Monday, March 7, 2011

General Economics

WSJ | Companies Start to Loosen Grip on Cash
The total year-to-date dividend payout of about $39 billion is up nearly 15% from the same period in 2010, and S&P expects it will reach $225 billion by year-end.
WSJ | Japan's Credit-Rating Paradox
That credit-market paradox reflects the fiscal discipline of some of Japan's best-run companies, while their government has become ever-more profligate over the past decade.
NY Times | Economic Reports for the Week
Scheduled for this week are consumer credit for January (Monday); wholesale trade inventories for January (Wednesday); trade deficit for January and weekly jobless claims (Thursday)…
WSJ | Banks Look to Replace Lost Debit-Card Fees banks are faced with new rules that will restrict how much they can charge merchants for debit transactions, erasing billions of dollars in revenue.
CNN Money | Who's buying homes? The rich
After four straight years of declines, sales of million-dollar homes and condos rose last year in all 20 major metro areas, according to DataQuick Information Systems.
Fox News | Economists Urge Obama Not to 'Overreact' to High Food Prices
Leading advocates for the world’s poorest and hungriest are urging President Obama not to “overreact” to recent spikes in food prices, particularly by imposing export bans on U.S. agricultural products.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: High-speed derailed
Florida, New Jersey and Ohio governors reject choo-choo boondoggle.
RCM | Why Social Security Is Welfare
Benefits shift; they're not strictly proportionate to wages but are skewed to favor low-wage earners - a value judgment reflecting who most deserves help; and they aren't paid from workers' own "contributions."
TechCrunch | Why Silicon Valley Immigrant Entrepreneurs Are Returning Home
...entrepreneurship is booming in countries that compete with us. And more than half a million doctors, scientists, researchers, and engineers in the U.S. are stuck in “immigration limbo”.
Investors | Healthy Consumer Relying On $1 Trillion Government Fix
...Mike Englund, chief economist at Action Economics, sees trillion-dollar deficits as "a huge head wind for the economy and one of the reasons we are growing so slowly."
WSJ | Still Too Big, Still Can't Fail
The biggest banks are bigger than they were before the last crisis.
CNN Money | Social Security needs to be fixed - So just do it
Social Security is the easiest to fix since, unlike health care, we actually know what will work: It boils down to some combination of benefit reductions and revenue increases.

Café Hayek | Dysfunctional
A very informative editorial from the New York Times that gives you some idea of what is going in New York with public employee compensation.
EconLog | Greenspan on the Economy
Type the sentence(s) summarizing the link here.
Marginal Revolution | Democracy in Deficit
Time is no longer on the side of good. I suggest that we confront the nation's fiscal difficulties as soon as possible.
EconLog | Do Labor Unions Promote the Middle Class?
...because the unions drive wages above competitive levels, they cause some of the workers to be put out of work. Many of these workers would have rather driven their own bargain and worked for a lower wage, but they can't do so legally.
Forbes: John Tamny | “Necessary” Bank Bailouts Harm the Economy, Wreck the Banks
Business failure hardly constitutes business disappearance, and the beauty of failure is that it ensures that poorly managed assets are released at frequently low prices to managers with a stated objective to develop those human, mechanical and financial inputs more effectively on the way to growth.

RCM: Wells Fargo Economics Group | Weekly Economic & Financial Commentary
Solid Week for the Economy, Slight Miss on Jobs.
Cato Institute | Fannie, Freddie, and the Subprime Mortgage Market
What remains in dispute is the role of government — specifically, that of Fannie Mae and Freddie Mac — in expanding the availability of subprime mortgage credit.

Health Care

NationalJournal | HHS Waivers to Health Care Law Top 1,000
The Department of Health and Human Services posted 126 new waivers to the health care law on Friday, bringing the total number granted to 1,040.
Politico | Haley Barbour's mixed message on Medicaid
The potential 2012 president contender says he hates having to come to Washington to "kowtow and kiss the ring" whenever he wants to adjust eligibility or coverage.

