05-20-2018  10:45 am      •     
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NEWS BRIEFS

Raina Croff to Speak at Architectural Heritage Center

'When the Landmarks are Gone: Older African Americans, Place, and Change in N/NE Portland’ describes SHARP Walking Program ...

Portland Playhouse Presents August Wilson’s ‘Fences’ Through June 10

May 20 performance will include discussion on mental health; June 10 performance will be followed by discussion of fatherhood ...

Peggy Houston-Shivers Presents Benefit Concert for Allen Temple CME

Concert to take place May 20 at Maranatha Church ...

Family Friendly Talent Show, May 18

Family Fun Night series continues at Matt Dishman Community Center ...

US Marshals, police arrest Vermont fugitive in Oregon

MONTPELIER, Vt. (AP) — The U.S. Marshals Service says a missing sex offender from Vermont has been arrested in Oregon.The Marshals say 55-year-old James Rivers was arrested May 16 in Cottage Grove, Oregon, by deputy marshals and local police. It's unclear if he has an attorney.Authorities...

Oregon State study says it's OK to eat placenta after all

PORTLAND, Ore. (AP) — First experts said eggs are bad for you, then they say it's OK to eat them. Is red wine good for your heart or will it give you breast cancer?Should you eat your placenta?Conflicting research about diets is nothing new, but applying the question to whether new mothers...

State sees need to reduce elk damage in the Skagit Valley

MOUNT VERNON, Wash. (AP) — Elk are easy to spot against the green backdrop of the Skagit Valley, where much of the resident North Cascades elk herd that has grown to an estimated 1,600 is found.For farmers in the area — especially those who grow grass for their cattle or to sell to...

Famed mini sub's control room to become future exhibit

BREMERTON, Wash. (AP) — The U.S. Naval Undersea Museum at Keyport has a new addition to its archives — the salvaged control room of the legendary, one-of-a-kind Cold War-era miniature submersible NR-1.Adm. Hyman G. Rickover, the father of the nuclear Navy, conceived the idea for the...

OPINION

Golfing While Black Is Not a Crime

Grandview Golf Club asks five Black women to leave for golfing too slow ...

Discovering the Best of Black America in 2018

Dr. Benjamin F. Chavis discusses the DTU Journalism Fellowship & Scholarship Program ...

Will Israel’s Likud Party Ever Respect the Rights of Palestinians?

Bill Fletcher weighs in on the precarious future of the two-state solution between the Israeli government and the Palestinian people ...

The Future of Medicinal Marijuana in Pets

Dr. Jasmine Streeter says CBD-derived products show beneficial therapeutic benefits for pets ...

AFRICAN AMERICANS IN THE NEWS

2018 midterms: An early heat for 2020 Democrats?

ATLANTA (AP) — Look closely enough at the 2018 midterm campaign and you'll see the stirrings of a Democratic scramble to reclaim the White House from President Donald Trump.The leading players — from established national figures such as former Vice President Joe Biden, Bernie Sanders...

Northern states taking down vestiges of racism, intolerance

DETROIT (AP) — A nearly 80-year-old statue depicting a European settler with a weapon in his hand towering over a Native American that some say celebrates white supremacy has been dismantled by crews in southwestern Michigan's Kalamazoo.And at the University of Michigan, regents have voted...

Guess who's coming to Windsor? Royal ceremony weds cultures

BURLINGTON, New Jersey (AP) — With a gospel choir, black cellist and bishop, Oprah, Serena and Idris Elba in the audience and an African-American mother-of-the-bride, Saturday's wedding of Prince Harry to American actress Meghan Markle was a blend of the solemn and the soulful.Guess who's...

ENTERTAINMENT

'13 Reasons Why' premiere canceled after Texas shooting

LOS ANGELES (AP) — Netflix canceled the premiere party for its second season of the teen drama "13 Reasons Why" because of a school shooting near Houston.The streaming service announced the cancellation hours before the scheduled premiere and red carpet event, citing the Friday morning...

'Shoplifters' wins Palme d'Or, grand prize to Spike Lee

A tumultuous Cannes Film Festival concluded Saturday with the Palme d'Or awarded to Japanese director Hirokazu Kore-eda's "Shoplifters," a tender portrait of a poor, impoverished family, while Harvey Weinstein accuser Asia Argento vowed justice will come to all sexual predators.At the closing...

'Jurassic Park' dinosaur expert's next big thing: holograms

HELENA, Mont. (AP) — Forget the gray, green and brown dinosaurs in the "Jurassic Park" movies. Paleontologist Jack Horner wants to transport people back in time to see a feathered Tyrannosaurus rex colored bright red and a blue triceratops with red fringe similar to a rooster's comb.Horner,...

