Edward Lazear
Edward P. Lazear is the Morris Arnold Cox Senior Fellow at the Hoover Institution and the Jack Steele Parker Professor of Human Resources Management and Economics at the Stanford Graduate School of Business. His areas of expertise include labor economics, industrial relations, and microeconomics. From 2006 to 2009, he served as chairman of the President's Council of Economic Advisers. Previously, he served on President Bush’s Advisory Panel on Federal Tax Reform. He is a fellow of the American Academy of Arts and Sciences, the Econometric Society, and the Society of Labor Economists.
Worst Economic Recovery Ever?
Lazear on Jobs Data
(photo credit: Kate Ure)
Lazear on CNBC
Lazear co-hosts Squawk Box
The Jobs Picture Is Still Far From Rosy
The typical American judges the state of the economy by the quality of the labor market. If jobs are scarce and wages are flat or falling, decent increases in the gross domestic product or the stock market are almost irrelevant. Aware of this point, President Obama convened yet another White House meeting on jobs earlier this week. After all, his own job is on the line.
To be sure, the administration has some good news to report. The most recent Bureau of Labor Statistics news release on the employment situation reported an unemployment rate of 8.5%, down from the previous month and considerably below the peak rate of 10.1% in October 2009. Jobs grew by 200,000 between November and December, which is enough to reduce the unemployment rate, albeit slowly.
Initial unemployment claims fell to 352,000 last week. New claims have been in the high 300,000s-range—not good, but way down from a peak of 618,000, the average during the second quarter of 2009.
Lazear on Jobs Day
Lazear on employment picture
CNBC interview of Ed Lazear
Ed Lazear discusses Fed policy and current events in Europe.
The Euro Crisis: Doubting the ‘Domino’ Effect
It seems everyone is worried that problems in Europe will derail our fragile recovery. For this reason, markets breathed a sigh of relief when the Europeans came up with a plan to provide yet another reprieve to Greece. The main worry, now somewhat eased, was that a Greek default would spread to countries like Italy, Spain and Portugal.
Although there are legitimate concerns about contagion, the fundamental problem facing Europe is one of governments becoming too big to be supported by the economy. Unless Europe solves its fundamental problems with meaningful structural reform, a temporary debt restructuring, no matter how clever, will fail to right the ship. Closer to home, the same issues that threaten Europe may soon become immediate concerns to Americans.
Lazear on Europe and Senate Jobs Bill
CNBC interview
Ed Lazear is interviewed on the economy on CNBC’s Squawk Box:
Lazear on the economy
(photo credit: Emre Ayaroglu)
How Big Government Hurts the Average Joe
During the debt-ceiling debate, President Obama characterized his push for higher taxes and less aggressive budget cuts as being helpful to the middle class. The claim was that failing to raise taxes on high-income earners would place a disproportionate share of the pain on the rest. But it is our record-high government spending, not the failure to raise taxes on the rich, that is the typical American’s largest long-term problem.
Workers do well only when the economy grows at a healthy and consistent pace. The biggest threat to long-term economic growth is government growth of the magnitude that characterized the past two years and that is forecast for our future.
Our current problems are not a result of acts of nature. They stem from policy choices that dramatically increased the size of the government. In the past two years, the federal budget has grown by a whopping 16%. Importantly, growth in agency budgets other than Defense exceeded that in Defense, despite the surge in Afghanistan. The budget for Health and Human Services, for example, home to Medicare and Medicaid, rose a hefty 22%, as compared with 12% for Defense.
Continue reading Ed Lazear’s Wall Street Journal op-ed…
(photo credit: neauthor77)
Why Can’t the Economy Create Jobs?
CNBC’s Larry Kudlow interviews Ed Lazear and Laura Tyson on the employment report for June.
Lazear on Kudlow
The Other Jobs Indicator
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Lazear on Fox Business
Jenna Lee interviews Ed Lazear on job growth and the JOLTS data on Fox News.
Why the Job Market Feels So Dismal
Why don’t American workers feel that the labor market is on the mend? After all, the May 6 jobs report could suggest that the labor market is improving. Nonfarm employment rose by 244,000 and employment growth over the last three months is averaging over 200,000 per month. With unemployment at 9%, employment is still down many millions from where it should be, but up from its recession lows.
The fact is the jobs numbers that create so much anticipation from the business press and so many pundit pronouncements do not give a clear picture of the labor market’s health. A better understanding requires an examination of hires and separations, or what the Bureau of Labor Statistics calls Job Openings and Labor Turnover Survey (JOLTS) data. Here are some surprising facts:
First, the increase in job growth that occurred over the past two years results from a decline in the number of layoffs, not from increased hiring. In February 2009, a month during which the labor market lost more than 700,000 jobs, employers hired four million workers. In March 2011, employers hired four million workers. The number of hires is the same today as it was when we were shedding jobs at record rates.
Lazear hosts CNBC’s Squawk Box
Ed Lazear guest hosted CNBC’s Squawk Box yesterday.
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Part 2:
Testimony to the Ways and Means Committee on the Effects of Spending and Deficits on Job Growth
Chairman Camp, Ranking Member Levin and members of the committee: Thank you for giving me the opportunity to speak to you today.
In my five minutes, I would like to cover three issues. First, as is becoming well-accepted, the current spending pattern is unsustainable. Second, the problem was created by policy and can be remedied by changing policy. But raising taxes in an attempt to meet spending is not the right solution to the problem. Third, if the spending picture is not altered, economic growth will suffer, and with it, employment, wages, and the standard of living of the typical American.
It is becoming common knowledge that the US budget deficit is a threat to our long run economic survival. Most concerns are over the effect of the budget deficit on growing debt and the consequence of that debt on the ability of the US to borrow. As our debt gets large relative to GDP, we will eventually have to service this debt out of tax revenues and offsets in other spending, both of which will place significant burdens on the fiscal situation. More important will be the effect on the private economy as high levels of government borrowing raise interest rates and stifle business investment. A well-known study by Reinhart and Rogoff suggest that as debt-to-gdp ratios get above 90%, growth rates fall significantly. By one estimate, economic growth would be about 1½% at a 90% debt-to-gdp ratio, and about 3½% at levels of debt-to-gdp below 30%. Given the President’s budget and forecast deficit if enacted, our debt-to-gdp ratio will be over 70% by this time next year.
Continue reading Edward Lazear’s testimony…
(photo credit: M.V. Jantzen)
