by HANS A. VON SPAKOVSKY February 21, 2016 12:00 PM
Several well-funded organizations — including the League of Women Voters and the NAACP — are fighting efforts to prevent non-citizens from voting illegally in the upcoming presidential election. And the United States Department of Justice, under the direction of Attorney General Loretta Lynch, is helping them.
On February 12, these groups filed a lawsuit in D.C. federal court seeking to reverse a recent decision by the U.S. Election Assistance Commission (EAC). The Commission’s decision allows Kansas and other states, including Arizona and Georgia, to enforce state laws ensuring that only citizens register to vote when they use a federally designed registration form. An initial hearing in the case is set for Monday afternoon, February 22.
Mapped: Negative central bank interest rates now herald new danger for the world
Negative rates are becoming the “new abnormal” in a shaky world economy. With fresh panic hitting markets, are we finally hitting the limits of what monetary policy can achieve? Click on the countries to find out
The world’s tentative experiment with negative interest rates got off to an unremarkable start.
Sweden’s Riksbank – the world’s oldest central bank – became the first major monetary authority to cross the rubicon and take its main policy rate into the red exactly a year ago to the month (see map above).
The Riksbank’s move followed the likes of Switzerland and Denmark, who had turned negative in a bid to stimulate flagging inflation and halt the punishing appreciation of their currencies.
By Peter Schroeder and Jordan Fabian – 02/10/16 06:00 AM EST
Seven years after President Obama’s inauguration, the debate about whether he saved the economy or held back its recovery is in full swing.
Obama has been taking a final-year victory lap, touting a national unemployment rate that has fallen to 4.9 percent as the latest sign of success for his economic stewardship.
Yet critics in Obama’s orbit, including Democratic congressmen and a former member of his Cabinet, suggest more could have been done if Obama had worked harder with lawmakers and members of his administration.
Rep. Collin Peterson (Minn.) — one of two Democrats still in office out of the 11 who voted against the stimulus
legislation — said the White House made zero effort to bring him, or other centrist Democrats, on board in the fight over the stimulus.
“They just wrote us off, I think,” he said. “I can’t even tell you who in the administration is supposed to be lobbying me.”
It’s a criticism of Obama that has remained steady for his entire presidency: He doesn’t work well with others, whether they are Republicans or Democrats, who disagree with him.
“This is very much a my-way-or-the-highway White House, and this is a president who would rather win the argument than get something done,” said Douglas Holtz-Eakin, head of the American Action Forum and the top economic adviser to Obama’s Republican opponent in 2008, Sen. John McCain (Ariz.).
Obama allies say such criticism is unfair and blame Republicans for failing to work with Obama since day one.
“There’s no question that had Congress enacted the president’s economic proposals, the economy would be in a stronger position today,” said Alan Krueger, a Princeton economist who was a top economic adviser to Obama.
Europe is facing a convergence of the worst crises since World War II, and the overwhelming consensus among officials and experts here is that the U.S. no longer has the will or the ability to play an influential role in solving them.
At the Munich Security Conference, the prime topics are the refugee crisis, the Syrian conflict, Russian aggression and the potential dissolution of the European Union’s very structure. Top European leaders repeatedly lamented that 2015 saw all of Europe’s problems deepen, and unanimously predicted that in 2016 they would get even worse.
“The question of war and peace has returned to the continent,” German Foreign Minister Frank-Walter Steinmeier told the audience, indirectly referring to Russian military interventions. “We had thought that peace had returned to Europe for good.”
What was missing from the conference speeches and even the many private discussions in the hallways, compared to previous years, was the discussion of what Europe wanted or even expected the U.S. to do.
Several European officials told me that there was little expectation that President Barack Obama, in his last year in office, would make any significant policy changes to address what European governments see an existential set of crises that can’t wait for a new administration in Washington.
