Connecting the Dots, August 2020
July 21, 2020
Even in normal times, the news describes murders, accidents, wars, natural disasters, and the passing of once-famous celebrities.
July 7, 2020
COVID-19 cases are growing fast in large parts of the US. The same folks who said the virus would just go away now say not to worry because fewer people are dying.
June 30, 2020
We’ve escaped the frying pan and found the fire. COVID-19 cases are now growing faster than they were when the first US lockdowns occurred last March.
June 23, 2020
The US economy entered recession at the end of February, according to the economists who officially define such things. But will it get even worse?
June 9, 2020
Pop math quiz: What is 1918 + 1932 + 1968?
Your calculator may say 5,818, but the real answer is 2020. This year has turned into a combination of those three historic years. In the US, we have
May 26, 2020
“You can lead a horse to water but you can’t make him drink,” says an old saying.
May 19, 2020
In theory, outside threats should make people set aside differences. The novel coronavirus seems to be doing the opposite.
May 12, 2020
We knew the April US jobs data would be ugly. Speaking on ABC’s “This Week” program last Sunday, Minneapolis Federal Reserve Bank President Neel Kashkari predicted “the worst is yet to come.”
May 5, 2020
Newly “liberated” Americans are flocking to beaches, parks, and restaurants, eager to prove the novel coronavirus doesn’t scare them.
April 28, 2020
“America will be open for business very soon,” said President Trump on March 23, just a week after local authorities began issuing stay-at-home orders.
April 21, 2020
The novel coronavirus is destroying human lives: almost 170,000 worldwide as I write this, including 40,000+ in the United States.
April 14, 2020
US unemployment shot higher in the last month, thanks to coronavirus closures. Some 17 million people filed new jobless benefit claims.
April 7, 2020
When (hopefully soon) we all get out of coronavirus lockdown and try to resume normal life, we will probably find a different “normal.”
March 31, 2020
“The new coronavirus is changing everything,” say many pundits.
March 24, 2020
Following the coronavirus news from home? Good for you. Home is where we should all be, except for medical, food, public safety, and other essential workers.
March 17, 2020
Bought any groceries lately? You probably weren’t alone. Nor were you surrounded by crazy people. The store mobs are perfectly rational, given recent events.
March 10, 2020
Financial professionals talk about all kinds of risk: credit risk, interest rate risk, political risk, inflation risk… the list goes on. Now, we have a new one.
March 3, 2020
The COVID-19 virus is pushing an economy that was already approaching a cliff. Will it go over the edge?
February 25, 2020
“A specter is haunting American capitalists—the specter of Bernie Sanders.”
February 18, 2020
Last week, the Senate Banking Committee held a confirmation hearing for Judy Shelton, whom President Trump has nominated to the Federal Reserve Board.
February 11, 2020
Allegedly smart people say the economy depends on the election and the election depends on the economy.
February 4, 2020Many 2020 market forecasts say politics will be a key factor this year. The US is starkly divided between parties with radically different policy agendas.
January 28, 2020
Jamie Dimon, CEO of JP Morgan Chase (JPM), which just marked the most profitable year any US bank has ever had, spoke on CNBC from Davos last week.
January 21, 2020
The “Phase 1” US-China deal is signed, sealed, and delivered. Phase 2 is in the works but won’t happen any time soon. Investors celebrated anyway.
January 7, 2020
January is here, which means prediction time. What will the year bring?
December 17, 2019
We have a trade deal! Should we pop the champagne corks?
December 10, 2019
We all want to know the future. Unfortunately, the future isn’t talking. It’s just coming, like it or not.
November 26, 2019Many young Americans struggle just to stay afloat. The difference between sinking and swimming often comes down to education.
November 19, 2019
Wealthy Republicans—and even some Democrats—are worried about Elizabeth Warren. Specifically, they fear her wealth tax idea.
November 12, 2019
Every month, the government publishes inflation data. And with every report for the last decade, we’ve marveled at how low it is.
November 5, 2019
The House appears likely to impeach President Trump. The Senate will then decide if he stays in office.
October 29, 2019
The US government spent almost a trillion dollars more than it received fiscal 2019. And that’s just the official, on-budget deficit. Fair accounting would look even worse.
October 15, 2019
Yay, we have a trade deal! Tough negotiations worked!
Well, maybe. It depends who you ask.
October 8, 2019
No one really likes paying taxes. At best, we wish we got more for our money.
A tax system should raise the necessary revenue fairly and with minimal economic distortion. Things go off the rails when governments use tax policy to reward (or punish) certain behaviors.
