Friday, September 24, 2010

9/24/10 Post

Warren Buffett to CNBC: "We're Still In a Recession"
Warren Buffett tells CNBC that by his own "common sense" definition, the United States is "still in a recession."
Gold Climbs to $1,300 on Dollar Concern; Silver at 30-Year High
Gold futures rose to a record $1,300 an ounce in New York as investors sought a protection of wealth and an alternative to a weakening dollar. Bullion traded at an all-time in London and silver reached the highest price since 1980.
Congress sends small-business fund to Obama
The Democratic-controlled Congress on Thursday sent President Barack Obama a long-delayed bill to help struggling small businesses with easier credit and other incentives to expand and hire new workers.
Thomas Hoenig Is Fed Up
Within the Federal Reserve, there is one very powerful voice of dissent.
Sales of new homes flat in August
Supply of houses on market drops to lowest level in 42 years.
PIIGS roast: Euro debt fears return
Ireland's gross domestic product fell in the second quarter. Since Ireland is one of the I's in the so-called group of troubled PIIGS nations in Europe -- Portugal, Italy, Greece and Spain make up the rest of the club -- that is not good news.
Durable-Goods Orders Drop
Durable-goods orders declined by 1.3% to a seasonally adjusted $191.17 billion, the Commerce Department said Friday. This is the biggest drop since August 2009.
Lawmakers curb SEC power to keep secrets
Lawmakers moved Thursday to repeal a provision in the financial reform law that shields the Securities and Exchange Commission from requests under the Freedom of Information Act.
For love or money? Census reports sharp rise this year in unmarried couples living together
The number of opposite-sex unmarried couples who shared living arrangements jumped 13 percent this year to 7.5 million. That's compared to a 2 percent decrease between 2008 and 2009.
Claims Alleging Job Bias Rise With Layoffs
For the six months that ended April 30, more than 70,000 people filed claims with the Equal Employment Opportunity Commission saying they had suffered job discrimination, a 60% increase in bias claims compared with the same period a year earlier.
Blame the rich: Wall Street an appealing target for Democrats, especially in Washington state
Patty Murray was stuck. Down in the polls for months and facing a well-known Republican challenger, the three-term Democrat was finding a difficult market for her hard-working-Senator sales pitch. Then she started bashing Wall Street.
'Pledge to America'
A quick look at the detailed provisions, in the GOP’s ‘Pledge to America’.
Andrew Jackson's tea party movement
The swift rise and recent success of the tea party movement have caught many observers by surprise. To a historian of the early American republic, however, the phenomenon displays an eerie familiarity. Andrew Jackson’s campaigns for president in the 1820s betray many parallels with today’s tea party movement.
F.C.C. Opens Unused TV Airwaves to Broadband
The change in available airwaves, which were freed up by the conversion of television signals from analog to digital, constitutes the first significant block of spectrum made available for unlicensed use by the F.C.C. in 20 years.
US investors shaken by jobless news
US stocks slid back under the key 1,130 level led by losses for financials and industrials after initial jobless claims unexpectedly climbed for the first time in four weeks.
Small Gifts Sent to Ease U.S. Debt
Last year, the Bureau of the Public Debt recorded $3.1 million in gifts, more than has been usual since the government began accepting such donations in 1961. At that rate, it would take millions of years to retire the $13.4 trillion the country owes its creditors, foreign and domestic.