Econ Comments                                                                                                             
Fiscal Times | Medicaid Block Grant Battle Could Have Far-Reaching Impact
Democrats and Republicans agree that turning Medicaid, which in fiscal 2009 cost state and federal governments $366 billion, into a block grant would fundamentally alter the program.
WSJ | ObamaCare's March Madness
After one year as the law of the land, mayhem abounds.
AEI | Romney Can't Withstand Obama's Kiss of Death
The irony is that Romney is right about this: Obamacare will be much easier to repeal precisely because Massachusetts went first and failed so miserably.

Heritage Foundation | Repeal is Not Enough: How States Can Survive the Impending Medicaid Crisis
Mark your calendars for July 1st. That is the day that Obamacare’s failed health care model will crash head on to the fiscal reality of strained states budgets.
NCPA: Health Policy Blog | The Future of Consumer-Directed Health Care
Over the next decade I believe we are going to see a major transformation of American medicine. It won’t be the kind of transformation that is normally discussed at health care conferences and at inside-the-Beltway briefings. Nor will it be the kind of change anticipated by the people who gave us the Affordable Care Act (ObamaCare).
Heritage Foundation | Secretary Sebelius Talks Fiscal Responsibility and Obamacare
The Secretary’s remarks highlighted the need for fiscal responsibility and health care reform that gives greater power to individuals and more flexibility to the states. Unfortunately, none of these goals can be achieved under Obamacare.


CNN Money | Average tax refund this year: $3,129
Nearly 52 million Americans have already filed their taxes, with more than 45 million of those taxpayers collecting refunds, according to the latest filing statistics from the IRS.

Econ Comments                                                                                                             
Daily Caller | Why corporate income taxes should be eliminated
Each 2.5% of cost savings in a household with a $40,000 budget will put an extra $1,000 on the table for spending or saving.


WSJ | Fed Unlikely to Remove Its Economic Stimulus Just Yet
Federal Reserve officials have grown more confident that a self-sustaining economic recovery is taking root in the U.S., but they want to see more evidence before they seriously consider how and when to pull back the enormous amounts of stimulus they pumped into the financial system.
NYT | The Chasm Between Consumers and the Fed
Inflation in the United States is low, and seems to be going down if it is moving at all. The Federal Reserve thinks it will be years before there is any significant inflation.
NationalJournal | Moody's Downgrades Greek Debt
Leading bond rating group Moody's Investor Service cut Greece's credit rating by three notches Monday and suggested it could cut even further, a sign it believes the nation's notoriously troubled finances show only glimmers of improvement.
Market Watch | Treasurys Fall As Debt Sales Overshadow Middle East
The 10-year note's yield has dropped from the recent peak of 3.77% set a month ago as the market benefited from demand for safe assets. The turmoil in Libya has escalated and there is some concern that antigovernment protests may soon spread to Saudi Arabia, a major oil producer and exporter.

Econ Comments                                                                                                             
Minyanville | The Quantitative Easing Debate Continues
Janet Yellen's latest speech shed some light on the Fed's mindset regarding monetary policy.
LA Times | Is inflation wolf at the door?
As oil and other commodities surge, some investors fear a spiral. Bernanke insists the Fed has it under control.
Fox Business | Most Economists Say Fed Easing is Helping
The survey from the National Association for Business Economics found 62.4% of the economists polled think the central bank's $600 billion stimulus plan is working.
Bloomberg | Lockhart Says Fed Shouldn't Rule Out More Asset Purchases
Federal Reserve Bank of Atlanta President Dennis Lockhart said the central bank shouldn’t rule out asset purchases beyond the $600 billion planned by June because turmoil in the Middle East risks causing a slowdown in the U.S.

