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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 Bush tax cuts were a huge success, and failing to extend them for all Americans–not just families earning less than $250,000, as President Barack Obama proposes–would be a terrible mistake.

Contrary to current White House propaganda, President George W. Bush achieved a lot of growth prior to the financial crisis, and lower taxes for all helped. The Bush prosperity was the byproduct of several multidecade policy trends that freed markets and empowered individuals to innovate and create wealth.

Freer trade championed by presidents since John F. Kennedy, and deregulation (begun by Jimmy Carter with the airlines) were critical to this trend. Also key was reducing excessively high tax rates on upper-income Americans, initiated by Ronald Reagan, somewhat interrupted by Bill Clinton, and reinstated by Bush.

Economists recognize highly productive people, if taxed punitively, create less wealth in the U.S. through arcane tax planning or simply move investments offshore. Higher taxes for high-income families would raise rates on fully half of the income earned by proprietorships and leave those small and medium-sized business with less to invest in creating new jobs.

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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:

Economists expect a strong jobs report for May, but the unemployment rate is expected to ease only slightly.

Friday, the Labor Department will release May employment data, and forecasters expect something north of 500,000 new jobs; however, many are in the public sector reflecting stimulus spending. Manufacturing is expected to add a respectable 30,000 new positions.

Unemployment is expected to only fall to 9.8% from 9.9% in April, because many sidelined adults, sensing improved conditions, started looking for work.

The big challenge is to keep gross domestic product growing at least 3% to pull down unemployment.

Much recent growth has been inventory adjustments, and sustainable growth, reflected in real consumer and business investment demand, has been only about 2%. As stimulus spending tails off, new sources of demand will be needed.

If the economy keeps growing at 3% the balance of 2010, demand for new capacity–improved rental housing, better located new homes, and commercial construction for retail and factory improvements–should accelerate in 2011. Auto sales, currently a bit above 11 million a year, should move up to 12 million plus with noticeable multiplier effects in the Midwest and Upland South.

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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 Labor Department reported the economy added 290,000 jobs in April but the unemployment rate increased to 9.9%, versus 9.7% the previous three months.

Federal government employment increased 65,000, boosted by temporary Census hiring, but the private sector added 231,000. Even the long-beleaguered manufacturing sector added 44,000.

Unemployment rose as many discouraged workers returned to the labor force and unemployment benefits ran out for some workers, pushing families harder into the jobs market.

The Great Recession destroyed more than 8.4 million jobs. To bring down the unemployment rate, the economy must add about 150,000 jobs a month to accommodate adult population growth, reentry of discouraged workers, part-time employees who would prefer full-time work, and marginally-occupied self-employed workers. Including these three groups, unemployment is closer to 20% than the 9.9% headline figure.

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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:

Friday, the Labor Department will release April employment data, and economists are optimistic the economy will show stronger jobs creation.

The consensus forecast, based on surveys of economists taken at the end of last week, is for a 180,000 jobs gain in April, after adding 162,000 jobs in March. The unemployment rate is expected to remain at 9.7 percent. My forecasts for April likewise are 180,000 jobs added and 9.7 percent unemployment.

The Great Recession destroyed 8.4 million jobs. To bring down the unemployment rate, the economy must add about 150,000 jobs a month to accommodate adult population growth, reentry of discouraged workers, part-time employees who would prefer full-time work, and marginally-occupied self-employed workers. Including these three groups, unemployment is closer to 20% than the 9.7% headline figure. 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:

Tuesday, the Commerce Department will report the February deficit on international trade in goods and services. Analysts expect it to increase to $39.0 billion from $37.3 billion in January. My forecast is in line with the consensus.

The trade deficit, along with the credit and housing bubbles, were the principal causes of the Great Recession. Now, a rising trade deficit and continued weakness among regional banks threatens to stifle the emerging recovery and keep unemployment near 10% through 2011.

At 3.1% of gross domestic product, the trade deficit subtracts more from the demand for U.S.-made goods and services than President Barack Obama’s stimulus package adds. Moreover, Obama’s stimulus is temporary, whereas the trade deficit is permanent and growing again.

Subsidized manufactures from China and petroleum account for nearly the entire deficit, and both will rise as consumer spending and oil prices rise through 2010.

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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:

Friday, the Labor Department will release March employment data, and economists have been optimistic the economy is finally gaining jobs and the recession has ended.

The consensus forecast, based on surveys of economists taken at the end of last week, is for a 200,000 jobs gain in March. The economy shed 36,000 jobs in February. The unemployment rate is expected to remain steady at 9.7%.

The ADP estimate for private sector jobs creation, released Wednesday, indicated a 23,000 loss, but that estimate does not include government workers and does not always track more comprehensive Labor Department estimates of private employment. 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:

Since the Democrats’ debacle in Massachusetts, President Barack Obama has been campaigning.

In the State of the Union address, his new budget and other staged events for the faithful gather for hope, the president has the audacity to double down on class warfare and crowd-frenzying envy, and tout as success an economic recovery about as thin as the Chicago Cubs’ World Series record book.

The economy is growing again but the president instead of divining new tax-the-rich and spend policies should recognize the economic recovery simply won’t create enough jobs to drive down unemployment, because his administration has not addressed the trade deficit. 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 Obama’s budget and deficit projections don’t reveal the sick state of U.S. finances, casting serious doubt on the safety of U.S. bonds.

Obama plans significant initiatives in health care, the environment, education, and jobs creation. Yet, the private sector, which must be taxed to finance government, is likely to grow slowly, resulting in too much federal borrowing.

To create jobs, businesses need customers and capital; without those they can’t sell what new employees make or buy equipment workers need.

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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:

In politics, whatever the president can get voters to believe becomes the truth, but in economics the numbers establish the facts.

Unfortunately for President Barack Obama, Americans can add, and their sums are destroying fantasies the president would hoist upon a more gullible public.

Despite claims that the $787 billion stimulus package and bank bailout averted calamity, the U.S. economy is in shambles.

The Commerce Department reported gross domestic product grew 5.7% in the fourth quarter, but 60% of that was an accounting adjustment. Businesses ran down inventories at a slower pace, but in the arcane world of GDP accounting, that scores an increase in investment and growth.

Domestic consumption and real investment, which define the sustainable pace of economic expansion, contributed a paltry 1.8% to growth. That’s less than half of productivity growth, indicating more pink slips are coming.

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By Neal Lipschutz

A DOW JONES NEWSWIRES COLUMN

At least for the day, the most powerful man in the U.S. financial industry and for equities markets is 82 years old, a man who ended his leadership of the Federal Reserve more than 20 years ago.

But Paul Volcker is back. Big time. Reportedly on the margins of the Obama administration even in his current role as an adviser, “the tall guy behind me,” in the words today of President Barack Obama, is back on stage figuratively and literally.

As the president announced two major initiatives that would radically change the world of America’s big banks, he was flanked by Treasury Secretary Timothy Geithner and adviser Larry Summers. He also had with him two key Congressional leaders, Rep. Barney Frank (D., Mass.) and Sen. Christopher Dodd (D., Conn.).

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