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| Edward Lazear: Economist and Presidential Adviser, Dies at 72 Posted: November 25, 2020 at 06:58 PM (Wednesday)He was a widely respected labor economist at Stanford who led President George W. Bush’s economic council during the financial crisis. Edward P. Lazear, a pioneering labor economist at Stanford University who advised President George W. Bush during the financial crisis, died on Monday. He was 72. The cause was pancreatic cancer, the ... | |
| Edward Lazear: The Poor Fare Best Under Free-Market Capitalism Posted: September 9, 2020 at 06:30 AM (Wednesday)Free-Market Capitalism Is Best for the Poor. President Trump and former vice president Biden have different visions of the country’s future. President Trump, during a recent event in Wisconsin, charged, “Joe Biden is just a Trojan horse for socialism.” Although it is unlikely that a President Biden would turn the U.S. into a socialist state, ... | |
| Edward Lazear: Growing Wage Inequality Is Caused by Growing Skill Inequality Posted: August 4, 2020 at 06:30 AM (Tuesday)To close the income gap, close the productivity gap. In recent years, the gap between the highest and lowest income brackets has become an area of growing concern for economists and policymakers, not to mention the low-wage workers who have been left behind. In late 2013, President Obama said that inequality was the defining issue of our ... | |
| Edward Lazear: Covid-19’s health effects are concentrated on older people. But the economic effects are hurting the young and poor. Posted: May 14, 2020 at 09:49 AM (Thursday)The pernicious health effects of covid-19 are concentrated among older people, but it is the young and especially low-income Americans who suffer the greatest harm from the country’s disease-mitigating shutdown policies. The bleak jobs data released last week, showing that more than 20 million Americans were thrown out of work in April, was ... | |
| Edward Lazear: Economic Stimulus Is the Wrong Prescription Posted: March 24, 2020 at 05:00 AM (Tuesday)We need liquidity to help businesses and individuals get through this necessarily tough time. Despite several days of intense negotiation, the Senate has so far failed to pass a bill to infuse over a trillion dollars into the ailing U.S. economy. While there can be no doubt that swift action is vital, too many politicians and policymakers seem ... | |
| Edward Lazear: PG&E Refuses to Get Burned Posted: November 25, 2019 at 07:04 PM (Monday)Under the utility’s incentive structure, blackouts make sense. My physician’s office called to have me come in right away. I had scheduled a flu shot for the following morning, but the office had been informed that PG&E would cut power within an hour. The refrigerator would warm and the serum would be spoiled before day’s end. That early ... | |
| Edward Lazear: The Recovery Is Reaching Its End Posted: June 18, 2019 at 06:32 PM (Tuesday)Recent slowing in job growth suggests that labor-market slack is almost eliminated. When unemployment dropped below 5% three years ago, some economists, including at the Federal Reserve, concluded that the labor market had topped out—that those still out of work would never get jobs. Three years and nearly eight million additional jobs later, ... | |
| Edward Lazear: Mind the Productivity Gap to Reduce Inequality Posted: May 6, 2019 at 06:18 PM (Monday)It isn’t only an American problem, but the U.S. has lessons to learn from other wealthy countries. How are American workers doing? Neither the middle class nor the poor have fared well in recent decades—but don’t blame tax cuts, a too-low minimum wage or the greed of the 1%. In rich countries around the world, the top half of the ... | |
| Edward Lazear: Why the Fed Should Heed the Market Posted: January 9, 2019 at 07:04 PM (Wednesday)Stock trends are the best predictor of growth. Recent volatility should give the central bank pause. Federal Reserve Chairman Jerome Powell, perhaps hoping to instill confidence, said in his press conference last month, “Of course we’re always data dependent.” But which data? There are countless indicators economists can seek out to track ... | |
| Edward Lazear: If Only Hillary and Bernie Would Recall JFK Posted: January 28, 2016 at 06:06 PM (Thursday)Kennedy knew ‘a rising tide lifts all boats.’ Today’s Democrats prefer class warfare over prosperity. Speaking about the economy a half-century ago, President John F. Kennedy told Americans that “a rising tide lifts all boats.” Today many disagree, including those in his party who want to be the next Democratic ... | |
