October 30, 2003

A ‘gangbuster’ economic number

U.S. gross domestic product – the value of everything we make and do – spiked to a 7.2 percent annual growth rate in the third quarter, more than double the rate during the second quarter. Underlying this big number were a 6.6 percent increase in consumer spending and a 15.4 percent jump in business spending on equipment and software. “This is a gangbuster number. Everything came together for the economy in the third quarter,” said Mark Zandi, chief economist at Economy.com. “The key challenge now is jobs.” New claims for unemployment benefits have drifted slightly lower in recent weeks, but there has been no surge in hiring yet. Blogger Brad DeLong, an economist, has a post on the dichotomy between fast economic growth and stagnant employment that concludes that next year, “Things are very likely to be either significantly better or significantly worse than the current consensus forecast--but we have no idea which." On their face, these numbers are very good news for the Bush administration. The economy, as always, remains the main preoccupation of most Americans and if the economy sustains its growth – and begins generating jobs at a respectable rate – the president’s re-election prospects will be greatly enhanced.

Posted by tbrown at 01:14 PM

An economic ‘coup’ in Russia

It looks like the bad old days are making a comeback in Russia. The government last Saturday arrested Russia’s richest man, Mikhail Khodorkovsky, on charges of tax evasion, fraud and forgery. Yesterday, the prosecutor’s office seized 44 percent of the shares of the company Khodorkovsky chairs, YukosSibneft, which is the world’s fourth-largest oil producer. These shares belong to stockholders, not Khodorkovsky, so the actions have produced a furor not only in Russia but elsewhere. As with many things in the former Soviet Union, this situation is complex. Here are a couple of pieces that explore the background and implications: -- The Moscow Times -- The New York Times (free registration required) It's been more than a decade since the Soviet Union collapsed, and the Russians still don't have their economic house in anything like good order. There is no reason to believe that Iraq's transition to something resembling a market economy and an at least semi-representative government will be any quicker or easier.

Posted by tbrown at 01:12 PM

Israel’s top soldier speaks out

First, a couple of dozen Israeli pilots refused to participate in raids on terrorist targets in civilian areas of the West Bank and Gaza because of the danger -- amply demonstrated in recent months -- of collateral deaths and injuries. Now, Israel’s top soldier, Lt. Gen. Moshe Yaalon, the military chief of staff, says tactical raids against terrorists are working against Israel’s strategic interests. Prime Minister Ariel Sharon reportedly was infuriated and demanded Yaalon’s resignation, but later backed off.

Posted by tbrown at 01:06 PM

Iraq, good and bad

Sgt. Stryker’s good news-bad news blog on Iraq has a couple of dozen posts now and is beginning to shape up as pretty decent one-stop shopping for headlines.

Posted by tbrown at 01:04 PM