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April 19, 1996
Mortgage rates have settled into a firm range, now seven weeks old: 8.00% - 8.375% at "par" prices.
The best single description of interest rates versus the economy came from Nomura Securities: "The longer interest rates persist at or above present levels, the more likely a recession becomes."
The trick in Nomura's line is the "longer-likely" part. The bond market panic is only two months old, and the worst of it only a month old -- since March 8. We got a lot of March data this week, naturally still showing a reasonable economy, not yet hurt by higher rates. A slowdown (and rate decline) may not happen until summer.
A contributing cause of the bond market heebie-jeebies this spring has to do with the evisceration of the Republican Congress. Braveheart died in fewer pieces than these guys.
Mr. Gingrich is the most unpopular politician in America, holding a 22% "approval" rating. You don't hear much about the Contract with America (nor will you ever again); the "shutdowns" were a disaster; and if there is to be a balanced budget, it will be on Mr. Clinton's terms.
The Democrats are applying a new torture, which is all the more effective because embarrassment is added to pain. The Dems are forcing a vote on raising the minimum wage.
The raise has little economic substance, and what little there is will add to inflation and eliminate jobs. The exquisite part: none but rich suburban or suicidal Republicans can vote against the raise. "Here: while I give you the red-hot iron treatment, rest your head on my whoopee cushion."
With apologies to the New York Times and Wall Street Journal for re-arranging their data, here are some minimum wage perspectives.
Total number of American hourly workers who are paid the minimum wage: 5%. That's right: five.
Percent of minimum earners who are men living with a wife: 9% (this is either evidence of sexism, or motivation; no study has been done).
Amount of purchasing power erosion since last rise: fifty cents. New increase proposal: ninety cents.
Number of economists signing a petition in favor of increase: 101. Percentage of opponents to an increase among 22,000 members of the American Economics Association: 77%.
Percentage of Americans in favor of raising the minimum wage: 84%.
Percentage of Americans who do not know what the minimum is: 78%.
Oh, the humiliation of it all. Put the poor Republicans out of their misery. Of course, if the election were today, they would be out of their misery, back to minority status, and no one would care if they voted like a pack of Scrooges.
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