Tuesday, March 15, 2011

General Economics

MSNBC | Nevada's boom ends in record number of empty homes
The figures are another striking example of how the housing crisis has pummeled Nevada, casting a new light on the severely weakened market after years of boom.
CNN Money | Will global economy be hit by Japan?
Japan is at serious risk of falling into a recession due to Friday's tragic earthquake and tsunami, according to many leading economists. But Japan could recover quickly, sparing the global economy a significant shock.
Bloomberg | Import Prices in U.S. Increased 1.4% in February on Oil, Food
Prices of goods imported into the U.S. rose more than forecast in February, led by gains in crude oil and food.

Econ Comments                                                                                                            
WSJ | Japan and the Broken Window Fallacy
As the French economist Frederic Bastiat once observed, reconstruction activity yields no net gain in a society's wealth.
WSJ | More Mortgage Mischief
Elizabeth Warren revs up her Consumer Financial Protection Bureau.
AEI | Economic Aftershocks: Four Big Repercussions
A calamity like Japan's massive 9.0 earthquake last week is certain to rock Japan's economy and, in turn, global commerce. There is no good way to put a number on this coming shock, though one early assessment was the fall of more than six percent in Japan's Nikkei stock market index on Monday.
WSJ | Carbon and Democracy
Congress gets ready to overrule the EPA on cap and trade rules.
Bloomberg | Four Ways the U.S. Can Help Japan, Also Itself: Amity Shlaes
This week of horror has generated record good will in the U.S. toward Japan.
Fox Business | How Will Japan’s Economy Survive?
Even the most unreconstructed bull will tell you that what they see happening in Japan scares them, and it’s not just because of the unspeakable, horrific loss of human life and the destruction from the massive earthquake and tsunami, costs for which the Insurance Information Institute now estimates may likely rank as “the worst in the history of the world.”
EconTalk: PODCAST | Townsend on Development, Poverty, and Financial Institutions
Robert Townsend of MIT and the Consortium on Financial Systems and Poverty talks with EconTalk host Russ Roberts about development and the role of financial institutions in growth.
Forbes | Why Social Security is a Ponzi Scheme
Want a recipe for ruckus? Merely suggest that Social Security might be a “Ponzi scheme”.

EconLog | Gene Smiley on the Great Depression
One of the commentators, mark, on Arnold's post today on the Great Depression noted that Gene Smiley has a book out on it. The book is excellent. I asked Gene to put in a few thousand words the highlights of the book as one of the articles in The Concise Encyclopedia of Economics. He did so and I use his article as a reading when I teach about the Great Depression.
Café Hayek | What Summers really really meant
I recently wrote about Larry Summers’s statement about the economic impact of the tragic events in Japan.
Cato@Liberty | Economic Freedom in India
Today Cato released the Economic Freedom of the States of India 2011 report (co-published with Indicus Analytics and the Friedrich Naumann Foundation) in Washington and New Delhi. India has been growing at high rates since it implemented market reforms in the early 1990s thus notably improving its level of economic freedom.
The Economist: Free Exchange | Japan update
ALL eyes remain focused on the situation in Japan, where rescue operations continue after a massive earthquake and tsunami. Concerns about damaged nuclear reactors continue to mount, and the extent of the catastrophe isn't yet clear.
NRO: The Corner | The Other Pension Crisis: Employer-Sponsored Plans
Unfortunately, this pension crisis isn’t the only one looming.
WSJ: Real Time Economics | Most Don’t Turn to Government in Tough Times
In some circles, there’s a belief the government safety net creates more problems than it solves because it makes it too easy to be out of work.

AEI | ObamaCare and the Dodd-Frank Act: What Would Hayek Say?
It is likely that Hayek—were he alive today—would have the same views as US conservatives about ObamaCare and the Dodd-Frank Act, the signature achievements of the Obama administration and the Democratic 111th Congress.
Mercatus Center | Do We Need the 30-Year Fixed-Rate Mortgage?
Are the benefits of the FRM worth the costs? Would the FRM disappear if Fannie and Freddie were no longer financing it? Are there mortgage alternatives that balance the needs of consumers and investors without exposing the taxpayer to inordinate risk? This paper seeks to answer these questions.

