Strikers in Dubai Facing Deportation
"Buy American" laws and why they're useless political fodder
Politically, most voters like the idea of U.S. businesses getting a first pass, so Buy America laws are an easy sell. But that goodwill stretches only so far: If Bangladesh produces textiles at rock-bottom prices, it’s hardly logical to spend taxpayer dollars buying far more expensive uniforms simply because they’re made in the U.S. Many states even have laws in place demanding that contracts go to the lowest competent bidder. Which is why, in practice, Buy America laws have so many loopholes. If they had more bite, they’d lose their appeal pretty quickly.
BP, Shell, and Statoil face class-action lawsuit over price fixing
Manufacturing slowed for a second straight month in May as weak overseas demand and government belt-tightening at home led to the sector's most sluggish rate of growth since October, a survey showed on Thursday.
Glasner on Bernanke's dismal testimony
The job market, five and a half years after the economy started its downturn, is in a shambles. Inflation is running well below the nominal 2% target, and is expected to remain there for as far as the eye can see. And what is the FOMC preoccupied with? Winding down its asset purchases “in light of incoming information.” The incoming information is clearly saying – no it’s shouting – that the asset purchases ought to be stepped up, not wound down. Does Bernanke believe that, under the current circumstances, an increased rate of inflation would not promote a faster recovery in the job market? If so, on the basis of what economic theory has he arrived at that belief? With inflation persistently below the Fed’s own target, he owes Congress and the American people an explanation of why he believes that faster inflation would not hasten the recovery in employment, and why he and the FOMC are not manifestly in violation of their mandate to promote maximum employment consistent with price stability. But he is obviously unwilling or unable to provide one.
Lars Christenson with the historical parralel
Why did Bernanke scare the markets? Well, maybe, just maybe, it was because his testimony was so obviously incoherent.
The Japanese stock market dropped more than 7% on Thursday and even though we are up 3% this morning there is no doubt that “something” had scared investors.
There are likely numerous reasons for the spike in risk aversion on Thursday, but one reason is probably that investors are getting concerned about the Federal Reserve and the Bank of Japan getting closer to scaling back monetary easing. That has reminded me on what happened in 1937 – when market participants panicked as they started to fear that the Federal Reserve would move prematurely towards monetary tightening – after the US economy had been in recovery since FDR took the US off the gold standard in 1933.
Going into 1937 both US government officials and the Fed officials started to voice concerns about inflationary pressures, which clearly sent a signal to market participants that monetary policy was about to be tightened. That caused the US stock market to slump and sent the US economy back into recession – the famous Recession in the Depression.