September 24, 2019
Economic growth isn’t random. It comes from individual decisions to buy, sell, or do nothing. We all make dozens every day.
Corporate CEOs and CFOs make bigger decisions, like whether thousands of people get hired or a factory gets built.
September 17, 2019
If you are American and you have health insurance, you probably get it from either your employer or some kind of government program. Or possibly both, if the government is your employer.
September 10, 2019
People respond to incentives. So do national governments. This is foundational to both economics and geopolitics.
August 27, 2019Until about 50 years ago, people paid attention to the area where they lived. They read local papers, shopped at local merchants, and socialized at local events.
August 20, 2019“Donald Trump Saves Christmas,” said the Gizmodo headline last week.
August 13, 2019
“You break it, you own it.”
Then-Secretary of State Colin Powell cited this Pottery Barn rule back in 2002. He was advising President George W. Bush of the consequences should an Iraq invasion go badly.
August 6, 2019The way you feel about yourself affects your behavior... and the economy.
July 30, 2019The US economy grew at a 2.1% annualized pace in the second quarter, according to data released last week. That was better than economists expected but hardly impressive.
July 23, 2019Last month, world leaders observed the 75th anniversary of D-Day, when Allied troops stormed the beaches of Normandy, France. It was a critical day in world history.
July 16, 2019Imagine an alternate history in which Donald Trump lost the 2016 election.
July 9, 2019
Remember “No Child Left Behind,” George W. Bush’s education reform plan? Congress passed it in 2001.
July 2, 2019
June 25, 2019
Just as an army moves on its stomach, an economy moves on ships, trucks, and planes. They carry the goods whose purchase adds up to growth.
June 18, 2019
The way you feel about yourself affects your behavior... and the economy.
June 4, 2019The logic of Donald Trump’s multi-front trade war, if there is any, is increasingly obscure. The tangled mix of policies isn’t accomplishing its stated goals and seems unlikely to ever do so. Meanwhile, it hurts the Americans it should supposedly help.
May 28, 2019To wrap up Memorial Day weekend, here’s a column I wrote last December. Recent trade war developments make it still highly relevant.
May 21, 2019People are worried robots will take their jobs. That’s a legitimate fear sometimes, but it’s not new. It is just another step in a process that started long ago.
May 7, 2019The yield curve isn’t the only sign recession is coming. Rising corporate hubris says the same thing.
April 30, 2019Almost every day brings comforting news on the trade front. They’re talking! Someone went to Beijing! Someone else is optimistic!
April 16, 2019It’s not a good sign for your health if your blood pressure drops too low. It can cause dizziness and fainting and, in severe cases, can even be life-threatening.
April 9, 2019Some things are too important to leave to politicians. One such thing: the money supply. That’s why the Federal Reserve Board is (at least in theory) an independent agency.
April 2, 2019If you follow daily market action—something I don’t usually recommend—it’s pretty clear investors don’t like tariffs or other trade restrictions.
March 26, 2019Looking at the official unemployment rate, American workers should be pretty happy. Almost everyone who wants a job has one.
March 19, 2019Technology and the economy are like an ouroboros, one of those snake-eating-its-tail symbols. You don’t know where one ends and the other begins.
March 5, 2019
Many Americans are worried about “modern monetary theory.” They fear a future Congress will use it to justify sharply higher spending and enlarge the national debt to unsustainable levels.
February 26, 2019Some things are so horrible, you don’t want to think about them.
February 19, 2019Many people are worried socialism will take over the US. They’re sure it will be awful.
February 12, 2019
Five years ago this month, Ukraine’s “Euromaidan” Revolution led to Russian forces occupying the Crimean peninsula and parts of Eastern Ukraine. The US and Europe imposed economic sanctions in response. Pundits like me proclaimed a new Cold War.
February 5, 2019
The US and China are racing to craft some kind of trade agreement before March 2, or else President Trump says he will impose stiff new tariffs.
January 29, 2019The simmering trade war is still... well, simmering. Markets rise and fall with each new rumor.
January 22, 2019Actions speak louder than words. That’s why surveys asking people what they think about the economy aren’t always useful. Their actions might not match what they tell pollsters.
January 15, 2019Much of the US government remains in shutdown as I write this, including the IRS.
January 8, 2019Here we are in 2019, our last chance to make the Twenty-Teens a decade that worked. Whether you think it worked depends partly on whether you worked… and how well you were paid for it.
December 18, 2018
Baby Boomers get blamed for all kinds of problems. Much of the blame is unfair, but there is no doubt the first postwar generation brought a lot of changes—culturally, economically, and otherwise.
