Thursday, March 3, 2011

General Economics

CNN Money | How the economy is really doing
These five indicators do a good job of showing what's really going on -- and what it feels like -- out there.
Fox News | Productivity up in 4th quarter as labor costs drop
Productivity grew in the final quarter of 2010 at the fastest pace in nine months even as economists expect a significant slowdown in productivity growth in 2011.
CNN Money | Home prices: The double-dip is near
On Tuesday, we found out that home prices were near their post-bust lows. Two days later the government reported that January saw a double-digit dip in the number of new homes sold.
Fox News | Retailers report solid gains in February
Shoppers braved February's chill to hand retailers surprisingly strong sales gains, extending the momentum from a strong holiday season and providing evidence of a strengthening economic recovery.
Politico | GOP strikes at housing programs
Congressional Republicans aiming to dismantle President Barack Obama’s agenda have set their sights on an easy target: housing programs that even Democrats, gearing up to fight the cuts, concede have been mismanaged.
The Economist | The 2011 oil shock
More of a threat to the world economy than investors seem to think.

Econ Comments                                                                                                             
WSJ | Time to Get Serious About American Oil
Why is Washington blocking oil exploration in states like Alaska and Louisiana when the Middle East is such a powder keg?
NRO | Time to Kill HAMP
It’s a rip-off, perpetuated by the very same people who have been ripping us off for years.
Minyanville | Housing Market, Community Banks Will Drag the Economy
The overall level of home sales and construction has remained low and the community banks are not fit to increase lending to homebuilders and potential home buyers

EconLog | Ken Rogoff and Others
As usual, Mark Thoma has interesting links for today.
EconLog | Keynesian Politics and the Minimum Wage
It would be nice to see some Keynesians follow in their predecessors' footsteps.
Heritage Foundation: Morning Bell | How Obama Is Making Gas Prices Higher
Instead of increasing domestic oil supplies, the Obama Administration has cut them at every opportunity, and Americans are now suffering because of those choices.
CSM: The Adam Smith Institute Blog | Setback for British 'free schools'
Strict building regulations may hinder the formation of a competitive market of new schools.
The Economist: Free Exchange | Global house prices
Clicks and mortar
Mercatus Center: Neighborhood Effects | Buy Local, Potomac Edition
What I can’t understand is why the buy local movement seems to have such moral force among otherwise completely moral people. To me, the notion that I should only deal with those who are similar to me—those who happen to share my culture or geography—seems downright ugly.
WSJ: Real Time Economics | Secondary Sources: Rate Risks, Inflation, Banks in Danger
A roundup of economic news from around the Web.
EconLog | Maladaptation to Higher Productivity
In an advanced economy, the new patterns of production that must be created are highly complex, and the skill sets required may take a long time to develop. It may not be possible to shift the same workers out of excess-labor sectors into expanding sectors. Instead, the transition may involve workers with obsolete human capital exiting the labor force, with new vintages of labor gradually filling the expanding sectors.

Heritage Foundation | Federal Transit Programs: Spending More and More for Less and Less
The federal transit program and the transit systems that it subsidizes are among the most wasteful enterprises in the American economy, and reforming them should be among Congress’s top priorities.

Health Care

MSNBC | House moves to repeal tax filing requirement
Both parties say provision in health care law would create paperwork nightmare.
CNN Money | Health care: Big change in drug costs for seniors
Under health care reform, consumers will see several new changes to their insurance coverage this year, the most significant of which affects the nation's 47 million Medicare beneficiaries.
WSJ | Bills Push Medicare Data Access
Two senators, a Republican and a Democrat, are pushing legislation to overturn a 1979 court injunction that bars the public from seeing what individual physicians earn from Medicare.

Econ Comments                                                                                                             
National Journal | Leave Politics Out of Hospital Infections, Berwick Says
Politics cannot help the United States improve its health care system, Centers for Medicare and Medicaid Services Administrator Dr. Donald Berwick said on Wednesday.
Cato Institute | Healthcare for All! Unless You're Fat
Discriminatory healthcare is the new reality. An NHS health trust now proposes to stop sending obese people and smokers for certain operations.

Heritage Foundation | Yet Another New Obamacare Bureaucracy
Proponents of the new law argue that its stringent insurance regulations will help consumers, but these new regulations also threaten some existing employer-sponsored plan arrangements.


Fox News | It's All Your Money: Paying for Energy Subsidies
Cheap gas. Energy independence. More power from wind and solar. Many Americans want these things, but do they want to pay for them with tax dollars
Fox Business | 10 Reasons You May be Required to File a Tax Return Even if you had Little or No Income
Most people are aware that there are income requirements for filing a federal income tax return. Most people also think that if their income falls below those income requirements, they don’t need to file. This is not necessarily so, in fact, in many cases, filing a tax return will get you an unexpected income tax refund. And naturally, in other cases, where filing is required even if below the income thresholds, you will pay the tax man.

