Blue Green Line in Header
 

Articles by Christopher Thornberg, PhD


Welcome to No Nonsense Economics


Interpreting news about the economy is tricky. What you see and hear on the surface may not accurately represent what is really going on underneath. Economic data is filled with unexplainable ups and downs, and can be easily misinterpreted or manipulated to support a particular point of view. No Nonsense Economics is a new feature from Beacon Economics where we hope to provide clear, relevant insights about what is happening in the economy - without the hype or hyperbole that seems to dominate the headlines.

Read more
CATEGORY: General Economy



New GDP Release Brings Both Good and Bad News


Today the Bureau of Economic Analysis released new and revised estimates of U.S. GDP. The release told us some things we already knew. It also changed the picture of what happened over the course of the recession.

Read more
CATEGORY: General Economy



A Bond Rating Conundrum?


Press coverage was intense through the weekend as the White House and Congressional leaders worked to pull together a budget compromise to allow the debt limit to be raised.

Read more
CATEGORY: General Economy



Housing Price Drop Not Necessarily A Bad Thing for California


Reaction to the latest news on home prices proves that, when it comes to housing, hype trumps logic. These price declines are not terribly troubling or surprising, and flat or mildly falling home prices can be a good thing in California. Why? Because it would allow business and government alike to lower costs.

Read more
CATEGORY: Real Estate



Volatility Returns with A Vengeance


It has been a wild ride in the equity markets over the past few days. The 5-day volatility index has hit highs that were topped only during the days following Lehman Brothers’ collapse, and Black Monday in the late 1980’s. Even after yesterday’s rally, the markets are roughly 10% to 15% off from where they were in July of this year. What comes next, we will have to wait to see.

Read more
CATEGORY: General Economy



Two D’s For the Double Dip: What to Worry About in the U.S. Economy—And What Not To


With all the market turbulence, and mediocre economic reports that have come out lately, that old specter ‘the Double Dip’ is yet again being splashed across the headlines. And along with the headlines have come the odds makers—the folks in my profession who like to attach probabilities to economic events.

Read more
CATEGORY: General Economy



Tax Cuts Are Not The Answer


Cuts in public spending and tax cuts for individuals at any level of income are not going to cure what currently ails the U.S. economy.

Read more



A Dirty Shame


Striking down a controversial rule at the Port of Los Angeles was another triumph of nasty politics over good policy.

Read more
CATEGORY: Environment



Political Negotiations You SHOULD Worry About


After months of deliberation, the Congressional super committee created to reduce the Federal deficit over 10 years finally acknowledged its failure to reach an agreement at the time the deadline was reached last week.

Gee... this had to be one of the least surprising political outcomes in quite some time.

Read more
CATEGORY: Economic Policy



Jerry Brown Tax Proposal Has Some Merit… But Why Not Implement Real Fixes?


Governor Jerry Brown recently announced a plan to fix California’s budget issues by raising income taxes on high-income earners and increasing the state sales tax. These measures will be presented directly to voters in an initiative on the November ballot. And the rhetoric on both sides will surely be theatrical.

Read more



Diving Into The Political Trees


Last week Ener1, a U.S. car battery manufacturer, filed for bankruptcy protection. This would not normally make headlines, except for the fact that a subsidiary of the company received funds from the U.S. Department of Energy in 2009 – and of course, it’s an election year.

Read more
CATEGORY: Economic Policy



The Unfortunate Triumph of Ideology Over Analysis


Back when the housing market was booming, Wall Street firms were handing out record bonuses, and unemployment had fallen all the way to 4.5%, I was regularly being called “Dr. Doom” by the various groups I spoke to, and by members of the media who called me to get an ‘alternative’ opinion.

Read more
CATEGORY: General Economy



Prop 13: It’s Time To Stop Being Railroaded by the Third Rail


I was recently invited to Sacramento to testify in front of the California Assembly Revenue and Taxation Committee about tax reform in the state – specifically Prop 13, the limitation on property tax increases enjoyed by current property owners.

Read more



California with Prop 13: A State of Fear Mongering


Jon Coupal’s new op-ed in the Orange County Register is an understandable response by the President of the Howard Jarvis Taxpayers Association to what is starting to happen in California: The growing recognition that Prop 13 was a terrible idea that has had far more negative consequences for the state’s economy than positive – and that it needs to go.

