Allegation: Too many ineligibles are voting.
Premise: Ineligibles are in fact showing up to vote.
Remember Tammany Hall under Boss Tweed? Those were the glory days of voter fraud, when the motto was "Vote Early and Often."
More recently, there has much more ado about voter fraud, with allegations of illegal aliens (picture little green men shaped like pickles) showing up in great numbers to cast ballots. The solution, many claim, is to require photo identification cards, so that only those really eligible get to vote.
But a more relevant problem may be voter turnout, encouraging the many millions who are actually eligible to show up and vote.
Generally, more than one-third of eligible Americans fail to vote in Presidential elections, and in some years the number of non-voters is nearly half of all those eligible.
The largest proportion, according to statistics kept by the Federal Election Commission, was in 1960, when 62.8 percent of the voting age population turned out in the Kennedy-Nixon contest. And in the 80 years since these results were kept, the lowest percentage of voter turnout was in 1996, when 49.0 percent of the eligible population showed up to elect Bill Clinton over Bob Dole or Ross Perot.
A few months ago, the Conservative Web site TrueTheVote reported it found 99 cases of "potential felony voter fraud," and that 46 states "have prosecuted or convicted cases of voter fraud" since the year 2000. The site does not indicate how many of the 99 potential cases resulted in convictions, nor does it give a time frame for these 99 cases.
More recently, ABC News reported that "of 197 million votes cast for federal candidates between 2002 and 2005, only 40 voters were indicted," and that of those 40, there were only 26 convictions or guilty pleas. That amounts to 0.00000013 percent of all votes.
So to hear all the hooing and hawing, one would think that polling places are being inundated by illegal aliens and/or other types of ineligible voters.
A better answer would be to increase the percentage of those actually eligible to show up. Presidential elections attract, at best, perhaps two-thirds of the eligible population. Other elections -- state and local contests, as well as non-presidential federal elections -- attract even fewer voters.
Compare the U.S. turnout percentage with that of Canada, which in its best year brought a 79.4 percent turnout in 1958, two years before JFK's victory in the U.S., with its record turnout of 62.8 percent. Canada's lowest turnout year was in 2008, with a 58.8 percent eligibility turnout. And that's still better than the 49.0 percent who showed up in the Clinton-Dole-Perot year of 1996.
In the United Kingdom, the lowest voter turnout was in 2001, which attracted 59.4 percent of eligible voters; its best year was 1950, when 83.9 percent of voters showed up.
So is there a problem in America with voter fraud and ineligible voters clouding results? Or is it that one side wants to better its own chances by limiting the numbers of those likely to vote for the opposition? And would it be a better solution to devote resources to increasing overall turnout, rather than sniping at the potential opposition?
Or is one side too afraid it will lose if it increases overall turnout?
Tuesday, August 13, 2013
Monday, August 12, 2013
Housing Barometers
Of the many components that go into building an economic forecast, the various contributors to housing sales may be the most useful.
Consider: The ability of a family to purchase a home depends on many factors, the first of which is having a job with a decent salary and a relatively secure future, as well as the ability to afford a down payment and take out a mortgage with a reasonable interest rate. That's five factors right there.
Next, consider the price of the home, which will depend partly on its size, age and location. That's four more.
Next, we get into the slightly more academic aspect known as supply and demand. By this we mean not only the supply of homes, new and existing, available for purchase, as well as the demand for housing and the willingness of owners to sell at a price a buyer is willing to pay. And that price is highly negotiable. Regardless of what an owner thinks the property is worth, its value is the price a buyer is willing to pay, and no more. The trick is to match the two.
Then there is the supply and demand of mortgage money, which partly affects the interest rate. And there is the willingness of lenders to approve a loan to an individual or family.
Given all those variables, what is the state of the housing market in America, and what does it bode for the economy as a whole -- or vice versa?
Existing-home sales have declined, according to the National Association of Realtors, a trade group of sales agents, but the median price nationwide has been rising at double-digit rates for months. In economic terms, this means the supply of homes available for sale has declined, and prices have risen as demand from buyers holds reasonably steady.
