Friday, March 4, 2011

General Economics

CNN | Florida high-speed train project derailed; Court rules for Scott
Supporters of a proposed high-speed rail system in Florida had hoped to get the project back on track Friday -- the deadline to accept $2.4 billion in federal funds -- but the Florida Supreme Court has ruled that Gov. Rick Scott can reject the money.
Fox | More Carry-On Luggage Costing Taxpayers, TSA Millions a Year
Choosing to carry your luggage onto a plane instead of checking it with an airline might save you a few bucks at the ticket counter but it's costing taxpayers about a quarter-billion dollars a year.
Bloomberg | Cotton Futures Soar to Record on `Worldwide Scramble' for Limited Supplies
Cotton futures surged to a record on signs that global demand from textile mills will continue to outpace supplies.

Econ Comments                                                                                                             
Barron's | The Mistrust Fund
The chief of federal budgeting misleads the public on Social Security.
Investors Business Daily | De-Banked By Dodd-Frank
The Dodd-Frank financial overhaul that passed last July charged the U.S. Treasury with fixing the prices that banks could charge merchants for debit card transactions. And on Dec. 16, the Treasury lowered the boom.
AEI | I Don't Know
Will the Doha Round Be Completed in 2011?

WSJ: Real Time Economics | China Is Number One… in Riskiness
A new survey of risk managers names China as the number one “emerging risk” that keeps them awake at night.
Café Hayek | Wal-Mart and Creative Destruction
A friend asked me earlier today a Wal-Mart question.  I remembered this letter to the editor of The Economist that I wrote in 2006; I post it here at the Cafe for the first time:
The Daily Capitalist | Why Real Estate Will Hold The Economy Back
Commercial real estate loans and residential housing will continue to be a significant drag on economic performance. Until the mass of over-built homes and commercial properties are liquidated credit will remain tight and unemployment will remain high.
Marginal Revolution | Wisconsin vs. Texas, on education
This piece is marred by some unfortunate polemics, but it makes one core point very effectively:
The Economist: Free Exchange | The risky list
If you had to pick the most systemically risky financial firms in America, which would be in your top three? Bank of America? Citigroup? MetLife?
AEI: The American | Who’s Stalling Whom on Trade?
Calls for broader trade progress have been bipartisan, yet the Obama administration continues to delay free trade agreements.

RCM: Wells Fargo Economics Group | ISM Non-Manufacturing Continues to Rise
The February ISM non-manufacturing index came in above expectations at 59.7 with increases in several of the index subcomponents. The prices paid component still signals upward pressure on input costs.

Health Care

Fiscal Times | GOP House Budget Chairman Ryan Pushes Medicare Vouchers
House Budget Committee Chairman Paul Ryan vowed Thursday to include aggressive reforms of Medicare in the budget proposal he is beginning to craft. Ryan reiterated his controversial idea to issue vouchers to beneficiaries.

Econ Comments                                                                                                             
Cato Institute | Mitch Daniels's Obamacare Problem
Mitt Romney isn't the only Republican presidential hopeful with an Obamacare problem: Indiana governor Mitch Daniels, were he to become the GOP's nominee, could also undermine the repeal campaign that has united the party's base and independent voters.
NRO | Hands off My Mental Activity
In upholding Obamacare, Judge Kessler undermines its supporters’ case.
Heritage Foundation | The Wyden-Brown Proposal: Does Not Fix the Problems of Obamacare
The wrong answer to Obamacare.
NRO | Vinson to White House: Stop Stalling
When he declared Obamacare unconsitutional, it wasn’t just “friendly advice.”

Cato@Liberty | Mitch Daniels’s ObamaCare Problem
A move like that could separate him from the pack.
AEI: The American | Obama’s Health Waivers: a One-Way Ratchet
But in practice, it appears, the president is ready to support state innovation in health reform only when it follows his big government playbook.
Cato@Liberty | Medicare Loses Nearly Four Times as Much Money as Health Insurers Make’
The latest from Jeffrey H. Anderson, which I'll file under I-Wish-I'd-Said-That:
NRO: The Corner | States Should Innovate, Not Imitate
If the president really wants to give states more freedom and flexibility, he will support the State Health Care Choice Act. As it stands, President Obama’s state “opt-out” really is nothing more than a cop-out.
Cato@Liberty | It’s Official: Governors Implementing ObamaCare Are Undermining the Lawsuits
Tea partiers and other conservative groups turned on House Republicans in a dispute over when the House would vote to cut off all ObamaCare spending. Where's the outrage over the governors and state legislators that are eagerly pursuing that funding, actively implementing the law, and preventing judges from stopping implementation?


