James Pethokoukis

AEICan US economic growth rise again? A new study gives reason for optimism In the magisterial The Rise and Fall of American Growth, Northwestern University economist Robert Gordon describes a “special century” of fast productivity growth from roughly 1870 to 1970. But the apogee of that period was really the 1920–1970 “golden age” period when the economy really felt the impact of the Second Industrial Revolution of the second half of the 19th and early 20th century. Via Twenty20. The second IR was a time that produced important and “unrepeatable” inventions flowing from the following five​ technology clusters: electrification, the internal combustion engine, [...]
Tue, Nov 21, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIAfter tax cuts: what a pro-growth agenda should look like Let's assume for a moment that Republicans pass and President Trump signs a $1 trillion-plus tax reform/cut bill. (I don't think the odds are 70%–80%, but “more likely than not” is reasonable, at least as I see it.) Now whatever the White House says or aggressive dynamic scoring models predict, America's 2% economy probably doesn't turn into a 3% economy, much less a 4%–5% economy, where income growth is more broadly shared. Other than figuring out how to now pay for those tax cuts (no small issue), what should be on [...]
Mon, Nov 20, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIShould we be as excited about the US economy as Trump is? From the @realDonaldTrump Twitter account this morning: Under President Trump unemployment rate will drop below 4%. Analysts predict economic boom for 2018! @foxandfriends and @Varneyco — Donald J. Trump (@realDonaldTrump) November 20, 2017 Now what I think he is referring to is this Goldman Sachs forecast: We have raised our GDP growth forecast for 2018 to 2.5% and lowered our unemployment rate forecast to 3.7% by end-2018 and 3.5% by end-2019. . . . Both wage and price pressures are likely to firm in this environment. Wage growth is moving toward the 3-3.25% [...]
Mon, Nov 20, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIBreak up Big Tech? What does that even mean? Are the very large, very successful tech megaplatforms a problem that needs solving? Are they suppressing competition, innovation, free speech, democracy? I'm skeptical that case has been proven to the extent a strong public policy response is required ASAP. And I am equally skeptical of the solution set being offered by those who are quite comfortable that the anti-tech case has been proven. Break ‘em up! Regulate the heck out of them! (Sotto voce: Nationalize them.) (L-R) Amazon CEO Jeff Bezos and Larry Page, CEO and Co-founder of Alphabet, sit during a meeting [...]
Mon, Nov 20, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIShould Washington break up Big Tech? The past year has seen a strange convergence of left and right on one topic: growing fear of Silicon Valley's leading firms. A few headlines will tell the tale. From Axios: “Tech's new Washington problem: Democrats.” From The Intercept: “Steve Bannon Wants Facebook and Google Regulated Like Utilities.” Vox: “Elizabeth Warren wants the government to crack down on technology giants.” Breitbart: “Tucker Carlson: Google should be regulated like the public utility it is.” Twitter Acting General Counsel Sean Edgett, Facebook General Counsel Colin Stretch and Google Senior Vice President and General Counsel Kent Walker are sworn [...]
Mon, Nov 20, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIProfits have been high. That isn't an argument against corporate tax reform It's an argument I see all the time on Twitter: “Corporate tax reform is useless. Just same-old same-old trickle-down economics. Profits are high and have been high for some time, not that it's really helped workers. Because it hasn't. So been there, done that.” And so on and so forth. Now let's put aside what Republicans are doing right now in Congress, and instead look more generally at the pro-growth implications of corporate tax reform, properly understood. Many respected economists, whether considered Republican-leaning or Democratic-leaning, think well-designed, revenue-neutral corporate tax reform [...]
Fri, Nov 17, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIFrom North Korea to Venezuela to Zimbabwe: When terrible government destroys a country It's especially compelling when reality makes your economic and and political points vividly clear and intellectually inescapable. Nothing like a natural experiment to drive a message home. Unfortunately, the fellow traveler in these cases is sometimes vast human misery. At unification, West German living standards were more than twice those in the communist East (and are still a third higher despite $2 trillion in fiscal transfers over the years). Venezuela shows what happens when full authoritarian populism gets put into action. And who hasn't seen the stark image of [...]
Fri, Nov 17, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIDo the tech masters of the universe need to be tamed? Financial Times columnist Martin Wolf runs through the numbers on just how big Big Tech really is: Eight of the world's most highly valued companies are technology businesses. The combined market capitalisation of these companies is $4.7tn. That is 30 per cent of the combined market capitalisation of the other 92 companies in the world's 100 most valuable firms. Of these eight companies, five (Apple, Alphabet, Microsoft, Amazon and Facebook) are from the US, two are Chinese (Alibaba and Tencent) and one is South Korean (Samsung). The most highly valued European [...]
Fri, Nov 17, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIMore trouble brewing for Big Tech on the right Josh Hawley, Missouri's attorney general, has launched an investigation into whether Google has violated that state's consumer protection and antitrust laws. Now Hawley, 37, is a Republican and apparently considered a rising start within the party. And if this is a sign where the Trumpopulist GOP is heading, Big Tech has serious cause for concern. More on this from Timothey Lee of Ars Technica: Hawley's decision to go after Google suggests that he sees some up-side in being seen as an antagonist to a company that conservatives increasingly view with suspicion. More [...]
Tue, Nov 14, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIAn amazing chart: Why the US will become ‘the undisputed global oil and gas leader for decades' This new analysis and forecast from the Energy Information Agency, reflected in the above chart, is amazing: A remarkable ability to unlock new resources cost-effectively pushes combined United States oil and gas output to a level 50% higher than any other country has ever managed; already a net exporter of gas, the US becomes a net exporter of oil in the late 2020s. In our projections, the 8 mb/d rise in US tight oil output from 2010 to 2025 would match the highest sustained period [...]
Tue, Nov 14, 2017
Source: James Pethokoukis Category: JAMES PETHOKOUKIS