The NAR pointed out that the inventory of homes listed as available for sale is down 7.6 percent from a year ago. And this, said NAR chief economist Lawrence Yun, "will continue to broadly favor sellers and contribute to above-normal price growth."
Those numbers, by the way, are for June, and were released in late July. Fresh numbers are to be issued before this month is out.
Meanwhile, new single-family homes sold in June at a rate 8.3 percent above May, and 38 percent above a year-ago, according to the U.S. Department of Housing and Urban Development.
Builders themselves are more confident, according to the National Association of Home Builders (NAHB). One reason: The inventory of existing homes available for sale is down, which provides more opportunity for builders of new homes.
Provided, of course, that buyers have jobs and mortgage money is available. Mortgage rates have risen to 4.61 percent, from 4.58 percent last month, but even so, the Mortgage Bankers Association has reported that loan applications to buy new homes rose 14 percent in July compared to June.
All numbers are national averages, and do not reflect local conditions. That brings up the classic determinant of location, location and location.
Housing, unlike employment, is a local market. A worker can move to another part of the country, or even to another country, in search of a job. Moving a house is a far more complex project.
All of which brings up the critical issues of jobs and wages. With the unemployment rate at 7.6 percent, and the federal minimum wage at $7.50 an hour, virtually no one in a minimum wage job can afford to buy -- or even rent -- a home.
Again, Economics 101 and the Law of Supply and Demand applies. Where there's a shortage of labor, pay scales rise to attract workers. In some cases, with an abundance of labor, pay scales may decline, but minimum wage laws erect a floor below which firms cannot go. However, they can, and sometimes do, relocate the business in search of lower wage costs.
Bottom line: Builders and sales agents are optimistic, mortgage rates are below 5 percent, and those with secure jobs at decent salaries are looking to buy homes.
As for those without secure jobs and decent salaries ...
Perhaps the market will worry about them when the supply of comfortable buyers and their demand for housing, as well as their ability to buy, all fall down.
Consider: The ability of a family to purchase a home depends on many factors, the first of which is having a job with a decent salary and a relatively secure future, as well as the ability to afford a down payment and take out a mortgage with a reasonable interest rate. That's five factors right there.
Next, consider the price of the home, which will depend partly on its size, age and location. That's four more.
Next, we get into the slightly more academic aspect known as supply and demand. By this we mean not only the supply of homes, new and existing, available for purchase, as well as the demand for housing and the willingness of owners to sell at a price a buyer is willing to pay. And that price is highly negotiable. Regardless of what an owner thinks the property is worth, its value is the price a buyer is willing to pay, and no more. The trick is to match the two.
Then there is the supply and demand of mortgage money, which partly affects the interest rate. And there is the willingness of lenders to approve a loan to an individual or family.
Given all those variables, what is the state of the housing market in America, and what does it bode for the economy as a whole -- or vice versa?
Existing-home sales have declined, according to the National Association of Realtors, a trade group of sales agents, but the median price nationwide has been rising at double-digit rates for months. In economic terms, this means the supply of homes available for sale has declined, and prices have risen as demand from buyers holds reasonably steady.
The NAR pointed out that the inventory of homes listed as available for sale is down 7.6 percent from a year ago. And this, said NAR chief economist Lawrence Yun, "will continue to broadly favor sellers and contribute to above-normal price growth."
Those numbers, by the way, are for June, and were released in late July. Fresh numbers are to be issued before this month is out.
Meanwhile, new single-family homes sold in June at a rate 8.3 percent above May, and 38 percent above a year-ago, according to the U.S. Department of Housing and Urban Development.
Builders themselves are more confident, according to the National Association of Home Builders (NAHB). One reason: The inventory of existing homes available for sale is down, which provides more opportunity for builders of new homes.