Read more



Actually, Mr. President… You Were Right


A few days ago President Obama made what the press have been referring to as a major ‘gaffe’ when he said during an interview that “the private economy is doing fine.” Republicans pounced, painting the President as ‘out of touch’ and declaring the statement symptomatic of his inability to lead the nation out of its severe economic crisis.

Read more
CATEGORY: General Economy



Enough With Faith-Based Economics


Dennis Meyers of the California Department of Finance has recently been writing a series of articles arguing that the state’s economy is not in the midst of a massive economic collapse as some have characterized.

Read more
CATEGORY: General Economy



Now That The Individual Mandate Is Law— It’s Time To Get Down To The Hard Work Of Fixing Healthcare


Given the rhetoric coming from supporters of the healthcare reform bill following the Supreme Court’s upholding of the ‘Individual Mandate’, it may be hard to believe that in the larger scheme of things, Obamacare is no cure-all for the healthcare crisis.

Read more
CATEGORY: Healthcare



2012 Presidential Election: The Big Bet


The upcoming presidential election will likely go down in history as the great Super Pac race—given the tremendous amount of cash the campaigns are taking in and starting to spend.

Read more
CATEGORY: General Economy



The Worst of Both Worlds: Understanding Why Prop 39 Is The Right Way To Go


This November, as usual, California voters will face a slew of state propositions at the ballot box. One deserves a closer look and, we believe, should be passed. Prop. 39 would change the current system that allows inter-state corporations a choice in how they calculate their liability for California corporate taxes. If passed into law, Prop 39 would enact a system where a company's income tax liability would be based solely on its sales in California. And then for the first five years, about half of the estimated $1 billion in additional annual revenue would be dedicated to energy-efficient projects at schools and other public buildings.

Read more



Now That’s A Fact, Jack


Last Friday’s relatively positive national employment report from the U.S. Bureau of Labor Statistics (BLS) elicited cries of foul play from the far right – started by none other that Jack Welch, the former head of GE who tweeted that the books were being cooked to help President Obama following his disastrous debate with Mitt Romney. Numerous other right wing pundits quickly jumped on board and started building on the story.

Read more
CATEGORY: General Economy



The Difference Between Accuracy and Bias - Part 2


In the short time since I last posted an insight, the issue of ‘accuracy vs. bias’ has raised its head yet again. Last time it was about something as broad as a debate on the national unemployment rate. This time it is very specific—namely an attack on Beacon Economics’ study of the potential economic impact of raising the minimum wage in the City of San Jose.

Read more
CATEGORY: Economic Policy



Presidential Politics: The Folly of Economic Promises


Why do we allow empty promises of economic gain and preposterous assignment of business cycle blame to cloud the issues that are truly important in the race for the White House?

Read more
CATEGORY: Economic Policy



China and Local Government: From Boogeyman To Benefactor


If you managed to peer through the blizzard of news reports about the presidential election, you may have heard that there is another country out there that is also going through a major change in leadership—albeit one with far less public scrutiny about the process than ours.

Read more
CATEGORY: General Economy



Understanding ‘The Cliff’


I was gratified the other morning to hear a long report on NPR’s Morning Edition pointing out what we have been saying here at Beacon Economics for some time—that the fiscal “cliff” isn’t any such thing.

Read more



A Christmas Thought


As we make our way through the holiday season, I want to ‘wrap’ up my posts for the year with a challenge to the conventional economic wisdom regarding gift giving.

Read more
CATEGORY: General Economy



Sharp Rules In A Blurry World


Any reasonable person understands the need for a strong, if limited, government in a modern economy. Setting the rules that guide market behavior, enforcing property rights, and maintaining a basic social safety net are essential lubricants for economic prosperity.

Read more
CATEGORY: Real Estate



Housing Bubble? Too Early To Call!


The sudden surge in the housing market here in Southern California has caught most people by surprise—and is already starting to cause worry in some circles.

Read more
CATEGORY: Real Estate



First Quarter GDP: What To Make Of It?


First quarter GDP data just came out and growth is up—2.5% (seasonally adjusted) compared to a paltry 0.4% in the fourth quarter of 2012. Yet despite the better number, many economists still say the first quarter is a disappointment because it came in below expectations.

