Thursday, September 30, 2010

9/30/10 Post


News
Jobless Claims Post Decline
Initial unemployment claims fell by 16,000 to 453,000 in the week ended Sept. 25, the Labor Department said in its weekly report Thursday. New claims for the previous week, ended Sept. 18, were revised upward to 469,000 from 465,000.
In Tax Cut Plan, Debate Over the Definition of Rich
One proposal being discussed is a millionaires’ tax, which would create one or two additional tax brackets for the wealthiest Americans and eliminate the Bush tax cuts only for those who earn more than seven-figure incomes.
House passes tariff bill to stop China's yuan imbalance with U.S.
Republicans from industrial states joined most Democrats in giving new powers to the Commerce Department to consider whether China's policy of tying the value of its currency to the dollar, rather than allowing it to rise in response to market forces, represents an unfair trade practice.
European debt woes hit world markets
A new flare-up in Europe's debt crisis hit world stock markets Thursday after Ireland announced it would sink more billions into its failed banks and Spain's public debt rating was downgraded.
Foreclosures Make Up 24% of Home Sales
A total of 248,534 U.S. properties in some stage of foreclosure -- default, scheduled for auction or bank repossession -- sold to third parties in the second quarter. While this represents an increase of nearly 5% from the previous quarter, the figures are down 20% from the same time last year.
US mortgage rates at record lows-Freddie Mac
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.32 percent for the week ended Sept. 30, down from the previous week's 4.37 percent and matching a record low set earlier in the month, according to the survey.
Oops! F.D.A. Error Is Talk of Henhouse
Ms. Balmer was in Pennsylvania to teach inspectors about how to keep germs away from poultry flocks, known as biosecurity. But the industry executives and state officials said she was breaking a basic biosecurity rule: keep vehicles, which may have driven through manure on rural roads or other farms, as far from the hens as possible.

Blogs
Three Fed Officials, Three Divergent Views
Three Federal Reserve officials are out today with divergent views on the economy and on whether the Fed should buy more Treasury bonds (which is known to some as quantitative easing) to push down long-term interest rates and stimulate growth.
Fannie Mae and Freddie Mac: Serious Delinquent Rates decline
Fannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business decreased to 4.82% in July, down from 4.99% in June - and up from 4.17% in July 2009.
Secondary Sources: September Consumption, Basel III, Development Research
A roundup of economic news from around the Web.
CBO Says China Currency Bill Won’t Do Much
A little perspective may be helpful here. In 2009, U.S. imports of goods from China were $297 billion. So we’re talking about an average tariff rate change of 0.0017 percent. That’s expected to triple in fiscal 2013, to $15 million in revenue, perhaps 0.005 percent.
Worried Consumers and CEOs Are Stuck in Logjam
Earlier this week, the Conference Board’s consumer confidence index unexpectedly plunged to 48.5 in September, the lowest reading since February. On the heels of the consumer report came news from the Business Roundtable that its CEO economic outlook index fell to 86.0 in the third quarter, from 94.6 in the second.
Recalculation vs. Structural Unemployment vs. AS/AD
The information technology workers laid off from financial firms may need different skills in order to be able to work on projects in nonfinancial businesses. They may need to start their own enterprises.
City Unemployment: Uneven
The Labor Department’s report on metro area employment Wednesday showed jobless rates in August were lower in 182 of 372 metro areas surveyed, compared to a year ago. But the unemployment rate was up in 169 places and flat in 21. El Centro, Calif. and Yuma, Ariz., led the pack with the highest jobless rates at 30.4% and 30.2%, respectively.

Research, Reports & Studies
Competition, Consumer Welfare and State Alcohol Regulation
Prudent public policy seeks the right balance between the responsible consumer’s interest in low prices and availability and the potential social costs associated with underage drinking and irresponsible use of alcohol by adults. The Commerce Clause and the Granholm decision require just such a balance. Creating some form of a Commerce Clause exemption for state alcohol laws would disturb this balance and raise the risk that anticompetitive laws would be tailored to take advantage of such a refuge.
Trade Freedom Continues to Advance—Barely
The 10 countries with the highest percentage of people living in poverty have an average freedom score of only 70.3 in the 2011 Index. By contrast, the 31 countries with the lowest poverty levels have an average trade freedom score nearly 10 points higher, at 79.9. The lesson here is that reducing trade barriers reduces poverty.

Economists’ Comments & Opinions
Outsourcing and the 21st-Century Economy
Taxing new U.S. corporate investment at 35%, when the world average is just over 18%, pushes companies to invest offshore.
The Only Policy Left: Growth
Reducing spending, controlling entitlements, reforming public pensions—all of that matters. It's important. But any population being asked to "sacrifice" needs to be able to believe something better is possible.
Why A Deficit-Financed Stimulus Leads Nowhere But To Stagnation
In the business or entrepreneurial sector, rising productivity and an enhanced pace of technological innovation mean that the economic value of investing is higher. Consequently, by employing more resources today, greater consumption will be possible tomorrow.
In Elizabeth Warren We Trust?
The unaccountable head of the new Consumer Financial Protection Bureau has repeatedly used shoddy data to push policies she favors.
Two Cheers for the New Bank Capital Standards
Why do we still rely on the rating agencies, and why are we still allowing Lehman Brothers levels of leverage?

Graph of the Day
CNN: Rising Medicaid costs to blow hole in state budgets
Where Did the TARP Money Go?

Book Excerpts
"The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." –Ludwig von Mises, Human Action (1949)

Did You Know
"...24% of men in newly formed couples in 2010 didn’t work last year compared to 14% in 2009. Meanwhile, the percentage of couples in which one partner was employed and the other was unemployed increased to 15% in 2010 from 8% in 2008, suggesting economic concerns are pushing people together. ...However, even as more people are moving in together, the U.S. marriage rate continues its long-term trend downward, according to data released last month by the Centers for Disease Control and Prevention. The marriage rate in 2009 fell to 6.8% in 2009 from 7.3% in 2007. There were 80,000 fewer marriages in 2009 than 2008, even as the population base rose 2.3 million."