Thursday, August 5, 2010

8/5/10 Post


News
SC gets $138 million in mortgage assistance
The Obama administration on Wednesday announced that it has approved mortgage-assistance proposals submitted by state Housing Finance Agencies in South Carolina, North Carolina, Ohio, Oregon and Rhode Island.
Geithner Defends Plan to Let Tax Cuts for Wealthy Expire
Mr. Geithner argued Wednesday that the wealthy tend to save more of their tax breaks than do other groups, so in letting their taxes rise there would be minimal impact on economic activity.
US jobs market still bleeding despite private hirings
A key US government report Friday is expected to show already high unemployment nudging up as firms remain reluctant to hire in large numbers.
Reality sets in for states on Real ID
Driver's licenses must meet rules.
In Germany, a Broad Recovery Is Under Way
German exports are booming again and so is employment. The country’s unemployment rate is 7.6 percent, almost at the pre-crisis level, and down from 9.1 percent in January.
Congress: Living High on the Backs of Taxpayers
As the rest of the country suffers, congressional perks and benefits are on the rise, costing taxpayers $4.66 billion a year—is it time for Congress to take a pay cut?
Ireland's unemployment rate rises to 13.7 percent as university students join welfare lines
Ireland's unemployment rate has reached a 16-year high of 13.7 percent as idle university students and laid-off professionals joined the welfare lines, the Central Statistics Office reported Thursday.
Congress Set to Boost Aid to States
Congress took a decisive step Wednesday toward finalizing a $26 billion bill offering aid to states, a surprise win for Democrats keen to demonstrate they're taking action on an economy showing signs of weakness.
The breakfast index: The cost of breakfast rises
The raw ingredients for breakfast in much of the rich world have increased in price by 25% since the beginning of June.
Billionaires to give away fortunes
Half of money will go to charity.
Euro higher after inspectors report Greek progress
The euro gained ground against the dollar on Thursday as European and International Monetary Fund inspectors said Greece has made considerable progress in dealing with its financial crisis
Hey, Dude, Where's My Job?
Minimum Wage Jump Teaches Teens Harsh Lessons.
European Central Bank, Bank of England hold steady
The European Central Bank and the Bank of England both left monetary policy unchanged Thursday, with key lending rates remaining at record lows.
State aid bill to bring House back
The sudden turnaround followed twin 61-38 Senate votes in which Maine Republican Sens. Susan Collins and Olympia Snowe joined in support of the $26.1 billion measure after Democrats agreed to pay for the costs with cuts from their own priorities, including food stamps for the poor.
In GOP Majority, Committees May Face Cuts
House Republican leaders are considering restructuring and possibly shrinking committees if they retake the majority this fall, according to several House GOP sources familiar with the discussions.
GOP Uses Health Care Playbook for Tax Cuts
Senate Republicans stepped up their withering criticism of Democrats over taxes, believing they have a line of attack that could prove as effective with voters in the midterm elections as their opposition to health care reform was last year.
GOP Marks Off Common Ground for Obama
House Republicans have identified some issues they might be able to work with President Obama on next year if the November elections deliver a GOP majority. But a good deal of partisan distrust would have to be overcome.
Prognosis guarded ahead of annual financial checkup for Medicare and Social Security
Seniors' groups are lobbying against benefit cuts, while conservatives say they will oppose tax increases, creating a difficult political environment for compromise.
So long, new deepwater drilling regulations
Democrats in the Senate rejected taking up a new oil spill response bill because of a dispute over who foots the costs of future spill cleanups and more importantly, how much those parties -- largely oil and exploration companies -- will pay.
What would FDR do? A Roosevelt speculates
Despite the fact that just about everyone has an opinion on it, the jury's out on whether President Obama is a latter day Franklin Delano Roosevelt.
Jobless claims jump to 3-month high
There were 479,000 initial jobless claims filed in the week ended July 31, up 19,000 from a upwardly revised 460,000 the previous week.
Tax cut squabble grows louder
Washington's big debate - whether or not to extend the Bush-era tax cuts – appears to be headed for a showdown when Congress returns from its summer break next month.
Back-to-school shopping starts slowly
Consumers are continuing to keep tight control of their spending as the economic recovery tugs along at a slower pace than most analysts predicted earlier this year.

