Thursday, February 24, 2011

General Economics

CNN Money | General Motors: First profit since 2004
General Motors on Thursday reported its first annual profit since 2004, capping an impressive turnaround by the once-troubled automaker.
WSJ | U.S. Pushes Mortgage Deal
Obama Proposal Seeks Multibillion-Dollar Settlement of Loan-Servicing Cases
CNN Money | Sales of new homes fall a shocking 11.2%
The new year has brought little cheer to new-home builders: Their sales fell a shocking 11.2% between December and January and 18.6% from 12 months earlier.
CNN Money | Social Security is safe in a federal shutdown
What happens to Social Security if the government shuts down?
Fox News | Durable goods orders excluding airplanes drop
Orders for long-lasting manufactured goods outside of transportation fell in January by the largest amount in two years.
CNN Money | Foreclosures make up 26% of home sales
Home prices are down but sales are up, somewhat contradictory trends.
The Economist | Oil pressure rising
Oil markets don’t like surprises.
WSJ | Irish Remedy for Hard Times: Leaving
The people of Ireland go to the polls Friday to deliver what's expected to be a knock-out blow to the governing party. But many are choosing to vote in a traditional Irish fashion: with their feet. Tens of thousands are joining in a new wave of emigration, turning their backs on a country mired in economic malaise.

Econ Comments                                                                                                              Cato Institute | The Myth of Corporate Cash Hoarding
American nonfinancial corporations were "sitting on" $1.93 trillion in liquid assets at the end of last year's third quarter, according to the Federal Reserve Board. This has become one of the most frequently echoed statistics, viewed as indisputable evidence that U.S. business leaders are unduly timid or evil.
WSJ | Why Regulators Should Let Banks Foreclose
Data show that brief additional time-outs don't allow borrowers to become current.
Real Clear Markets | With Unions, Follow the Money
Missing in action, walking off the job. That's the new style for Democratic state legislators, first in Wisconsin, then in Indiana. They have fled to Illinois, rather than provide the quorum necessary for votes on legislation sponsored by Republican majorities to curtail public-employee benefits and union activity.
WSJ | The Public Worker Gravy Train
Many government employees are paid up to 30% more than those in the private sector.

Heritage Foundation | 10 Things You Need to Know About High Gas Prices and Obama’s Oil Policy
This week the media’s attention is finally focused on oil prices. After two years of continually rising consumer gas prices in America, the oil futures market has captivated the Mideast storyline. And attention is much needed.
Cato@Liberty | Despite Huawei’s Experience, America Is Open to Chinese Investment
Despite the sour grapes expressed by Huawei and its patron, the Chinese Ministry of Commerce, the United States is open and ready to welcome Chinese investment
The Economist: Democracy in America | Barriers to trade back in the day
This isn't to say that it's a good idea to ratchet up levels of protectionism when, as now, overall barriers to trade are low and declining. But when everyone's doing it, it's probably true that the people who do it more effectively are benefiting from it.
Time: Curious Capitalist | Will $100 Oil Kill the Recovery?
Oil climb has traders and others saying oh-no.
Carpe Diem | As a Share of Income, Americans Have the Most Affordable Food in World & It's Never Been Better
As much as Americans might complain about rising food prices in the U.S. (even though annual CPI food inflation hasn't been above 2% for almost two years), we've got the most affordable food on the planet as a share of income


Heritage Foundation | New CBO Report Proves We Cannot Afford Obamacare
Obamacare includes tremendous new levels of federal spending at a time when lawmakers are seeking ways to reduce the unaffordable size of government. It pays for new spending by increasing taxes on the American people, burdening individuals and businesses and putting further strain on the economy. And, as we explain further in recent research, a realistic scoring of Obamacare shows that it is certain to increase deficits.
NRO: Critical Condition | The Latest Obamacare Court Ruling: Congress Can Regulate ‘Mental Activity’
On Tuesday, Judge Gladys Kessler of the U.S. District Court for the District of Columbia handed down her decision in the fifth Obamacare court challenge, Mead v. Holder. Kessler upheld the individual mandate, along with the rest of the law, leading PPACA advocates to crow that three judges have upheld the mandate, versus two who have overturned it.


NY Times | In City Often? Tax Man Asks Some for Tally
...this year, the state tax department...[is] asking state residents who own second, or perhaps third and fourth, homes to specify how many days they spent in New York City. A number nearing 183 will be a red flag.

Econ Comments                                                                                                             
Cato Institute | Will a VAT Turn America into a Greek-style Welfare State?
...because the VAT is hidden from consumers, politicians find they are an easy source of new revenue — which is one reason why the average VAT rate in Europe is now more than 20 percent!
Financial Post | Terence Corcoran: America’s corporate tax nightmare
High U.S. tax rates are distorting ­investment decisions.
Barron's | Getting a Tax Break
A large number of online brokers still don't give investors much choice on the accounting treatment of their stock sales.

