6/23/10 Post

BUZZ: Europe spurns Obama's plea for more spending

News
Caution's the word as Fed wraps up meeting
As they wrap up a two-day meeting to review the U.S. economy, interest rates and monetary policy, Federal Reserve officials are expected to issue a cautious statement keeping rates on hold at record-low levels.
Derivatives: No special deals for Wall Street
As Congress debates the final language for reforming Wall Street, a behind-the-scenes battle is raging over the arcane details of derivatives regulation.
After a year off, millionaires back in bloom
After plummeting by a record amount in 2008, the number of millionaires in the world recovered last year despite ongoing weakness in the global economy.
Housing Market Threatens U.S. Recovery as Slide Resumes
The end of the tax credit in April is putting a strain on a market still hurting from the worst collapse since the Great Depression. Foreclosures may reach 1.9 million this year after a record 2 million in 2009.
Consumer Financial Protection Bureau closer to reality
House and Senate negotiators near agreement on creation of the controversial new agency.
Cities Grow as Housing Bust Slows Movement to Suburbs
Several of the nation's biggest cities saw populations grow faster last year than any year in the 2000s as the recession and housing bust kept people from moving out of state or to the suburbs, the Census Bureau said.
Hidden Costs of Moving to a New Home
Don’t forget to factor transportation, utility, and insurance costs into your moving decision
Daunted by deficits
Across the world - from the US to Greece - plans are under way to cut spending and raise taxes.
Medicaid’s Ticking Bomb Could Wipe Out State Budgets
A new study claims the costs of Medicaid’s long-term care services could cripple states’ already-fragile budgets.
What Would You Do With an Extra Hour?
Americans Are Spending More Time Watching TV and Sleeping as Unemployment Rises, Survey Finds

Blogs
Speak Out on Out-of-Control Spending
Can Washington really be trusted to use new revenues to close the deficit gap, or would they just spend the money on new programs?
Morning Bell: Obama’s Leadership Vacuum
There are several crises confronting America and President Obama isn’t quite sure what to do about it.
The Real “Anti-Stimulus” – The Nation’s Growing Debts
There is no magic in debt-financed infrastructure and economic-development, only a deferred tax bill to pay for the government’s gambles.
How high will Existing Home Months-of-Supply increase this summer?
...expect house prices to fall in the 2nd half of 2010 and into 2011 - probably another 5% to 10% for the major house price indexes (Case-Shiller and CoreLogic).
The Glories of Competition
Early Monday, Barnes & Noble Inc. cut the price of its Nook e-reader to $199 and introduced a Wi-Fi-only model for $149. Hours later, Amazon.com Inc. lowered the price of its Kindle e-reader to $189.
Estimate of June Decennial Census impact on payroll employment: minus 243,000
The Census Bureau released the weekly payroll data for the week ending June 12th this morning...
Another view of the structural versus cyclical unemployment question
...the relatively disappointing May private-sector payroll jobs numbers released last Friday and the improving but low level of job openings reported in the JOLTS data for April are reminders that weak labor demand is still the dominant factor inhibiting the overall employment recovery.

Research, Reports & Studies
Lots of Regulatory Expansion but Little Reform
The U.S. Senate’s financial “reform” bill, consisting of over 1,500 pages of regulatory expansion, is unlikely to achieve its own goal of preventing another crisis. But it is certain to produce an efflorescence of bureaucratic interventions, red tape, and costs.
In Russia, a Climate of Fear Is Stifling Innovation
Paralyzed with fear and uncertainty, Russian entrepreneurs are investing very little in their country beyond their immediate production needs.
The Crisis in Public Sector Pension Plans
A Blueprint for Reform in New Jersey.

"Did You Know"

According to a recent poll, 71% of people expect cancer will be cured by 2050, 66% expect artificial limbs to be working better than real ones and 53% say ordinary people will travel in space. 72% of people are expecting a major energy crisis, 58% saying there is likely to be another world war and 53% anticipating a terrorist attack on the U.S. involving nuclear weapons.

Graphic of the Day
New home sales plummeted to their lowest level in the history of the data set as only 300,000 contracts were signed.
See: Government Debt Issuers Most Likely to Default
See also: Government Spending on Defense, Social Security, and Medicare (%GDP)

Economists’ Comments & Opinions
Threat of Another Economic Stumble Is Real
The danger of deflation is still there. The risk of another stumble in our economy is real, including the continuing fragility of community banks over commercial real estate loans.
Schumpeter 2.0
A great thinker’s contribution not only appears in his or her finished works and arguments, but also within the rich intuitions or core ideas that underlie the arguments.

Book Excerpts
"...Suppose that it will cost six francs to repair the damage [of a window broken by a child]. If you mean that the accident gives six francs' worth of encouragement to the aforesaid industry [for glass], I agree. I do not contest it in any way; your reasoning is correct. The glazier will come, do his job, receive six francs, congratulate himself, and bless in his heart the careless child. That is what is seen.

But if, by way of deduction, you conclude, as happens only too often, that it is good to break windows, that it helps to circulate money, that it results in encouraging industry in general, I am obliged to cry out: That will never do! Your theory stops at what is seen. It does not take account of what is not seen.

It is not seen that, since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library. In brief, he would have put his six francs to some use or other for which he will not now have them. -Frédéric Bastiat, The Broken Window, What Is Seen and What Is Not Seen, (1848)