Health Care

NationalJournal | House Oversight Panel Tackles Health Law Waivers
The House Oversight and Government Reform Health Subcommittee will take a closer look at waivers under the health care reform law on Tuesday, examining how the Obama administration has used them for some employers.
NationalJournal | Senate Budget Panel to Eye Medicare Vouchers, Medicaid Reform
The Senate Budget Committee will take a look at some policies to save money on Tuesday, including proposals that would turn part of Medicare into a voucher program and redefine Washington’s relationship with the states under Medicaid.

Econ Comments                                                                                                             
Washington Times | TURNER: Medicaid transforming into single-payer surprise
Governors cry for help as their states drown in red ink.
CNN | Don't cut Medicaid, fund it better
Yes, we can cut Medicaid and make the state budgets look better in the short term. But we will be cutting from a program that is already short on funds and protecting those who really might not be able to protect themselves. There will be a very real, very immediate, and very human cost. We should stop and consider that.

Marginal Revolution | Makena and the Orphan Drug Act
Makena is a drug used for premature birth therapy. It’s been available off-label for a long-time but KV pharmaceuticals ran a clinical trial and applied for FDA approval under the Orphan Drug Act (ODA). Under the ODA, KV is entitled to seven years of market exclusivity, this is even stronger than a patent because it gives KV the right to exclude from the market any drugs (not just similar drugs) that treat the same condition.
Cato@Liberty | ObamaCare: a Federal Takeover, No Matter Who Runs the Exchanges
I argue that states should refuse all ObamaCare funds and refuse to erect an ObamaCare Exchange that would execute the law's many health-insurance regulations. Since ObamaCare provides that the feds will set up and administer an Exchange in states that don't do so themselves, Goozner concludes that I'm actually advocating a federal takeover of health care. Really?
EconLog | Central Planning in Health Care
President Obama has repeatedly given us his vision of how to lower the cost of health care and raise its quality: Find out what works; then get everyone else to copy it. Toward that end, the administration is making millions of dollars available for pilot programs and demonstration projects. Will any of this work?


Ludwig von Mises Institute | What Can We Do about Gasoline Prices?
Because government is a main cause of high gasoline prices, the solutions for alleviating this problem are obvious; stop government intervention in energy markets and allow private markets to determine oil and gasoline prices.
Cato@Liberty | Tax-consumers Use Our Money to Lobby for More of Our Money
...governments and other tax-consumers use taxpayer dollars to lobby the government to get more taxpayer dollars.


Bloomberg | Fed’s Next Steps Divide Economists as Purchases Wind Down
Federal Reserve policy makers are almost certain to fulfill their plan to buy $600 billion in Treasuries, a survey of economists shows. How they finish the purchases and what they do next is a matter of disagreement.
Fox News | Fed meets as economic risks widen
The Federal Reserve meets Tuesday at a time of widening economic risks: higher oil and food prices; unemployment near 9 percent; crises in the Middle East and Japan.
WSJ | Fed to Assess Multiple Trouble Zones
The Federal Reserve is unlikely to follow its European counterpart in hinting it is ready to reverse its easy-money policies, as the U.S. central bank waits to see the impact of several trouble zones brewing around the world.
CNN Money | Sagging stocks put Bernanke on the spot
Will QE2 still be working if the U.S. stock market takes a swan dive?

Econ Comments                                                                                                             
WSJ | 'I Can't Eat an iPad'
The Federal Reserve has been on a media campaign to sell its monetary policy to average Americans, but this hasn't always gone smoothly. Witness last week's visit to Queens, New York, by New York Fed President William Dudley, who got a street-corner education in the cost of living.
Minyanville | The Economic Impact of the Earthquake and Japan's Struggle to Recover
The Bank of Japan said it will provide "massive" liquidity to the banking system in order to assure the crisis will remain one of massive damage and not massive deflation.

