7/7/10

BUZZ: Long Recession Ignites Debate on Jobless Benefits

News
Credit card delinquencies fall to 8-year low
The number of consumers behind on their credit card payments fell to an eight-year low in the first quarter of 2010. Overall, delinquencies across a wide-range of consumer debt categories have also fallen.
Farm workers: Take our jobs, please!
Facing growing anti-immigrant rhetoric, the United Farm Workers union is challenging Americans to take their labor-intensive, low-paying farm jobs.
Bush tax cuts up in the air
Odds are good that the middle-class will get to keep their tax cuts. The question now is for how long.
Mortgage Applications in U.S. Rise 6.7% as Homeowners Move to Refinance
The Mortgage Bankers Association’s index increased 6.7 percent in the week ended July 2. The Washington-based group’s refinancing gauge jumped 9.2 percent to the highest reading since May 2009, and its index of purchases fell 2 percent to the second-lowest level since 1997.
Obama Will Appoint CMS Chief While GOP Is Away
Obama intends to overcome GOP resistance to his nominee to lead the Centers for Medicare and Medicaid Services by making a recess appointment Wednesday.
Expect lots of government layoffs at state, local level
Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding.
Services report fuels US recovery fears
Concerns that the US economic recovery is in danger of stalling mounted on Tuesday when a monthly report on activity in the services sector showed a surprisingly steep drop in June.
Even State Capitals Feel the Squeeze
Many capital cities, particularly those with limited private industry, may suffer additional strain as states embark on their deepest cuts yet in the financial downturn.
Hard Times for Ill., but Not for Governors Staff
Giving Quinn's staff big pay hikes while he slashes spending in education and health care services doesn't sit well with lawmakers and could hamper the governor's efforts to convince them to support borrowing for state pensions.
Home-Efficiency Program Takes Hit
A White House-backed effort to encourage home-energy improvements was dealt a blow Tuesday after a federal regulator said the program posed significant risks to mortgage lenders and investors.
TSA drops policy blocking 'controversial' sites
Revises 'acceptable use' for Internet access after criticism.

Blogs
States Fighting Back Against Obamacare: Virginia
Although President Obama signed the Patient Protection and Affordable Care Act into law , the battle against the federal takeover of health care is far from over. In March, Virginia passed its own statute protecting Virginians from having to comply with such a mandate.
Side Effects: Obamacare Shifts Costs to the Privately Insured
President Obama promised to address the growing costs in health care with passage of his “reform” bill. But instead of reducing costs, Obamacare will succeed only at shifting the burden to taxpayers and the privately insured.
Unemployment Extension Could Boost Jobless Rate
The government’s unemployment rate counts only workers who say they’re looking for work. To qualify for benefits, a person has to say he or she is looking for work. When benefits were less generous – or simply unavailable – more jobless workers indicated that they had given up looking, and thus weren’t officially counted as unemployed.
Legislators’ Ignorance of the Legislation is No Excuse
'Suppose a “yes” vote also requires a signed statement, before the vote, that says, “I have personally read this law, in its entirety, and approve its content.”'
Secondary Sources: Better Jobs, Putting Idle Cash to Work, Benefits Extension
A roundup of economic news from around the Web.
The Obama Tax Future
How heavily will President Obama's planned tax hikes weigh upon the U.S. economy?
Induced Human Error
No one who has studied much economics will be surprised by this: the Peltzman effect in action.
The Ethics and Etiquette of Statistical Discrimination
No matter what they say, everyone engages in statistical discrimination.
Environmental Disaster
[The administration's energy retrofit program is] Not so blandly heartwarming after all; more like an unmitigated disaster for anyone who took one of these loans
Administration More Concerned about Trade Appearances than Action
Simply relying on bigger federal government programs is not going to increase exports.
Executive Compensation By Any Other Name and Continued
Most convincing piece of evidence: public company CEOs are not paid more than their private counterparts.

Economists' Comments & Opinions
Keynes vs. Hayek: The Great Debate Continues
Is all spending equally productive, or should government policies aim to simulate private investment?
More Grade Inflation for President Obama
Just 18 months into his term, a team of presidential scholars has decided Barack Obama's already the 15th best president we've ever had. On Thursday, the Siena Research Institute released its latest presidential rankings list, based on a poll of 238 academics.
A Trillion Unintended Consequences
Dodd-Frank's last minute assault on Main Street derivatives.
The Curse Of Economic Uncertainty
Fiscal austerity is not the problem-- lack of clarity is.
Government taxes imaginary income
IRS has long been a lawless agency outside the Constitution.
Hard Knocks From Easy Money
The Federal Reserve is feeding big government and harming middle-class savers.

Somebody will come up with a way to genuinely rebuild some trust, and securitization will return. -Garett Jones, Twitter

Graphic of the Day
NYTimes: American Dream Is Elusive for a New Generation
See: Total Government Spending (% GDP)
See also: After the gold rush
PODCAST: Kling on the Unseen World of Banking, Mortgages, and Government

Research, Reports and Studies
The Rising Threat of Deflation
As we enter the second half of 2010, while markets have been obsessed with Europe's debt crisis, they have failed to notice potentially more ominous developments. By later this year, persistent excess capacity will probably create actual deflation in the United States and Europe
How Americans Are Overtaxed to Overpay the Civil Service
Salaries and benefits—for identical jobs—are 30 percent to 40 percent higher in the federal government than in the private sector. Congress should not overtax all Americans to overpay the privileged workers in the civil service.
The Death of Neoliberalism
As the Bush-Obama era of bailout economics and Keynesian rehabilitation settles into something like cruising speed, perhaps the most fantastic fact to swallow will be that once upon a time the United States had a president who restrained government spending, balanced the budget, argued forcefully for the benefits of free trade, and declared that “the era of big government is over.”
ISM Nonmanufacturing Survey Disappoints
The headline reading of the health of the non-factory sector was below the consensus estimate, a weaker but still expansionary 53.8. The contraction in employment and drop in new orders are particularly bothersome.
Missing the Point: Lessons from The Big Short
The regulatory legislation now before the House and Senate will make it difficult for participants in the CDS market to speculate against a bubble, making future bubbles more likely.
Do Consumer Price Subsidies Really Improve Nutrition?
In fact, it may have had a negative impact for some households.

Book Excerpts
"Interference of any kind... in the spontaneous direction of industry, and the free employment by their owners of the great agents in production, labour, land, and capital, has the certain effect of benumbing their powers and lessening the sum of production, and consequently the shares, of the producing parties; as well as of needlessly, and therefore unjustly, curtailing their freedom of action." -George Julius Duncombe Poulett Scrope, Principles of Political Economy (1833)

"Did You Know"
The average private-sector employer pays $9,882 per employee in annual benefits, while the federal government pays an average of $32,115 per employee. Since the recession began, federal employment has risen by 240,000—12 percent. The unemployment rate for federal employees has only slightly risen from 2.0 percent to 2.9 percent between 2007 and 2009.