Every year, the Texas Comptroller of Public Accounts prepares a document detailing the financial status of the State of Texas. The 2022 report (for the fiscal year ended August 31) was recently released. It paints an interesting picture that is well worth exploring.
World population recently reached the eight billion milestone according to estimates from the United Nations. That's up from about 2.5 billion people in 1950, with a gain of a billion since 2010. However, population growth rates are falling, and the total will likely peak at around 10.4 billion in the 2080s.
Gazing out over the next few decades, I see at least three major challenges confronting the US economy. First, we have to overcome the consequences of the lingering effects of the pandemic, including getting inflation under control, dealing with the inevitable fallout that effort will involve, and working through ongoing supply chain disruptions. Second, we must confront the chronic worker shortages. Third, we need to fashion a realistic energy policy which both meets climate goals and provides for future essential resources (more on that another time).
The rate on 30-year mortgages has topped 7% for the first time in more than 20 years. The sharp rise from about 3% just a year ago is causing fallout for homebuyers and the housing market. While the current situation is going to be costly from several perspectives, a market crash akin to the Great Recession of 2008 is NOT in our future. Let’s briefly explore.
Recently released test scores show that Texas public schools fared better than many through the pandemic, though ground was clearly lost. In a recent column, I examined scores from the National Center for Education Statistics which indicate the declines in averages at a national level; now, we have the state level data.
In the aftermath of World War I, Congress enacted The Merchant Marine Act of 1920 (commonly known as the Jones Act after its foremost proponent, Senator Wesley R. Jones from Washington). Essentially, the law requires that any cargo shipped between US ports must be shipped on vessels that are US built, owned, and crewed. It was designed to support the US maritime industry, but it's a protectionist measure leading to a variety of concerns. It has long outlived its usefulness (to the extent it ever had any).
For the second consecutive year, the Nobel Memorial Prize in Economics has been awarded to three Americans. For 2022, the recipients are Ben S. Bernanke (former Federal Reserve Chairman now with The Brookings Institution), Douglas W. Diamond (University of Chicago), and Philip H. Dybvig (Washington University in St. Louis) "for research on banks and financial crises."
Recent data is showing some encouraging signs for manufacturing employment. The United States has recovered all production jobs lost during the pandemic and then some, and there is ample reason for this upward trend to persist.
The Federal Reserve recently announced another increase in the target interest rate for federal funds to 3-3.25%. The point is to slow the economy in order to reduce inflation. It's a balancing act of the Fed's twin mandates – maximizing employment and keeping inflation at bay.
Among the most widely discussed economic phenomena in our post-pandemic world is the so-called "Great Resignation," a phrase used to describe what seems on the surface to be unusually high numbers of people leaving their jobs after the arrival of COVID-19.