Provided, of course, that buyers have jobs and mortgage money is available. Mortgage rates have risen to 4.61 percent, from 4.58 percent last month, but even so, the Mortgage Bankers Association has reported that loan applications to buy new homes rose 14 percent in July compared to June.
All numbers are national averages, and do not reflect local conditions. That brings up the classic determinant of location, location and location.
Housing, unlike employment, is a local market. A worker can move to another part of the country, or even to another country, in search of a job. Moving a house is a far more complex project.
All of which brings up the critical issues of jobs and wages. With the unemployment rate at 7.6 percent, and the federal minimum wage at $7.50 an hour, virtually no one in a minimum wage job can afford to buy -- or even rent -- a home.
Again, Economics 101 and the Law of Supply and Demand applies. Where there's a shortage of labor, pay scales rise to attract workers. In some cases, with an abundance of labor, pay scales may decline, but minimum wage laws erect a floor below which firms cannot go. However, they can, and sometimes do, relocate the business in search of lower wage costs.
Bottom line: Builders and sales agents are optimistic, mortgage rates are below 5 percent, and those with secure jobs at decent salaries are looking to buy homes.
As for those without secure jobs and decent salaries ...
Perhaps the market will worry about them when the supply of comfortable buyers and their demand for housing, as well as their ability to buy, all fall down.
Sunday, August 11, 2013
Demographics is Destiny
The male WASP (White Anglo-Saxon Protestant) is a minority in America, and always has been. Even so, most of the political and business power for many years was concentrated in the hands of these few. But that's changing.
Until relatively recently, every member of the United States Supreme Court was a white, male Protestant. Today, there are none.
In 1960, some 75 percent of foreign-born Americans came from Europe, according to Census Bureau data, with 9 percent coming from Latin America and 5 percent from Asia. In the 2010 Census, the numbers had changed sharply. Only 12 percent came from Europe, compared to 53 percent from Latin America and 28 percent from Asia.
In terms of the total population, in 1960 some 9.7 million Americans, or 5.4 percent of the total, were born in other countries. Fifty years later, 40 million Americans were foreign-born, or 12.9 percent of the total population, according to Census data.
In the 1960 Census, 1.3 million Americans said they were born in Italy -- the leading contributor of foreign-born resident -- with Germany in second place, sending 1 million. The 2010 Census showed Mexico as leading, with 11.7 million residents reporting they were born there. China was second, reported by 2.2 million residents, and India was third, with 1.8 million. No European country made the top ten list in the most recent Census, a reverse from 50 years earlier, when no Asian nation was listed in the top ten. Only Mexico was recorded on both lists: In first place in 2010, up from seventh place 50 years ago, when 600,00 reported Mexico as their birthplace.
Prejudice against the foreign-born has long been commonplace in American history. In the mid-19th Century, the biggest target comprised Irish Catholics, and that continued well into the20th Century. One of the most flagrant examples was found among employers, who used well-understood abbreviations in their advertising: "Help Wanted: NINA" (No Irish Need Apply). Later newcomer groups such as Jews and Italians suffered similar discrimination.
Today, the target of newcomer dislike comprises primarily Hispanics, Asians and those from the Indian Subcontinent.
Will this continue? Perhaps. But consider this: The U.S. and Europe are still wallowing in economic recession, while China's economy grew by 7.5 percent this year, and that of Vietnam has grown by at least 5 percent each year for the past five years, and that pace is expected to continue into next year.
There must be something in America that still attracts newcomers, despite the widespread, continuing discrimination and economic recession.
Until relatively recently, every member of the United States Supreme Court was a white, male Protestant. Today, there are none.
In 1960, some 75 percent of foreign-born Americans came from Europe, according to Census Bureau data, with 9 percent coming from Latin America and 5 percent from Asia. In the 2010 Census, the numbers had changed sharply. Only 12 percent came from Europe, compared to 53 percent from Latin America and 28 percent from Asia.
In terms of the total population, in 1960 some 9.7 million Americans, or 5.4 percent of the total, were born in other countries. Fifty years later, 40 million Americans were foreign-born, or 12.9 percent of the total population, according to Census data.
