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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

The market for existing homes continues in the doldrums, as young couples continue to opt for renting and older couples can’t unload homes to retire or relocate to find employment.

The National Association of Realtors reported Wednesday that sales in January were 4.57 million, below the 4.69 million expected by forecasters. This confirmed concerns that large numbers of buyers were getting cold feet and canceling contracts. Reports of stronger buyer activity and pending sales must be taken with a sack full of salt.

Prices are falling–the average sales price was $154,700, down from $162,200 in December, raising new concerns that the job market might not be recovering as much as thought. A strong job market is necessary to give young couples confidence that they can take the plunge into home ownership, and not get caught in a fire-sale situation by losing a job or a forced relocation. Continue reading…

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Rick Santorum’s assertion that President Barack Obama’s agenda is not about the quality of life or jobs but “some phony ideal. Some phony theology” may not be an appropriate characterization of his religious views. However, it is an accurate description of what is wrong with the hard left in American politics, and the thinking that drives domestic policy in the Obama administration.

Too often liberal policies are based more on faith than reason–often those are premised on assertions having little foundation in facts or modern economics. Consequently, the president advocates or imposes solutions that make the nation’s problems worse, and when confronted with disappointing results he often tells us what he believes, without offering the data and logic that brought him to those conclusions.

Regarding the financial crisis, the president assigns blame to the lack of regulation. The facts are banks got into trouble making loans on real estate assigned inflated values to borrowers who could not repay. Loans were bundled into bonds and sold to investors. When not enough unwitting fools bought bonds, the big Wall Street banks put unsold securities into offshore special investment vehicles (SIVs), whose potential losses were not supposed to be a claim on bank capital. Other firms, like American International Group Inc., sold insurance to against potential losses on bonds without sufficient assets to back up that protection. Continue reading…

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

President Barack Obama’s fiscal 2013 budget projects a fiscal 2012 deficit (that’s the fiscal year ending in September) at $1.3 trillion–up from less than $1.0 trillion a month ago. However, like all presidents with lots of red ink he is promising to dramatically reduce the deficit by the time his successor takes office.

The budget projects a $612 billion deficit in FY2017–if Congress follows the president’s prescriptions to raise taxes on the wealthy and if we buy the president’s growth assumptions.

The budget assumes Mr. Obama will have a second term that astounds economists–his budget assumes 3.9% growth from 2014 to 2017. That is well beyond what most private economists would concede is likely.

If you believe that one, New York Mayor Michael Bloomberg is selling shares in the Brooklyn Bridge.

The author can be reached at pmorici@rhsmith.umd.edu and followed on Twitter at @pmorici1.

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Democrats rejoiced that unemployment fell to 8.3% and 247,000 new jobs were added in January, confirming to them President Barack Obama will take them to victory in November.

Whoa! Prospects for more improvement are not great, and President Obama was smart to greet the jobs report with caution. He inherited a mess. Unemployment jumped from 6.8% to 10% from his election to October 2009. Since, most of the progress has been statistical, not real.

Jobs creation has barely kept up with population growth–the same percentage of adults is employed today as when unemployment peaked. Three-quarters of the reduction in joblessness is attributable to fewer adults employed or seeking work. The most effective Obama jobs program has been to convince more Americans they don’t want a job–without that, the unemployment rate would still be at least 9.5%.

Many of the jobs created in recent months don’t pay well, and too many well-educated Americans are relegated to low-skilled and part-time work for lack of opportunities. Gains are concentrated in areas such as restaurants, health care and education, and business services categories–lots of waiters, and more nurse’s aides than nurses, record keepers than teachers, and clerical workers than architects and lawyers. Continue reading…

  These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

In his State of the Union Address, President Barack Obama hammered on two resounding themes–fairness and the economy.

Both hollow from a president who has failed on the job. He has not kept his promise to get the economy going again, and inequities in income and opportunities have hardened during his tenure. Scratch the surface of his largely reworked proposals, and too much political opportunism and hypocrisy emerges.

Once again, he promised to tax the wealthy and lambasted oil companies, and offered the vision of an economy where every American has a decent shot at success through education and hard work. Yet, too many of his tax proposals are intended to punish his opponents and protect his friends, and his education proposals simply won’t help the unemployed if the economy is creating too few new jobs each month.

The big fairness problem with taxes is that wage and salary incomes are taxed at much higher effective rates than capital gains and carried interest in partnerships–the latter include the income managing partners and employees receive for running private equity firms and hedge funds.

