Remembering George Schultz at a 1983 Reagan cabinet meeting

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February 8, 2021 — In early November 1983, President Ronald Reagan was meeting with his entire cabinet, as Secretary of State George Schulz walked him through each step of an upcoming visit to Japan and Korea.  I was there as the “plus one” staff aide to Martin Feldstein, Reagan’s top economic adviser.

On the occasion of Schultz’s passing, February 6, at age 100, I offer two remembered anecdotes from this meeting.

Reagan and Whales

Reagan said very little during the lengthy briefing and it wasn’t clear whether he was taking it all in.  At one point, Schultz was talking about the disagreement between the US and Japan over whaling. read more

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Will the GameStop game stop?

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February 6, 2021 — Whether one thinks that the overall equity market is currently valued properly or not, something very unusual happened in the last week of January to GameStop stock.  Its price rose 323 percent for the week, and 1,700 per cent for the month (that is, an 18-fold increase). This was a speculative bubble. That is, the price departed from fundamentals.

Some investors who got in early and got out early made a lot of money. Just as many people, who got in too late or stayed in too long, lost a lot of money, as valuations came back to earth. read more

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Republicans fight deficits only when a Democrat is President

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January 28, 2021  —  High among the many priorities of newly-inaugurated US President Joe Biden are the challenges of an economy that appeared to be slowing down as the new year started, with the latest employment numbers looking bleak.  A fourth-quarter slowdown in the US recovery from the horrendous second quarter could be attributed to the expiration of some of the bipartisan stimulus programs that were passed by Congress in March of 2020, or to the third wave of Covid-19, or to both factors.  Even if Covid-19 abates during the course of 2021 and pent-up consumer demand then kicks in, the US faces challenges right now, in such areas as schools, infrastructure investment, state and local finances, and especially the fight against the pandemic itself. read more

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