In the 1960 Census, 1.3 million Americans said they were born in Italy -- the leading contributor of foreign-born resident -- with Germany in second place, sending 1 million. The 2010 Census showed Mexico as leading, with 11.7 million residents reporting they were born there. China was second, reported by 2.2 million residents, and India was third, with 1.8 million. No European country made the top ten list in the most recent Census, a reverse from 50 years earlier, when no Asian nation was listed in the top ten. Only Mexico was recorded on both lists: In first place in 2010, up from seventh place 50 years ago, when 600,00 reported Mexico as their birthplace.
Prejudice against the foreign-born has long been commonplace in American history. In the mid-19th Century, the biggest target comprised Irish Catholics, and that continued well into the20th Century. One of the most flagrant examples was found among employers, who used well-understood abbreviations in their advertising: "Help Wanted: NINA" (No Irish Need Apply). Later newcomer groups such as Jews and Italians suffered similar discrimination.
Today, the target of newcomer dislike comprises primarily Hispanics, Asians and those from the Indian Subcontinent.
Will this continue? Perhaps. But consider this: The U.S. and Europe are still wallowing in economic recession, while China's economy grew by 7.5 percent this year, and that of Vietnam has grown by at least 5 percent each year for the past five years, and that pace is expected to continue into next year.
There must be something in America that still attracts newcomers, despite the widespread, continuing discrimination and economic recession.
Saturday, August 10, 2013
News and Comment
Be careful what you wish for. You may get it.
News: Two small email providers have decided to shut down their messaging service and destroy their files rather than turn them over to government snoopers. This even before it's clear that the scoopers have demanded the files. The companies cite privacy issues as the reason.
Meanwhile, President Obama is trying to reassure the American people that such surveillance is necessary to combat terrorism, and the public needs to be more comfortable with government watchdogs.
Comment: Do you still think Edward Snowden was a traitor in exposing the National Security Agency's trolling through the electronic files of American citizens? Watchdogs can bite.
News: The chairman of the Republican National Committee has threatened to deny NBC's News Division access to presidential debates if the NBC Entertainment Division goes through with its plan to broadcast a film biography of Hillary Clinton. The odd thing is, the proposed biopic is to be produced by a unit of the Fox empire, controlled by Rupert Murdoch.
Comment: Can you say "petty"?
It's reminiscent of Protestant Loyalists in Northern Ireland demanding the right to march through Catholic Republican neighborhoods chanting "Nyaah, nyaah, we beat you" as they celebrate a Protestant victory over Catholics at the Battle of the Boyne on the 12th of July, 1690 -- more than 300 years ago.
Even now, police moved in yesterday in as nationalists backing unification with the Republic of Ireland were blocked by loyalists insisting that Ulster remain part of the UK.
News: Two small email providers have decided to shut down their messaging service and destroy their files rather than turn them over to government snoopers. This even before it's clear that the scoopers have demanded the files. The companies cite privacy issues as the reason.
Meanwhile, President Obama is trying to reassure the American people that such surveillance is necessary to combat terrorism, and the public needs to be more comfortable with government watchdogs.
Comment: Do you still think Edward Snowden was a traitor in exposing the National Security Agency's trolling through the electronic files of American citizens? Watchdogs can bite.
News: The chairman of the Republican National Committee has threatened to deny NBC's News Division access to presidential debates if the NBC Entertainment Division goes through with its plan to broadcast a film biography of Hillary Clinton. The odd thing is, the proposed biopic is to be produced by a unit of the Fox empire, controlled by Rupert Murdoch.
Comment: Can you say "petty"?
It's reminiscent of Protestant Loyalists in Northern Ireland demanding the right to march through Catholic Republican neighborhoods chanting "Nyaah, nyaah, we beat you" as they celebrate a Protestant victory over Catholics at the Battle of the Boyne on the 12th of July, 1690 -- more than 300 years ago.