The average 65-year-old borrower has 47% more mortgage debt than those in 2003
By
JOSH ZUMBRUN
Updated Feb. 12, 2016 4:17 p.m. ET
Older Americans are burdened with unprecedented debt loads as more and more baby boomers enter what are meant to be their retirement years owing far more on their houses, cars and even college loans than previous generations.
The average 65-year-old borrower has 47% more mortgage debt and 29% more auto debt than 65-year-olds had in 2003, after adjusting for inflation, according to data from the Federal Reserve Bank of New York released Friday.
Just over a decade ago, student debt was unheard-of among 65-year-olds. Today it is a growing debt category, though it remains smaller for them than autos, credit cards and mortgages. On top of that, there are far more people in this age group than a decade ago.
The result: The composition of U.S. household debt is vastly different than it was before the financial crisis, when many younger households took on large debts they could no longer afford when the bottom fell out of the economy.
The shift represents a “reallocation of debt from young [people], with historically weak repayment, to retirement-aged consumers, with historically strong repayment,” according to New York Fed economist Meta Brown in a presentation of the findings.
A new economic crisis would trigger a political backlash in Britain, Europe and the United States which could drag us all down into poverty
By Allister Heath
10:24PM GMT 10 Feb 2016
They bounce back after terrorist attacks, pick themselves up after earthquakes and cope with pandemics such as Zika. They can even handle years of economic uncertainty, stagnant wages and sky-high unemployment. But no developed nation today could possibly tolerate another wholesale banking crisis and proper, blood and guts recession.
We are too fragile, fiscally as well as psychologically. Our economies, cultures and polities are still paying a heavy price for the Great Recession; another collapse, especially were it to be accompanied by a fresh banking bailout by the taxpayer, would trigger a cataclysmic, uncontrollable backlash.
The public, whose faith in elites and the private sector was rattled after 2007-09, would simply not wear it. Its anger would be so explosive, so-all encompassing that it would threaten the very survival of free trade, of globalisation and of the market-based economy. There would be calls for wage and price controls, punitive, ultra-progressive taxes, a war on the City and arbitrary jail sentences.
A pernicious cycle of collapsing commodities, corporate defaults, and currency wars loom over the global economy. Can anything stop it from unravelling?
By Mehreen Khan, graphic by Tom Shiel
10:00AM GMT 06 Feb 2016
A global recession is on the way. This truism of economics holds at any point in which the world is not in the grips of a contraction.
The real question is always when and how deep the upcoming downturn will be.
“The crash will come, but it would be nice if it came two years from now”, Thomas Thygesen, head of economics at SEB told over 200 commodity investors and analysts in London last month.
His audience was rapt with unusual attention. They could be forgiven for thinking the slump had not already arrived.
Commodity prices have crashed by two thirds since their peaks in 2014. Oil has borne the brunt of the sell-off, suffering the worst price collapse in modern history. Brent crude has fallen from $115 a barrel in the summer of 2014, to just $27.70 in mid-January.
Nathan Bomey, USA TODAY9:26 a.m. EST February 5, 2016
Consumers will likely pay the price for President Obama’s proposed $10 tax per-barrel of oil, an administration official and a prominent analyst said Thursday.
Energy companies will simply pass along the cost to consumers, Patrick DeHaan, senior petroleum analyst for GasBuddy.com, which tracks gas prices nationwide, said in an interview with USA TODAY.
Obama is set to propose the tax when he reveals his budget next week, as part of an effort to reduce carbon emissions and generate billions of dollars for mass-transit investments and self-driving vehicles. The new tax would be phased in over five years, and would apply to both domestic and imported oil.
For the last two years, America’s job-creation machine has been like “The Little Engine That Could,” chugging ahead with “I think I can, I think I can” regardless of headwinds at home or abroad.
The nation added 3 million jobs in 2014, making up all the ground lost in the Great Recession, and then piled on another 2.7 million jobs last year. All while the broader economy, as measured by the gross domestic product, grew at a relatively lackluster pace.
