Wednesday, March 9, 2011

General Economics

News                                                                                                                             
RealClearPolitics | Obama: "More Money" Is Needed For Education Reform
"People started to realize what is needed is not either, or -- not either more money or more reform, it's both and. Both more money and more reform," President Obama said at a technology school in Boston on Tuesday.
CNBC | Welfare State: Handouts Make Up One-Third of U.S. Wages
Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.
ABC News | An Oil Price of $140 a Barrel Could Lead to a Recession and 'Demand Destruction'
$140 a Barrel Could Cause Recession in Advanced Economies, Says Leading Economist
CSM | Gas prices soar past $3.50 per gallon: Are Middle Eastern uprisings to blame?
Gas prices have been only modestly affected by fighting in Libya, but a 'fear factor' is driving up oil futures, which in turn drive gas prices.
WSJ | Senate Passes Patent System Overhaul
The Senate overwhelmingly passed legislation Tuesday to overhaul the U.S. patent system, reviving a long-stalled effort and raising industry hopes that the biggest changes to patent laws in almost six decades could soon be enacted.
Fox Business | January Wholesale Inventories Rise
Wholesale inventories rose more than expected in January and sales set their fastest pace in 14 months, according to a government report on Wednesday that offered further signs of strengthening demand.
Bloomberg | Foreclosure Aid on Chopping Block as Democratic Support Fades
U.S. House Republicans prepared to vote on whether to eliminate the Obama administration’s signature anti-foreclosure effort as support for the program also eroded among Democrats.
Fox Business | Rising Trade Deficit Slows Recovery, Jobs Creation
On Thursday analysts expect the Commerce Department to report the deficit on international trade in goods and services was $41.0 billion in January, up from $40.6 billion in December and $27 billion in mid 2009, when the recovery began.

Econ Comments                                                                                                             
Bloomberg | What a Waste Trying to Find Government Waste: Caroline Baum
Everyone who wants to eliminate waste, fraud and abuse in government, raise your hand.
NRO | Zandinomics
McCain's pet Democrat is peddling a free lunch with a free dessert.
Fortune | How cheap houses spell bad news
Houses look more affordable than ever. But prices will have to fall further before many Americans can actually afford to buy one.
AEI | Why NPR Should Urge Congress to End Its Subsidy
The case for government support of public broadcasting is far weaker than it was in the 1960s and 1970s
Reason | The State Pension Time Bomb
Poor accounting rules and flagrant irresponsibility have sped up the states’ day of reckoning.

Blogs                                                                                                                           
NYT: Room for Debate | Should Fannie and Freddie Go?
What are the consequences to ending all government support in the mortgage market?
Daily Capitalist | Commercial Real Estate Loan Liquidations Continue
It is too soon to determine if this is a moderating trend or not, but it is resolving a lot of debt that was malinvested during the boom. But $5 billion is not insignificant.
CSM: The Daily Reckoning | Time to invest in Japan?
Some financial experts say now is the time to buy and hold Japanese stocks.
Daily Capitalist | Housing Negative Equity Remains At Historic High
CoreLogic released it negative equity report for Q4 2010 today and it was not encouraging:
CSM: The Adam Smith Institute Blog | A new way to think about recessions?
Look at how specializations in business match up with demand.
EconLog | Economists' Ideological Blind Spots
Tyler Cowen makes up long lists of the blind spots of left-leaning economists and right-leaning economists. If I were asked this question, I would boil my answers down to one suggestion for each.
WSJ: Real Time Economics | Secondary Sources: Budgets, Labor Force, Mauritius, Blogs
A roundup of economic news from around the Web.

Health Care

News                                                                                                                             
CNCB | Maine gets break in federal health care overhaul
The federal government Tuesday granted Maine a waiver of a key provision in President Barack Obama's health care overhaul, citing the likelihood that enforcement could destabilize the state's market for individual health insurance.
Fox News | Mandatory Funds in Health Care Law
Your share of mandatory funds in health care law.

Econ Comments                                                                                                             
Cato Institute | Obamacare Can't Be Fixed
Permitted to stand, Obamacare will reduce Americans' incomes, harm their health, and decrease their freedom.