Even now, police moved in yesterday in as nationalists backing unification with the Republic of Ireland were blocked by loyalists insisting that Ulster remain part of the UK.
Friday, August 9, 2013
Too Big to Fail?
Economists have long said that when the U.S. sneezes, the rest of the world catches cold. But there may come a time when that will no longer be true. Similar things have happened before, so there's no reason it can't happen again.
Worldwide, the U.S. is the largest and most productive of any nation, with GDP of $16 trillion. That's a quarter of the world's total output of goods and services, and double the value of the world's second largest economy, China, which has a GDP of $8.2 trillion.
America is also a major market for merchants in other countries, with total imports of $2 trillion yearly. That's roughly the same as the total GDP in Canada ($1.8 trillion), Mexico ($1.2 trillion), Russia ($2.6 trillion), Spain ($1.8 trillion), France ($1.3 trillion), France ($2.6 trillion), Germany ($3.4 trillion), or the UK ($2.4 trillion).
So when Americans stop buying stuff from overseas, it's easy to see why a slump in the U.S. economy strongly affects economies in other nations. However, it's important to remember a basic principle of accounting: Worldwide, the values of exports vs imports -- one on each side of an accounting ledger -- always balance. A foreign trade deficit may be a useful number for business and government in a single nation to consider, but in the case of the U.S., that deficit -- $34.2 billion in June -- amounted to about 2 percent of the total GDP of $16 trillion.
In economic terms, then, the U.S. is the world's dominant power. Was it always so? No. Will it always be so? Maybe, maybe not.
There was a time when the Roman Empire was the world's dominant power. Later, Spain was the richest and most powerful. Then came France, and after that, Britain.
Some nations achieved dominance through economics and world trade, others by military means, or a combination of the two. Spain focused on acquiring the most gold, but in the process impoverished many peoples of North and South America.
Britain used a colonial approach, where colonies supplied raw materials to UK manufacturers, and had to buy the finished products from them.
Colonialism was rife in the 17th, 18th and 19th Centuries, and many view the wars between Britain, France and Spain as military matters for control of territory. Seen another way, they were economic matters for control of resources and markets, using the military as weapons in an economic battle.
Consider this: Most wars use territorial control, politics, the egoism of political leaders, or even religion as excuses. The real reason, more often than not, is economic.
Meanwhile, nations in so-called developed economies struggle to resume and increase their growth rates, while those in Asia and less-developed nations in the so-called Third World are prospering or have plenty of room to grow.
Only by acknowledging this reality and working together for the common good, rather than struggling for dominance, can the world avoid pushing that economic struggle to a military one.
Worldwide, the U.S. is the largest and most productive of any nation, with GDP of $16 trillion. That's a quarter of the world's total output of goods and services, and double the value of the world's second largest economy, China, which has a GDP of $8.2 trillion.
America is also a major market for merchants in other countries, with total imports of $2 trillion yearly. That's roughly the same as the total GDP in Canada ($1.8 trillion), Mexico ($1.2 trillion), Russia ($2.6 trillion), Spain ($1.8 trillion), France ($1.3 trillion), France ($2.6 trillion), Germany ($3.4 trillion), or the UK ($2.4 trillion).
So when Americans stop buying stuff from overseas, it's easy to see why a slump in the U.S. economy strongly affects economies in other nations. However, it's important to remember a basic principle of accounting: Worldwide, the values of exports vs imports -- one on each side of an accounting ledger -- always balance. A foreign trade deficit may be a useful number for business and government in a single nation to consider, but in the case of the U.S., that deficit -- $34.2 billion in June -- amounted to about 2 percent of the total GDP of $16 trillion.
In economic terms, then, the U.S. is the world's dominant power. Was it always so? No. Will it always be so? Maybe, maybe not.
There was a time when the Roman Empire was the world's dominant power. Later, Spain was the richest and most powerful. Then came France, and after that, Britain.
Some nations achieved dominance through economics and world trade, others by military means, or a combination of the two. Spain focused on acquiring the most gold, but in the process impoverished many peoples of North and South America.
