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Romney’s Timely Proposal to Raise and Index the Minimum Wage
February 3, 2012 | Washington Post Editorial
Mitt Romney has had a rough time explaining how he would maintain a social safety net for the poor. His recent remarks have suggested callousness. But amid the kerfuffle, he offered one good idea: specifically, he told the Associated Press on Wednesday that he backs indexing the federal minimum wage to inflation, just as he did when running for governor of Massachusetts a decade ago. Currently $7.25 per hour, the federal minimum last went up in July 2009. As an anti-poverty measure, it is far from perfect.
Mitt at a Minimum
February 3, 2012 | Wall Street Journal Editorial
Serves us right. Yesterday we tried to defend, or at least explain, Mitt Romney's remark that he didn't worry about the poor because they had the government to help them. Then Mr. Romney tells the world he favors a rising minimum wage indexed for inflation that really would hurt the poor. Mr. Romney reaffirmed his minimum-wage views to reporters as he tried to extricate himself from the controversy over his "poor" remarks. (See "What Mitt Really Meant," Feb. 2.) It was a classic political gotcha moment, and Mr. Romney's response was more troubling than his earlier marks.
Mitt Can Win By Battling America’s Debt Addiction
February 3, 2012 | Sebastian Mallaby in Financial Times
Florida’s Republicans have spoken and Mitt Romney has regained his frontrunner status. But like George H.W. Bush – another decent, diligent, dynastic Republican – Mr Romney has an enemy more terrible than any mortal rival: he has a problem with the Vision Thing. Despite the fuss about his tax returns, his trouble is not that he made millions as a private equity baron. It’s that managerial credentials are all he has going for him. His campaign is devoid of an animating idea.
Fed’s Evans Would Back ‘Very Aggressive’ Debt Purchases
February 3, 2012 | Real Time Economics
A high-profile defender of Federal Reserve policies to stimulate the U.S. economy would back “very aggressive” debt purchases by the Fed, and said he believes the central bank should more explicitly state the conditions necessary for a federal-funds rate increase. “We still have a ways to go” before the Fed would begin to raise interest rates, said Charles Evans, president of the Federal Reserve Bank of Chicago.
Bernanke Adopts Caution on US Recovery
February 3, 2012 | Financial Times
US Federal Reserve chairman Ben Bernanke struck a cautious tone on the health of the economy in testimony to Congress but gave no hint that more stimulus from the central bank is near. The pace of the economic recovery remains “frustratingly slow” and “the sluggish expansion has left the economy vulnerable to shocks”, Mr Bernanke told the House of Representatives budget committee. But he added: “Fortunately, over the past few months, indicators of spending, production and job market activity have shown some signs of improvement”.
GOP: Cut Federal Workers, Not Defense
February 3, 2012 | The Hill
A group of Republican senators introduced legislation Thursday that would wipe out automatic defense cuts by reducing the federal workforce by 5 percent and extending a freeze on federal pay through June 2014. The GOP senators, led by Arizona’s Jon Kyl and John McCain, wish to prevent $500 billion in automatic defense cuts set to begin in January 2013. Their bill would eliminate the first year of the cuts by hiring back two workers for every three who leave.
Payroll Conferees Avoid the Big Issue
February 3, 2012 | Politico
They bickered over boiler regulations, rambled about research and development credits and discussed the finer points of business expensing. But there was one important matter the payroll tax conference committee didn’t debate Thursday: the payroll tax itself. Twenty-six days remain until the popular tax cut is set to expire for 160 million Americans. But the debate so far has been consumed by side issues.
Appropriators Look Past Sequester
February 3, 2012 | CQ
The very real possibility that a 9 percent spending cut for most federal programs will be ordered next Jan. 2 is hanging over the heads of congressional appropriators. For now, though, they are acting as if it does not matter. Appropriators appear on track to produce fiscal 2013 bills that ignore the threatened spending “sequester,” which is intended to help pare more than $1 trillion from the accumulated deficit through fiscal 2021. For fiscal 2013 — the budget year that begins Oct.
Longer-Term Forecasts are a Step Backward
February 2, 2012 | Charles Goodhart in Financial Times
Forecasting is done adequately when everything is stable and the future turns out to be like the past; indeed, standard models used by central banks virtually force forecasts to revert to past trends. But when a break comes, central banks are as clueless to foresee it as anyone else. Forecasts for 2008 made as late as the middle of the same year are a case in point. Neither central bankers, nor anyone else, have a good way of predicting future fluctuations in either output, inflation or interest rates more than a few quarters ahead.
The ‘Financial Recession’ Excuse
February 2, 2012 | Phil Gramm in Wall Street Journal
Why did the U.S. recover faster from the Panic of 1907 than from the 2008 recession and the Great Depression? Commerce Department data released last Friday show that four years after the recession began, real gross domestic product per person is down $1,112, while 5.8 million fewer Americans are working than when the recession started. Never before in postwar America has either real per capita GDP or employment still been lower four years after a recession began.

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