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Raising the minimum wage to lift people out of poverty has the opposite effect. So why does an idea that violates the most basic principle of economics keep coming back to haunt us?

Tagged with: Minimum Wage Law

Don’t start writing housing’s obituary just yet.

Tagged with: housing bubble housing market

The U.S. budget deficit is plummeting. However, the recent improvement in the debt and deficit as a share of the economy does nothing to alleviate the nation’s long-term structural challenges.

Have you ever wondered why conservatives are so opposed to government interference in the marketplace yet so tolerant, even welcoming, of its role in our personal lives? You could say the same about liberals, whose preferences for government involvement run in the opposite direction.

What went wrong? The U.S. economy seemed to have finally reached a cruising altitude, albeit a low one, almost three years after the end of the 2007-2009 recession. Growth was hardly strong at 2 percent, and monthly payroll increases of 250,000 during the winter were nothing to get excited about. Still, the idea that the U.S. economy might finally be able to walk on its own got tripped up by anemic job growth of 69,000 in May.

Anecdotes are no substitute for hard data. But when they start to reach a critical mass and they all tell the same story, you know something big is going on.

There is nothing, and I mean nothing, like rising crude-oil prices to make sensible people go all wobbly in the head. Economists fail to differentiate between cause and effect.

Long and variable lags. That’s all I could think of when I read the Federal Reserve statement and learned that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”

It’s that time of year again when people in my line of work (“profession” is probably a stretch given the low esteem in which the media is held) look back and offer up top-10 lists or reminisce about the most memorable moments, good and bad.

I’ve been wondering to what extent the presumed incentives for buying a home — super-low mortgage rates and discounted prices, down by one-third nationwide from their 2006 peak — are being neutralized by the Federal Reserve’s tell-it-all communications policy.

If there’s a fire in the building, exit via the stairwell. If the power goes out, wait for the backup generator to kick in. If the car engine overheats on the highway, pull over and call AAA.