The Economist: Free Exchange | Ahead of the Fed
In all likelihood, Chairman Ben Bernanke will announce no change to planned asset purchases, and no change in the Fed's interest rate language. But observers will look carefully to see if shifts in the Fed's economic assessment suggest a change in bias.
WSJ: Real Time Economics | Will Higher Energy Prices Pass Through to Consumers?
Are there any signs that higher energy prices are translating into rising core inflation? We may get an answer this week.
The Economist: Free Exchange | Problems not yet solved
The Financial Times reports today that euro-zone leaders have reached a deal on a series of measures designed to solve the currency area's ongoing debt crisis. At first glance, the numbers look impressive. Euro-zone members will bulk up funding levels for the European Financial Stability Fund and its post-2013 successor, the European Stability Mechanism. The plan would also give the EFSF the ability to buy some government debt.
Volokh Conspiracy | David Stockman on The End of Sound Money and the Triumph of Crony Capitalism
It has been along time since I’ve heard anything about David Stockman.  But this analysis of the justification for the bailout (including intervening to preserve the commercial paper market) raises some excellent questions.  As does his analysis of the federal budget and what the future holds.


Washington Times | Cutting budget tougher as fiscal year’s funds dwindle
When the House voted last month to cancel a military jet engine project, it didn’t just halt the spending, it said the program should get zero money this fiscal year. The only problem — it’s five months into the fiscal year, and the Defense Department says the project already has spent $140 million.
NY Times | Budget Stalemate Leaves Chaos at Many Agencies
Officials at various agencies have frozen hiring, canceled projects, delayed contracts, reduced grants and curtailed training, travel and upgrades in information technology.

Econ Comments                                                                                                             
Washington Times | BLANKLEY: Deficits, promises and destiny
It may not be overstatement to assert that this presentation may determine whether Republicans win or lose the 2012 elections, and whether the United States government acts in time to save our economic future from ruin.
NY Times | What Is Missing in Deal on Europe’s Debt Crisis
Pressed yet again by a skeptical market to take action, Europe’s leaders cobbled together a new structure over the weekend that would allow its rescue fund, the European Financial Stability Facility, to disburse its entire 440 billion euro, or $615 billion, allotment if needed, and to buy bonds at government auctions.
Washington Times | RAHN: Averting the Washington Monument ploy
This is known as the Washington Monument Ploy, which got its name when a national parks director shut down the Washington Monument and Grand Canyon for two weeks in 1969 to protest budget cuts, rather than cutting administrative costs, deferring maintenance and curtailing new projects.
Minyanville | Plugging the Deficit: How Low Can States Go?
With states facing a combined $125 billion budget deficit, Ohio will release its budget tomorrow -- and it's not looking pretty.

WSJ: Real Time Economics | Japan’s Lesson to U.S.: Get Your Fiscal House in Order
Here is an economic lesson that the U.S. and other governments can learn from the horror that has struck Japan in the past week: Get your fiscal houses in order.
Bankrupting America | Did you get your money’s worth from congress last week?
The House passed four bills or resolutions that would save taxpayers more than $1 billion…
Political Calculations | To Whom Does the U.S. Government Really Owe Money?
...the U.S. Treasury has revised their data, specifically to identify who the real foreign owners of the U.S. national debt are. Here are how things really stood at the end of the U.S. government's 2010 fiscal year on September 30, 2010…

AEI | The Year of the Sovereign Debt Crisis might the increased prospect of default in the eurozone periphery and the loss of triple-A ratings in the major industrialized countries affect the global economy?


Econ Comments                                                                                                             
WSJ | Jobless Rate at 2012 Presidential Vote Forecast at 7.7%, Highest Since Carter-Ford, but the Trend May Matter Most
The U.S. jobless rate will be 7.7% in November 2012, the highest level for a presidential election month since Jimmy Carter defeated Gerald Ford in 1976, according to the average forecast of economists in the latest Wall Street Journal survey.
WSJ | Why North Dakota Is Booming
They're drilling for oil, attracting high tech, and keeping the tax burden moderate. Result: 3.8% unemployment.

The Economist: Free Exchange | Are the numbers wrong?
Ezra Klein links to a  new study of sorts by economist Michael Mandel which suggests that America's datakeepers are getting something seriously wrong. According to Mr Mandel, American data do not take into account the discount implicit in cheap imports or the import content of American exports. The figures may therefore be overstating American productivity gains and understating the trouble in American industry. It sounds bad.