Mercatus Center: Neighborhood Effects | Tax and Expenditure Limits: A Panel Discussion
More than half of all states operate under some sort of state tax and expenditure limit (or TEL). And with nearly every state facing the most-serious fiscal crisis of a generation, these sorts of limits are increasingly talked about as a solution. But do they work? Are there nuances? What do states need to know before implementing one? How would a TEL affect your state? 
Fox News | Non-Defense Energy Programs
Obama's FY2012 budget includes $12.1 billion in spending on non-defense energy projects, boosting spending on clean energy programs and energy research. His 2012 budget includes $3.2 billion for energy efficiency and renewable energy programs (a 44% increase over current spending levels), $5.4 billion for research and development at the Office of Science (a 9% increase), and $550 million for the Advanced Research Projects Agency-Energy (a 41% increase). Spending on fossil energy is cut 45% .
CSM: Tax Vox | If mortgage interest deductions were cut, who would notice?
Taxpayers might get up in arms if the deduction were eliminated, but they would have no reason to be upset.


WSJ | Why the Dollar's Reign Is Near an End
For decades the dollar has served as the world's main reserve currency, but, argues Barry Eichengreen, it will soon have to share that role. Here's why—and what it will mean for international markets and companies.
MSNBC | Once-quiet Bernanke now has lots of opinions
Fed chairman becoming increasingly comfortable with political matters that he said he'd aovid.
USA Today | European Central Bank: Rate hike on horizon
European Central Bank president Jean-Claude Trichet shocked markets Thursday by saying interest rates could be raised at the next policy meeting in April to fight inflation across the 17-nation eurozone.
WSJ | Euro-Zone Growth Led by Exports
The euro-zone economy grew at a steady albeit modest rate in the final quarter of last year as export and household consumption growth was offset by a slump in new investment and a slowdown in government expenditure, official figures showed Thursday.
NYT | Fed Notes ‘Modest to Moderate’ Growth of Economy
In the central bank survey of economic activity, compiled in what is called the beige book, severe winter weather affected some aspects of the pace of economic activity.
Bloomberg | Bernanke Says Stronger Recovery Would Reduce State Woes
"If the economy continues to strengthen at about the pace projected by the Federal Reserve and many private forecasters, states and localities may start to get a little breathing space."
Fiscal Times | Inflation Rears its Ugly Head as Gas and Food Prices Rise
With gas prices at a two-and-a-half-year high, and global food prices up 25 percent last year because of adverse weather conditions, American consumers and businesses are becoming increasingly uneasy, economists say. “Strong commodity prices were benefiting producers of cotton, corn, soybeans, wheat, poultry, hogs and cattle, while there are also some reports of rising input prices, particularly in fertilizer and feed prices.”

CSM: Daily Reckoning | Gold and silver: The states' new currency?
States aren't allowed to coin money. They can issue gold and silver, though, and some are talking about actually doing it.
Tim Duy's Fed Watch | The Rearview Mirror
The ISM manufacturing index extended January's impressive gains, again with improving internals. Note declines in the inventory measures, which suggests manufacturing momentum is set to continue. One can wring their hands over the personal income and outlays report which revealed a very small 0.1 percent decrease in real spending.
NYT: Economix | Is the New York Fed Making a Big Mistake?
An uncomfortable dissonance is beginning to develop within the Federal Reserve.
The Economist: Free Exchange | The ECB may soon raise rates
The ECB did not announce a rate increase today, but it did signal that one would be occuring soon—if not next month, then almost certainly in April.
WSJ: Real Time Economics | Bernanke’s Prognosis & Prescription for State, Local Governments
The state and local fiscal crisis is going to get worse before it gets better, says the nation’s most powerful economist, Federal Reserve Chairman Ben Bernanke.