Blogs                                                                                                                             
Heritage Foundation | Defunding Obamacare: Istook Testifies in the House
To de-fund Obamacare, it is insufficient simply to deny future funding. Until the full law can be repealed, at least the existing and advance appropriations need to be rescinded, just as the House last month voted to repeal billions of dollars from previous appropriations to 123 federal programs.
Heritage Foundation | Did Obama Finally Accept That He Lost the Obamacare Lawsuit?
The administration’s goal is to buy time to build up the edifice of Obamacare so that, even if the courts do strike down the individual mandate, the Supremes will allow the rest to stand.  That strategy may now be unraveling.
Heritage Foundation | Obamacare Subsidizes Health Benefits for State and Local Government Retirees
Obamacare also created the Early Retirement Reinsurance Program, which subsidizes employer-sponsored health benefits for early retirees and their families. The program will cover 80 percent of health expenses between $15,000 and $90,000, and was intended to encourage employers to maintain coverage for the age group between 55 and 65, who can face difficulties purchasing insurance in the individual market absent an employer-sponsored plan.

Taxes

News                                                                                                                             
Politico | Grover Norquist, Tom Coburn duel over tax hikes
Coburn and Norquist, two of Washington’s most unfailing apostles of starving the government, are locked in a low-grade duel over whether ideological purity on taxes is a realistic position in the face of skyrocketing national debt and growing deficits.

Blogs                                                                                                                             
CSM: Tax VOX | The battle over Internet sales tax
States on a tight budget are looking everywhere, including Internet sales, to squeeze out some extra money.

Monetary

Econ Comments                                                                                                             
Minyanville | The Exploding US Money Supply Myth
Yes, the US government is running a massive $1.5 trillion deficit, but it is not "printing money" uncontrollably and flooding the world with dollars that will lead to hyperinflation.
Bloomberg | China's 10% Growth Faces Risk of 10% Inflation: William Pesek
If any generalization can be made about China-watchers, it’s that they are an optimistic bunch. They scour government data, energy-use tables and factory output, finding loads to smile about. China can grow 10 percent a year forever.
Minyanville | What Happens When QE2 Ends?
What the end of bond-buying means for Mr Market.
Minyanville | PIIGS Watch: Inflation Arrives as Credit Agencies Strike
Moody's and Fitch bust Greece and Spain on the eve of the March summits, while the promise of April interest rate hikes adds even more complications.

Budget

News                                                                                                                             
CNN Money | Goolsbee: Spending cuts won't close budget gap
Austan Goolsbee, chairman of the Council of Economic Advisers, said that stronger economic growth, including an emphasis on doubling exports, is the best way to address the deficit.
CNS News | Hoyer Says Federal Budget May Not Be Balanced for 20 Years
Hoyer noted that even his 20-year estimate was based on a robustly growing economy that would allow the government to take in a normal level of tax revenue instead of the reduced revenue it expects to take in during a recession.
CNN Money | National debt: 'Time for gridlock is over'
As lawmakers continued to butt heads over how much spending should be cut over the next seven months, a few senators on Tuesday were trying to keep the focus where they think it belongs -- the next several decades.
Politico | Reid: Save frederal funding for the cowboy poets!
In the middle of his tirade against House Republicans' "mean-spirited" budget bill on the Senate floor Tuesday, the Senate Majority Leader lamented that the GOP’s proposed budget cuts would eliminate the annual "cowboy poetry festival” in his home state of Nevada.
Fox News | Senate to Vote on Rival GOP, Democratic Budgets
In a demonstration of official Washington's often curious logic, the Senate is expected to vote down both a slashing GOP budget bill and a less painful Democratic plan to demonstrate progress instead of gridlock.
CNN Money | IRS budget in the crosshairs
The Republican spending plan for the rest of the fiscal year would strip the IRS of $600 million in funding -- including $285 million from the agency's enforcement budget.
Fox News | AIG repays $6.9 billion to bailout program
AIG has now paid back $9.1 billion of the $68 billion in bailout funds it received from the government at the height of the 2008 financial crisis.
WSJ | China's Debt Burden Limits Policy Leeway
...including the debts of local governments and many parts of the state-owned banking sector, as many economists say is proper, shows the constraints facing Beijing in the fight against inflation, its top economic priority.
Fiscal Times | EU Debt Crisis Mounts as Market Strains Portugal
Europe's government debt crisis has flared up again in the run-up to two crucial meetings of EU leaders as Portugal had to pay 50 percent more to raise cash in the markets on Wednesday than it had to just six months ago.