Yahoo! Finance | France to scrap tax cap for the rich
Critics say the cap, which ensures that no one pays more than 50 percent of annual earnings in tax, is a sop to the rich at a time of belt-tightening across Europe.


Bloomberg | Fed Policy Makers Signal Abrupt End to Bond Purchases in June
Federal Reserve policy makers are signaling they favor an abrupt end to $600 billion in Treasury purchases in June, jettisoning their prior strategy of gradually pulling back on intervention in bond markets.
Fox News | Utah Considers Return to Gold, Silver Coins
It's been nearly 80 years since the U.S. stopped using gold coins as legal currency, and nearly 40 since the world abandoned the gold standard, but the precious metal could be making a comeback in the United States -- beginning in Utah.
Bloomberg | Gross Says Inflation Matters More Than Bernanke Indicates
Rising oil prices may cut U.S. gross domestic product by a quarter to half a percentage point, Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene.

Econ Comments                                                                                                             
Fortune | Global stagflation is here to stay
Don't believe the overly bullish global growth estimates. There's plenty of evidence that growth will slow and inflation will continue to accelerate, even if commodities back off their highs.
Barron's | What's the Fed's Playbook for the Second Half?
Pimco's Gross sees tightening once Fed purchases end. Avoiding the fumbled handoff.
NY Sun | The Eclipse of Ben Bernanke
When, in the Constitution, [the founders] delegated to the Congress the power to coin money, they did so in the same sentence in which they also delegated to Congress the power to fix the standard of weights and measures.
RCM | Eichengreen is Wrong About the Dollar
The idea that we can make our trade deficit go away - and that we need to - simply by devaluing the dollar is something that sounds good in theory but has yet to work in the real world.

Forbes: Bill Flax | You Call It Inflation, I Call It Theft
The proponents of consumption-based stimuli overlook the essentiality of saving.
EconLog | Two Basic Macro Questions
...there is a very large Fed attribution error--people attribute to monetary policy far too much power.


NY Times | Democrats Open Talks by Offering $6.5 Billion More in Cuts
...White House and Congressional Democrats on Thursday offered to trim an additional $6.5 billion from current spending, a figure far short of the Republican goal of cutting agency budgets by $61 billion.
CNN Money | Budget held hostage: Day 154
Thursday was the 154th day the federal government has operated without a budget.
The Economist | The stealth deficit commission
A group of senators breathes life back into the Bowles-Simpson budget report.

Econ Comments                                                                                                             
Fiscal Times | The Federal Subsidy That Just Won’t Die: LIHEAP
Just a week ago, House Republicans pushed through a massive spending cut resolution that included a $400 million reduction in LIHEAP this year.
Washington Times | GREGOIRE & HEINEMAN: State bankruptcy is not the answer
Fortified fiscal restraint is the path to economic recovery.

Cato@Liberty | Spending Still Increases with GOP Cuts
...both discretionary and total federal outlays (actual spending) would still be higher in fiscal 2011 versus fiscal 2010.
WSJ: Real Time Economics | Roubini Says Slow Growth May Mean Debt Restructuring
Advanced countries with high levels of debt will have to consider debt restructuring as anemic growth won’t enable them to tackle their liabilities, U.S. economist Nouriel Roubini said in Paris Friday.
Washington Post: 2chambers | House budget chairman Ryan: More stopgap spending measures possible's possible that Congress will take up more stopgap government funding measures instead of a longer-term one when a resolution keeping the government running expires later this month.
WSJ: Real Time Economics | Tracking Public Pension Plans
For the 126 plans covered, the site pegs pension assets at nearly $2.7 trillion in 2009, compared to nearly $3.4 trillion in liabilities.
NRO: The Corner | The Debt-Ceiling Debate Continues
The main concern that people seem to have about not raising the debt ceiling is its impact on interest rates.


CNN Money | More jobs means worse traffic congestion
Had you noticed your drive to and from work got a little quicker the past couple of years?
Bloomberg | Republicans, Fed Clash on Job Impact of Spending Cuts
U.S. Representative Kevin McCarthy thought he had an ally in Federal Reserve Chairman Ben Bernanke on the impact that Republican budget cuts will have on jobs.
CNN Money | February jobs report: Unemployment falls again
The jobs outlook brightened in February, as strong business hiring helped trim unemployment to its lowest level in nearly two years.

EconLog | Maladaptation to Higher Productivity
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.