Connecting the Dots, May 2019
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.
April 24, 2018
The funny thing about breakthrough technologies is that we rarely see the break. They tend to sneak up on us. Every now and then, something revolutionary comes out of nowhere, like the iPhone in 2007, but it still took a few more years to take off.
April 17, 2018
Economics is the study of people’s rational choices when they’re faced with scarcity and uncertainty.
April 10, 2018
International trade policy shouldn’t be headline news. We just need stability, so everyone can conduct business—but that’s not where we are.
April 3, 2018You may have noticed stocks have stopped going straight up. By itself, that’s not scary. Bull markets and high volatility can coexist, and often did until the last few years.
March 27, 2018
“Fake news” has become a buzzword, especially connected to social media. Which becomes even more worrisome in light of the recent scandal about Facebook’s shady data-sharing and advertising practices.
March 20, 2018
When you have a major problem, you consult an expert—at least, that’s the idea. But in recent years, we’ve learned the hard way that so-called “experts” don’t always know what they’re talking about.
March 13, 2018This week, I have a TMI problem. That stands for “Too Much Information,” and typically means someone shared personal info you’d rather not know.
March 6, 2018
Judging by the official 4.1% unemployment rate, US workers appear to be doing pretty well. Unlike a few years ago, almost everyone who wants a job has one. That’s an improvement.
February 27, 2018Some people, including me, have been predicting trade war ever since the 2016 election—and for a good reason. President Trump promised all sorts of harsh trade actions. He killed the Trans-Pacific Partnership agreement within days of taking office, which was a big deal.
February 20, 2018Everyone is worried about debt. Government debt, household debt, personal debt, corporate debt. We are in it up to our eyeballs and often beyond.
February 13, 2018
Did the recent 10% drop in the stock market bother you? Let me take a wild guess: it’s because you have money in stocks. No one likes seeing their net worth decline.
February 6, 2018Never fear, the billionaires are here. They will save us from medical bankruptcy.
January 30, 2018
Robots and AI are coming for your job. And if you’re already retired, they’re still coming for your kids.
January 23, 2018You know that awful feeling when you think you lost your wallet? Now imagine you had $75 million in it. What would that feel like?
January 16, 2018Bankers divide the population into two categories: “banked” and “unbanked.” They seek to bank all humanity, because these days, to be unbanked is considered the financial equivalent of homelessness.
January 9, 2018
Nine days into 2018, I’ve read 793 economic and market forecasts. Okay, that’s an exaggeration… but it certainly feels like it. In any case, I’ve read enough to know opinions are all over the place. Whatever your desired scenario, some expert says it’s a sure thing.
January 2, 2018Welcome to 2018. Now is the time for New Year’s resolutions, so you might have important financial decisions to make.
December 19, 2017Bitcoin mania is starting to look like a religion.
December 12, 2017Everyone is talking about bitcoin, even people who otherwise know little about investing. That’s probably a bad sign for bitcoin.
December 5, 2017
According to the more cynical pundits, government programs usually achieve the opposite of their intended goal. And sometimes they do.
November 28, 2017
The US Senate may vote on its tax “reform” plan this week. If it passes, they’ll have to reconcile it with the somewhat different House plan.
November 21, 2017
Remember when everyone wanted to cut the federal deficit? Fiscal policy was much simpler back then: balanced budget good, deficits bad.
November 14, 2017
Congress is deciding your portfolio’s future right now—so you might want to pay attention.
November 7, 2017The US is about to fire another salvo in the international trade war, and this one may actually make sense.
October 31, 2017
Happy Halloween. Whether you’ll get a trick or a treat is hard to know in this zombified economy.
October 24, 2017If you think economics is boring, bring up “free trade” and see what happens. I guarantee sparks will fly.
October 17, 2017
According to the Bureau of Labor Statistics (BLS), the US economy is at full employment, or close to it. Yet it doesn’t feel that way for many Americans. Even if you have a secure job, you probably know people who don’t.
October 10, 2017Wall Street endlessly gushes about retirement. Its TV commercials show how wonderful life will be in our golden years—when we are old, yet still healthy and wealthy enough to go hang-gliding every day.
October 3, 2017
In theory, capitalism is all about healthy competition, which makes producers deliver quality goods and services at lower prices.
September 26, 2017Here’s a loaded question for you: “What could go wrong?”
September 19, 2017
When it comes to public sentiment, banks and Congress have a lot in common.
September 12, 2017
September is not unfolding as expected. Then again, as Yogi Berra said, “It’s tough to make predictions, especially about the future.”
September 5, 2017Hurricane Harvey hit Texas hard. Much of Houston, our largest city, will be uninhabitable for months, maybe years.
August 29, 2017
Everyone is worried about robots. Elon Musk fears they will kill us all if we give them both deadly weapons and autonomy.
August 22, 2017
In June, the US ran a $32.6 billion “trade in goods” deficit with China. That’s the difference between our imports from China ($42.3 billion) and our exports to China ($9.7 billion), according to the US Census Bureau.
August 15, 2017
What do freight trains, oil supertankers, and the Trump administration’s trade plans have in common? Once they get going, they’re pretty much unstoppable.
August 8, 2017
10 years ago this summer, the world changed. The remarkable part is how quickly we forgot.
August 1, 2017
If you were to ask me what the most inefficient US market sector is, I would probably say, defense.
July 25, 2017
The first step to surviving a war is knowing which side you are on. But in a trade war, that’s not always easy.
July 18, 2017
Like him or not, you can’t deny that Donald Trump thinks big. All his ideas are huge, beautiful, unbelievable, fantastic.
July 11, 2017
Removing barriers to international trade has both upside and downside. Donald Trump is now president in part because he focused on the downside: lost US jobs, closed factories, blighted communities.
July 3, 2017
Top central bankers choose their words carefully. They know sending the wrong signals can unleash havoc, and they’ll get blamed for it. More important, as masters in acrobatic flip-flopping and backpedaling, they rarely promise a specific outcome.
June 27, 2017
US stock benchmarks hit new all-time highs this month, and despite rich valuations, buyers think they’ll go higher still.
June 20, 2017
The Federal Reserve hiked interest rates again last week. Yes, it was a tiny hike, but as they say, “A quarter-point here and a quarter-point there, and pretty soon you’re talking about real money.”
June 13, 2017
America is fully employed, or so say the statistics. Federal Reserve officials think the job market is strong enough to justify higher interest rates. They’re afraid inflation will get out of control.
June 6, 2017
Americans have hated government red tape since 1776. Our founding document, the Declaration of Independence, complained King George III “sent hither swarms of Officers to harass our people and eat out their substance.”
May 30, 2017
Does the past predict the future? If you work in the regulated financial industry, you can only answer that question two ways. Your acceptable answers are:
May 23, 2017
Silicon Valley is a mystery to most people. So is technology in general, for that matter.
May 16, 2017
Obamacare probably doesn’t affect you directly.
May 9, 2017I like Starbucks. That’s not the same as liking Starbucks coffee. I think their coffee is fine, but I’m not a connoisseur. I just like it hot and caffeinated.