CNN Money | Budget battle: What got cut
The bill terminates eight government programs, for savings of $1.24 billion, while an additional $2.7 billion in earmarks are eliminated.
ABC News | Social Security Scare: Is Government Running Out of Funds?
Lawmakers on both sides of the political aisle are hesitant to put Social Security on the chopping block, but with the U.S. debt growing rapidly, time to reform the 76-year-old program is running out, experts say.
Examiner | Biden to referee Hill talks on budget
Vice President Biden has been tapped by his boss to referee budget talks between congressional Republicans and Democrats, who are miles apart on how to fund the federal govenrment for the remainder of the fiscal year that ends September 30.
USA Today | House budget cuts target poison control, product safety
Senate supporters say they'll work to retain federal funding of poison control centers and a new product safety complaint database, both targeted by House budget cutters, when they take up the controversial government spending bill.
CNN Politics | Napolitano defends proposed Homeland Security budget
If House-approved cuts "become the basis for the FY12 budget, then I think the Congress needs to understand ... that, in all likelihood, will have a security impact," Napolitano said.
Fscal Times | The Federal Subsidy That Just Won’t Die: LIHEAP
The federal Low-Income Home Energy Assistance Program has been rescued from the budgetary dead so many times it’s like it came from the biblical story of Lazarus. It was created in 1981 on the heels of the 1970s energy crisis — and is designed to help poor people in cold climates heat their homes in winter or pay utility bills to get air conditioning in summer.
Source | Obama Seeks Budget Talks, But GOP Awaits Democratic Plan
With the White House pressing for quick resolution of a congressional impasse on spending, House Republicans face a crucial decision: Insist on sticking with controversial policy provisions or opt for a package that could reach the president's desk relatively quickly.

Econ Comments                                                                                                             
Washington Times | RUGY & FICHTNER: Don’t raise the debt ceiling
It’s time to finally draw the line.
NationalJournal | GOP's Cuts Would Cost 200,000 Jobs, Bernanke Says
Republican plans to cut $60 billion from the federal budget would cost roughly 200,000 American jobs, Federal Reserve Chairman Ben Bernanke told the House Financial Services Committee today.
Politico | Right pressures Mitch McCOnnell on budget
Senate Minority Leader Mitch McConnell is facing enormous presure from conservatives not to budge on major spending cuts, so he is aligning himself with Republicans who are warning him not to negotiate anything less than the %60 billion the House GOP has vowed to slash.
NRO | Setting the Record Straight
"If you pass my budget, we'll start living within our means and start paying down the debt,"

Marginal Revolution | David Leonhardt on the state pension shortfall
If state and local governments instead assumed a future return of 7 percent, their funding gap would nearly double, to $1.3 trillion, according to Alicia Munnell and her colleagues at the Boston College retirement center. If they assumed a 6 percent return, the funding gap grows to $1.8 trillion.
Atlantic: Megan McArdle | Will the GOP's Budget Cuts Drive the Economy Into the Ditch?
For some reason, over the last few days, the claims about the effects of GOP budget cuts keep getting more theatrical.
Cato Institute | Two-Week Budgets?
Runaway spending, deficits, and debt as far as the eye can see. If it takes two-week budgets to keep the nation's eye on the ball, so be it, as the man said. That's what the last election was about.
Forbes: Jerry Bowyer | What Global Markets Say About U.S. Default Risk
The event futures’ market over at Intrade has an active contract on a downgrade of U.S. sovereign debt ratings, and since debt ratings are attempts to assess risk of default, it appears that those market participants at least are thinking about a default.
Heritage Foundation | The Balanced Budget Debate Begins
Senator Mike Lee (R-UT) has offered a Sense of the Senate Amendment to the Patent Reform Act of 2011 testing the waters on the idea of a balanced budget amendment to the Constitution.
WSJ: Real Time Economics | U.S. Getting Closer to $14.29 Trillion Debt Ceiling
As of Monday, the U.S. had $14.14 trillion in debt subject to the $14.294 trillion debt ceiling, according to the government’s Bureau of Public Debt. This is up from $14.0 trillion Jan. 28.

Mercatus Center | Improving the Accuracy of U.S. Government Debt Estimates
U.S. government estimates suggest that growing public debt threatens the stability of the financial system. However, there is wide variability across estimates of the size and trajectory of federal debt levels and the forecasting track record is poor. This paper analyzes the differences among estimates and argues that modeling innovations are needed to improve public financial policy making and administrative management.


Huffington Post | Fed's Bernanke: GOP Budget Cuts Could Trim 200,000 Jobs
Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs.
CNBC | Jobless Claims At 2-1/2 Year Low; Productivity Rises
New U.S. claims for unemployment benefits unexpectedly fell last week to touch their lowest level in more than 2-1/2 years, while nonfarm prouctivity rose as expected in the fourth quarter.

Econ Comments                                                                                                             
Real Clear Markets | White House, Women's Wages, Myths
With Tuesday's arrival of Women's History Month, the White House published a compendium of information about women, Women in America: Indicators of Social and Economic Well-Being.

Calculated Risk | Weekly Initial Unemployment Claims decline sharply, 4-Week average below 400,000
The DOL reports on weekly unemployment insurance claims:
CSM: Mises Economics Blog | TSA unionization may open floodgates
More than 40,000 TSA workers were given collective bargaining rights last month. Will this make unionizing more widespread?