Thomas Palley

Trade promotion authority (TPA) – formerly known as fast-track negotiating authority – is set to expire on June 30, 2007. As a result, the Bush Administration and business interests are now lobbying Congress for its renewal. However, there are strong reasons to not just let TPA temporarily lapse, but also to permanently bury it. (more…)

The US economy is showing signs of a potentially rapid deceleration. In particular, there is accumulating evidence that the housing sector slowdown may be becoming a meltdown. In many areas house prices are falling, house sales are down nationally, and mortgage delinquencies and foreclosures are rising – especially in the sub-prime market. This has caused tremors in broader financial markets. The only good news is employment and wages continue growing, but labor markets conditions are also widely viewed as a lagging indicator. (more…)

In recent years outward foreign direct investment (FDI) by US corporations to other countries has been increasing rapidly, while inward FDI by foreign corporations into the US has been trending down. Since investment in the US is critical for future economic prosperity, these patterns are troubling and provide evidence of how globalization and flawed policy are encouraging corporations to abandon America. (more…)

In anticipation of 2008, a potentially historic debate is shaping up within the Democratic Party. On one side are progressive Democrats whose lineage reaches back to FDR and the New Deal. On the other side are new Democrats, who emerged in the 1980s and embraced Ronald Reagan’s critique of big government. (more…)

There is a growing business chorus calling for shrinking the Sarbanes – Oxley Act (Sarbox) regulating U.S. capital markets. Recently, a self-appointed “blue ribbon” committee financed by Wall Street interests called for making shareholder class action suits more difficult to bring, lowering the legal liability of auditors and directors, and easing accounting certification requirements. In response, the Securities and Exchange Commission (SEC) appears to be moving to implement some of this wish list. (more…)

The economics of regulation teaches that regulation only matters if it is binding and compels people to change their behavior. It also teaches that because binding regulation compels change, those subject to it oppose it. After all, they preferred doing what they were doing before the regulation was passed. That carries an important political lesson: those subject to binding regulation will want it repealed. (more…)

Over the last four years the U.S. trade deficit has persistently set new records, hitting $716.7 billion in 2005, equal to 5.7 percent of GDP. The trade deficit has both real and financial effects. Real effects refer to impacts on employment, incomes, and manufacturing capacity. Financial effects refer to the impact of accumulated indebtedness resulting from borrowing to finance the deficit. (more…)

A lot of newspaper ink has been spilled over immigration. So why write another op-ed? The reason is that the economics behind the debate remains badly out of focus, and understanding that economics is key to carving a passage through this nastiest of political wedge issues. (more…)

China’s President Hu Jintao will visit Washington DC next week (April 20) where he will meet with President Bush. For the last several years, China’s under-valued exchange rate has been imposing large costly distortions on the American economy. Unfortunately, the Bush administration has taken no action. Instead, it has allied itself with multi-national corporations who are profiting handsomely from the current U.S. – China economic relationship, which allows them to import cheap Chinese products on which they earn huge margins. If the President won’t take decisive action to get China to significantly revalue its exchange rate, Congress should. Here is an economic indictment against China that justifies such action. (more…)