Blogs
Secondary Sources: Taxes and Small Business, Exports, Technology and Jobs
A roundup of economic news from around the Web.
The Limits of Policy Analysis
Naturally, this has put me in mind of just how hard it is to predict policy outcomes--how easy it is to settle on some intuitively plausible outcome, without considering some harder-to-imagine countervailing force.
Compensation Study: Employers Pay More, Employees Make Less
Employers might be paying more for compensation but employees aren’t taking home the extras, according to a new study.
Great Moments in Government-Run Healthcare
What really astounds me is not that a Swedish man sewed up his own leg after waiting for a long time in a hospital... The really disturbing part of the story is that the hospital then reported the man to the police.
Bankruptcy Filings Drop in the South
While filings were up 9% in July compared to the same time a year earlier, they were down in a handful of southern states, such as Tennessee and Mississippi.
Primaries Show Continued Republican Enthusiasm
There were no huge surprises in primaries held yesterday in Kansas, Michigan, and Missouri. But one thing was clear. Many more voters showed up for the Republican primaries than on the Democratic side.
Worth a thousand words
After 50 years of communism, life expectancy has gone up dramatically (about 25%) in both countries. But now Portugal is more than twice as prosperous as Cuba.
Earnings, Not Lack of Social Security, Increased Past Poverty
...the real reason that half of the elderly lived in poverty before Social Security was that about half of everyone lived in poverty then, for the simple reason that the country was a heck of a lot poorer.
Imaginary Savings Used to Justify $26-Billion in Spending
Using the classic Washington fib that “It’s paid for,” Congress is spending an extra $26-billion to bail out state governments.
Extreme Judicial Activism on Marriage
Governments derive their just powers from the consent of the governed. The people of California, and the United States, have made clear in numerous ways that they have not consented to the redefinition of marriage.
The Obama Elite vs The American People
The facts are becoming quite clear. Kagan, Walker, Gibbs, and Obama all give the same weight to the will of the American people as expressed at the ballot box: “Nothing.”
The Two GOPs
As the fall elections approach, two factions within the congressional GOP have emerged. One is short-term oriented and just wants to return the GOP to power in Congress. The other is more ideas driven and views the upcoming election as an opportunity to push for substantive governmental reforms.
The Failure of Socionomics, Part 2
Even when analyzed on its own terms, socionomics fails rather badly as a social theory and as a tool of stock market prediction.
Why Government Spending, Public Sector Jobs Are Burden to Society
Society derives certain benefits from these expenditures but beyond a certain point, government spending, public sector employees have negative effects.
Five Reasons to Be Bullish
Five Reasons to Be Bullish
Financial Virus Permeates the System
Some sharp minds on the Street are "going dark" and removing themselves from the markets.
Once Again, the Social Security Trust Fund Has No Money in It
Almost as soon as the 2010 Social Security trustees report comes out today; various groups will claim that the program is fiscally healthy because its trust fund won’t run out until sometime in the 2030s. Sadly, the reality is very different.

Research, Reports & Studies
Going Soft: How the Rise of Software Based Innovation Led to the Decline of Japan's IT Industry and the Resurgence of Silicon Valley
...examines the change in the nature of Information Technology (IT) and the effects it has on the performance of the IT industries in the United States and Japan.
An Update on State Budget Cuts : At Least 46 States Have Imposed Cuts That Hurt Vulnerable Residents and the Economy
With tax revenue still declining as a result of the recession and budget reserves largely drained, the vast majority of states have made spending cuts that hurt families and reduce necessary services.

Economists’ Comments & Opinions
Your Stimulus Dollars at Work: Going to Places Regardless of Economic Need
"Hard-hit Florida ranks last in stimulus benefits per resident despite having the nation's fifth-highest unemployment rate. Nevada has the nation's worst unemployment — 14.2% — but ranks 46th in stimulus benefits."
What if the jobs don't come back?
Based on the history, pre-recession unemployment rates won't be seen again until 2027 as idled workers find it harder and harder to land jobs.
Squeezing the Rich Is Poor Way to Spur Growth: Commentary by Caroline Baum
To ignore evidence that the rich behave differently is silly. The government can’t get more blood from a stone, yet it keeps trying.
POWELL: The unemployment president
Obama joins tax hikers hall of shame.
Buffett on World's Growing Wealth
"We're in the early stages of fairly widespread enormous wealth around the world. The world will get more prosperous as we go along. Human potential has come nowhere close to being fully realized. As people exercise that potential and governments allow it to thrive you're going to have more and more wealth throughout the world."
Private Enterprise Does It Better
Free enterprise does everything better. Why? Because if private companies don't do things efficiently, they lose money and die. Unlike government, they cannot compel payment through the power to tax.
The Public Option Rises – Again
Liberals, who see the public option as the first step toward their goal of a single-payer government health care system, never truly abandoned the idea.
Saying No Is Not Nihilism
It's not just tea partiers that are seeking smaller government these days.
Did the Feds End the Great Recession?
A report released last week by prominent economists Alan Blinder and Mark Zandi and it says what the Obama Administration had hoped all along. So, with all due respect to Blinder and Zandi, I'll ask for a little patience to summarize my main criticisms of their report:

Graph of the Day
SeekingAlpha: The number of unemployed in Germany decreases while the number of the unemployed in the United States continues to rise
See: The Crisis in Deeply Underwater Mortgages, Unemployment Edition
See also: The Truth About the 2001-2003 Tax Cuts

Book Excerpts
"Just as there cannot be a uniform price for all kinds of labour, an equality of demand and supply for labour in general cannot be secured by managing aggregate demand. The volume of employment depends on the correspondence of demand and supply in each sector of the economy, and therefore on the wage structure and the distribution of demand between the sectors. The consequence is that over a longer period the Keynesians remedy does not cure unemployment but makes it worse." –F.A. Hayek, The Collected Works of F.A. Hayek, Vol. 6 (1999)

Did You Know
Some wasteful stimulus spending:
• $62 million for a tunnel to nowhere in Pittsburgh, PA that even Governor, Ed Rendell called “a tragic mistake”
• $1.9 million for international ant research
• $529,648 to study the effects of local populations on the environment…in the Himalayas
• $700,000 to study why monkeys respond negatively to inequity
• $456,663 to study the circulation of Neptune’s atmosphere
• $200,000 to help Siberian communities lobby Russian policy makers