Monday, June 28, 2010

6/28/10 Post

Economic Outlook: Worsening picture in the US
Investors will this week be bracing themselves for signs that the US recovery is slowing, as a slew of economic data on the world’s largest economy is expected to paint a downbeat picture.
Finance Bill: How Changes Could Affect You
The sweeping finance legislation negotiators wrapped up early Friday morning would constitute the biggest overhaul of U.S. financial regulations since the 1930s.
On Finance Bill, Lobbying Shifts to Regulations
The surge in hiring has sent a joke bouncing around Washington: Congress finally passed a jobs bill — full employment for lawyers.
Growing Deficit Concerns Are Trumping Spending
In a poll by the Pew Research Center for the People & the Press earlier this month, 60 percent of those surveyed said the president’s stimulus plan had not helped the economy. Only 33 percent thought the stimulus had helped.
G-20 Agrees to Cut Debt
Rich Nations Back Halving Deficits by 2013, Signaling Intent to Ease Stimulus
Handicapping a Double Dip
According to a model developed by Credit Suisse, there's scant possibility of a relapse into a recession.
Wall Street Hiring Jumps Most Since 2008 as Guarantees Return
Firms are adding jobs for the first time in two years, rebuilding businesses cut during the financial crisis and offering guaranteed payouts to lure top bankers.
Economic damage caused by oil spill may not go beyond the Gulf region.
Analysts say the spill will reduce economic growth by only about one-half of 1 percentage point this quarter, and even less during the second half of the year.
Personal income edges higher
Personal spending ticked higher in May, while income rose for a 7th straight month.
Job blues for gray-haired workers
The nationwide unemployment rate for older workers -- while lower than that of younger workers -- has barely moved since hitting a record high of 7.2% in December. It's currently 7.1%.
Congress blasts Medicaid hole in states' budgets
Officials in Massachusetts and 29 other states that counted on the funds to balance their budgets are left with the task of slashing services and payrolls once again.
Obama urges Congress to pass Wall Street reforms
President Barack Obama on Saturday urged Congress to pass the financial reform bill aimed at strengthening consumer financial protection and enhancing transparency in derivatives trading.

Secondary Sources: Austerity, Financial Illiteracy, Free Trade
A roundup of economic news from around the Web.
The Future According to Dividends, Mid-2010 Edition
...the S&P 500's trailing year dividends per share have been projected to change into the future since 14 July 2009 for each quarter where we have dividend futures data available...
Chicago Fed: Economic Activity increased in May
This is a composite index based on a number of economic releases.
“In the Long Run We Are All Dead” What Does It Mean?
If we are all dead in the long run, then Keynes-Krugman must argue that we are all dead in the short run as well, too.
Personal Income up 0.4%, Spending Increases 0.2% in May
The increase in income was good news, but personal income less transfer payments are still only 1.4% above the low of last year.
The new financial regulation bill
The best equilibrium is to have discredited ratings agencies, not revamped and reregulated agencies.
Housing Supply Metrics
Various housing supply measures compiled from various sources.
Signal and Noise in Economics Writing
...non-economists should express opinions about macroeconomics only with great humility. ...economists, too, need to show humility.
Weekly Summary and a Look Ahead
The key economic report this week will be the June Employment Report to be released on Friday.
Will We Learn from Greece?
If Mr. Hoenig is right and Greece is a lesson, let’s hope that policy makers in the US learn it before the pension crisis hits.
The Constitution is Still Number One
Majority of people strongly agreed with the statement that judges should “Uphold the values of those who wrote the U.S. constitution long ago".
Protecting the Second Amendment
In what is probably the most important Second Amendment case in Supreme Court history, the Court today held that the “right of the people to keep and bear Arms” cannot be infringed by the states.
Economic Insights from Fed President Hoenig
“Artificially low interest rates tend to promote consumer spending over saving and, over time, systematically affect investment decisions and the relative cost and allocation of capital within the economy.”
BIS Warns Central Banks Against Keeping Rates Low for Too Long
...keeping rates low for too long, and other actions like buying government bonds, creates risks to financial stability and opens central banks up to political pressure.

Research, Reports & Studies
Hudson Institute Economic Report
This week saw disappointing data for GDP and housing, suggesting that the economy's rebound is not imminent.
Wells Fargo Economics Group: Weekly Economic & Financial Commentary
Despite disappointing data, the recovery is still on.
Adverse Selection, Reputation and Sudden Collapses in Secondary Loan Markets
...a variety of policies that have been proposed during the recent crisis to remedy market inefficiencies do not help resolve the adverse selection problem.
Obama Discovers One More Crisis for a Toxic Tax
Obama's team seems to believe that even though doubts over new regulations and higher taxes may undercut job creation, the sacrifice is worth it because Democrats get a legislative win.
Americans Relate to Founders, Not Progressives
A nation of property owners is less willing to plunder the property of others in search of some promised gain than a nation where most people don't and will never own significant property.

Graphic of the Day
PER SECOND Debt Increase during Obama Presidency Exceeds ANNUAL Household Income
See: Inflation-Adjusted Cost of a K-12 Public Education and Percent Change in Achievement of 17-Year-Olds, since 1970
See also: Average Federal Tax Rates by Quintile
PODCAST: Caplan on Hayek, Richter, and Socialism
VIDEO: Obama Calling "Bluff" Of Those Complaining About "Deficits And Debt"

Economists’ Comments & Opinions
Why Friedrich Hayek Is Making a Comeback
With the failure of Keynesian stimulus, the late Austrian economist's ideas on state power and crony capitalism are getting a new hearing.
A Pendulum Swing Toward Austerity
In many respects, the expansionary phase of big government is coming to an end, and quickly.
Hillary Clinton: Accidental Supply-Sider
She's right about Brazil's growth. She's wrong about its tax rates.
The Keynesian Dead End
Spending our way to prosperity is going out of style.

Don't talk abt "progress" in terms of longevity, safety, or comfort before looking at zoo animals compared to those in the wildrnss. -Nassim Taleb, Twitter

Book Excerpts
"Representative democracy cannot subsist if a great part of the voters are on the government pay roll. If the members of parliament no longer consider themselves mandatories of the taxpayers but deputies of those receiving salaries, wages, subsidies, doles, and other benefits from the treasury, democracy is done for." -Ludwig Von Mises, Bureaucracy (1945)

"Did You Know"
According to preliminary estimates by The Heritage Foundation’s Center for Data Analysis; Americans’ dependence on government grew by 13.6 percent in 2009. The Index’s dependence variables that grew the most over that past year are: Health and Welfare at 22 percent, Rural and Agricultural Services at 20 percent, and Housing at 15 percent. The Index has grown by 49 percent since 2001. Americans’ dependence on the government was 14 times greater in 2009 than it was in 1962.