lm&m=222610&l=8&v=252043
“We therefore urge the President to lead a major public engagement effort – beyond a one-day summit – to inform Americans of the scale and nature of the long-term fiscal crisis, explain the consequences of inaction and discuss the options for solving the problem. This should be bipartisan, and involve a serious conversation with Americans to help guide action in Washington. As a group with some experience in this domain, we stand ready to assist if needed.”
A New Era of Responsibility - Renewing America’s Promise
White House, Office of Management and Budget – February 26, 2009
http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf
The budget of the United States Government for the fiscal year 2010.
Democrats: Brief Analysis of President Obama’s FY 2010 Budget
U.S. Senate, Senate Budget Committee, Democratic Staff - Brief Analysis – February 27, 2009 – 13 pages
http://budget.senate.gov/democratic/statements/2009/Obama%20FY%202010%20Budget%20Brief%20Analysis_022709.pdf
The Democratic Staff of the Senate Budget Committee comments on President Obama’s FY 2010 Budget.
Republicans: The Obama Budget: A Summary and Analysis
U.S. Senate, Senate Budget Committee, Republican Staff – February 26, 2009 – 10 pages
http://budget.senate.gov/republican/pressarchive/2009-02-26BudgetOutlineSummary.pdf
The Republican Staff of the Senate Budget Committee comments on President Obama’s FY 2010 Budget.
Allison Hughey
How Tax Relief Can Stimulate Economic Growth
National Center for Policy Analysis – Brief analysis - February 10, 2009 – 2 pages
http://www.ncpa.org/pub/ba/ba641/
“Congress is debating an economic stimulus package that would substantially increase federal spending, but may not speed recovery from the current recession. The Congressional Budget Office estimates that less than 40 percent of the proposed infrastructure spending in the stimulus bill will be spent within two years. Tax cuts, by contrast, can have an immediate effect.”
William G. Gale and Alan J. Auerbach
The Economic Crisis and the Fiscal Crisis: 2009 and Beyond
The Brookings Institution – Paper – February 19, 2009 - 29 pages
http://www.brookings.edu/~/media/Files/rc/papers/2009/0219_fiscal_future_gale/0219_fiscal_future_gale.pdf
“This paper discusses the impact of recent tumultuous economic events and policy interventions on the Federal fiscal picture for the immediate future and for the longer run. In 2009, the federal deficit will be larger as a share of the economy than at any time since World War II. The current deficit is due in part to economic weakness and the stimulus, and in part to policy choices made in the past. What is more troubling is that, under what we view as optimistic assumptions, the deficit is projected to average at least $1 trillion per year for the 10 years after 2009, even if the economy returns to full employment and the stimulus package is allowed to expire in two years. The longer-run picture is even bleaker…”
MONETARY POLICY
Ben S. Bernanke
The Semiannual Monetary Policy Report to the Congress
U.S. Senate Committee on Banking, Housing and Urban Affairs - Hearing - January 24, 2009 - 10 pages
http://banking.senate.gov/public/_files/BERNANKESTMT022409_MPR_SenateBankingCommittee.pdf
Ben S.Bernanke, Chairman of the Board of Governors of the Federal Reserve System analyzes the economic situation and monetary policy. After describing the recent economic and financial developments and the policy responses, he develops the economic outlook and the quarterly projections of the Federal Open Market Committee.
Monetary Policy and the State of the Economy
U.S. House Committee on Financial Services - Hearing - February 26, 2009
Dr. James K. Galbraith, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin
Dr. Alan S. Blinder, Center for Economic Policy Studies, Princeton University
Dr. John B. Taylor, Senior Fellow, Hoover Institution, Stanford University
This hearing is following Ben S.Bernanke’s Semiannual Monetary Policy Report to the Congress, presented before the Senate (February 24) and the House (February 25) Committees.
FINANCE
Julia S. Perelstein
Macroeconomic Imbalances in the United States and their Impact on the International Financial System
Levy Economics Institute of Bard College - Web posted - February 2009 – 21 pages
http://www.levy.org/pubs/wp_554.pdf
The paper presents that the financial crisis of 2007–08 was made global by the current account deficit in the United States and there is global dependence on the United States trade deficit as a means of maintaining liquidity in financial markets. The outflow of dollars from the United States was invested in U.S. capital markets, causing inflation in asset markets and leading to a bubble and bust in the subprime mortgage sector. Since the U.S. dollar is the international reserve currency, international debt is mostly denominated in dollars. Because there is a high degree of global financial integration, any reduction in the U.S. balance of trade will have negative effects on many countries throughout the world, according to the paper.
Mark Jickling
Causes of the Financial Crisis
Congressional Research Service, Library of Congress - Web posted February 11, 2009 – 10 pages
http://www.taxpayer.net/user_uploads/file/Reports/CRS/1-29-09%20CRS%20Causes%20of%20the%20Financial%20Crisis.pdf
The current financial crisis began in August 2007, when financial stability replaced inflation as the Federal Reserve’s chief concern. The roots of the crisis go back much further, and there are various views on the fundamental causes. It is generally accepted that credit standards in U.S. mortgage lending were relaxed in the early 2000s, and that rising rates of delinquency and foreclosures delivered a sharp shock to a range of U.S. financial institutions. While some may insist that there is a single cause, and thus a simple remedy, the sheer number of causal factors that have been identified tends to suggest that the current financial situation is not yet fully understood in its full complexity.
