If you had the opportunity to interview Federal Reserve chairman Ben Bernanke, what questions might you ask?
-- John Maggs, NationalJournal.com
4 responses: Nancy Cleeland, Nicolas Véron, J.D. Foster, Desmond Lachman
This post on TheAtlantic.com sorts some evidence for how much the recession so far resembles the Great Depression, with some surprising results. In particular, it is interesting to think about the distinction between the United States and the global economy, and the role of industrial output. Is it right to compare things this way? Is any of this evidence compelling?
-- John Maggs, NationalJournal.com
4 responses: Edward Leamer, Gary Burtless, Grover Norquist, Martin Baily
President Obama has proposed giving the Federal Reserve new authority to regulate systemic financial risk and creating an oversight council of financial regulators. He wants to give the Federal Deposit Insurance Corp. the power to wind down complex financial institutions. And he plans to create a new agency to protect consumers in financial transactions. Are the president's proposals necessary, and if so, why? Are they sufficient, and if not, why not?
-- Bruce Stokes, NationalJournal.com
7 responses: Alan Meltzer, Bruce Josten, Nicolas Véron, Bruce Stokes, John Berlau, Nancy Cleeland, Simon Johnson
Federal Reserve Board Chairman Ben Bernanke recently urged Congress to focus on "fiscal sustainability" -- which he defined as achieving a stable ratio of government debt and interest payments to gross domestic product, and setting tax rates at levels that don't impede economic growth. But "fiscal sustainability" is also a political concept. How would you define it? Should federal revenues be expected to stay near historical norms even as government programs bear the brunt of an aging society? Does it matter whether the societal costs of aging are borne publicly or privately?
-- Julie Kosterlitz, NationalJournal.com
7 responses: James K. Galbraith, Alan J. Auerbach, Gene Steuerle, Desmond Lachman, Fred Smith, Grover Norquist, Robert Reischauer
The Obama administration says it plans to be a hands-off majority owner of General Motors, and that the executives it appoints will be free of government influence in their management decisions. Is this possible or likely? After the company emerges from bankruptcy, will GM managers be allowed to move plants overseas, or shut some down? Can a company be well-run when its owners refrain from influencing management?
-- John Maggs, NationalJournal.com
4 responses: Nicolas Véron, Alan Meltzer, J.D. Foster, Guy de Jonquières
Floyd Norris of the New York Times noted that the U.S. unemployment rate could surpass Europe's for the first time in memory. Does this indicate that the European approach of greater job protections could sustainably deliver more employment, in addition to its other arguable advantages in pay and benefits? How should we think about this data and what it says about labor policy in each place?
-- John Maggs, NationalJournal.com
3 responses: James K. Galbraith, Desmond Lachman, Nicolas Véron
CEA Chairman Christina Romer has provided some details about how the Obama administration plans to count the 3.5 million jobs it predicts will be created or saved under the $787 billion economic stimulus plan, reopening a debate about whether that achievement can ever be verified. As Greg Mankiw argues here, with the economy doing worse than when that prediction was first made, judging the results of the stimulus may be even more difficult. Was it wise to set such goals? Should economists always avoid them?
-- John Maggs, NationalJournal.com
With job losses slowing to 539,000 in April, has employment turned a corner? Christina Romer, the president's chief economic adviser, said Sunday that job losses did seem to be slowing but would continue through 2009, even if the economy starts growing in the final three months of the year. In which sectors would an employment recovery manifest itself? What factors, such as auto industry layoffs, might drive a renewed job loss later this year? What role would the apparent stabilization of finance play?
-- John Maggs, NationalJournal.com
5 responses: John S. Irons, James Sherk, Grover Norquist, J.D. Foster, Gary Burtless
President Obama has embraced the idea of tax reform and created an independent commission, but told its members to work within the confines of current policy. Can there be meaningful reform that doesn't raise income taxes on 95 percent of taxpayers? How might Obama and the commission escape these handcuffs? Other than the general goals of broadening the base and lowering rates, what should the commission focus on? If freed from its handcuffs, should tax reform be a vehicle for higher taxes to reduce the deficit, perhaps through a new Value-Added Tax? Should it seek to lower or abolish corporate taxes to spur investment?
-- John Maggs, NationalJournal.com
8 responses: Norbert Walter, Grover Norquist, Ryan Ellis, Mark Bloomfield, Rob Atkinson, Jeffrey Frankel, William Gale, J.D. Foster
Treasury has notified the banks that it believes need more capital, but it has delayed releasing that information to the public and hasn't even fully disclosed its stress test criteria. The stress test approach depends to some extent on public disclosure moving banks to absorb losses and recapitalize, but there is the countervailing risk that full disclosure will foment a panic. Is there a way out of this quandary that makes good practical and economic sense?
-- John Maggs, NationalJournal.com
