Thursday, September 9, 2010

9/9/10 Post

U.S. Falls in Ranks of Global Economy
The U.S. fell two spots, to rank No. 4 behind Switzerland, Sweden and Singapore in the Geneva-based [World Economic Forum] organization's annual survey of global competitiveness. Germany climbed two notches to end in fifth place; Japan was ranked No. 6.
Budget Deficit at $1.3 Trillion So Far in Fiscal 2010
The federal government spent about $1.3 trillion more than it collected during the first 11 months of fiscal year 2010, a report said Wednesday.
Recovery Spreads Fitfully
Farm, Manufacturing States Hold Edge Over Regions That Lean on Housing.
Controversial Oregon Taxes May Spur Corporate Exodus
A new tax hike on high income earners and businesses in Oregon has sparked a debate over whether the move will eventually drive away businesses and generate far less tax revenue than proponents predict.
ECB: More Debt Action May Be Needed
Euro-zone countries should be ready to implement more measures to reduce their debt burden should the economy grow less than expected, the European Central Bank said in its monthly bulletin Thursday.
Holiday Job Outlook Stays Flat
Yet Most Retailers Are Optimistic, With 64% Expecting Seasonal Sales to Improve.
U.S. Trade Gap Narrows
The U.S. trade deficit contracted sharply in July, posting its biggest drop in 17 months as exports of airplanes surged and U.S. demand for imports fell across the board.
Consumers to Pay Nine Percent More Out of Pocket
The latest analysis of health care reform – out today from bean counters at Medicare – won’t make selling it on the stump any easier. Yet there’s a glimmer of hope in the out years of the 10-year projection that the plan will begin to “bend the cost curve.”
Fight Brewing on Dividend Taxes
Telecom Firms Say Higher Rate on Payouts Would Hurt Values of Their Stocks.
Help for homeowners who haven't missed a payment
Borrowers who are up-to-date with their payments but have seen their home's value drop way below their loan amount could get help from a new government program.
Teaching: No longer a recession-proof job
The hiring of new teachers has slowed dramatically and fewer veteran educators are staying in the field for their entire careers, said Segun Eubanks, director of teacher quality at the National Education Association, which has 3.4 million members.
Obama: Close tax loopholes to juice economy
As President Obama pushes a new campaign to juice up the economy, he's starting to fill in the details of how he would pay the estimated $180 billion tab. His plan: Eliminate some corporate tax breaks and subsidies, and close loopholes.
Consumer borrowing falls again in July as credit card use falls for 23rd straight month
Borrowing dropped at an annual rate of $3.6 billion in July, the Federal Reserve reported Wednesday. That marked the 17th drop in credit in the past 18 months.
Experts Plan Tour To Tout Deficit Measures
Five prominent budget experts said today they will tour at last six cities to discuss with the public ways to reduce the budget deficit, even though they doubt Congress will act on the issue before the end of the year.
GOP Blasts Obama’s Economic Plan
Republican leaders wasted little time responding to President Obama’s charge Wednesday that restoring GOP leadership in Washington would send the nation’s economy careening backward, and accused the president of proposing the wrong prescription for a turnaround.
Economists cut U.S. growth forecast again
Projected U.S. economic growth for the rest of this year and next was revised down for a third month in a row by a panel of about 50 economists.
Obama Targets Boehner, Casts Election as 'Fear Versus Hope'
President Obama, in Cleveland to deliver an aggressive campaign-style speech, urged voters not to buy the economic plan Republicans are selling, casting the upcoming election as one of "fear versus hope."
Audit of Priority Mail's ads: Doesn't 'fit'
Made popular by the "If it fits, it ships" slogan in television ads, the Priority Mail initiative is seen as a bright spot during otherwise tough economic times for the U.S. Postal Service, where multibillion-dollar deficits and declining mail volume have officials moving to cut a day of delivery. But questions have surfaced about whether the campaign is as profitable as it seems.
Budget dilemma pits raising revenues vs. spending cuts
President Obama says the federal government needs more revenue, while House Minority Leader John A. Boehner says it needs to spend less. One of them could walk out of this year's congressional elections with a mandate to handle one of the most intractable problems facing the country.