December 11, 2018
We have a temporary truce in the trade war. No one is quite sure if it will last, especially financial markets, which after a short-lived rally saw little to celebrate in the latest Trump-Xi meeting.
December 4, 2018Here’s a question whose answer is rarely pleasant: “What could go wrong?”
November 27, 2018By most measures, the US economy is performing okay. New data tomorrow will likely show real GDP growth still near 3.5%. Unemployment is below 4%. Inflation is up a bit but still historically low.
November 13, 2018The US-China trade war dominates the economic news, but in the long run, tariffs may be a minor detail.
November 6, 2018Today’s election, divisive though it is, can’t change one thing: We Americans love our sweets. This is bipartisan.
October 30, 2018
If the news media’s White House sources are correct, President Trump’s trade war with China may soon intensify.
October 23, 2018I wrote last week about the huge amount of money Americans spend on healthcare. Many people simply can’t afford to get the care they need.
October 16, 2018Being sick is no fun, whether you’re a patient or the economy. Illness disrupts people’s lives and, economically speaking, diverts scarce resources from more productive uses.
October 9, 2018To hear some people talk, the North American Free Trade Agreement is practically dead. Soon a newly negotiated revision will take its place.
October 2, 2018Free trade is amazingly popular for something that doesn’t actually exist. Even Americans who can’t define free trade tell pollsters they love it.
September 25, 2018Whether you see it or not, a machine is coming for your job right now. Yes, yours.
September 18, 2018The US economy is at “full employment,” says the official 3.9% unemployment rate. Every educated person who wants to work has at least one job. Some of us have several.
September 11, 2018Patrick Watson is working on a special project this week. The following is one of his most popular columns, originally published March 21, 2017.
September 4, 2018
Suppose we asked 100,000 random people to flip a coin until it landed on tails. 50,000 would get tails on the first flip. On the next flip, 25,000 would get tails, then 12,500, and so on.
August 28, 2018
Those worried about the Fed’s so-called “independence” from politics are a little late. The US presidents, who nominate its board members, long ago put political loyalty high on the qualification list.
August 21, 2018
Finding more and better-trained workers is the top challenge for many US business owners. They say current workers can’t produce enough to meet growth objectives.
August 14, 2018Gasoline prices have been strong this summer, though they’re still below last May’s peak, when the national average was near $3 a gallon.
August 7, 2018A penny saved is a penny earned, goes the old saying… but that’s not true. In today’s world, a penny saved is better than a penny earned.
July 31, 2018
“Information overload” used to describe the amount of news available to us. Now the term is woefully inadequate. We are not just overloaded, but inundated.
July 24, 2018President Trump likes to call the Russia investigation a “witch hunt.” Yet he also thinks your car endangers US national security. Yes, your car, the one in your garage right now. It is the enemy.
July 17, 2018Economists disagree about job automation: Some see imminent doom, others think we can adjust. There’s not a lot in-between.
July 10, 2018Americans may be bitterly divided on everything else, but we all agree on one thing: We love our dogs. Our cats, too, plus a few other companion species. We’ve made them part of the family.
July 3, 2018According to the dictionary, “welfare” is a word that describes our health, happiness, and fortunes. But in the US, it usually refers to government support, which many consider shameful. No one wants to be “on” welfare.
June 26, 2018We’re in a trade war. No, we’re not. Yes, we are, but it won’t be so bad.
June 19, 2018
Those who call economics “the dismal science” are half right. It is indeed dismal (“dingy and unwelcoming”) to think about, except for dweebs like me.
June 12, 2018
Some things you just don’t question. For American workers, Social Security is one of them. You pay into it your whole career, and you expect to get paid when you retire. No politician dares say you won’t.
June 5, 2018The US economy is growing but corporate profits are not, according to data released last week. That’s disappointing for stockholders.
May 29, 2018Our endless drive for more money, more stuff, and just generally “more” has turned into a vicious cycle of materialism.
May 22, 2018Financial markets move when humans (or machines programmed by them) decide to buy or sell. In theory, these decisions are rational, but in reality, they’re often driven by emotions.
May 15, 2018This month, my wife and I drove from Austin to Memphis. Going across Arkansas on I-30 and I-40, the number of trucks seemed quite high.
May 8, 2018You’ve heard the old line about three kinds of falsehoods: lies, damned lies, and statistics. All three are easy to find on the Internet.
May 1, 2018
Those who support free-market economics say it is the best, most efficient path to maximum prosperity for everyone.