| Edward Lazear: This is the real unemployment rate Posted: November 6, 2015 at 09:32 AM (Friday)The government announced Friday that October's unemployment rate stood at 5 percent, lower than it has been for two-thirds of the time since 2000. Many economists view rates around this level as full employment. Despite this, wages haven't been growing. The general sense is that the labor market is far from tight, and economic growth is weak. ... | |
| Edward Lazear: How Not to Prevent the Next Financial Meltdown Posted: October 2, 2015 at 07:10 PM (Friday)Dodd-Frank’s safeguards against chaos are based on a misdiagnosis of what led to the 2008 crisis. The large market declines and increased volatility of the past few months have prompted concerns that we may be headed toward financial chaos again. The 2010 Dodd-Frank law was the supposed solution to prevent that from happening, but as ... | |
| Edward Lazear: Why the Recovery Still Limps Along Posted: June 22, 2015 at 06:53 PM (Monday)A state-by-state analysis shows that market-oriented policies work. Too bad more states aren’t using them. A number of current and former governors will be running for president in 2016, and each will tout his state’s accomplishments and claim credit for the positives, deserved or not. Politics aside, cross-state comparisons provide a ... | |
| Edward Lazear: Want to Reduce Inequality? Consult China, Vietnam and India Posted: March 31, 2015 at 07:29 PM (Tuesday)In 1981, half of the developing world earned less than $1.25 daily. By 2011, the portion had dropped to 17%. President Obama has called income inequality the “defining challenge of our time.” Many progressives blame the market economy and doubt John F. Kennedy’s view that “a rising tide lifts all boats.” In 2011 Mr. Obama chided those who ... | |
| Edward Lazear: Solving the Puzzle of Stagnant Wages Posted: January 25, 2015 at 07:25 PM (Sunday)Evidence points to growing government regulation like Dodd-Frank and policies that discourage investment. The elation over wage increases in private business reported in last month’s job report has been replaced by disappointment. The Bureau of Labor Statistics reported on Jan. 16 that average hourly earnings fell five cents in December, eating ... | |
| Edward Lazear: 'Scoring' Legislation for Growth Posted: January 6, 2015 at 07:24 PM (Tuesday)New laws have economic consequences. Ignoring them doesn’t make a bill ‘neutral.’ The House of Representatives on Tuesday adopted a rule that will change Washington and lawmaking for the better. When legislation is proposed, the Congressional Budget Office is tasked with estimating its fiscal consequences. In most cases, the CBO assumes there ... | |
| Edward Lazear: An Immigration Game Plan for the New Congress Posted: December 4, 2014 at 07:08 PM (Thursday)Republicans would be wise to take a measured approach that moves the country and the economy forward. President Obama’s unilateral action on immigration angered many in Congress and among the public. With Republicans taking control of Congress, it is tempting to respond aggressively. Instead, a more measured and constructive approach would ... | |
| Edward Lazear: Government Forecasters Might as Well Use a Ouija Board Posted: October 16, 2014 at 08:00 PM (Thursday)Government economic forecasts receive a great deal of attention and are used to make a case for or against legislation or public policies. How good are the forecasts? The answer: not very. Forecasting is an inexact science at best, and the trust that Congress and the public invest in these estimates is ... | |
| Edward Lazear: The Climate Change Agenda Needs to Adapt to Reality Posted: September 2, 2014 at 07:30 PM (Tuesday)Limiting carbon emissions won't work. Better to begin adjusting to a warmer world. The Obama administration is instituting a variety of far-reaching policies to reduce carbon emissions and mitigate climate change. Are any of these capable of making a difference? Simple arithmetic suggests not. Given this reality, we would be wise to ... | |
| Edward Lazear: Job Turnover Data Show Lots Of Churning, Little Job Creation Posted: August 19, 2014 at 06:37 PM (Tuesday)The government's latest survey of job openings and labor turnover implies that while the U.S. labor market has improved significantly since the recession, it is far from having recovered.
The key determinant of labor market health is hiring, and hiring remains well below normal.
