Baum's View on Money: Washington's To-Do List
Good morning, everyone. Here's a selection of articles I'm reading to start what's shaping up to be a busy week in Washington.
Congress returns, no time to waste.
Congress' to-do list for the fall is overwhelming, starting with the vote to authorize military action in Syria, a short-term funding bill to keep the government running, a needed increase in the debt ceiling and hearings to confirm the next Federal Reserve chairman, once President Barack Obama gets around to making his announcement. Remember those high-priority issues, such as immigration reform? It was sent to the back of the line.
Going to bat for Janet Yellen.
"Brilliance is not the only determinant of performance," writes economist Joseph Stiglitz in the New York Times, in a rousing endorsement for Janet Yellen as the next Fed chairman. "Values, judgment and personality matter, too." Larry Summers may be exceptionally qualified to handle financial crises, but what matters "is not just 'being there' during a crisis, but showing good judgment in its management" and a commitment to taking actions to reduce the likelihood of another crisis. In all those areas, Stiglitz finds Summers "flawed."
Down Memory Lane with the financial crisis.
It was five years ago this month that Lehman Brothers collapsed. The Wall Street Journal's David Wessel uses the anniversary as an opportunity to examine the lessons learned from the financial crisis. He takes a look at, among other things, the U.S. economy (still healing), housing (one is six mortgage holders still underwater) and too big to fail (still with us). Conclusion? It could have been worse without aggressive government action. On the other hand, the results have underperformed expectations.
Falling for the wrong reason.
The good news is the U.S. unemployment rate (7.3 percent in August) is coming down faster than the Fed expected. The bad news is it's falling for the wrong reason: a decline in labor-force participation. Bloomberg News' Rich Miller reports that a key issue for the Fed in its decision to taper asset purchases is whether the drop in the labor-force participation rate is structural or cyclical. The odds still favor taper "lite" -- maybe $10 or $15 billion -- at next week's policy meeting.
Today's graphic on health care premiums.
The Manhattan Institute's Avik Roy (a.k.a. "The Apothecary" at Forbes) crunches the numbers to see if the Affordable Care Act lives up to its name. Data for only 13 states and the District of Columbia are available so far, and the news isn't encouraging: an average increase of 24 percent.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)