Daily Capitalist | QE To Infinity: Not?
For now, leaving the important Mideast disturbance and all the known other issues aside, the cards look increasingly aligned for a traditional “sweet spot” year for economic activity:  Low interest rates, lots of labor slack, a good deal of unused manufacturing capacity, and tons of fiscal stimulus.  Plus lots of skepticism.
Econlog | The Macro Implications of Monetized Debt
Everybody talks about a monetary "exit strategy" once a strong recovery takes hold. But what about a fiscal exit strategy? Other than Ron Paul, does anyone have several hundred billion in spending cuts ready to go?
WSJ: Real Time Economics | Rapid Jobless Drop May Accelerate Tighter Monetary Policy
The startlingly quick pace with which the unemployment rate has fallen is raising questions whether the labor market could soon reach levels that may start to generate inflation and alter the monetary policy outlook.


Washington Times | $6B budget cut: A ‘limit’ for Democrats, a nick for Republicans
Taken together, the short- and long-term budget fights show how tough it will be for lawmakers to find common ground on the single biggest issue facing them over the next six months.
CNN Money | Budget battle: Neither side blinks
On Day 157 of operating without a full budget, and with 13 days to go before the latest short-term fix expires, lawmakers appear no closer to a deal to keep the government running.

Econ Comments                                                                                                             
RCM | Government Shutdown? So What?
According to news reports, Team Obama and House Republicans are at least $50 billion apart in the budget negotiations for FY2011.

Mercatus Center: Neighborhood Effects | Boise County, Idaho files for bankruptcy
In this case, the county is not struggling to pay its bondholders, but was found by a court to be in violation of a federal law.
Political Calculations | The New Obamamath
...$20 billion short of the actual amount of spending cuts it would take for the President to actually achieve a level of cuts "that meet congressional Republicans halfway."
Cato@Liberty | Republicans Are Right to Cut the IRS Budget
The President is resisting a GOP proposal to modestly trim the IRS's gargantuan $12.5 billion budget and his argument is that we should actually boost funding for the tax collection bureaucracy since that will mean more IRS agents squeezing more money out of more taxpayers.


WSJ | Jobs Open, but Filling Them Slows Down
Since December, the economy has added about 130,000 jobs a month, barely more than what is needed to keep up with population growth, according to the U.S. Labor Department. Meanwhile, the number of job openings advertised online has grown by more than 400,000, to 4.2 million, according to the Conference Board, a research organization. That increase continued a trend that began in the spring of 2009.

Econ Comments                                                                                                             
Real Clear Markets | The Unemployment Decrease Is An Aberration
A closer look at the recent decline, however, shows it to be an aberration.
Minyanville | Reflections on the BLS Jobs Report
This was a solid jobs report -- not as measured by the typical recovery, but definitely one of the better reports seen in years. But will it stay this good?

The Economist: Free Exchange | The new new normal
Many economists will say that 127,500 is just a neutral number, only enouhg to keep up with population growth. This, then, is the new normal: an economy that grows only fast enough to keep enemployment from rising, not strong enough to create the jobs needed to bring unemployment down.
Calculated Risk | Duration of Unemployment, Unemployment by Education, Diffusion Indexes
What we want is a large number of high paying jobs added each month, spread across many industries. What we got was some improvement in jobs added, although not high paying jobs - but fairly widespread.
WSJ: Real Time Economics | Tale of Two Jobs Surveys
By one measure the labor market is much stronger than the gain of 192,000 nonfarm jobs in February suggests.
Econlog | The Great Substitution
One point about the Great Substitution of leisure for work is that leisure excapes taxation. That raises all sorts of issues.
WSJ: Real Time Economics | Number of the Week: Workers Not Benefiting From Productivity Gains
The labor market may be improving, but U.S. workers have yet to share much in the productivity and profits they’ve helped generate during the recovery.
Calculated Risk | Participation Rate Update
I've been expecting some small bounce back in the participation rate, but my guess last year was probably too high. I know some analysts who think that it will just stay flat for a few years before declining again. This will be a key number to watch over the next few years.
WSJ: Real Time Economics | Jobless Rate Drop: It’s for Real — Mostly
The unemployment rate dropped for the third consecutive month in February, and for the most part it’s the result of more people being hired, though workers dropping out of the labor force remains a concern.