John H. Makin is a resident scholar at the American Enterprise Institute (AEI) where he studies the US economy, monetary policy, financial markets, corporate taxation and banking. He also studies and writes frequently about Japanese, Chinese and European economic issues.
Makin has served as a consultant to the US Treasury Department, the Congressional Budget Office, and the International Monetary Fund. He spent twenty years on Wall Street as the chief economist, and later as a principal of Caxton Associates a trading and investment firm. Earlier, Makin taught economics at various universities including the University of Virginia. He has also been a scholar at the Bank of Japan, the Federal Reserve Bank of San Francisco, the Federal Bank of Chicago, and the National Bureau of Economic Research. A prolific writer, Makin is the author of numerous books and articles on financial, monetary, and fiscal policy. Makin also writes AEI's monthly Economic Outlook which pairs insightful research with current economic topics.
Makin received his doctorate and master’s degree in economics from University of Chicago, and bachelor’s degree in economics from Trinity College.
The first quarter’s negative growth rates are troubling. The only way to tackle to negative growth rates is to work on the supply side. The Fed needs to undertake measures to boost investment and produce capital stock instead of staying quiet and safe.
The recent drop in US unemployment to 6.1 percent has raised hopes for a stronger economy, even though analysis of the major features of the US economy since 2008—regarding growth, employment, wages, and investmen—shows that all are dismal, notwithstanding the recent modest pickup in monthly employment increases. America needs a stronger recovery.
Without a doubt, exciting new technologies, including in robotics, 3-D printing, and gene therapy, are impressive. Blood markers and the ability to reengineer genetic DNA have achieved fantastic breakthroughs. Nanotechnology and biotechnology have improved living standards significantly.
Makin reviews Piketty’s Capital in the twenty- first Century, and finds that Piketty’s argument fails once distortions of data are adjusted. In fact, higher taxes, proposed by Piketty, wopuld increase income inequality.
Economic growth since the end of the 2008 financial crisis has been considerably below the average of other post–World War II recoveries. To elevate and sustain growth, the US government must reverse disinflation before it becomes deflation, reduce marginal tax rates on capital accumulation, and provide clear leadership that focuses on building opportunity.
It is necessary to be preemptive when facing deflation. Deflation is self-reinforcing, so if you wait to offset it until prices are actually falling, you risk losing control. Central banks in the United States and around the world must end their complacency and respond preemptively to the threat by monitoring inflation rates and undertaking aggressive monetization.