All posts by Teresa Ghilarducci


Detroit and America Win, Republicans Lose!

As we count our blessings, let’s give some thanks for the government’s shrewd bailout of Chrysler and General Motors. And let’s also be thankful that the wrongheaded opposition of Republicans didn’t deter the Obama Administration from doing the right thing. When you include the ripple effects from the bailout not only on direct auto-industry jobs, but on suppliers, community businesses, housing, etc., the Obama-directed bailout saved, in the aggregate, 1.1 million jobs and prevented a loss of $9…


Cut the Deficit? Start With Defense.

Back in February, President Obama was worried (for some reason not quite understood by most economists) that recession-fighting government spending would spike government debt. So he created a commission to recommend tax hikes and spending cuts by December 1. Two weeks ago, the commission’s co-chairs released their own report as did a centrist group of Senate leaders, and more proposals, from the left and right, are forthcoming. Last week The New York Times invited readers to be a commissioner a…


Serious Debt Discussions Please …

This week, you might have been confused when a Congressional leader said that, according to a headline, we must “Extend All Bush Tax Cuts; Time to Get Serious About the Deficit.”

No, this isn’t a satirical mash-up headline from The Onion. Rather, it signals the looming battle over America’s fiscal and economic future, which could end up affecting every phase of our lives, from retirement to health care to home mortgages to higher education.

In February, President Obama appointed the grandly name…


Printing Money Blues

There is a lot of fuss about the Fed’s plans to print $600-billion dollars (the technical name is “monetizing the debt”) in an attempt to boost business and consumer spending.  President Obama goes to the G-20 meetings besieged by major grumbling from Europeans and China about the Fed move, which lowers the value of the dollar, which, in turn, lowers the price of what we sell to other countries and raises the costs of imports. This helps American production only if there is no retaliation. And …


The Girl Who Legitimated Sadomasochistic Porn

"You must buy it, Lisbeth! It's a best seller!"

I fly a lot and commute on the subway to work; I check out the books people are reading. In the past few years, the series by Stieg Larsson, starting with The Girl With the Dragon Tattoo, has shown up in the hands of my seatmates. I like mysteries and gritty police procedurals, so I settled down with Netflix and the Swedish film version to check out the buzz.

What I saw—and what I have since found out about the books—was a stew of sadomasochi…


Can We Offer Tips From TIPS?

Today’s breathtaking financial news was that the interest rate for a certain U.S. government bond fell below zero. These bonds are called Treasury Inflation Protected Securities, or TIPS. TIPS are indexed to inflation in order to protect investors from the negative effects of inflation.

Interest rates are extremely low. But most economic textbooks written before the financial crises intoned that interest rates were bounded by zero. The reasoning was that no one would pay to lose money. Zero was …


Buying Votes?

Yesterday’s Wall Street Journal’s editorial page strained my cynicism  with the article “Buying the Senior Vote: Obama wants $15 billion in checks for grandma.”

It accuses a proposed plan to send over 59 million older people a $250 stimulus check as being like some pathetic Kentucky style “coupons for votes” scheme; “It’s hard to imagine a more blatant vote-buying exercise, especially with polls showing that seniors have turned sharply against the Democrats this year.”

Haven’t the WSJ editors be…


Don’t Be Fooled by the Unemployment Report

The unemployment report came out an hour and a half ago and it’s not good news, though the news reports may be bland.

It probably will be reported that nothing much has changed; but things have changed: no improvement means erosion.

We lost 95,000 jobs last month; remember, we need about 160,000 jobs created each month just to keep up with population and labor force growth. AND the current rate of 9.6 percent is among the highest unemployment rates there have been. AND, the long-term unemploymen…


Make Jobs, Not War

Opinions from economists are converging: Unemployment, now at 9.8 percent for adult men, 8 percent for adult women, may not improve for three years. What’s even more sickening is that the decay (an appropriate word to describe the human misery and eroding human and physical capital caused by joblessness) doesn’t have to happen.

Congress and the president could boost economic growth with a trillion-dollar stimulus—not more war please, though that works, but more unemployment benefits, a work-s…


Contest: Obama is Most Like What Plant?

Barrel cactus by kevindooley


As polls predict Republican success in the midterms; the Republicans are getting pretty reckless. Not only do they complain about the deficit while opposing tax hikes on the rich, they are also running with sticks in their hands. A Republican candidate for Congress in Michigan was asked by a potential voter where he thought President Obama was born. Former Representative Tim Walberg, who is running against current Democratic Representative Mark Schauer in Michigan’s 7th district, replied:

“I …


Poll: Americans Split Over Taxes on the Rich

No wonder I got so many comments on my call to tax the rich. The issue divides the country—about half say do, the other half say don’t. Are people confused? Really, what’s the choice?