The data-rich Job Openings and Labor Turnover Survey, or JOLTS, ... | |
| Edward Lazear: Government Dries Up California's Water Supply Posted: June 26, 2014 at 06:46 PM (Thursday)Price and other controls make it much harder to deal with the drought. Many parts of the country, notably California and Texas, are experiencing intense drought. California rainfall in the Northern Sierra this year was 28.8 inches, 60% the normal amount. Most of Texas is experiencing moderate to exceptional drought conditions. Voluntary ... | |
| Edward Lazear: A Gifted Economist and the Ultimate Social Scientist Posted: May 5, 2014 at 07:04 PM (Monday)Gary Becker pioneered the use of economics to understand behavior, gaining insights with far-reaching benefits. When Gary Becker of the University of Chicago died on Saturday at age 83, the world lost one of the great economists of the past century—and one of its most significant social scientists. Becker believed that economics could be used ... | |
| Edward Lazear: How to Energize a Lackluster Recovery Posted: April 20, 2014 at 05:35 PM (Sunday)Allowing the full and immediate deductibility of capital investment would spur growth and raise wages. April always brings complaints about the pain of paying taxes—and the complaints are justified. According to the Bureau of Economic Analysis, over 30% of U.S. gross domestic product is taxed away to fund federal, state and local governments. ... | |
| Edward Lazear: The Hidden Rot in the Jobs Numbers Posted: March 16, 2014 at 06:29 PM (Sunday)Hours worked are declining, resulting in the equivalent of a net loss of 100,000 jobs since September. Most commentators viewed the February jobs report released on March 7 as good news, indicating that the labor market is on a favorable growth path. A more careful reading shows that employment actually fell—as it has in four out of the past ... | |
| Edward Lazear: Bushcare Posted: February 18, 2014 at 06:56 AM (Tuesday)George W. Bush found the solution to America's healthcare crisis seven years ago. Too bad nobody listened.
The Congressional Budget Office’s warning that the Affordable Care Act will cause employment to fall by the equivalent of 2.5 million full-time workers is just the latest of Obamacare’s negative surprises. Unfortunately, House ... | |
| Edward Lazear: The Young, the Restless and Economic Growth Posted: December 22, 2013 at 06:04 PM (Sunday)Countries with a younger population have far higher rates of entrepreneurship. Despite the strong showing in third quarter, GDP growth since the official end of the recession in June 2009 has been substandard. Some worry that the U.S. may follow in Japan's footsteps, experiencing a "lost decade" of economic stagnation. It may sound strange, ... | |
| Edward Lazear: President Obama, is a 'substandard' health plan really substandard? Posted: November 8, 2013 at 05:45 AM (Friday)When I worked in the government, I lived only two miles from the White House. As a result, I decided that my transportation needs were minimal so I bought a no-frills Ford Focus.
The car had a standard, stick shift transmission, roll-down windows and manual locks. My car was “substandard” compared to the almost all other autos in the White House lot, but it was a fine car that served me well. ... | |
| Gary Becker and Edward Lazear: How 'Debt Ceilings' Increase Debt Posted: October 23, 2013 at 06:53 PM (Wednesday)They provide the illusion of spending control while government expands apace. The recent wrangling in Washington over the debt ceiling, with both sides promising to return to battle early next year, never got around to considering this proposition: Maybe debt ceilings are a bad idea, because they may lead to ... | |
| Edward Lazear: No Tapering Soon if the Fed Looks at Labor Posted: September 30, 2013 at 07:03 PM (Monday)A 6.5% unemployment target isn't the only concern. The employment rate matters too, and it's still looking anemic. The Federal Reserve's Sept. 18 decision to stay the course on its asset purchases surprised and confused many market participants, who felt the central bank had sent contradictory signals about its intentions. In fact, the Fed ... | |
| Edward Lazear: Increased Productivity Is A Job Killer When Unemployment Is High Posted: September 19, 2013 at 06:36 PM (Thursday)Productivity growth is essential to the well-being of workers. Sustained improvement in productivity is a necessary condition for growing wages and raising the standard of living. But high unemployment during the recession and weak recovery has turned productivity growth into ... | |
| Edward Lazear and Keith Hennessey: Who really fixed the financial crisis? Posted: September 13, 2013 at 07:24 PM (Friday)This weekend marks the fifth anniversary of the collapse of Lehman Brothers, providing an opportunity to recount the history of the financial crisis, look back at what really caused it, and consider policy ramifications that remain relevant today. Even five years later, a host of misconceptions about the crisis — ranging from why it began to ... | |
| Edward Lazear: The Stock Market Beats GDP as an Economic Bellwether Posted: July 30, 2013 at 07:17 PM (Tuesday)The initial quarterly numbers are usually wrong—and they're poor predictors of future economic growth. On Wednesday, the Bureau of Economic Analysis releases its estimates of U.S. gross domestic product for the second quarter of the year. The BEA bureau cautions that its numbers are estimates and are subject to significant ... | |
| Edward Lazear: An Upgrade for the Senate Immigration Bill Posted: July 16, 2013 at 07:13 PM (Tuesday)Its point system makes it less likely that the people with the most to contribute to the U.S. can get here legally. Compared with the system in place now, the Senate's immigration reform is a big improvement. But the bill has flaws that make it less likely that the people with the most to contribute to U.S. society can get here legally. Still, ... | |
| Edward Lazear: The Hidden Jobless Disaster Posted: June 5, 2013 at 07:23 PM (Wednesday)At the present slow pace of job growth, it will require more than a decade to get back to full employment defined by prerecession standards..