U.S. & WORLD NEWS

'Deadpool 2' ends Avengers' box-office reign, rakes in 5M

LOS ANGELES (AP) — Deadpool and his foul-mouthed crew of misfits and malcontents have taken down the...

Iraq's al-Sadr, promising reform, is constrained by Iran

BAGHDAD (AP) — Iraq's Muqtada al-Sadr, the maverick Shiite cleric whose political coalition beat out Iran's...

Company in Cuba plane crash had received safety complaints

HAVANA (AP) — The Mexican charter company whose 39-year-old plane crashed in Havana had been the subject of...

Palestinian publicly sets himself on fire in Gaza

GAZA CITY, Gaza Strip (AP) — A 20-year-old Palestinian is in critical condition after publicly setting...

Iran says EU political support not enough, urges investment

TEHRAN, Iran (AP) — Iran's state TV is reporting that the country's foreign minister has urged the European...

The Latest: Maduro's challengers criticize 'red points'

CARACAS, Venezuela (AP) — The Latest on Sunday's presidential election in Venezuela (all times local):1:01...

Bill Spriggs
William Spriggs

To an optimist, this is a sign from an independent authority that the economy is stabilized and on a sustained path forward. Unemployment rates are falling, job creation over the last few months is averaging more than 200,000 net new jobs a month, the Gross Domestic Product (the value of all goods and services made in America in a year) rose 4.1 percent last quarter, led by investment, and housing starts increased to a five-year high in November. Those are good signs. President Obama could take a bow. Republicans, who have conceded nothing to the president on economic policy, would be left with more whining. But it may be too early to remove the punch bowl. 

The Fed believes the good signs in the economy prove its policy is moving the economy forward. It is obviously true that with Congress locking the president into endless debates on shrinking the government and slowing the economy that the Fed is the only economic policymaker trying to expand the economy. Clearly, if the Fed did not take action, things would be worse. But that is different than whether the policy actually is moving the economy. Here the story is more difficult.

The Fed controls interest rates, and so can encourage more investment to take place-the low cost of money makes more investment projects profitable. Private-sector investment is recovering. It has returned, in real amounts, to its pre-recession levels in equipment and intellectual property, but still lags in construction. But, as a percent of the GDP, private investment is a smaller share of GDP than its pre-recession peak of about 19 percent of GDP. Worse, while interest rates are low, public investment is declining. At the federal level, government investment has been falling since 2010, mostly led by defense reductions.  

State and local governments are in worse shape on making investments. They have been reducing investments since 2008 and are at levels that are near 13-year lows. At precisely the time investments in our schools, roads, ports, sewer and water systems can be made at record low interest rates, the public sector is de-investing.

This lack of robust investment is critical because a higher share of GDP needs to go to investing in America's future. More investment, public and private, is needed so we have the public and private capital-buildings, machines and roads-to fuel and sustain our growth. With such low interest rates yielding only modest levels of investment, it isn't clear how easily the Fed could stimulate the economy if it slowed again. So, slowing things down has great risks. Clearly, higher interest rates are not going to stimulate more investment.

The real problem is that the “real” economy-the wages of workers, employment and output-are not back to pre-recession levels. Instead of investing to expand America's capacity, too many firms are using low interest rates to borrow money to buy back their company's stock. That borrowing does not increase potential output, but it does make the price of stocks rise and therefore the pay and bonuses of corporate CEOs continues to soar. It is a key reason the 1% continue to see their incomes rise. 

A healthy recovery needs to see rising wages for workers. But, with more than 1.2 million fewer jobs than in 2008, and more than 2.8 job seekers per job opening, there is little pressure for wages to rise. The record low share of young people employed has resulted in a smaller share of Americans working. That makes households very fragile, because each worker has to stretch his or her pay further to support others. 

Republicans think the solution is easy on that score-simply cut the government out of helping support the incomes of the unemployed or the underemployed, whose wages are so low they need the Supplemental Nutrition Assistance Program (food stamps) to eat. Such stinginess does not reduce the dependence of workers; it just makes the 99 percent piece of the pie shrink.

It may not be too late for Congress and the president to pull their weight and conduct the expansionary policy needed to restore public investment to ensure America's growth. But the economy is frailer with the Fed taking away the punch bowl. 

Follow Spriggs on Twitter: @WSpriggs. Contact: Amaya Smith-Tune Acting Director, Media Outreach AFL-CIO 202-637-5142

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