Mr. Obama’s minimum tax for millionaires would punish mom and pop businesses that create so many of the new jobs, as well as raise taxes on capital gains and carried interest. For the former reason, such a tax simply won’t pass the Republican House. Doing more to tax investment income would upset lots of Democrats and Wall Street financiers, and consequently, the president won’t do much to surgically fix that problem. Continue reading…

  These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Mitt Romney lost South Carolina by failing to convince voters he has the character and platform to turn the country around.

South Carolinians, burdened by shuttered factories, high unemployment and vanished dreams, keenly see problems. Large corporations, sitting on $2 trillion in ready cash, invest too little in American jobs, and instead move production and research and development to Asia as quickly as they can.

President Barack Obama has further tilted the playing field in favor of Asian venues by tolerating higher tariffs, more discrimination in government procurement and increased manipulation of currency values by China and others. He has raised the cost of doing business in the U.S. by shutting down oil production, raising health-care costs and tolerating the monopolization of commercial banking by Wall Street.

Mr. Romney promises to aggressively develop domestic oil and stand up to China, but will encounter fierce opposition from Democrats in Congress on energy issues, and from them and House Speaker John Boehner (R., Ohio) on China. In addition, Wall Street bankers are among Mr. Romney’s largest campaign contributors, and they don’t want China confronted. Continue reading…

Mitt Romney’s rigid position on illegal immigration and embrace of Kris Kobach, former law professor and architect of a law to rid Arizona of illegal aliens, may well cost him the fall election even if helps him win the Republican nomination.

The U.S. has an unwritten but plain immigration policy.

The U.S. Border Patrol imposes significant risks on people trying to enter the country illegally but once inside, illegal immigrants usually can find work and remain here. They manage to obtain false documents or work off the books, and are significant shares of the work force in agriculture, construction and many service activities. Continue reading…

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Iowa doesn’t pick presidents, it simply winnows the field. It’s too prosperous to provide an adequate test of which Republican candidates can prevail in more economically challenged primary states and the general election.

With New Hampshire also prosperous and fairly safe for Mitt Romney, the South Carolina and Florida primaries on Jan. 21 and 31 offer him the opportunities to prove he has what it takes to solve the country’s problems and score convincing victories.

In both those states, unemployment is 10%, as opposed to less than 6% in Iowa and New Hampshire. Romney must do more than chant the Republican catechism–less tax, less government and less regulation–because all the candidates are doing the same in one fashion or another. He must explain to voters what’s broken–how President Barack Obama’s policies are holding back growth and jobs creation–and outline how he will fix those things.

Moreover, after George W. Bush bequeathed to Obama the economy in dire straits, in the general election, the Republican nominee cannot simply fall back on the catechism without becoming too vulnerable to Obama’s claim that all the Republicans care about is enriching the rich and returning failed policies of the past.

In Iowa, the economy was not enough the focus of discussion. Caucus goers divided between 25% who picked Romney because he is perceived to be “most electable,” and 75% who splintered among a flock of other candidates who fashioned themselves “true conservatives.” Each offered their own flavor of conservatism, and Rick Santorum–the least vetted and vulnerable–essentially tied Romney. Continue reading…

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

The economy is expected to register 3% growth or better for the fourth quarter, thanks to stronger consumer spending; however, the growth in consumption has been outpacing income, debt is piling up again, and some pullback in consumer activity is likely in the first half of 2012.

Unlike the boom years of the last decade, households will not be able to refinance credit card debt and auto loans by further mortgaging homes, and consumers simply must slow down during the first half of 2012.

The economy will register growth at or below 2% in the first half of 2012, perhaps picking up in the second half of the year to 2.2% to 2.5%. Continue reading…

These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:

Americans should be thankful that the values that define America–personal liberty and individual pursuit of happiness–are increasingly embraced around the globe.

The Arab Spring and upheavals in Russia are affirmations that even more of humanity finds hope in democracy. The remarkable economic progress of Brazil, China and others are tangible proof of the power of individual enterprise and ambition.

For much of the last century, America has used its wealth to promote those values and build international institutions supporting them, and we are succeeding. That is American exceptionalism. Now we must ask is America exceptional enough to prosper in a world it did so much to create?

The Great Recession and halting recovery teach that America’s special place in the world cannot be taken for granted. To enjoy extraordinary prosperity–and the freedom of purpose it enables–America must be more than home to visionary innovators like Steve Jobs. Americans must build an exceptionally competitive society, anew. Continue reading…