Econ Comments                                                                                                             
New American | Touted Savings in Spending Proposals Misleading
Once analysts cut to the real savings, however, Republicans have the Democrats beat by a mile, having proposed $61 billion in savings versus the Democrats' $8.7 billion.
NRO | Zandinomics
In his model, the multiplier is greater than one. This means that when government builds that bridge, not only does the bridge not really cost us anything, but building it generates additional resources that we can use to stimulate private consumption and investment: The free lunch includes a free dessert.

Blogs                                                                                                                             
NRO: Lou Dolinar | The Bullet Train to Bankruptcy
…[Californians] appear to be questioning the High-Speed Rail Authority, which voters empowered in 2008 to issue $9.95 billion in bonds and build the nation’s largest such system.
Mercatus Center: Neighborhood Effects | Entitlement, Entitlements, Entitlements
Because we are borrowing so much to pay for these programs, our interest payments begin to climb…and climb…and climb.
NRO: Jim Lacey | A Modest Fiscal Proposal
[D]o you have an infant? If you do, her share of the government debt is now $45,000.
Bankrupting America | The federal budget war: FY 2011 continuing resolution
On March 8, the Senate is expected to take up two versions of a long-term CR. One is the Republican House-passed version and one is version written by Democrats in the Senate. If the House version passes, lawmakers have a long-term deal on their hands.
Cato@Liberty | Spending Growth: Nondefense Discretionary
Nondefense discretionary spending accounts for approximately 17 percent of total federal spending.
NRO: The Corner | ‘No Way Out’ of Debt Trap
...these projections, which show an explosion in the amount of money needed to service our debt, underestimate the problem, since any decrease in economic growth resulting from higher interest rates — or any other cause — is not accounted for.
Cato@Liberty | Federal Budget Cap at 3%
Limiting spending growth to 3 percent is a modest goal, but over time the results would be quite dramatic compared to Obama’s no-reform spending plan.

Employment

News                                                                                                                             
WSJ | Greek Jobless Rate Accelerates
Greece's unemployment rate continued to accelerate in December, rising to 14.8% compared with 10.2% in December 2009, the statistics service ELLSTAT said Wednesday.

Econ Comments                                                                                                             
WSJ | Jobs, Regulations and Broken Windows
The White House thinks that more regulations will create more jobs.
Investors | Cynical Unions Are No Friends To U.S. Workers
The biggest myth about labor unions is that unions are for the workers. Unions are for unions, just as corporations are for corporations and politicians are for politicians.
WSJ | LAMBRO: A strong dose of economic reality
Dismal jobs report shows Obamanomics isn’t working
Minyanville | Is Unemployment Really Declining?
The employment situation may moderate during 2011, but don't expect to see the job growth needed to significantly drop unemployment levels back to pre-crash levels.

Blogs                                                                                                                           
CSM: Stefan Karlsson's Blog | Education and employment don't have to be linked
In the US, the unemployment rate is much lower for highly educated people, but such a correlation doesn't exist in every country.
Daily Capitalist | Is Unemployment Really Declining?
I tend to believe the BLS unemployment numbers in that they indicate marginal gains in employment, although they are probably statistically insignificant. Last Friday’s report said that the civilian unemployment rate declined to 8.9% from 9.0%.
Political Calculations | The Minimum Wage and Job Loss from 2006 through 2010
So, in percentage terms of the change in total employment level from 2006 to 2010, jobs affected by the federal minimum wage hikes of 2007, 2008 and 2009 account for 42.5% of the total reduction in jobs seen since 2006.