Read more
CATEGORY: General Economy



Prop 13: Silencing The Messenger? Not A Chance


Beacon Economics was surprised recently when a speech I was scheduled to give was cancelled a couple of weeks before the event. We later learned that my talk was called off because at least one or two of the organizers were upset about my opinions on Proposition 13.

Read more



Timeless Lessons: Remembering the Roots of the Crash


Five years ago, Lehman Brothers filed for bankruptcy. The collapse caused the markets to swoon and billions of dollars in taxpayer support was handed out. I remember it well because in many ways it was the final vindication of the warnings I had been giving over the previous two years, after I had left UCLA’s Anderson Forecast and started Beacon Economics.

Read more
CATEGORY: General Economy



California’s Affordable Housing Problem: If You Don’t Like What You’re Reaping, Stop Sowing It


You may not have noticed, but California managed to dodge another regulatory bullet when Governor Brown recently decided to veto AB1229—a bill by Assemblymember Toni Atkins that would have made “inclusionary housing” part of the entire California housing landscape.

Read more



A California Christmas Wish List


Dear Santa,

Well, it’s that time of year again, and I’d like to think I was a good little economist in 2013. I guess that means it’s time for my Christmas wish list, although I’m sure there are more than a few folks who think I deserve less than a stocking full of coal!

Read more
CATEGORY:



Policymakers Again Using Wrong Tool for the Job


Throughout 2013, I spent a good portion of my time here on No Nonsense Economics bashing far rightwing views that grossly exaggerated both the danger of the Federal deficit and the positive economic value of tax cuts. 

Read more
CATEGORY:



What’s So Bad About Inequality? A Lot, Actually


Wealth and income inequality has been in the news a lot this past week. Why an issue that has been a growing problem for so long has suddenly become the topic du jour in Washington DC is unclear to me—but I am glad it is finally rearing its head so publicly. 

Read more



Time To Say No To Hollywood Tax Subsidies


If you’ve been following California’s budget news lately, you’re probably aware that the state achieved a sort of budget surplus this year. I say ‘sort of’ because while it’s true that state revenues came in modestly higher than expenditures, the gap doesn’t come close to covering our underfunded public pensions, leftover debt from the last few years of deficits, and deferred maintenance on decaying infrastructure.

Read more
CATEGORY:



California’s Nattering Nabobs of Negativism


Wow, I’m not feeling too good lately about what’s happening with the economy in California and its regions.

Read more
CATEGORY:



Bringing A Knife To A Gunfight


EDITOR'S NOTE: This post was co-authored by Dustin Schrader.

If you haven’t caught the news, there is a new bill floating around Sacramento that attempts to deal with the affordable housing crisis in California.

Read more
CATEGORY:



A Port Strike: More News Than Economics


Over the last few months, the International Longshore and Warehouse Union and the Pacific Maritime Association have been negotiating a new contract that will cover nearly 20,000 dockworkers at 29 West Coast ports...

Read more



B of A’s Fine: Waiting For the Next Financial Shoe To Drop


JP Morgan did it. Citibank did it. Now Bank of America is about to do it as well—pay the U.S. government a whopping fine for their role in the subprime mortgage disaster and the financial market meltdown that followed.

Read more
CATEGORY:



Dry Spell or Drought? Why the Difference Is Important


In recent months California’s news has been filled with stories about the state’s water situation, many of which lead with declarations such as “California’s crippling drought,” “the state’s devastating drought,” or similar rhetoric.

Read more
CATEGORY:



Statistician, Heal Thyself


It’s a cliché to point out that we live in the era of big data – from piles of personal data collected by the web geniuses at Google and Facebook to financial data compiled by credit rating agencies to the new government sponsored economic databases open to use by any number of firms including Beacon Economics.

Read more



It’s Not the Economy, Stupid!


EDITOR'S NOTE: This post was co-authored by Adam Fowler.

So the midterm election is finally over and, as the pollsters predicted, it was a big win for the Republicans.

Read more
CATEGORY: General Economy



The Gap Between Advocacy and Analysis


There is a big difference between analysis and advocacy. If you are an anlayst, you start with a question and try to find an answer.

Read more
CATEGORY:



2014: A Look Back With Irony…


Oh what a year 2014 was. Not so much for what actually happened – all said and done it turned out to be a pretty good year, in a relatively ordinary sort of way.

Read more
CATEGORY:



Some Perspective On The Ports


If you haven’t caught the news, which would be tough given recent press exposure, it looks like the ongoing conflict between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) has finally come to an end.

