Nearshore Journal

By Philip Peters

In a new Kauffman Foundation Survey of its top economics bloggers called “Kauffman Economic Outlook” –  recently completed a grading of U.S. institutions 
that Influence the economy. The full details of the study will be released tomorrow and we will post the full study on our blog. Watch for the complete results tomorrow.

In the study, what is billed as the country’s most prolific and influential economics bloggers, graded the institutions and organizations that impact the economy.

Ranging from an A to F grading scale, the economics bloggers give the highest marks to the Congressional Budget Office (CBO) and General Accountability Office (GAO), as well as to the “U.S. business community.” Central banks such as the Federal Reserve and European Central Bank got passing grades by most, with few A’s and many F’s.

The World Bank also had mixed marks. The worst grading  went to Wall Street firms (31 percent F’s) and the U.S. Congress (51 percent F’s).

You can view a visual display of the results from this link.

It is also shown below.

CONFERENCE BOARD JOBS NUMBER
On a more positive note the Conference Board Online Job Demand survey today revealed that online job demand increased to 382,000 in January following the 362,000 number posted in November 2009. These improved metrics point to a strengthening economic performance in the fourth quarter 2009. The complete report can freely downloaded from this link.

IN DEFENSE OF THE U.S. ECONOMY

A final article I bring to your focus is David Bond’s piece on “How to Balance the Economy and Bring Jobs at Home,” which we posted this morning. Bond’s 2o-year analysis ponders the $ 9 trillion dollars acumulated deficit in U.S traded goods and its concomitant debilitating  effects on Americas fiscal health. “Much of this money,” he argues in his opening paragraph,  ”was re-circulated fueling the increasingly larger budget deficits and the over consumption of American consumers.”

He continues, ” American economists and politicians have been blinded by the promise of the advantages of free trade while ignoring the obvious costs to American security and prosperity of our increasing dependence on foreign suppliers for everything from food products to finished manufactures. Even our defense sector, below the level of our prime contractors, has been hollowed out by the outsourcing of production to distant sources of supply.”

He makes a suspiciously protectionist argument (though he argues to the contrary), underpinned by a interesting tax policy which lowers the corporate tax rate from 35 to 25%. This strategy, he intimates, can be a strategic counterpoint to U.S. job losses occasioned by outsourcing effects.  He argues vehemently for the revitalization of a U.S. manufacturing sector, and makes a clarion call for a more sustainable middle class access and wealth creation distribution from productivity gains currently cornered by Wall Street practitioners.

He fails to site, however, that the U.S. consistently runs a service trade surplus with the rest of its trading partners. Should these partners embark on a tit for tat internal job creation response, as he argues for within the U.S. He also fails to discuss the positive disinflationary effects on consumer prices that the American consumer realizes from China manufacturing activities. John Price’s Decade of the Panda article should be read as a counter balance to Bond’s. Certainly, an incipient trade war should be the least favored consideration as we undergo this precarious, yet hopeful recovery.

by Philip Peters