Big Day on Capital Hill – Economy

Today the Joint Economic Committee of the US Senate held a hearing on the economy. There is a summary called Middle Class: “On the Edge” by Tami Luhby on money.cnn.com. There are many fascinating tidbits related to this and the writing is very straight forward and brief. Check the government website – http://www.house.gov/jec/index.htm

But the two economists that provided testimony did so in an commendable fashion.

Jared Bernstein of the Economic Policy Institute (EPI) provides a 21 page effort (several charts so it is an easy read). Here is an excerpt of his testimony titled How Much More Can Consumers Be Squeezed by Stagnant Income, Skyrocketing Household Costs, and Falling Home Prices?

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As members of this committee are well aware, many of America’s working families have far too little to show for an economic period characterized by impressive productivity growth. The 2000s may well be the first business cycle on record where real median family income is lower at the end of the cycle than it was at the beginning. Now, as the 2000s cycle appears to be over, weakness in key markets—housing, labor, financial—is taking a further toll on these already stressed families. Prices of key items, such as energy and food, are rising much more quickly than average inflation, and more to the point, much faster than their earnings. These weaknesses are also leading to the net loss of jobs, and payrolls are down by over 400,000 so far this year.

David Kreutzer of The Heritage Foundation is the other economist to provide testimony to the Joint Economic Committee. His writing is called The Impact of Higher Gasoline Prices on Household Costs and Income. It is a three page opinion on the economic situation caused by higher costs of gasoline. Here is my favorite excerpt:

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Higher gasoline
prices squeeze the production side of the economy from both the demand and
costs directions. Consumers’ demand for output drops as they divert
expenditures from other items to gasoline. In addition, gasoline is a factor of
production in the distribution of goods and services. Faced with higher costs,
producers raise their prices. But the lower demand prevents the prices from
rising enough to completely offset cost increases. This leads to production
cuts and, therefore, to lower employment. In turn, these conditions put
downward pressure on wages and salaries.

About benleeson
My name is Ben Leeson. I currently work for a large financial company in IT. I went to school at Marist College in Poughkeepsie, NY. I graduated with a B.S. in Business Administration concentrating in HR. Professor William Brown taught me and I enjoyed his classes; even acquiring an appreciation for just about all things HR. I didn’t pursue a job in that field after college but I’ve kept up with it. This blog will further my fascination with all things HR. I hope to grow my knowledge of the area through thoughtful writings and spirited feedback. I will attempt to have a fairly routine style so anyone reading can come to expect certain segments. Please excuse my incorrect grammar and occasional misspelling.

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