Happy Friday, folks. And it's not just any Friday; It's employment Friday. So get cracking on your daily reads so you'll be all set for the 8:30 a.m. release.
A new era for monetary policy?
AllianceBernstein's Joe Carson walks us through the history of monetary regimes. He divides post-war central banking into three distinct periods: the Keynesian era (1945 to the mid-1970s), when policy makers operated under the assumption that there was a permanent trade-off between unemployment and inflation; the price-stability era (late-1970s to 2007), when central bankers viewed price stability as an end in itself and a means to an end (full employment); and the current crisis-management era. What's next? In the wake of a series of asset bubbles, Carson hopes the next regime will "restore a broad monetary anchor," with an eye toward the macroeconomic damage that can come from a boom/bust in asset markets in addition to consumer price inflation.
'Tempered optimism' is a way to feel good.
This year's rosy economic expectations are apt to be realized, according to Laura D'Andrea Tyson, writing in the New York Times' Economix blog. Just so you don't get carried away, consider this two-handed economist warning: "There are plenty of reasons for optimism," she says. "But" -- you knew this was coming -- "there are also plenty of reasons that optimism should be tempered with caution and with concern about the prospects for sustainable and equitable growth." (Notice how "equitable" has become a precondition.) The headwinds may have abated, but there's "uncertainty," geopolitical risks and the possibility of secular stagnation to worry about. Consider my optimism tempered.
The fundamental problem with Obamacare.
The Washington Post's Ezra Klein has an insightful interview with health-care consultant Robert Laszewski on what's right and what's wrong with Obamacare. The individual mandate? "Almost worthless," Laszewski says, because it can't be enforced. The mix of young and sick people? "It's not positive." Laszewski captures the essence of what's wrong with Obamacare: "It’s product driven and not market driven. They didn’t ask the customer what they wanted." In other words, it meets the needs of the very poor, who didn't have health care, but "it doesn’t really meet the needs of healthy people and middle-class people."
Daddy, how can the Treasury borrow when it's out of borrowing authority?
Good question, Johnny. The Bipartisan Policy Center explains everything you need to know about the Treasury's "extraordinary measures": extraordinary in the sense that the government can keep borrowing even though it has maxed out its credit card. The Treasury can reduce intra-governmental debt by not fully investing in certain trust funds, thereby making room under the borrowing authority to issue more debt to the public. Eventually the gimmicks run out. Some lawmakers want to abolish the extraordinary measures, which would be a step in the direction of honest accounting.
They came to do good and ended up doing well.
"They" are our elected representatives in Washington. The average net worth of a member of Congress topped $1 million in 2012 for the first time ever, according to the Center for Responsive Politics. Some 268 lawmakers had a net worth over $1 million, up from 257 last year. Democrats edged out Republicans by a small amount. Senators' median income was more than three times that of members of the House. There's a link to an individual-member breakdown at the bottom of the post.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)