The market tanked Wednesday on bad preliminary job news. And so, when Friday's jobs report is released, the unemployment rate and the number of new jobs will come in for close scrutiny. Then again, they always attract the most attention. Even the Federal Reserve focuses on ... | |
| Edward Lazear: Beware the Monthly Jobs-Report Chatter Posted: April 4, 2013 at 06:48 PM (Thursday)The initial reports are often inaccurate and don't say anything useful about where the economy is heading. April 5 brings us another "jobs day," the first Friday in each month, when the latest employment numbers come out. With much business-media fanfare, the numbers will be parsed for what they tell us about the economy and where it is ... | |
| Gary Becker and Edward Lazear: A Market Solution to Immigration Reform Posted: March 1, 2013 at 06:32 PM (Friday)Since the recession formally ended in June 2009, the American economy has been growing at a rate of 2%, about one percentage point below its long-term average. To improve this performance, the U.S. needs more people with skills, vision and a drive to improve themselves—qualities that lead to innovation, business creation, increased employment ... | |
| Edward Lazear: Chinese 'Currency Manipulation' Is Not the Problem Posted: January 7, 2013 at 07:18 PM (Monday)An analysis of trade patterns with the U.S. and Europe shows that the yuan's value has not affected the numbers.
When things are not going well, it is common to seek scapegoats. In this vein, populists of various stripes allege that China manipulates the value of its currency to favor its exports and undercut American workers, particularly in manufacturing. ... | |
| Edward Lazear: There Is No 'Structural' Unemployment Problem Posted: September 3, 2012 at 09:03 PM (Monday)A look at the skills-jobs mismatch finds no evidence that changes in the economy explain high joblessness. The problem is slow growth.
The unemployment rate has exceeded 8% for more than three years. This has led some commentators and policy makers to speculate that there has been a fundamental change in the labor market. The view is that today's economy cannot support unemployment rates below 5%—like the ... | |
| Edward Lazear: Whose Fault Is Today's Bad Economy? Posted: June 13, 2012 at 07:27 PM (Wednesday)What we're experiencing is a new wave of slowdowns, not a continuation of past problems.
Picture this scenario in baseball: Pitcher Smith replaces a starting pitcher in the fourth inning, when his team is down by three runs. The team scores two runs in the next inning, almost tying the score. But in the sixth inning, Smith gives up five runs, putting his team ... | |
| Edward Lazear: Three Views of the 'Fiscal Cliff' Posted: May 20, 2012 at 06:19 PM (Sunday)It's the tax increases we have to fear. Spending cuts won't hurt the economy.
Discussion of the so-called fiscal cliff—the combination of tax increases and spending cuts that will come in 2013 if Congress and the president don't act—confuses a number of different issues. The evidence suggests that we should fear the tax hikes, but not necessarily the ... | |
| Edward Lazear: The Worst Economic Recovery in History Posted: April 2, 2012 at 07:20 AM (Monday)Since the second half of 2009, the U.S. economy has grown at a rate of 2.4%, a full percentage point below average long-term growth..
How many times have we heard that this was the worst recession since the Great Depression? That may be true although the double-dip recession of the early 1980s was about comparable. Less publicized is that our current recovery pales in comparison with most other ... | |
| Edward Lazear: The Jobs Picture Is Still Far From Rosy Posted: January 19, 2012 at 06:52 PM (Thursday)New unemployment claims are down, but the likelihood that an unemployed worker will find a job has not substantially improved.
The typical American judges the state of the economy by the quality of the labor market. If jobs are scarce and wages are flat or falling, decent increases in the gross domestic product or the stock market are almost irrelevant. Aware of this point, President Obama convened ... | |
| Edward Lazear: The Euro Crisis: Doubting the 'Domino' Effect Posted: October 31, 2011 at 07:00 AM (Monday)Preventing a Greek default will not reverse the lackluster growth that has plagued the other vulnerable countries for many years now. .
It seems everyone is worried that problems in Europe will derail our fragile recovery. For this reason, markets breathed a sigh of relief when the Europeans came up with a plan to provide yet another reprieve to Greece. The main worry, now somewhat eased, was that a Greek ... | |
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