Option A: The very rich pay more tax, bringing down the deficit by $700-billion in 10 years and we do not suffer productivity loss, output loss, or any real utility loss because the rich will adjust by buying fewer goods and services that cultivate what the marketing consults call connoisseurship (we will lose a b…


Tax the Rich

I don’t blame anyone for being confused about the tax cut debates.  I’ll make it simple.

Obama wants to raise taxes on the richest 2.1 percent of taxpayers. 

The Republicans don’t.

The tax increase would yield $700-billion; which is a lot of money, even for the U.S. government. (Ways to relate to $700-billion are endless: the GDP of the Netherlands, or 10 times federal education spending.)  

Rich families, on average earning one-half million dollars per year, would pay about $3,000 more in taxe…


Right-Wing Madness or Political Ploy?

As the Republicans are fighting hard to keep tax cuts for the wealthy, one of their spokespersons, Newt Gingrich—former Speaker of the House, whom David Broder of The Washington Post once described as a “visionary,” lamenting that he didn’t run for President in 2008—seems to be running a side-show diversion. The latest visionary thinking could be a parody of a postmodern political-science course on Africa.

Believe me, before this makes any sense you will have to understand the Export-Import bank…


On Manufacturing Hate: Remembering 9/11

On the ninth anniversary of the 9/11 attacks, and 50-some days before the midterm elections, hate-filled rallies at the World Trade Center site, and elsewhere, were staged against the “Ground Zero mosque.” The New York rally was organized by right-wing blogger, author of Obama Adminstration’s War on America. And the keynote speaker was Dutch parliamentarian Geert Wilders  who supports banning the Koran and elsewhere has described Islam as not a religion, but as “the ideology of a retarded cultur…


The Recession and Labor Day

We could very well have a double dip recession and the dippy newspapers would not prepare us for it. On Labor Day, in the worst recession since the Great Depression, the center of the New York Times op-ed page features John Grishman writing about his underwear.

At least Paul Krugman, in the side column, warns us that our economy looks a lot like 1937. Back then, weak-kneed politicians hesitated on continuing with a much needed fiscal stimulus and gave in to the theory-heavy, tired, wrong bromide…


Labor Day and Unemployment

Hey Brainstorm readers! This blog site made itself into another blog and newspaper—well sort of newspaper.

A blogger for The Washington Examiner (a give-away paper at the D.C. Metro and in freebie boxes around town) attacks my Brainstorm blog about falling wages for American workers. 

Did he dispute the fact that employers are using unemployment as an opportunity to cut wages for their existing workers even when profits are up?


He defended the practice.

He writes that the price of labor is “…


Striking Mott Workers; U.S. Call Centers

The shocking story in this week’s Financial Times had this lead: “Call center workers are becoming as cheap to hire in the U.S. as they are in India.” High unemployment in the U.S. has forced down wages for low-paid workers in the U.S. so that in many cases Americans are cheaper to hire than those in a country where most people live on less than $8.00 per day.

For 90 days, workers at the upstate New York Mott factory (owned by Dr Pepper Snapple) have been striking to stop a $1.50 cut in pay, pen…


The Irish Economic Bog

I just got back from Ireland, discussing my book When I’m Sixty-Four: The Plot Against Pensions and the Plan to Save Them. In Ireland, pension security and the financial crisis is on everyone’s mind.

I spoke twice—first at the business school at Trinity College, at an event sponsored by its superb Pension Policy Research Group funded by the American based Atlantic Philanthropies. The second venue was the Kilkenny Arts Festival (fellow economists, eat your heart out—my badge said “Kilkenny Artis…


Care About the Deficit?

On a daily basis, political leaders stoke fears about the growing U.S. federal budget deficit. Senator Judd Gregg (R-NH), ranking Republican on the Senate Budget Committee, warns that “the United States will “essentially be where Greece is in about seven years.”  Senator Tom Coburn (R-OK) says that the growth of the federal deficit “… puts our kids and grandkids at great risk.”

 And Democrat Erskine Bowles, former Chief of Staff to President Clinton and the chair of President Obama’s deficit red…


Obscene Economics: Part 2

graph from treehugger

Last week, I wrote that excessively paid CEO’s are bad for the economy. Now we have more evidence that an extremely top-heavy economy hurts us all. Five percent of the people represent 30 percent of our consumer spending.

Top-of-the-fold NY Times front page story reports the rich spent more and faster last year than the rest of us, but they are slowing down now.

So is it logical that the rich should have lower taxes, more subsidies, and anything else they want so their spe…