Read more



We Need More Daylight Savings… Not Less!


Well, we recently went through the annual process of moving our clocks ahead an hour for daylight savings, and once again, the whole process has come under attack.

Read more
CATEGORY: General Economy



Jerry’s Choice And The California ‘Drought’


Not long ago I wrote a short piece here on No Nonsense Economics noting that the current water situation in California should more aptly be named a ‘water shortage’ rather than a ‘drought’, the difference being that a drought is a water shortage with significant negative economic consequences.

Read more



U.S. Financial Markets: What, Me Worry?


There has been a lot of ‘bubble’ talk lately. Sure, there is the lunatic fringe—such as Ron Paul’s online interview about the coming crash of the U.S. currency, or Jim Rickard’s dire warnings of the impending 25-year depression conveniently laid out in a $25 hardcover book ($13.99 for the Kindle edition!).

Read more
CATEGORY: General Economy



A Crisis Too Good To Waste


Between California’s odd summer storm, rising seawater temperatures, and muggy summer, it’s pretty clear that the El Nino weather phenomena is starting to form out in the Pacific Ocean.

Read more



How Many Holes Does It Take To Fill The Albert Hall?


Advocates pushing for both education and immigration reform in the United States often invoke the ‘needs’ of the U.S. labor market in making their pitch.

Read more
CATEGORY: General Economy



FFR: The Kardashians Of The Financial World


It’s that time of the year again. Not the holiday shopping season—I’m referring to the rampant speculation over what might happen at the next bi-monthly Federal Reserve (Fed) board meeting on December 15 and 16.

Read more
CATEGORY: General Economy



What’s With Iowa?


As we kick off 2016 here at No Nonsense Economics it’s the perfect time to give a nod to the ‘official’ start of the presidential election year. This week’s Iowa caucus has once again raised eyebrows – and hackles.

Read more
CATEGORY: General Economy



Exporting Water In A Drought


The good news is that El Nino came back in 2016 bringing with it much needed rains and a snowpack that is already well above normal.

Read more



US Financial Market Drama: Much Ado About Nothing


This year started with a thud rather than a bang as financial markets across the globe saw major selloffs.

Read more
CATEGORY:



California’s Minimum Wage Hike Debate…Or Debacle?


A few weeks ago Governor Jerry Brown suddenly, and seemingly without warning, reached a deal with union groups under which California’s minimum wage will be sharply raised to $15 per hour by 2022. The measure was quickly rubber-stamped by the state legislature and puts California firmly on a path to one of the highest wage floors in the nation.

Read more
CATEGORY: Economic Policy



Brexit As A Non Issue


When the UK voted to leave the European Union, it set off an explosion of media coverage even as equity markets around the globe, including in the United States, dived in the aftermath.

Read more
CATEGORY: General Economy



Miserabilism Debunked: Middle Class Stagnation


Humans by nature are inherently discontent—not that this is a bad thing. Much of human progress can be traced to people striving to improve their own personal circumstances.

Read more



Keeping An Eye On The IE


It sometimes seems like the Inland Empire is the Rodney Dangerfield economy—it just doesn’t get any respect. But given the region’s ascendency as an economic engine, that will likely change.

Read more
CATEGORY: General Economy



The Tyranny of Direct Democracy


Remember when the biggest thing arriving in your mailbox over the course of the year was the massive old Sears catalog? Times have changed. For many, this year’s heftiest arrival was probably the 2016 California Voter Guide, which came in at over 200 pages.

Read more
CATEGORY:



California’s Ballot Propositions: A Few Thoughts


In California, this year’s bumper crop of confusing and often contradictory ballot propositions are the best example of a bad idea that has rapidly grown out of control (our most recent post, The Tyranny of Direct Democracy, lays out the serious and intensifying problems associated with the state’s Initiative system).

Read more
CATEGORY: General Economy



Trump and the Triumph of ‘Miserabilism’


Donald Trump’s victory a few weeks ago threw the political science world into turmoil.

Read more
CATEGORY: General Economy



Reforming the ACA: Losing the Forest for the Trees


Californians are correct to be worried about the future of the Affordable Care Act (ACA) now that the Republicans control both branches of Congress and the White House. But they should be more worried about a looming crisis that neither presidential candidate addressed during the contentious election season...

Read more
CATEGORY: Healthcare



logo