NRO: Exchequer | Tax Cuts and Wisconsin’s Deficit
How exactly do $137 million in tax cuts cause a $3.6 billion deficit in two years? I am dying to know.
Greg Mankiw | Tax Fact of the Day
"The U.S. effective corporate tax rate on new investment was 34.6 percent in 2010, which was the highest rate in the OECD and the fifth-highest rate among 83 countries…"


Bloomberg | Euro Gets Cold Shoulder at Ballot Box of Anger: Jens Bastian
The first of seven regional elections in Germany this year left no doubt about where German voters stand on a much larger issue: the euro crisis.

Econ Comments                                                                                                             
AEI | No Time for US Schadenfreude over Europe
After many years of being at the receiving end of European lectures as to the superiority of Europe's economic and social model, it is all too tempting for Americans to derive satisfaction from Europe's present sovereign debt crisis.
Minyanville | Why Monetary Policy Doesn't Cause Higher Agricultural Commodity Prices
Though excess monetary creation creates an inflationary environment, we can't blame it for floods, droughts that have wreaked havoc on wheat, cotton and sugar markets.
POLITICO | Fed fix needed on debit swipe fees
Sometimes a free market does not – or cannot – correct a divergence from the competitive norm. When these persist over time or worsen, it is among the few scenarios where there is reason for government to examine, and possibly correct, the cause. This is why the Federal Reserve’s proposed rule to limit debit-card “swipe fees,” a measure called for in the Dodd-Frank financial reform legislation, is justifiable public policy — and overdue.
Minyanville Why the Fed Is Likely to Start Tightening in the Third Quarter
A sustained improvement in consumer sentiment in the next few months will have some hawks raising their heads in the FOMC as headline inflation is also turning for the worse.
Pittsburgh Tribune Review | Inflation's worst consequence
The biggest problem with inflation is that it interferes with the system of communication that markets use to inform workers, investors, entrepreneurs, businesses and consumers about how they can best achieve their economic goals given the underlying economic realities. That system is prices.

The Economist: Economics by Invitation | Is the modern central bank in need of reform?
How should monetary policymaking change? Should central banks have a larger or smaller regulatory role? Is independence all it's cracked up to be? Or are modern central banks the best we can hope for?
WSJ: Real Time Economics | Fed’s Plosser: Would Consider Early QE2 End If Economy Accelerates More
One of the Federal Reserve‘s leading hawks warned Wednesday of the risks of maintaining easy monetary policy in the face of rising commodity prices and said if the recovery continues to pick up speed, he’d support curtailing the bond-buying program widely known as QE2.
WSJ: Real Time Economics | Fed’s Hoenig: Easy Money And Too-Big-To-Fail Must End
Federal Reserve Bank of Kansas City President Thomas Hoenig on Wednesday said the U.S. central bank was risking a new financial crisis with its easy-money policies and urged regulators to break up the biggest banks.


Bloomberg | U.S. Government Shutdown Looms as Lawmakers Deadlock Over Budget Proposal
A U.S. government shutdown looms after lawmakers deadlocked yesterday over a Republican proposal to cut $4 billion as part of a budget measure needed to keep federal agencies running.
Washington Times | Obama sits out budget brawl
...the Obama White House has been largely absent from the political debate, issuing a veto threat to try on the Republicans’ spending-cuts bill but declining to offer publicly a counteroffer…

Econ Comments                                                                                                             
NRO | After Obama, the Deluge
A less eloquent president will have to balance budgets.
Minyanville | Obama's Budget Proposal Resurrects Idea of Taxing Carried Interest
Specifically, the budget calls for taxing "carried [profits] interests as ordinary income" in order to increase Treasury receipts by $14.8 billion over 10 years.
NRO | Budget 101
Paul Ryan conducts “listening sessions” for new GOP members

NRO: The Corner | Social Security and the General Treasury: Who’s Raiding Whom? should collect taxes that will be earmarked to pay for benefits and only benefits. Social Security shouldn’t have to turn over its cash to Treasury, and it shouldn’t be allowed to receive money from the general revenue.

Bankrupting America | State budget battles: isolated event or coming epidemic?
We compiled a brief fiscal and economic overview for each state — from its annual spending and revenue, to its unfunded pension liabilities.


MSNBC | Jobless claims drop more than expected
Third drop in the past four weeks for critical job market indicator
CNN Money | Jobless claims fall to 391,000
In another sign that the job market is slowly recovering, the number of Americans filing first-time claims for unemployment benefits fell last week.

CSM: Stefan Karlsson | Private vs. public sector: Who makes more?
If unionized government workers really are underpaid, is there still a point to having unions?
NYT: Economix | Higher-Paying Jobs Lost, but Lower-Paying Jobs Gained
While the country’s recessionary job losses skewed to middle- and higher-paying jobs, its job gains since then have skewed to lower-paying jobs.
National Review: The Corner | Government vs. Private Employee Compensations
Are public workers “overpaid, underpaid or just right?”