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Renewing America

Ideas and initiatives for rebuilding American economic strength.

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Letting China’s Bubble Burst

by Michael Spence
investor board stock Beijing China An investor watches an electronic board showing stock information at a brokerage office in Beijing, China, July 7, 2015 (Kim Kyung-Hoon/Reuters).

The problems with China’s economic-growth pattern have become well known in recent years, with the Chinese stock-market’s recent free-fall bringing them into sharper focus. But discussions of the Chinese economy’s imbalances and vulnerabilities tend to neglect some of the more positive elements of its structural evolution, particularly the government’s track record of prompt corrective intervention, and the substantial state balance sheet that can be deployed, if necessary. Read more »

Three Misconceptions About Inequality

by Renewing America Staff
worker clean Brooklyn Bridge Park New York A worker tries to clean the path at the Brooklyn Bridge Park in New York February 22, 2015 (Eduardo Munoz/Courtesy Reuters).

Explanations of why inequality is growing in the United States too often rest on three misconceptions: that capital is rising as a share of the economy, that most of the rise in wage inequality is explained by growing gaps within companies between higher and lower paid workers, and that workers are increasingly moving from one job to another. In a new column for Bloomberg View, CFR Adjunct Senior Fellow Peter Orszag discusses another explanation, which could help policymakers better understand and respond to this growing problem.

What Would Happen if DHS Really Shuts Down?

by Edward Alden
border agents vehicle crossing Sweetgrass Montana U.S. border agents check a vehicle entering the United States at the American border crossing at Sweetgrass, Montana (Todd Korol/Courtesy Reuters).

Among the long list of reasons that the U.S. Congress has become a dysfunctional body, the biggest one may be this: its members are never truly held responsible for the consequences of their actions. They can gin up one “fiscal showdown” after another because they know that, even if all or parts of the government shut down temporarily, the real world costs are fairly minor. The only genuine victims in the short run are the government employees themselves–who are either furloughed without paychecks or, if deemed “essential,” forced to work for nothing but an IOU. For some, that could mean genuine hardship; for all, it is another slap in the face that further saps the morale of our civil service and drives good people away from government. Read more »

Five Reasons for Slow Growth

by Michael Spence
storm clouds Capitol dome Washington Storm clouds approach the U.S. Capitol dome in Washington (Gary Cameron /Courtesy Reuters).

A remarkable pattern has emerged since the 2008 global financial crisis: Governments, central banks, and international financial institutions have consistently had to revise their growth forecasts downward. With very few exceptions, this has been true of projections for the global economy and individual countries alike. Read more »

2014 by the Numbers: A Pretty Good Year

by Edward Alden
Falls Church Virginia December 2014 gas prices A taxi passes a gas station in Falls Church, Virginia December 16, 2014. For the first time in more than a decade, U.S. gasoline prices are tumbling toward $2 a gallon even as the economy grows and unemployment shrinks (Kevin Lamarque/Courtesy Reuters).

The Washington Post’s Outlook section last week declared that President Obama had the “worst year in Washington,” dissecting the trifecta of election defeat, foreign policy missteps and falling popularity. But if judged by the standards that actually affect the lives the most Americans – the state of the economy and the state of their pocketbooks – 2014 was perhaps the best year of Obama’s presidency. It wasn’t all good by any means, and some of the biggest problems saw little improvement, such as the number of part-time workers who would prefer full-time work and those who have given up entirely. But many of the indicators are finally pointing strongly in the right direction. Read more »

Don’t Get Too Excited About the Budget Deal

by Renewing America Staff
moon Capitol dome The moon is seen rising behind the dome of the U.S. Capitol building (Jim Bourg/Courtesy Reuters).

If Congress can pass the spending bill it has negotiated, it will succeed in avoiding another costly and embarrassing shutdown. However, as CFR Adjunct Fellow Peter Orszag explains in a new column for Bloomberg View, that doesn’t mean it’s good policy. The “CRomnibus,” as it is colloquially referred to, continues to cut discretionary spending to the bone, but Congress makes no effort to evaluate where cuts can be made without doing further damage to the economy.

Obama’s Immigration Action Shows the Limits of Executive Power

by Edward Alden
rally immigration reform Capitol Hill Washington Latinos rally in favor of comprehensive immigration reform on Capitol Hill in Washington (Larry Downing/Courtesy Reuters).

President Obama’s executive action on immigration, which will temporarily legalize as many as 5 million unauthorized immigrants in the United States, is being criticized by opponents as an unprecedented abuse of presidential authority. But as the details are coming out, what the action shows instead is how sharply limited the president’s powers actually are. What has been true for many years remains true today: the real problems with U.S. immigration laws simply cannot be solved without congressional action. Read more »

A New Do-Nothing Congress

by Renewing America Staff
Obama Boehner U.S. President Barack Obama sits with Speaker of the House John Boehner during a memorial service for former Speaker Tom Foley (Kevin Lamarque/Courtesy Reuters).

If Republicans take the Senate, will it lead to productive compromise or just more obstruction? In a new column for Bloomberg View, CFR Adjunct Senior Fellow Peter Orszag discusses the range of scenarios that Republican control of the Senate could produce in areas like healthcare, trade, and the federal budget.

Growth in the New Climate Economy

by Michael Spence
wind turbines Palm Springs California Wind turbines are seen in Palm Springs, California (Eric Thayer/Courtesy Reuters).

Action to reduce carbon-dioxide emissions and mitigate climate change has long been viewed as fundamentally opposed to economic growth. Indeed, the fragility of the global economic recovery is often cited as a justification to delay such action. But a recent report, “The New Climate Economy: Better Growth, Better Climate” released by the Global Commission on the Economy and Climate, refutes this reasoning. Far from being a detriment to economic growth, the report concludes that efforts to combat climate change could boost growth considerably–and relatively soon. Read more »

Inequality Starts With Your Employer

by Renewing America Staff
Revision3 worker cubicle Bonnie Burton, director of social media strategy for Revision3, works at her cubicle in San Francisco, California (Noah Berger/Courtesy Reuters).

Discussions of inequality often focus on the pay gap between executives and lower-level employees. However, in a new column for Bloomberg View, CFR Adjunct Senior Fellow Peter Orszag highlights new research showing that variation in salaries across different companies is actually the largest driver of inequality. This finding may help explain the decline in job-related mobility among Americans. Once a worker finds a high-paying company, they are less likely to leave. This limits opportunities for workers in lower-paying companies to make a move into a higher-paying one, and therefore decreases the incentives to move across state lines to find a new job.