Obama vs. JFK on taxes

New Jobs Data, a Late British Economist and a Fed Nominee
Job openings in July, at 3.042 million, were up from 2.864 million in June. But that is still a long, long way from pre-recession levels in excess of nearly 5 million. The economy, in other words, isn’t creating anywhere near enough jobs to absorb 14.9 million unemployed workers.
Adding insult to injury, some towns levy automobile "crash tax"
If you have an at-fault accident on certain stretches of Interstate 5 near Fresno, Calif., you may suffer an extra pain: A $370 bill from the Fresno County Fire Protection District.
Weekly Initial Unemployment Claims decline
"In the week ending Sept. 4, the advance figure for seasonally adjusted initial claims was 451,000, a decrease of 27,000 from the previous week's revised figure of 478,000."
Secondary Sources: Tax Cuts, Housing and Government, Obamanomics
A roundup of economic news from around the Web.
“There is no such thing as macroeconomics.”
Alchian didn’t deny there were aggregate economic phenomena, only that theory must be microeconomic. In substance, that was Hayek’s view.
Tech Spending Cushions Some Metro Areas
Demand in the technology sector has improved both from consumers’ willingness to splurge on electronics even on tighter budgets and from companies upgrading software.
Consumer Credit Declines in July
"In July, total consumer credit decreased at an annual rate of 1-3/4 percent. Revolving credit decreased at an annual rate of 6-1/4 percent, and nonrevolving credit increased at an annual rate of 1/2 percent."
The Obama tax plan, or Austro-Obama business cycle theory
[Kleinbard:] “You’re putting businesses in the same economic position as if you were inviting them to borrow money to buy tax-exempt bonds.”
Fed's Beige Book: Continued growth, but "widespread signs of a deceleration"
Pretty weak, but still growing in August.
Economics 101
President Obama’s problem is that the people aren’t buying what he’s selling – and for good reason. His ideas, far from being new, have been tried countless times, both here and abroad. They don’t work.
“We’re Talking Bridges…”
On Labor Day, President Obama announced his plan for an additional $50 billion in spending, mostly on transportation. An area Obama specifically mentioned was more spending for bridges. While clearly there are bridges that are greatly in need of repair and represent a threat to passenger safety, what has been the overall trend in bridge quality? In one word: improving.
The Clean Energy Future Looks Dim for Light Bulb Workers
This month General Electric will shut down the last major incandescent light bulb factory in the United States, and the 200 workers in Winchester will lose their jobs. Green advocates hold that more jobs will be created making the high-tech replacements. Too bad the green-job theory is wrong.
Obama’s Desperate Times and Desperate Measures
Faced with predictions of staggering losses for his party in November’s midterm elections, President Barack Obama today appeared on ABC’s “Good Morning America” and said, “If the election is a referendum on ‘are people satisfied about the economy as it currently is,’ then we’re not going to do well, because I think everybody feels like this economy needs to do better than it’s been doing.”
Side Effects: Obamacare Raises Your Premiums
It’s exactly what conservatives predicted. While the Congressional Budget Office (CBO) did estimate that Obamacare would cause health insurance premiums to rise, conservatives correctly pointed out that the CBO’s estimates were wildly optimistic.
White House Aide Contradicts Obama on Stimulus II
We already noted that White House aides were already backtracking on President Barack Obama’s promise that his $50 billion infrastructure plan
Hurricane Katrina: Grassroots Greatness and Federal Failure
On the fifth anniversary of Hurricane Katrina, credit for New Orleans’s ongoing recovery continues to go to the grassroots, not the federal government.
Obama Hoping to Counter Poor Polls With Pro-Business Agenda
During a talk in Cleveland, Obama will unveil one of the most aggressive business proposals of his administration.

Research, Reports & Studies
Keys to Sustainable Recovery
With economic growth lower than expected, policymakers should undertake measures with a higher probability of stimulating the economy. Plenty of options have not yet been tried.
Obama’s Desperate Search for Effective Stimulus
An economy floundering and an election looming have President Obama thrashing about for a viable jobs policy.
Infrastructure Stimulus Spending: Pandering to Organized Labor
In a normal world, one would expect that the sorry outcome of an increasingly unpopular ARRA would have discouraged the President and his economic team from repeating the mistake. But apparently not…
Study: Impact of tweaking 14th
Repealing birthright citizenship under the 14th Amendment would actually increase illegal immigration rather than decrease it, according to a nonpartisan report. The Migration Policy Institute says that by denying automatic citizenship to U.S.-born babies of undocumented immigrants, the nation’s illegal immigrant population would grow to 16 million over the next 40 years, an increase of at least 5 million people.

Economists’ Comments & Opinions
What’s Stalling the Next Economic Revolution?
The next economic revolution is likely to come in healthcare and education. Two things stand in the way: credentials cartels and state-subsidized incumbents.
Tax Contradictions
Obama says the economy needs a tax cut—and a tax increase.
JOHN STOSSEL: Entrepreneurs Under Attack
Every day, federal, state and local governments stifle small businesses to privilege well-connected incumbent companies. It's a system of protectionism for influential insiders who don't want competition. Every locality has its share of business moguls who are cozy with politicians.
The Federal Heath-Care Tease
Minnesota's Governor declines to take the ObamaCare bait.

Graph of the Day
Do Unemployment Benefits Keep the Jobless at Home?
•See: Dept. of Education Spending

Book Excerpts
"We can now stand back and look at the overall pattern built into our government. Here is what we see: (1) We see the arbitrary assaults on business and the slow destruction of our productive system, which is the source of all wealth. (2) We see the redistribution of increasing amounts of wealth to a combined clientele of the acutely needy and a growing portion of the middle class. (3) We see the tax burden growing steadily to finance the redistribution process. (4) We see an abyss of governmental debt piled on debt, much of it hidden from the public by budgetary manipulation. (5) We see a commitment to a vast network of lifelong pensions to government employees and others in the middle-class populace.

…As this incessantly compounding debt and ravenous devouring of investment capital coincides with a nonstop regulatory assault on our productive system and a nonstop redistributionist assault on our productive classes, the national Ponzi game too must ultimately self-destruct." –Former Treasury Secretary William E. Simon, A Time for Truth (1978)

Did You Know
The number of people who died on the nation's roads fell 3,615, or 9.7%, from 2008 to 33,808 last year, the latest available data from the Department of Transportation. That was the lowest total since 33,186 people were killed in 1950, when there were one-fifth the number of vehicles on the road than today.