But the January jobs report, released Friday, suggests that the ever-dependable locomotive for the U.S. economy has encountered a hill that slowed it sharply.
The question now is whether it is just moving through an unusually steep patch or has finally met a hill it cannot conquer. The answer probably won’t be known for a couple of months, but Friday’s report has further clouded the outlook for investors and the Federal Reserve’s interest rate policy.
The Labor Department said that employers added just 151,000 jobs last month, down from an average monthly gain of 283,000 in the fourth quarter of last year.
Economists caution that one can’t make too much of a single month’s data, especially in the winter when weather can skew payroll statistics. Unseasonably warm temperatures in December probably inflated hiring that month in construction, for example.
The global economy seems trapped in a “death spiral” that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi strategists have warned.
Some analysts — including those at Citi — have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”
The nationwide release of “A Clockwork Orange” was 44 years ago — on Feb. 2, 1972 — but today its star, Malcolm McDowell, says the movie was more prescient than it seemed at the time.
Based on a novel by Anthony Burgess, the Stanley Kubrick film shows “a world in which all older people stayed indoors with their televisions on,” McDowell told the News. “And that’s basically what happened.
‘A CLOCKWORK ORANGE’ IS A MIND-SHATTERING VISION OF TOMORROW: 1971 REVIEW
“It’s just the young people out there doing drugs — and he foretold all this before the drug explosion.”
The film, like the book, depicts a dystopian future filled with “ultra-violence,” gangs of “droogs” and depravity at every turn. The four main characters — including McDowell’s lead character Alex — spend their free time in a bar where they drink drug-laced milk in preparation for an evening filled with violence, mayhem and even rape.
The book was released in 1962 and shooting for the film began in 1969, “so this is really before huge gang violence and drugs happened,” McDowell said.
With some of the most iconic scenes set behind bars, the prison system looms large in the world of “A Clockwork Orange” — much like in modern America.
Three-month Treasury bill rate falls to negative 0.5 percent Very adverse scenario posits harsh worldwide recession
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As interest rates turn negative around the world, the Federal Reserve is asking banks to consider the possibility of the same happening in the U.S.
In its annual stress test for 2016, the Fed said it will assess the resilience of big banks to a number of possible situations, including one where the rate on the three-month U.S. Treasury bill stays below zero for a prolonged period.
“The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities,” the central bank said in announcing the stress tests last week.
In that particular simulation, the unemployment rate doubles to 10 percent, the same level it reached in the aftermath of the last financial crisis.
Three-month bill rates have slipped slightly below zero several times in recent years, including in September after the Fed delayed rate liftoff amid global financial market turmoil, touching a low of minus 0.05 percent on Oct. 2.
But in the stress test, banks would have to handle three-month bill rates entering negative territory in the second quarter of 2016, and then falling to negative 0.5 percent and holding there through the first quarter of 2019.
NEW YORK (Reuters) – U.S. companies are growing more concerned about the prospects of a recession in the year ahead for the first time since the end of the financial crisis.
So far this year, the number of companies whose executives have mentioned recession concerns to analysts and investors is up 33 percent from the same period a year ago; the first such increase since 2009. Some 92 companies have discussed a U.S. recession in their earnings calls, according to Thomson Reuters data.
That gloomy talk highlights worries that growth in the world’s largest economy may be coming to a halt. Gross domestic product grew 0.7 percent in the final quarter of 2015, down from 2 percent in the third quarter, while double the number of companies are cutting or flat-lining their capital spending in the year ahead, according to Reuters data. The benchmark S&P 500, a leading indicator of economic strength, had its worst January since 2009 as oil tumbled below $30 a barrel and remained near 12-year lows.
While nearly all companies that have discussed recession say that U.S. consumers continue to look healthy, many are growing concerned that the steep declines in energy prices and job cuts in the industry are going to bleed into the larger economy. Overall, economists expect the U.S. economy to grow 2.4 percent in 2016, according to a Dec. 30 Reuters poll.
