Wednesday, June 30, 2010
6/30/10 Post
News
Private Sector Adds Few Jobs
Private-sector jobs in the U.S. increased by 13,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. Economists had expected ADP to report a jobs gain of 60,000 for June. The estimated change in employment for May was revised to a gain of 57,000 from an increase of 55,000 first reported.
Bank Fee Is Eliminated in Financial Bill
The Obama administration supported the change in the final bill, in part because of concern that the proposed fee on big banks in the financial regulatory measure would complicate Mr. Obama’s efforts to impose a separate, larger $90 billion bank tax over 10 years.
23 Doomsayers Who Say We're Heading Toward Depression In 2011
The truth is that we are facing the greatest sovereign debt crisis in modern history. There is no way out of this financial mess that does not include a significant amount of economic pain.
Top 5 Most Economically Optimistic Countries
Who's Weathering the Global Recession?
House votes to give homebuyers 3 extra months to qualify for tax credit
Under current law, homebuyers who signed purchase agreements by April 30 have until Wednesday to close on the sale to qualify for tax credits of up to $8,000. The bill would give buyers until Sept. 30 to complete their purchases. The bill passed 409-5. It now goes to the Senate.
High rates, more fees -- credit card traps here to stay
Beginning Aug. 22, your credit card company won't be able to charge you inactivity fees or excessive late fees, and it will only be allowed to charge you one penalty fee at a time. That's the good news. But banks will still be able to get around many of these rules.
U.S. debt to reach 62% of GDP by year-end: CBO
Lower tax revenues and higher federal spending to fight the recession will push the federal debt to 62% of gross domestic product by the end of this year.
Fiscal 2011 could be hardest yet for states
Fiscal 2011 begins on Thursday for most states, which have turned to another round of cuts and tax increases to try to wipe out the gap. All states with the exception of Vermont must balance their budgets.
Dodd-Frank bill amended to change funding method
The sweeping Dodd-Frank bank reform bill was amended Tuesday by a joint House-Senate conference committee to change the way the bill is funded, in order to address the objections of several key Republican senators.
Blog
Is it 1937 again?
There are many commentaries on David Leonhardt's article today on whether we should be raising taxes and cutting government spending, as was done in 1937. Yet I don't see anyone -- at least not today -- talking about monetary policy during 1936-7.
Secondary Sources: Absent Recovery Engines, Growth Risks, 401(k)s
A roundup of economic news from around the Web.
Oops, they may have made the data up
Fraud can happen to anyone. But confirmation bias always make fraud easier.
City Unemployment Rates: Vegas Struggles, Washington on Top
Fifteen of the 49 largest cities in the U.S. saw year-over-year declines in their unemployment rates in May, according to new Labor Department data, even as the unadjusted national rate — at 9.3% — was 0.2 percentage points above its year-ago level.
2nd Half: Slowdown or Double-Dip?
No one has a crystal ball, but it appears the U.S. economy will slow in the 2nd half of 2010.
Recovery Faces Tough Road, Double Dip or Not
...both the data and the gloom pervading financial markets suggest the current recovery will be a long, painful process.
No Easy Way to Fix Social Security
Keeping Social Security just as it is means not doing a lot of other things that progressives want, because the pockets of the rich are not a bottomless resource.
Treating R&D as Investment, Rather Than Expense, Boosts GDP
If research and development costs were treated as an investment, rather than as an expense, gross domestic product would have been 2.7% higher between 1998 and 2007, according to updated figures released Wednesday.
American Austerity
Austerity is an expensive form of insurance against a true fiscal crisis. And though it doesn't necessarily seem like it when you're not having one, fiscal crises are much, much worse than austerity budgets. Fiscal crisis means that rather than unpleasant cuts, you have sudden, unmanageable collapses in things like public pension plans. The resulting suffering is not unpleasant; it is disastrous.
Research, Reports & Studies
CBO: The Long-Term Budget Outlook
Federal Debt Held by the Public Under Two Budget Scenarios
Consumer Confidence Plunged in June
Consumer confidence plunged 9.8 points in June, as consumers lost faith in both the pace and sustainability of the recovery. Expectations fell with fewer consumers expecting economic conditions to improve.
The Political Economy of the Subprime Mortgage Credit Expansion
The evidence suggests that both subprime mortgage lenders and subprime mortgage borrowers influenced government policy toward housing finance during the subprime mortgage credit expansion.
A Comparison of OMB's and CBO's Technical Assumptions Used in Estimating Defense Spending
Letter to the Honorable Nancy Pelosi
Missing the Point: Lessons from The Big Short
The book Big Short raises questions about the validity of the ideas underpinning the financial regulation legislation Congress is now considering.
Markets: The Credit Ratings Agencies
Can financial institutions instead be trusted to
seek their own sources of information about the creditworthiness of bonds, so long as financial regulators oversee the safety of those bond portfolios?
Graphic of the Day
Study Measures Impact Beyond the Jobless Rate as Pay Cuts and Furloughs Take Toll
See: 50 Dead-Simple Ways for the US to Cut Its Budget
See also: Total Nonfarm Payrolls
See also: The Facebook Economy
Economists’ Comments & Opinions
Financial Overhaul Is Politics in Worst Sense: Richard Posner
The most sensible legislative response to the financial collapse of September 2008 would have been to do nothing until the causes of the collapse were fully understood.
Obama's fiscal fantasyland
Responsible people, whether they are national leaders or average citizens, understand that both in their personal and public lives they cannot spend themselves into prosperity.
2010 mid-year review
Commentary: Where we've been and where we're going
Why Obamanomics Has Failed
Uncertainty about future taxes and regulations is enemy No. 1 of economic growth.
It's Time To Bring Back Jobs
The focus should be on better long-run policy, not more feeble short-term fixes.
A Big Bang for Greece
How did Greece get into the death spiral that it's in? Unfunded entitlements. In other words, promise somebody something, don't come up with the financing for it, and pretty soon you find yourself in a fiscal/debt crisis. What should Greece have done?
The Bailout Tax
CBO estimates that the bill's vaunted "Orderly Liquidation Authority," which is being sold as tough medicine for failing banks and their creditors, will cost taxpayers $20.3 billion between now and 2020.
Book Excerpts
"...entrepreneurship and competitiveness are two sides of the same coin: that entrepreneurial activity is always competitive and that competitive activity is always entrepreneurial..." -Israel Kirzner, Competition and Entrepreneurship (1973)
"Did You Know"
"Estimates of the size of the “informal sector” (i.e. the Black Market) in the US indicate that 9% of activity occurs in this sector.
The Western European average: 18%
Greece: 28.6%
