Anirban Basu | WYPR

Anirban Basu

Host, Morning Economic Report

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants.  Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate.  Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes.  Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.

He is the author of numerous regional publications including the Mid-Atlantic Economic Quarterly and Outlook Maryland and is routinely asked to contribute to local media, including on his radio show on WTMD, 89.7 FM/Baltimore and here on WYPR's Morning Economic Forecast.  Anirban completed his graduate work in mathematical economics at the University of Maryland.  He earned a Masters in Public Policy from Harvard University in 1992. His Bachelors in Foreign Service is from Georgetown University and was earned in 1990.  He is currently working toward his J.D. at the University of Maryland, Baltimore.

The U.S. economy officially emerged from recession in June 2009.  That means that in just three months, America will commence its sixth year of economic recovery.  But a survey conducted last week by NBC News and the Wall Street Journal found that 57 percent of respondents still think that the economy is in recession. 

A new paper authored by three Princeton economists, including Alan B. Krueger, the former chairman of President Obama’s Council of Economic Advisors, indicates that long-term unemployment is even more problematic than conventional wisdom suggests.  According to the paper, the long-term unemployed are "an unlucky subset of the unemployed." 

Economists love leading economic indicators.  As many people are aware, economists do not have a great reputation for forecasting accuracy.  So we are always on the hunt for leading indicators that might help to improve our record.  Here’s a prediction. 

A recent Wall Street Journal article highlights some very interesting dynamics in the world of federal lending to small businesses.  For instance, in 2008, African-American owned businesses received 11 percent of all Small Business Administration loans.  Last year, that share was down to just 2.3 percent of the federal agency’s approximately 54,000 loans. 

Most observers seem to agree that for America to fulfill its economic potential, it must continue to dominate emerging high tech industries.  For that to happen, America must continue to fund basic scientific research.  But in recent years, federal funding for basic research has declined.  Labs are being shuttered.  Scientists are being dislocated and research projects are being postponed or simply abandoned. 

A recently released International Monetary Fund paper indicates that "In the United States, the share of market income captured by the richest 10 percent surged from around 30 percent in 1980 to 48 percent by 2012."  The paper also points out that the income share of the richest 1 percent increased from 8 percent to 19 percent over that period, but that even more striking was the fact that the income share of the richest 0.1 percent went from 2.6 percent to 10.4 percent. 

A recent New York Times article highlighted the incredible impact of different income levels in different communities.  The two communities of focus were Fairfax County, Virginia, one of America’s most affluent counties, and McDowell County, West Virginia about 350 miles away.

There was a time when conventional wisdom suggested that as economies developed, income inequality would decline largely through the formation of larger middle classes.  Some of this wisdom was set forth by Belorussian-born American economist Simon Kuznets. 

According to the Federal Reserve’s latest quarter report regarding U.S. finances, household wealth expanded 13.8 percent last year, the fastest rate of growth in American wealth since 2004.  Rising equity and home prices contributed heavily.  The value of stocks and mutual funds held by individuals rose by more than 30 percent, which according to Moody’s Analytics represents the largest dollar increase in history.  Homeowners’ equity grew 29 percent, with gains on part with those registered during the boom times of the previous decade.

Nonprofits - 3/20/14

Mar 20, 2014

For a variety of reasons ranging from tax considerations to emerging social challenges, the role of nonprofits in the U.S. economy continues to expand.  According to the most recent figures compiled by the Urban Institute, between 2001 and 2011, the number of nonprofits operating in the U.S. expanded by 25 percent while the number of for profit business rose by just one half of 1 percent. 

Debate regarding local and national minimum wages rages on.  A recent article authored by economist Laura D’Andrea Tyson, a professor at the University of California, Berkeley and a key policy advisor to the Clinton Administration puts a different twist on the discussion. 

A recent Federal Reserve Bank of New York study provides additional evidence regarding the rampant underemployment of recent college graduates.  Among other things, the study determined that the share of Americans ages 22 to 27 with at least a bachelor’s degree who were in jobs that don’t require a college degree was 44 percent in 2012.  That’s up from 34 percent in 2001, a year during which the U.S. was in recession. 

A new report issued by the U.S. Travel Association makes the claim that there is a days off deficit in America.  If people would simply use more of their paid leave, America’s economy would benefit. 

In many ways, sub-Saharan Africa is still poor.  Despite the fact that many of the nation’s fastest growing economies are located in Africa, gross national income there averages just $2,232 per capita.  By contrast, gross national income in the U.S., which is a measure distinct from gross national product, is in the range of $50,000 per person. 

An analysis conducted by John Bound of the University of Michigan and Sarah Turner at the University of Virginia tracks college education through the latter half of the 20th century.  The two analysts found that when states are home to large college age populations, public spending per student declines and graduation rates suffer.  In other words, when there are many young people between the ages of 18 and 22, investment in each student falls. 

Even in the face of still high unemployment nationally, there appear to be a growing number of industries reporting skills shortages, including construction, manufacturing and cyber-security.  Another shortage has emerged among regional airlines, which are facing deeper and more widespread pilot shortages as reported in the Wall Street Journal. 

According to an analysis by Moody’s Analytics, American consumers are poised to increase their spending.  After years of holding back, there is pent-up demand for many goods and services.  Household balance sheets have improved as many have refinanced mortgages and paid down total debt.  Employment gains nationally have been in the range of 1.7 percent per year for the last two years, with the nation adding not quite 200,000 jobs per month last year.  

An analysis by Haver Analytics summarizes the extent to which various state economies have recovered from the Great Recession.  Three indicators were used to compile the rankings.  

First, the analysis considers employment gains or losses in each state.  Second, the analysis focuses upon home prices.  Finally, the analysis considers highway miles driven, both a reflection of how many people are driving to work each day and how much merchandise is being shipped to stores. 

Healthcare - 3/7/14

Mar 7, 2014

For decades, American policymakers have felt that too much of the nation’s economy was tied to healthcare.  After all, the US spends much more on healthcare than other countries.  The goal among many has been to reduce outlays tied to healthcare, with the logic being that diminished healthcare expenditures would free up resources for other parts of the economy. 

There has been much discussion worldwide regarding poor air quality in China.  The Chinese government is also concerned, and Chinese officials recently announced that they were offering a total of 10 billion renminbi, or $1.65 billion to cities and regions that make significant progress in air pollution control this year.

Fuel Economy - 3/5/14

Mar 4, 2014

The federal government introduced ambitious fuel economy standards for passenger vehicles back in 2012.  The goal is to slash US oil consumption by two million barrels per day by 2025.  But the marketplace has other ideas. 

A recent report supplied by the nonpartisan Congressional Budget Office indicates that a proposal to raise the national minimum wage to $10 and 10 cents per hour could reduce total US employment by 500,000 workers by the latter half of 2016.  

A recent Brookings Institution study finds that communities that exhibit the most economic dynamism also often produce the greater levels of income inequality. Income inequality is far greater in cutting edge cities like New York and San Francisco relative to Columbus, Ohio or Wichita, Kansas.

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