In the glory days of the early 1980s, stocks and bonds were cheap and Wall Street became the center of the American economy. But those cheap asset prices did a lot of structural damage to US society, some of which is still becoming clear. The pricey stock market and skinny bond yields of 2017, by contrast, may pay unexpected dividends in the future.Asset prices tend to have an inverse relationship with the strength of the labor market. When unemployment is low, like it is now and like it was in

Viewpoints Oct. 23, 2017

Zhou Xiaochuan, governor of the People’s Bank of China, has guided his country’s monetary policy for most of the 21st century. He was appointed in 2002, shortly after China joined the World Trade Organization, and helped steer its economy through the global financial crisis. In the process, he gained widespread respect at home and a reputation for prudent liberalism abroad.Lately, Zhou has been circulating widely. At a forum in June, he criticized protectionism in China’s financial sector. In an

Viewpoints Oct. 23, 2017

How can I tell if you have a degree from the Massachusetts Institute of Technology? One way would be for me to ask about MIT. If they say yes, then you have a degree from MIT. If they say no, then you don‘t. That is what having a degree from MIT, customarily, means: that MIT acknowledges you as a graduate. MIT is an important credentialing institution because a lot of people trust its degree-granting process. It is, to use the term of art, a trusted intermediary. It is well suited to keep the le

Viewpoints Oct. 23, 2017

In the runup to China’s twice-a-decade Communist Party Congress, many analysts have turned bullish on the Chinese economy. Some of the optimism is based on an impressive recovery since the quasi-crisis of late 2015 and early 2016, some on hopes that a strengthened President Xi Jinping will emerge from the congress to restart far-reaching reforms. Whatever the cause, though, the giddiness is ill-founded.In our China Beige Book, we quiz over 3,300 firms across China about the performance of their

Viewpoints Oct. 19, 2017

For anyone baffled by President Barack Obama’s humiliating outreach to Iran in his second term, President Donald Trump’s speech Friday was cathartic.He spoke plainly about Iran’s “rogue regime,” which seized power by revolution and “forced its people to submit to fanatical rule.” The nation’s Revolutionary Guard will be designated as supporting terrorism and sanctioned. Trump seeks to assure us that he will never allow Iran to get a nuclear weapon. As I reported last week that he would, Trump st

Viewpoints Oct. 18, 2017

President Donald Trump’s foreign policy often seems designed to spite his predecessor. Barack Obama’s administration helped negotiate the Trans-Pacific Partnership. Trump voided it. Obama urged countries to accept more Syrian refugees. Trump is accepting far fewer. Obama brought us the Iran nuclear deal. Trump says it’s an embarrassment. And yet on the thorny question of Turkey, Trump’s approach has been more “yes we can” than “make America great again.” Like Obama in his first term, Trump now s

Viewpoints Oct. 17, 2017

The civilian prime-working-age population in the US has barely budged over the past decade.The Wall Street Journal‘s Lev Borodovsky, taking notice of this phenomenon Wednesday, said it is making it “increasingly challenging to boost the speed of economic expansion.” But “prime age” isn’t necessarily what it used to be in the workplace, and this nation certainly has no shortage of 55-plussers.People 55 and older are less likely to be in the labor force than those aged 25 through 54 -- that‘s why

Viewpoints Oct. 16, 2017

Texas power generator Luminant announced Friday that it will close two coal-fired power plants in early 2018. Last week, it said it would close another coal plant that is more than 40 years old -- an announcement that came days before the clearly telegraphed effort to roll back the Clean Power Plan. The three plants join the ranks of more than 200 plants that have closed in the past decade due to age, a losing battle against low-cost natural gas and renewable energy, low or negative demand growt

Viewpoints Oct. 16, 2017

On the evening of Oct. 10, Catalonia’s separatist president, Carles Puigdemont, stood before the regional parliament to deliver what was widely expected to be a unilateral declaration of independence. But he ended up offering a fudge. Despite asserting “the mandate that Catalonia become an independent state in the form of a republic,” he proposed “suspending the effects of the declaration of independence to undertake talks in the coming weeks.”The performance left more questions than answers, bu

Viewpoints Oct. 15, 2017

If you thought internet ads were annoying, consider this: The websites you visit could now be harnessing your computer to do cryptocurrency mining.Digital currencies demand a lot of computing power. To complete each block of transactions, computer owners around the world must race to solve an extremely difficult cryptographic puzzle, with the winner getting paid in the relevant cryptocurrency. To increase their chances, such “miners” invest vast amounts in processing capacity -- building server

Viewpoints Oct. 15, 2017

A few decades ago the choice for most people was pretty simple: either the city or the suburbs. The city was exciting but a little dangerous. The suburbs were comfortable but bland. These days our suburbs and cities are converging, which is narrowing our lifestyle choices.Consider the Washington area. The Rosslyn, Clarendon and Ballston parts of Arlington, Virginia -- which are right next to the District of Columbia -- used to be considered suburban, and are still formally classified as such. Ye

Viewpoints Oct. 13, 2017