Britain used a colonial approach, where colonies supplied raw materials to UK manufacturers, and had to buy the finished products from them.
Colonialism was rife in the 17th, 18th and 19th Centuries, and many view the wars between Britain, France and Spain as military matters for control of territory. Seen another way, they were economic matters for control of resources and markets, using the military as weapons in an economic battle.
Consider this: Most wars use territorial control, politics, the egoism of political leaders, or even religion as excuses. The real reason, more often than not, is economic.
Meanwhile, nations in so-called developed economies struggle to resume and increase their growth rates, while those in Asia and less-developed nations in the so-called Third World are prospering or have plenty of room to grow.
Only by acknowledging this reality and working together for the common good, rather than struggling for dominance, can the world avoid pushing that economic struggle to a military one.
Thursday, August 8, 2013
The New Normal
Major economies in Asia are booming, while those in Europe are stagnating and the U.S. struggles to regain its footing.
Germany is doing well, for the moment, but weakness in other parts of Europe may infect Germany's export business as others can't afford to buy.
In Japan, first quarter output grew by a 4.1 percent annualized rate, seasonally adjusted, and "the near-term outlook has improved considerably," according to the International Monetary Fund. And economic performance in China over the past three decades "has been remarkable," the IMF said, with economic growth this year expected to reach 7.75 percent. However, there are "downside risks from both external and domestic uncertainties," according to an IMF report.
Meanwhile, in Germany, the outlook through 2014 depends heavily on "a gradual recovery in the rest of the euro area" as well as a reduction in uncertainty.
In neighboring France, the economy "flatlined" in 2012, but there may be a gradual recovery over the rest of this year, the IMF said, even though the French economy may well contract by 0.2 percent this year.
The hope of recovery, however, is little consolation to those out of work in France, where the unemployment rate is 11 percent and rising, with unemployment among young people rivaling Spain's overall rate of about 25 percent.
The rate of unemployment throughout the 17 nations that use the euro as a common currency is 12.1 percent, according to Eurostat, the official number-crunchers for the European Union. The savings rate is up and the volume of retail trade is down, along with the rate of business investment.
What does this say? Those without jobs can't buy stuff, and those who are working, as well as their employers, are cutting back on spending. Governments, too, are listening to a call for austerity.
Economics 101: Gross Domestic Product (GDP), the total value of goods and services produced in a country, is calculated by adding up consumer spending, company investment, government spending, and net exports. And consumer spending accounts for about 80 percent of the total.
So if consumers without jobs can't buy, wary companies cut back on investment in additional production capacity, and exports decline because consumers in other countries are also in financial straits, the result is economic recession. And if governments also close their wallets, the consequence can be disastrous.
What's the answer? Government spending, since government has the least worry about deficit as a way of spending our way to prosperity. That, of course, is a short term solution, to be used only until the economy recovers. After that, rising tax revenue can pay off the deficit.
Bottom line: The Western World is trying to deal with a weakening economic environment, while the major economies of the Far East are thriving.
Keep in mind, however, that much of the Asian economy depends on exports. And if the rest of the world can't afford to buy, we all go downhill.
Germany is doing well, for the moment, but weakness in other parts of Europe may infect Germany's export business as others can't afford to buy.
In Japan, first quarter output grew by a 4.1 percent annualized rate, seasonally adjusted, and "the near-term outlook has improved considerably," according to the International Monetary Fund. And economic performance in China over the past three decades "has been remarkable," the IMF said, with economic growth this year expected to reach 7.75 percent. However, there are "downside risks from both external and domestic uncertainties," according to an IMF report.
Meanwhile, in Germany, the outlook through 2014 depends heavily on "a gradual recovery in the rest of the euro area" as well as a reduction in uncertainty.
In neighboring France, the economy "flatlined" in 2012, but there may be a gradual recovery over the rest of this year, the IMF said, even though the French economy may well contract by 0.2 percent this year.
