Without Federal Spending, What's Left of US GDP Growth?
Should a country's gross domestic product include government spending? No, argued Simon Kuznets, the Nobel economics laureate who helped create the measure now known as GDP. When the US Department of Commerce started publishing estimates of national output in the 1940s with government spending included, Kuznets complained that this ensured 'that fiscal spending would increase measured economic growth regardless of whether it actually benefited individuals' economic welfare,' according to economist Richard Kane.
Part-time government worker Elon Musk echoed Kuznets last week, asserting that 'a more accurate measure of GDP would exclude government spending. Otherwise, you can scale GDP artificially high by spending money on things that don't make people's lives better.' Soon after, Commerce Secretary Howard Lutnick — whose department is still responsible for producing US GDP data — declared that 'governments historically have messed with GDP. They count government spending as part of GDP. So I'm going to separate those two and make it transparent.'
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15 hours ago
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Richard Garwin obituary
The Nobel laureate Enrico Fermi called his student Richard Garwin 'the only true genius I've ever met'. Garwin, who has died aged 97, is perhaps the most influential 20th-century scientist that you have never heard of, because he produced much of his work under the constraints of national or commercial secrecy. During 40 years working at IBM on an endless stream of research projects, he was granted 47 patents, in diverse areas including magnetic resonance imaging, high-speed laser printers and touch-screen monitors. Garwin, a polymath who was adviser to six US presidents, wrote papers on space weapons, pandemics, radioactive waste disposal, catastrophic risks and nuclear disarmament. Throughout much of that time, a greater secret remained: in 1951, aged 23, he had designed the world's first hydrogen bomb. Ten years earlier, Fermi had had the insight that an atomic bomb explosion would create extraordinarily high pressures and temperatures like those in the heart of the sun. This would be hot enough to ignite fusion of hydrogen atoms, the dynamical motor that releases solar energy, with the potential to make an explosion of unlimited power. This is known as a thermonuclear explosion, reflecting the high temperature, in contrast to an atomic bomb, which starts at room temperature. Detonation of the atomic bomb in 1945 gave the proof of the first part of this concept, but in secret lectures at the Los Alamos laboratory in New Mexico that summer, Fermi admitted that although an exploding atomic bomb could act as the spark that ignites hydrogen fuel, he could find no way of keeping the material alight. In 1949, the USSR exploded its first atomic bomb and within months President Harry S Truman announced that the US would develop 'the so-called hydrogen or superbomb'. In the same year, Garwin graduated from the University of Chicago with a doctorate in physics and became an instructor in the physics department. Fermi invited him to join Los Alamos as a summer consultant, to help to realise Truman's goal. Early in 1951 Edward Teller and Stanislaw Ulam made the theoretical breakthrough: a bomb consisting of two physically separated parts in a cylindrical casing. One component was an atom bomb whose explosion would emit both atomic debris and electromagnetic radiation. The radiation would move at the speed of light and flood the interior with rays that would compress the second component containing the hydrogen fuel. The impact of the debris an instant later would complete the ignition. This one-two attack on the hydrogen fuel was the theoretical idea that Teller asked Garwin to develop. Garwin turned their rough idea into a detailed design that remains top secret even today. The device, codenamed Ivy Mike, was assembled on the tiny island of Elugelab in the Enewatak Atoll of the Marshall Islands in the south Pacific. Weighing 80 tonnes and three storeys high, it looked more like an industrial site than a bomb. It was undeliverable by an aeroplane but designed solely to prove the concept. On 1 November 1952, the explosion, which was 700 times more powerful than the atomic bombs dropped over Hiroshima or Nagasakai, instantly wiped Elugelab from the face of the earth and vaporised 80m tonnes of coral. In their place was a crater a mile across into which the waters of the Pacific Ocean poured. The mushroom cloud reached 80,000ft in 2 minutes and continued to rise until it was four times higher than Mount Everest, stretching 60 miles across. The core was 30 times hotter than the heart of the sun, the fireball 3 miles wide. The sky shone like a red-hot furnace. For several minutes, many observers feared that the test was out of hand and that the whole atmosphere would ignite. None of the news reports mentioned Garwin's name; he was a scientific unknown, a junior faculty member at the University of Chicago. A month later he joined the International Business Machines Corporation, IBM, in Yorktown Heights, New York. The post included a faculty appointment at Columbia, which gave him considerable freedom to pursue his research interests and to continue as a government consultant at Los Alamos and, increasingly, in Washington. Born in Cleveland, Ohio, the elder son of Leona (nee Schwartz), a legal secretary, and Robert Garwin, a teacher of electronics at a technical high school by day and a projectionist at a cinema at night, Dick was a prodigy; by the age of five he was repairing family appliances. After attending public schools in Cleveland, in 1944 he entered Case Western Reserve University. In 1947, he graduated with a bachelor's degree in physics and married Lois Levy; the couple moved to Chicago, where Garwin was tutored by Fermi. He earned a master's degree in 1948 and a doctorate, aged 21, in 1949. In his doctoral exams he scored the highest marks ever recorded in the university. In addition to his applied science research for IBM, he worked for decades on ways of observing gravitational waves, ripples in space-time predicted by Albert Einstein. His detectors successfully observed the ripples in 2015. This has opened a new window on the universe, in revealing the dynamics of black holes. Throughout his career he continued to advise the US government on national defence issues. This included prioritising targets in the Soviet Union, warfare involving nuclear-armed submarines, and satellite reconnaissance and communication systems. A strong supporter of reducing nuclear arsenals, he advised the US president Jimmy Carter during negotiations with the Soviet president Leonid Brezhnev on the 1979 Strategic Arms Limitation Treaty. He believed that the US should nonetheless maintain a strategic balance of nuclear power with the Soviet Union and opposed policies that could upset that: 'Moscow is more interested in live Russians than dead Americans.' After retiring from the University of Chicago in 1993, he chaired the State Department's arms control and non-proliferation advisory board until 2001. In 2002 he was awarded the National Medal of Science, the US's highest scientific award, and in 2016 the Presidential Medal of Freedom, the nation's highest civilian award. In presenting the award, Barack Obama remarked that Garwin 'never met a problem he didn't want to solve'. Lois died in 2018. Garwin is survived by two sons and a daughter, five grandchildren and a great-grandchild. • Richard Lawrence Garwin, physicist, born 19 April 1928; died 13 May 2025
Yahoo
21 hours ago
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Trump tariff deals: Here is the one 'real problem'
President Trump's tariffs have been roiling markets, with investors reacting quickly to any news on deals. Paul Krugman, Nobel Laureate in economics and author of his self-titled Substack, says there is one "real problem" with Trump's tariff plans. Find out what it is in the video above. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Yeah, so that it's a real problem, which is that there are in fact no genuine deals to be had. The whole presumption of the Trump trade war is that other countries are treating us very unfairly as he says, uh, which is basically not true, and we can have, so we can talk a little bit about China, but the European Union has a tariff of less than 2% on average against US products. What are they supposed to concede? What's the deal? Uh, so the real question is not what genuine deals, but whether other countries can and will devise face saving stuff, stuff that, um, Trump can call a victory and lead him to basically call off the dogs. Uh, and I have real doubts about that, because I suspect that, uh, in a way, I think all the people talking about Taco are are are in a way making, uh, making and the off ramp harder, be harder for Trump to, uh, to claim victory while actually admitting defeat. And, um, it's going to be really hard to see how this plays out. It it certainly is hard, but it seems like investors are taking the path of ignoring it, at least for now. Chris Harvey of Wells Fargo, this morning saying tariff risks are already priced in if not overstated. What do you think investors are are banking on? I mean, in environment where a Nobel laureate economist is telling me that it's hard to game out where this is all heading. Well, one of the interesting things here is that the, uh, there are three markets to look at. There's the stock market, the bond market, and the currency market. The stock market seems to say, "Well, all right, no big deal. We'll we'll just ride this out." Uh, the bond market and the currency market are both basically saying, "Oh my god," right? Uh, uh, we're slightly off the highs, but 30 year interest rates are extremely high, uh, by, you know, any recent historical standard. Uh, the dollar has weakened even as interest rates have gone way up, which is totally not something we normally see in the United States. Uh, we look like an emerging market. And this morning's Substack, I did a comparison. I said, "You know, the US data kind of look like Mexico during the peso crisis of 1994-95." Obviously the numbers are a lot smaller, not not a comparable plunge in the currency, not a comparable rise in interest rates, but the direction rising interest rates on a falling dollar is something you expect to see in a developing country, not in the United States of America. So what are the longer term implications of that, Paul? Well, the world seems to be losing faith in us. I mean, as it, it's hard to read this stuff without saying that international investors don't consider America a safe haven anymore. That they're not at all sure that the United States can be trusted to, uh, to make good on its payments that it's a a place to park your your money during a store. I mean, over the weekend, uh, Scott Besant, the Treasury Secretary, said, uh, there is no way America will ever default on its debt. Yeah, when you're say for the Treasury Secretary to even feel that he needs to say that is an extremely alarming sign. Sign in to access your portfolio
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a day ago
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Opinion - Don't know what DC club to join? Ask Groucho.
These are tough times in Washington. Federal employees don't know from one day to the next whether they'll still have a job. Reporters fear their editors won't back them up if they're too hard on reporting the truth about President Trump. Lobbyists scan their client list to make sure none can be blackballed as 'DEI.' Republican politicians worry about being primaried. Democrats worry about being dismissed as irrelevant. All that angst! But, according to a recent survey in the New York Times, that stress is minor compared to the biggest existential crisis facing younger, political and socially-ambitious Washingtonians today: What private club shall I join to further my career and, maybe, have fun along the way? Let's be honest. The choices are not great, starting with what is probably still Washington's most prestigious private club, the Metropolitan Club, nestled in a drab high rise near the White House. It has a roster of famous Washington establishment names — I once chatted up Vice President Dick Cheney there — but if you're looking for signs of life, you'd be better off at Congressional Cemetery. Next up, the Cosmos Club, located in a beautiful Beaux-Arts mansion on Massachusetts Avenue, near Dupont Circle. Like San Francisco's Bohemian Club, the Cosmos Club is home to artists, writers and intellectuals. Its walls are covered with photos of members who have won the Nobel or Pulitzer Prize. But, again, it's atmosphere is quiet, if not moribund. But now there are two alternatives. Ned's Club, which opened in late January, across from the Treasury Department, with a $5,000 initiation fee plus an annual $5,000 membership fee. Aiming to attract younger professionals from both parties, Ned's has already signed up 1,500 major players in the current and past administrations, as well as several big-name journalists. If that's your idea of a good time, 'half the lobbyists in town are always there,' one unnamed member told the Times. The Executive Branch, opening this month, is Washington's most exclusive private club, created by a group of investors led by Donald Trump Jr. in an subterranean cavern under a Georgetown shopping mall. With a membership fee of $500,000, the Executive Branch is clearly a place where MAGA moguls and government officials — and maybe even POTUS himself — can hoist a drink without fear of rubbing elbows with someone not wearing a MAGA hat. If you're not sure what club to join, here's the obvious answer: Don't join any of them. To make it in Washington, you don't really have to. There are plenty of power pits in DC you can get into for just the price of a meal. No place speaks Washington politics and power like The Palm restaurant, where caricatures of past and present big shots stare down at you from the walls. Legendary lobbyists like Tommy Boggs and Chuck Manatt had their own tables here. At Friday lunch, chances are you'll see former Virginia Gov. Terry McAuliffe (D) holding court. Joe's Seafood, Prime Steak and Stone Crab, in a renovated bank at the corner of 15th and H, NW, a block from Lafayette Park, is another favorite for Republican and Democratic operatives. Dinner at the Capitol Grill, near the Capitol, is like dinner in the House GOP Caucus: swap stories with House Majority Leader Steve Scalise (R-La.). Or join Trump insiders led by frequent diner Steve Bannon at Butterworth's, on Capitol Hill. Trattorio Alberto, on Barracks Row, once former House Speaker John Boehner's (R-Ohio) hideaway, nightly hosts Congress members and staffers from both sides of the aisle. The Tune Inn remains Washington's classic, no-frills, grungy bar. And there's still no better place to see and be seen by the politically powerful than Georgetown's Café Milano. The point is: With so many free alternatives, there's no need to join a private club to help you climb the political, professional and social ladder. In fact, when it comes to joining clubs, the leading authority is the great Groucho Marx. He once applied for membership in the Los Angeles chapter of the Friars Club. But, once accepted, he declined the invitation, citing a busy schedule. Club managers objected, insisting there must be something else. 'I do have another reason,' Groucho wrote back promptly. 'I didn't want to tell you, but since you've forced the issue: I just don't want to belong to any club that would have me as a member.' That Groucho philosophy of not joining any club has enabled me to survive and thrive in the highly-competitive worlds of San Francisco, Los Angeles and Washington. I highly recommend it. Bill Press is host of 'The Bill Press Pod.' He is the author of 'From the Left: A Life in the Crossfire.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
