News
Bloomberg | U.S. Housing Recovery Stymied by Government
While a record share of Americans want to buy homes, U.S. policies, often working at cross-purposes, are making it more difficult. Government-controlled Fannie Mae and Freddie Mac have boosted standards so high that some people previously considered prime borrowers no longer qualify.
WSJ | OECD Growth Steady
Developed economies grew at an unchanged rate in the first quarter of 2011, although a decline in the contribution from consumer spending and a rise in the contribution from stock building pointed to weakness ahead.
USA Today | Foreign buyers lifting U.S. home sales
Foreign buyers are helping to stoke home sales in U.S. vacation hot spots decimated by the real estate crash, especially in southern Florida.
CNN: Money | The hidden costs of fuel economy regulations
They are at it again -- the government and the automakers are trying to determine what's good for American car buyers. As usual, they have the right destination in mind, but they are heading in the wrong direction to get there.
Fox News | White House Disputes Study Saying Stimulus Cost Taxpayers $278,000 Per Job
The report released by the president's Council of Economic Advisers late Friday ahead of the July 4 holiday weekend estimated the Recovery Act saved or created between 2.4 million and 3.6 million jobs by the end of March 2011. Spending equaled $666 billion by that time.
Politico | State budgets are set to cause strain on the economy
To make ends meet, Arizona will drop Medicaid coverage for 130,000 childless adults. Michigan will slice public school funding by $470 per student. New York will reduce education aid by $1.3 billion. Wisconsin plans to chop into the Earned Income Tax Credit, which hurts household budgets of the working poor.
Econ Comments
WSJ | Inside the Disappointing Comeback
Two years ago, officials said, the worst recession since the Great Depression ended. The stumbling recovery has also proven to be the worst since the economic disaster of the 1930s.
Market Watch | The next, worse financial crisis
The last financial crisis isn’t over, but we might as well start getting ready for the next one.
WSJ | Overcaffeinated CAFE
Obama's crusade to increase automobile fuel-economy standards makes little economic sense—and it won't save the planet.
AEI: American | Housing Finance: For Once, Please Leave It Alone
The housing sector is not well. Politicians to the rescue?
Daily Caller | What would the founders do about welfare?
In the early days of the American experiment, local governments — not the feds — assumed this responsibility. But there was careful emphasis that “poor laws not go beyond a minimal safety net,” West notes, and that aid be provided only on the condition of labor. Only the truly helpless, those “who had no friends or family to help, were taken care of in idleness.”
AEI | How Effective Was the 2009 Stimulus Program?
No doubt that there were some worthy ARRA projects, and some dollars that were well-spent. But when a bureaucracy and political culture so thoroughly internalize the idea that spending, any spending, is "better than nothing," the result is broadband lines at $7 million a pop.
Blogs
Café Hayek | Down is Not Up
Here’s Mark Perry’s take on David Brooks’s belief that, to quote Brooks, it’s among America’s “problems” that “[m]anufacturing employment is cratering even as output rises.” (We might cite also Pres. Obama’s concern that technologies such as ATMs ‘destroy’ jobs.)
Econlog | PSST and Aggregation
I think that economic activity consists of taking advantage of specialization and trade. When you work in the market, you are doing a relatively narrow, specific job in order to be able to consume a remarkable variety of goods and services that would be much harder for you to provide for yourself.
Economics One | No, A Bigger Stimulus Would Not Have Worked Either
As early as the summer of 2009 it was clear that ARRA was not working as intended, as John Cogan, Volker Wieland and I reported. Research since then has uncovered the reasons why. One reason is that very large stimulus grants to the states did not go to infrastructure spending as intended, and that’s what Ned Gramlich found out about Keynesian stimulus packages thirty years ago.
Reports
RCM: Wells Fargo | Factory Orders Nearly Offset April’s Decline
Factory orders climbed 0.8 percent in May, nearly offsetting April’s upwardly revised 0.9 percent decline. Manufacturing orders appear to be bouncing back following the Japan earthquake and tsunami shock.