The hope of recovery, however, is little consolation to those out of work in France, where the unemployment rate is 11 percent and rising, with unemployment among young people rivaling Spain's overall rate of about 25 percent.
The rate of unemployment throughout the 17 nations that use the euro as a common currency is 12.1 percent, according to Eurostat, the official number-crunchers for the European Union. The savings rate is up and the volume of retail trade is down, along with the rate of business investment.
What does this say? Those without jobs can't buy stuff, and those who are working, as well as their employers, are cutting back on spending. Governments, too, are listening to a call for austerity.
Economics 101: Gross Domestic Product (GDP), the total value of goods and services produced in a country, is calculated by adding up consumer spending, company investment, government spending, and net exports. And consumer spending accounts for about 80 percent of the total.
So if consumers without jobs can't buy, wary companies cut back on investment in additional production capacity, and exports decline because consumers in other countries are also in financial straits, the result is economic recession. And if governments also close their wallets, the consequence can be disastrous.
What's the answer? Government spending, since government has the least worry about deficit as a way of spending our way to prosperity. That, of course, is a short term solution, to be used only until the economy recovers. After that, rising tax revenue can pay off the deficit.
Bottom line: The Western World is trying to deal with a weakening economic environment, while the major economies of the Far East are thriving.
Keep in mind, however, that much of the Asian economy depends on exports. And if the rest of the world can't afford to buy, we all go downhill.
Wednesday, August 7, 2013
Wondering
What, me worry?
The Bank of England said it will keep interest low, at 0.5 percent for government funds, until the unemployment rate drops to 7 percent from its current 7.8 percent.
On this side of the pond, two Federal Reserve governors said the U.S. central bank may squeeze off the money pump next month, and the Fed chief put the target indicator at a 7 percent unemployment rate. It's now 7.4 percent, down from 7.6 percent in June.
Meanwhile, President Obama announced a move to get rid of Fannie Mae and Freddie Mac as the nation's primary home mortgage guarantor. The two companies well belly up during the nation's financial crisis, and were bailed out by the government. The thinking now is to get rid of the moral hazard of letting the companies think they could be more loose in their lending, knowing the government would bail them out if they sank.
Message: No more bailouts; you're on your own.
Whether all these things will happen soon, or not until the economy returns to health, is another issue.
As to economic good news, the Commerce Department reported that the U.S. international trade deficit dropped in June, as exports rose and imports declined. American firms sold more stuff overseas than they bought for resale to U.S. consumers that month. Want numbers? The value of exports in June totaled $191.2 billion, up from exports in May valued at $187.1 billion. Imports that month were $225.4 billion, down from $231.2 billion.
In an economy totaling $16 trillion, however, a foreign trade deficit of $34.2 billion is a relatively small percentage.
The Bank of England said it will keep interest low, at 0.5 percent for government funds, until the unemployment rate drops to 7 percent from its current 7.8 percent.
On this side of the pond, two Federal Reserve governors said the U.S. central bank may squeeze off the money pump next month, and the Fed chief put the target indicator at a 7 percent unemployment rate. It's now 7.4 percent, down from 7.6 percent in June.
Meanwhile, President Obama announced a move to get rid of Fannie Mae and Freddie Mac as the nation's primary home mortgage guarantor. The two companies well belly up during the nation's financial crisis, and were bailed out by the government. The thinking now is to get rid of the moral hazard of letting the companies think they could be more loose in their lending, knowing the government would bail them out if they sank.
Message: No more bailouts; you're on your own.
Whether all these things will happen soon, or not until the economy returns to health, is another issue.
As to economic good news, the Commerce Department reported that the U.S. international trade deficit dropped in June, as exports rose and imports declined. American firms sold more stuff overseas than they bought for resale to U.S. consumers that month. Want numbers? The value of exports in June totaled $191.2 billion, up from exports in May valued at $187.1 billion. Imports that month were $225.4 billion, down from $231.2 billion.
In an economy totaling $16 trillion, however, a foreign trade deficit of $34.2 billion is a relatively small percentage.
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