Weekly Commentary

Anyone who has built a house knows the first 90% of construction tends to go remarkably well. The framing goes up, the roof goes on, and every week brings visible progress. Then come the inspections, change orders, and the seemingly endless list of things nobody anticipated. The last 10% can consume an extraordinary amount of […]

There is something remarkable about a hamburger. It’s one of the few things in life that can explain economics better than a room full of PhDs. In 2006, a Big Mac cost about $2.67. Today, it’s $6.22. That’s an increase of 133%, compared with roughly 68% for the broader Consumer Price Index over the same […]

There is an old saying that if you don’t know who is losing at the poker table, there’s a good chance it’s you. I suspect a growing number of Americans have that uneasy feeling about the economy. They go to work, earn a paycheck, pay their bills, and wonder why getting ahead seems harder than […]

There is a reason airplane wings bend. Watch one from a window seat in turbulence and it can be a little unsettling. The wing moves far more than most passengers would like. But that flexibility isn’t a defect. It is part of what keeps the airplane in the sky. A perfectly rigid wing would have […]

There is a familiar pattern in economic history. First comes the spending. Then comes the skepticism. If the spending was aimed at something real, the output eventually shows up where people can no longer ignore it. That was true in the electrification era. Money poured into generation, wiring, equipment, factories, and the physical buildout needed […]

There is an old story about a man looking for his keys under a streetlight. His friend asks if that is where he lost them. “No. I lost them across the street.” “Then why are you looking here?” “Because the light is better.” I thought about that after the Fed raised rates this week. Kevin […]

There is an old habit in Washington that works pretty well right up until the point it doesn’t: When something gets expensive, subsidize it. Housing too expensive—help with the down payment. Energy too expensive—send a credit. Consumers unhappy about prices—send them a check. There is a certain elegance to this approach. Unfortunately, economics occasionally gets […]

I’m having a lot of discussions with clients and colleagues on the headline US debt. It’s real and serious, but it’s not the first time we’ve seen this kind of macroeconomic event. In 1946, Americans had plenty to worry about. The country had just finished financing the largest war in its history. Federal debt had […]

During World War II, Americans did something economists had rarely seen at that scale. They earned more money and saved an extraordinary amount of it. By 1943, Americans were saving roughly 27% of their disposable income. Some of that was forced on them. Cars were hard to buy. New homes were scarce. Consumer goods were […]

In the early 1870s, America was laying railroad track at a remarkable pace. The railroads were transforming the country, but somebody had to pay for all that steel, land, and labor. Much of the money came from bonds sold to private investors. Those railroad bonds competed with government debt for the same pool of capital. […]