Richard Fairbank, chief executive of Capital One Financial Co., for example, said he sees a recession as increasingly likely if financial market turmoil spreads into the real economy.
Millions of people around the world are emerging from poverty thanks to rising economic freedom. But by sharp contrast, America’s economic freedom has been on a declining path over the past decade.
America’s declining score in the index is closely related to rapidly rising government spending, subsidies, and bailouts.
According to the 2016 Index of Economic Freedom, an annual publication by The Heritage Foundation, America’s economic freedom has tumbled. With losses of economic freedom in eight of the past nine years, the U.S. has tied its worst score ever, wiping out a decade of progress.
The U.S. has fallen from the 6th freest economy in the world, when President Barack Obama took office, to 11th place in 2016. America’s declining score in the index is closely related to rapidly rising government spending, subsidies, and bailouts.
Since early 2009:
Government spending has exploded, amounting to $29,867 per household in 2015.
The national debt has risen to $125,000 for every tax-filing household in America—a total over $18 trillion.
The government takeover of health care is raising prices and disrupting markets.
Bailouts and new government regulations have increased uncertainty, stifling investment and job creation.
This is not something to take lightly. Economic freedom is the foundation of U.S. economic strength, and economic strength is the foundation of America’s high living standards, military power, and status as a world leader. The perils of losing economic freedom are not fictional.
It is painfully clear that our economy has been performing far below its potential, with individuals, families, and entrepreneurs being squeezed by the proliferation of big-government bureaucracy and regulations.
As documented by the index, and by other scholars, America’s economic freedom has been declining at an alarming pace.
Indeed, as The Wall Street Journal recently summed it up succinctly, Obama is “a champion when it comes to limiting economic freedom, and American workers have the slow growth in jobs and wages to prove it.”
Not surprisingly, our economic dynamism and innovative capacity have been measurably reduced.
Not surprisingly, our economic dynamism and innovative capacity have been measurably reduced. Self-inflicted wounds include:
The U.S. has the highest corporate tax rate in the developed world. This has driven new jobs to other, more competitive nations and has meant fewer jobs and lower wages for Americans. The overall annual cost of meeting regulatory requirements has increased by over $80 billion since 2009, with more than 180 new regulations in place. In terms of ease of starting a new business, analyzed by a recently published World Bank report, the U.S. is ranked shockingly low at 49th, trailing countries such as Canada, Georgia, Ireland, Lithuania, and Malaysia.
No wonder the labor force participation rate has remained at near record lowsafter more than five years of steady decline.
Worse, vibrant entrepreneurial growth has been stymied by greater policy uncertainty and mounting debt. And a disturbing trend toward cronyism has gravely eroded the rule of law and distorted our free-market system.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, keynote speaker of the official release of the 2016 Index, recently stated:
It’s been almost seven years since the Obama “recovery” began, and our economy is barely out of neutral. Why does America have to settle for this?
Restoring economic freedom is prerequisite to revitalizing and brightening America’s future. 2016 is the year to reaffirm the principles of limited government, free enterprise, and rule of law so that we can reconstitute an America where freedom, opportunity, and prosperity flourish.
Because it is completely misreading the situation. Early in the new year, on Sunday, January 3, Federal Reserve vice chair Stanley Fischer delivered a hawkish speech to the American Economic Association.
Completely misreading the economy, which is woefully weak while inflation is virtually nil, Fischer strongly hinted that the Fed would be raising its target rate by a quarter of a percent every quarter for the next three years.
The next day the S&P 500 dropped 1.5 percent. In the week that followed, the broad index fell 6 percent. The week after that it fell over 2 percent. During that two-week period, the Dow Jones dropped 1,437 points.
The dollar went up. Oil plunged 21 percent. Raw-material commodities dropped. And credit risk spreads in the high-yield junk market rose substantially. Actually, it was a global event, as stock markets around the world plunged. Utter chaos.
