Bernanke Won’t Rule Out More Bond Buys
– Federal Reserve Chairman Ben Bernanke told CBS in an interview to be aired Sunday that he’s not ruling out purchasing more bonds to aid the U.S. economy, the network said in a release Friday. In an interview taped Tuesday in Columbus, Ohio, Bernanke defended the central bank’s program to buy $600 billion in U.S. Treasury notes, which was attacked by senior politicians in the U.S. and abroad. Top Republicans charge the bond purchases, due to end in June, could bring high inflation and may weaken the U.S. dollar excessively. Like he did in 2009 to defend the government’s actions to fight the financial crisis, Bernanke is going to appear for the second time on “60 Minutes,” the CBS News show, this Sunday to discuss the most pressing issues facing the U.S. economy.
Social Security Fix Is To Raise Cap.
Former Clinton Secretary of Labor, Prof. Robert Reich, makes quick work of dispensing with the phony ‘problem’ with Social Security. Reich writes here
. “Let’s be clear about the long-term deficit problem. It’s not Social Security. Social Security’s shortfall is modest. It arises because so much income has gone to top earners in recent years that the payroll tax covers a smaller percentage of overall income than was planned for. I should know. I used to be a trustee of the Social Security trust fund. The obvious answer is to lift the cap on income subject to Social Security payroll taxes, now $106,800, to about $150,000.”
Save Our World, Create Chinese Consumer Culture
– So the post title is a bit hyperbolic, but not much. If global economic imbalances imperil the existence of the contemporary trade and globalization, then job#1 is alleviating them. In case you missed it, the New York Times Magazine
had a very interesting article
over the weekend on the challenges of getting China to move towards a consumer culture. While the US has swung too far in that direction, China is arguably at the opposite extreme. Both must change. There are certainly many examples of PRC noveau riche
splurging (see the accompanying photo essay
), but that’s not what will get consumption up in China but Jiang average opening up his or her wallet. I have actually written an academic piece
that makes similar points–it’s in China’s best interest to become less manufacturing intensive on environmental grounds, revaluation of the renminbi will encourage domestic consumption by increasing local purchasing power, etc.–but I’ll save that for a later day. In the meantime, the NYT article gets the general outlines of this story right, although I have more to say about the marketing aspects of creating Chinese consumer culture: