Prospects for growth in the year ahead are solid at the national level, and of course, this can only be good news for the Bay Area and California as well. The U. S. economy has shown remarkable resilience in the face of some severe shocks - in particular, the surge in energy prices that began a couple of years ago and the devastation wrought by the twin hurricanes last summer.

One common way of judging whether housing's price is in line with its fundamental value is to consider the ratio of housing prices to rents. This is analogous to the ratio of prices to dividends for stocks.

Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not.

In the long run, outsourcing is another form of trade that benefits the U.S. economy by giving us cheaper ways to do things.

Are deviations from full employment a social problem? Obviously.

We need to increase the transparency of shadow banking markets so that authorities can monitor for signs of excessive leverage and unstable maturity transformation outside regulated banks.

Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.