Martin Neil Baily and Robert E. Litan
Fixing Finance: A Roadmap for Reform
The Brookings Institution – Paper – February 17, 2009 - 45 pages
http://www.brookings.edu/~/media/Files/rc/papers/2009/0217_finance_baily_litan/0217_finance_baily_litan.pdf
“The Obama Administration has announced that fixing the nation’s financial system is one of its highest initial priorities… In this essay, we attempt to provide our own version of a roadmap for reform. We believe that the central challenge confronting policy makers now is to establish a new regulatory framework that will do a far better job preventing financial abuses and their consequences without chilling innovation and prudent risk-taking that are essential for growth in any economy. To accomplish that end will require a major restructuring and strengthening of the two pillars upon which an efficient and safe financial system must rest: market discipline and sound regulation.”
Financial Stability Plan
Joint statement by Secretary of the Treasury Timothy F. Geithner, chairman of the board of governors of the Federal Reserve System, Ben S. Bernanke, chairman of the Federal Deposit Insurance Corporation, Sheila Bair, comptroller of the currency, John C. Dugan, and director of the Office of Thrift Supervision John M. Reich
Federal Deposit Insurance Corporation – Press release - February 12, 2009
http://www.fdic.gov/news/news/press/2009/pr_fsb.html
A comprehensive set of measures to restore confidence in the strength of U.S. financial institutions and to restart the critical flow of credit to households and businesses has been announced. The program will help lay the groundwork for restoring the flows of credit necessary to support recovery. The core program elements include new Capital Assistance Program and Public-Private Investment Fund. A new Treasury and Federal Reserve initiative to dramatically expand, up to $1 trillion, the existing Term Asset-Backed Securities Lending Facility (TALF) in order to reduce credit spreads and restart the securitized credit markets that in recent years supported a substantial portion of lending to households, students, small businesses, and others.
N. Eric Weiss et al.
Troubled Asset Relief Program and Foreclosures
Congressional Research Service, Library of Congress - February 17, 2009 – 13 pages
http://assets.opencrs.com/rpts/R40224_20090217.pdf
Increasing foreclosure rates and problems in financial markets are some of the issues addressed in the Emergency Economic Stabilization Act of 2008 (P.L. 110-343), which created the Troubled Asset Relief Plan (TARP). The law authorized $700 billion in spending. The report focuses on Title II of the bill, which would require the Treasury to spend a minimum of $40 billion of the second $350 billion on foreclosure mitigation. The bill, as passed by the House, would require the Secretary of the Treasury to develop a plan by March 15, 2009. Both H.R. 703 and H.R. 788 have the same safe-harbor provisions.
David C. John, James L. Gattuso
Obama's Bank Bailout Plan: Not Ready for Prime Time
The Heritage Foundation - Web memo - February 12, 2009
http://www.heritage.org/Research/Economy/wm2291.cfm
“The Administration's financial bailout strategy announced by Timothy Geithner, despite some positive elements, is filled with incomplete and unsound policy proposals financed by trillions of taxpayer dollars”.
Living on the Hedge: A Forum on the Private Investment Fund Industry
The Brookings Institution – Event transcript – February 12, 2009 – 143 pages
http://www.brookings.edu/events/2009/0212_hedge.aspx?emc=lm&m=222135&l=44&v=252043
Wall Street hedge funds and their larger-than-life managers have captured Main Street’s imagination, as well as investor dollars. On February 12, the Brookings Institution hosted a forum to explore the role of hedge funds in the ongoing financial crisis, as well as their uncertain future in the evolving regulatory environment.
Tim Westrich
Putting Credit Card Debt on Notice - Using electronic reminders to give consumers the right information at the right time
Center for American Progress – Report - February 2009 – 14 pages
http://www.americanprogress.org/issues/2009/02/pdf/credit_cards.pdf
“Washington is awash in proposals for revamping banking regulation—and credit card fees are only one element that needs to be examined. But lawmakers should consider how technology can make everyday financial products such as credit cards easier to use and understand.”
Stuart E. Weiner
The Federal Reserve's Role in Retail Payments: Adapting to a New Environment
FRB Kansas City - Economic Review - Fourth Quarter 2008 – 30 pages
http://www.kansascityfed.org/Publicat/ECONREV/PDF/4q08weiner.pdf
“The U.S. retail payments system is in the midst of a transformation. The shift from paper to electronics, the emergence of new instruments and payments channels, the rise in nonbank participation, the change in risk profiles—all are elements of this new landscape. The Federal Reserve takes as one of its mandates fostering a payments system that is safe, efficient, and accessible. How does the Federal Reserve fulfill this mandate in this new environment?”
