By Wendy Simmons

 

The Supreme Court surprised many Americans Thursday by upholding President Obama’s signature piece of domestic legislation, the Affordable Care Act, a.k.a. "Obamacare." While the political fallout will be felt for the next five months, at least four things are immediately clear:

1) The Tea Party rises again
During the primaries, there was much GOP hand-wringing over whether Mitt Romney was acceptably conservative to the base. Primary voters that strongly identified with the Tea Party were particularly unhappy with Romney’s candidacy.

 

By Yuval Rosenberg

It's been nearly four years since the Troubled Asset Relief Program (TARP) was signed into law by President George W. Bush, and the U.S. banking sector has clearly rebounded. The Federal Deposit Insurance Corporation said earlier this year that banks posted $35.3 billion in profits in the first quarter of 2012, the best three-month period since the second quarter of 2007, before the financial crisis hit. The amount of troubled assets, including bad loans and foreclosed property, has continued to decline, according to an Investigative Reporting Workshop analysis of first-quarter FDIC data.

 

By Mark Thoma

The upcoming presidential election gives voters a choice between two very different philosophies of government. For Democrats, an activist government is necessary to keep markets functioning, and to smooth economic fluctuations. Without government oversight, markets would be captured by monopoly power, consumers would be at the mercy of unscrupulous producers, there would be distortions from adverse selection, information asymmetries, moral hazard problems, and so on. In addition, if government does not take action when a recession hits, the downturn will be much worse and much longer than necessary.

For Republicans, however, activism is exactly the wrong approach to take. They believe that the key to making markets work and smoothing economic fluctuations is for the government to get out of the way and let the private sector work its magic. In general, markets react faster, incorporate more information, and regulate commercial behavior better than humans will ever be able to do. 

By Howard R. Gold, MoneyShow.com

 

It's been the prevailing economic philosophy of the Republican Party since Ronald Reagan was elected president in 1980. Supply-side economics held that reducing marginal tax rates would spur economic growth, create jobs, and even generate tax revenue for the government.

 

And it makes sense in theory: If people keep more of what they make, they would logically work harder, spend more, and hire more people, right?

 

By Dan Burrows

If nothing else, the term "central banker" is more than apt. Taking flak from both the left and the right, the global chiefs of monetary policy are stuck in the middle and singled out for scorn for both doing too much and doing too little.

True, the criticism comes with the job, and in many cases is more than warranted. But monetary policy can only do so much. Both at home and abroad, real solutions to the world's economic woes won't come out of the Federal Reserve or the European Central Bank. They'll come from the fiscal policymakers -- the politicians -- and that's why yields on Treasurys and German bunds and Japanese sovereign debt are sounding once unfathomable lows.

 

By David J. Lynch

 

The U.S. economy's anemic rebound from the worst recession in six decades is pummeling workers while leaving bosses almost unscathed, and neither President Barack Obama nor Republican challenger Mitt Romney is captivating these disaffected voters five months before the national election.

 

Between 2007 and 2010, working-class people -- those in nonprofessional occupations who lack college degrees -- saw their median earnings fall 4.6 percent, according to a study of U.S. census data prepared for Bloomberg News by Sentier Research of Annapolis, Md. Over the same period, earnings for college-educated professionals or managers rose 1.9 percent.

 

By Anders Aslund

 

Not so long ago, Sweden could claim world leadership in unmitigated Keynesian economics, with a 90 percent marginal tax rate and a welfare state second to none.

 

Now Swedes look at the conflict between the U.S. and German examples over whether more spending or more austerity is the key to financial salvation, and for them the choice is easy: Germany was right. Northern Europe harbors no sympathy for the spendthrifts of Southern Europe.

 

"The U.S. labor market is becoming more sclerotic."

 

That's the take of Harvard University Professor Lawrence Katz, a former chief economist at the U.S. Labor Department, who sees a major "hollowing out" of the middle of the job market.

 

Americans are becoming less and less inclined to take a risk in the job market, to move to another house to accept a new job, or to start their own businesses.