Many Supporters Not Willing to Trumpet ObamaCare’s Achievements
Many are trying to back away slowly from their previous support of ObamaCare.
Secondary Sources: Toxic Asset’s Death, Stressful Cities, Income Diversity
A roundup of economic news from around the Web.
A Novel Way of Keeping Fiscal Deficits Under Control?
Having inherited an 8 percent budget deficit from the previous socialist government, the new conservative-liberal government of Slovakia has come up with a novel way of keeping budget deficits under control in the future. Starting in 2011, salaries of government ministers will rise and fall depending on the evolution of the fiscus.
Outside the Beltway: A Taxpayer Victory in Bell, CA
Last month, we highlighted wasteful spending in Bell, Calif., that resulted in paying the City Manager nearly $800,000 a year. This gross misuse of public funds prompted an investigation by prosecutors and what they found was amazing. They found that not only was the City Manager, Robert Rizzo, grossly overpaid, but the city council failed to oversee his actions, which resulted in Rizzo making unauthorized city loans to himself.
ObamaCare Leads Minnesota Insurers to Suspend Sales
Two of Minnesota’s biggest health plans said Thursday they have temporarily suspended sales of individual health insurance policies because of uncertainty related to the new federal health reform law.
The Fight to Protect Your Employee Health Care Coverage
Obamacare includes a provision to allow existing plans to be “grandfathered” under the new law, so that Americans won’t have to change coverage they like to adhere to the new law’s numerous rules and regulations.
Side Effects: Premiums Will Rise Because of Obamacare
Even President Obama admitted that his health care plan was “going to increase our costs—we knew that.”
Inflation Fears of Rich, Poor Diverge
There are “differences in inflation expectations across demographic groups’ and there are “marked changes in the sizes of those differences over time,” a new report issued by the Federal Reserve Bank of New York said Thursday.
CLASS Act Repeal Should Be Taken Seriously
Should Americans be forced into mandatory participation in a government-run long-term care Ponzi scheme? Or is a taxpayer bailout of another congressional misadventure a better idea?
The Attack on Civilization
"Somewhere along the way, during the last 50 years, the critique of capitalism changed from condemning its failure to spread the wealth to condemning the very opposite. Suddenly the great sin of capitalism was that it was producing too much, making us all too materialistic, fueling economic growth at the expense of other values, spreading middle-class decadence, and generally causing society to be too caught up in productivity and too focused on the standard of living."
Waiting for Crazy
President Barack Obama’s second address to the United Nations General Assembly almost sounded as if he were speaking to voters on the campaign trail in Iowa, instead of fawning diplomats in Manhattan.
The High Cost of College
I'm tempted to simply say we ought to end the subsidies altogether, but I don't know what the counterfactual is. When my parents were in college, it was possible to work your way through a good four year school; these days, that's difficult to impossible. Have loans really increased access? Or have they simply made it more expensive?

Research, Reports & Studies
The Uncertainty of Health Care Projections
Many economists and policy analysts have very different views on what effect PPACA will have on business, government finances, and the health care industry. During the debate, the Congressional Budget Office (CBO) had the daunting task of issuing the official estimate of the bill’s costs and savings.
Obama Tax Hikes: Bad for All Americans
If Congress adopts the President’s plan, it will eliminate all the growth-promoting policies in the 2001 and 2003 tax relief packages slowing down economic growth and job creation while the economy struggles to recover. Slower economic growth will not only hurt those that will pay higher taxes under President Obama’s plan—it will hurt Americans at all income levels
Government’s Light Bulb Ban Is Just Plain Destructive
In 2007, Congress passed an energy bill that placed stringent efficiency requirements on ordinary incandescent bulbs in an attempt to phase them out beginning in 2012 and have them completely gone by 2014. But the politicians, as they typically do, failed to see the unintended consequences of this program.
RCM: Wells Fargo Economics Group: LEI Inches Up: Slogging Along in the Slow Motion Recovery
For the 16th time in 17 months, the Leading Economic Index nudged higher, while the Coincident Index was unchanged and the Lagging Index added a modest 0.2 percent.
RCM: The curse of government failure
There is no doubt that the U.S. has witnessed a regime change in terms of the relative size of the federal government. The “Law of the Ratchet” is alive and well.

Economists’ Comments & Opinions
Change at the National Economic Council: What does it mean?
...any administration’s communications successes and failures are as much the responsibility of policy staff as of the communications staff. I strongly disagree with many of the Obama administration’s economic policy choices, but there are limits to what it can do to predict and strengthen national economic performance – even if their policy analysis and prescriptions are perfectly optimized.
Why Business Bashing Has Flopped
Former CEOs and Wall Street vets are holding up well against Democratic attacks.
Poor Kid on Block Fleeced by the Elderly: Laurence Kotlikoff
The personal savings rate, like the federal deficit, is a made-up, accounting measure, with no economic content. Its value and changes through time are entirely dependent on how we classify things. For example, counting Social Security contributions dramatically raises the personal savings rate, but lowers its recent growth.
The Responsibility Deficit
The heart of any moral system is the connection between action and consequences. Today’s public anger rises from the belief that this connection has been severed in one realm after another.
The IPO and the American Dream
Well-functioning capital markets are critical for job creation. Congress should ease the burden on companies that go public—and fast.
The Battle for the Future
For most of the life of America, and when it grew fastest, government spent just a few hundred dollars per person. Today, the federal government alone spends $10,000. Politicians talk about cuts, but the cuts rarely happen. The political class always needs more.

Graph of the Day
Cato: What Constitution? What Monopoly? What Failure?
See: Recession or Not, U.S. Job Market Woes Persist

Book Excerpts
"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. " –Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776)

Did You Know
The United States is the fattest nation among 33 countries with advanced economies. Two-thirds of people in this country are overweight or obese; about a third of adults — more than 72 million — are obese, which is roughly 30 pounds over a healthy weight.