Wednesday, March 16, 2011

General Economics

News                                                                                                                             
Yahoo Finance | Wholesale prices up 1.6 pct. on steep rise in food
Wholesale prices rise 1.6 pct. due to biggest jump in food costs in more than 36 years
CNN Money | Building permits fall to all-time low
The housing market just can't seem to catch a break.
Fox | Japan crisis puts world financial markets on edge
Fears over the escalating nuclear crisis in Japan overtook financial markets around the globe Tuesday, pushing stocks and other investments lower. The Japanese stock market lost 10 percent of its value, and Wall Street dropped steeply before bouncing back.
Politico | World braces for Japan economic hit
The economic fallout on Japan and the rest of the world in the wake of last week’s devastating earthquake and tsunami is only beginning to emerge.

Econ Comments                                                                                                            
CNN Money | Alan Greenspan: Stimulus hurt recovery
Massive government intervention to save the economy is to blame for the lagging recovery, Former Federal Reserve Chairman Alan Greenspan said Tuesday.
RCM | To Recover, Japan Must Ignore the Fallacies
The ongoing tragedy in Japan has unsurprisingly generated a great deal of commentary covering how - and if - the country will recover economically from difficulties that at least from the television screen, seem insurmountable. The happy news is that if history is any kind of indicator, Japan will rebound with great speed.
NRO | The Infrastructure Bank That Isn’t
John Kerry’s recycled slush-fund recipe.
Washington Times | OWENS: The upside of high oil prices
Market forces will generate alternatives - if the feds don’t intervene
Mercatus Center | Economists Look Beyond Housing Crisis to Propose Long-Term Reform
As the U.S. housing market struggles to right itself, many Americans may be hoping the worst is over. While real estate prices continue to fall in parts of the country, increases in the sales of existing homes have many breathing a sigh of relief. Even if stability returns in the short term, however, many are claiming that the government-sponsored enterprises (GSEs) that dominate the U.S. mortgage market need serious reform to avoid a repeat of the housing market crash.

Blogs                                                                                                                          
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.”
Cato@Liberty | Are Mortgages Cheaper in the U.S.?
As Congress and the White House continue to debate the future of Fannie Mae and Freddie Mac, one of the oft heard concerns is that if we eliminate all the various mortgage subsidies in our system, then the cost of a mortgage will increase.  There certainly is a basic logic to that concern.  After all, why have subsidies if they don't lower the price of the subsidized good.
NRO: The Agenda | Do Funds Flowing to Schools and Local Governments Go to Poor People?
If I were creating a system designed to put more resources in the hands of poor people, would I (a) give money to poor people in the form of EITC benefits or direct wage subsidies or would I (b) hire large numbers of public workers? It’s not obvious that (b) is a smarter strategy than (a).
Forbes: The Capitalist | Obama’s ‘Stimulus’ Precluded A Robust Recovery
Whatever is tried by today’s economic charlatans, don’t dare doubt them! Hope springs eternal for the Keynesians and Obama-zombies.
EconLog | Regional Disasters: AS/AD vs. PSST
Suppose that a natural disaster occurs in one region. How does this affect the rest of the world?
WSJ: Real Time Economics | Economists React: If Worst Happens in Japan, All Bets Are Off
Economists and others weigh in on the economic effects of the Japanese earthquake and tsunami.

Health Care

News                                                                                                                             
NationalJournal | Are GOP Leaders Going Soft on 'Obamacare'?
Top tea partiers in Congress openly worry about the commitment to defund the health care law.

Econ Comments                                                                                                             
Politico | Why I voted to repeal health reform
We are one year removed from the passage of the Affordable Care Act and nearly two months past a vote in the House to repeal it. Since that first vote was cast, my constituents remind me at every town hall meeting I hold that they are overwhelmingly opposed to this law. That is why I supported repeal.
NationalJournal | Look on the Bright Side of Health Reform, Sebelius Tells Congress
Health and Human Services Secretary Kathleen Sebelius is set to fulfill her role as the health care reform law’s top cheerleader on Wednesday, when she testifies in front of a Senate Finance Committee hearing to mark the law’s first anniversary.
NRO | Obamacare Marches On
What are Republicans doing to stop it? Not much.

Blogs                                                                                                                             
Econlog | Health Care Prior to Stagnation
Keep in mind, though, that even if we had not expanded third-party payments, health care spending probably would have risen faster than other spending. That is, I think that the inflation-adjusted demand for health care has been on a long upward trend
Heritage Foundation | Obamacare Ties Hands of Congress to Control Funding
Within its 2,700 pages, Obamacare has been given billions of dollars in advance appropriations—$6 billion was immediately appropriated, while over $105 billion was appropriated for the years following. In this way, the 111th Congress made spending decisions for years in advance, making a clear “attempt to handcuff the current Congress and prevent it from determining current levels of spending,” Congressman Istook told members of the committee.
Heritage Foundation | The “Untouchable” $23.6 Billion
This $23.6 billion is part of the $105.5 billion appropriated by the last Congress to fund Obamacare.  The remainder (Think of it as post-dated checks for the other $81.9 billion.) automatically becomes available between now and FY2019.

Taxes

News                                                                                                                             
Washington Times | Governor works to restore Great Plains to greatness
Mr. Brownback has called for giving new residents to any county that lost more than 10 percent of its population a five-year exemption from state income taxes.

Monetary

News                                                                                                                             
MSNBC | Central bank says it will stick with $600B Treasury bond-purchase program
The Federal Reserve said on Tuesday the U.S. recovery is gaining traction and inflation pressure from soaring energy costs should be short-lived, allowing it to maintain its heavy support for the economy. The U.S. central bank decided unanimously to forge ahead with its $600 billion bond-buying plan despite a considerably more upbeat assessment of the economy and the job market.
CNN Money | Fed not sweating high oil prices
The central bank acknowledged there have been significant increases in commodity prices such as oil since its last meeting, but added that it believes underlying inflation pressures remain subdued.
Bloomberg | Fed Signals Further Stimulus Unlikely as Recovery Strengthens
Federal Reserve officials signaled they’re unlikely to expand a $600-billion bond purchase plan as the recovery picks up steam and the threat that inflation will fall too low begins to wane.
Time | Can the Euro Zone's New Rules Cure Its Ills?
It has been more than a year since financial markets began buffeting the euro and threatening its very viability, yet Europe is still battling to fix the system and restore confidence in the single currency.

Budget

News                                                                                                                             
CNN Money | Debt leaves no wiggle room for disasters
Left unchecked, by 2020, 92 cents of every federal tax dollar will be needed just to pay for Medicare, Medicaid, Social Security and interest on the debt.
WSJ | Illinois Pension Crisis Eludes Easy Solutions
Critics say these proposals will go only part way in erasing the $82 billion unfunded pensions liability that is projected to grow to $139.8 billion in 2030
CNN Money | Ohio governor slashes $8B from budget
Fulfilling his promise not to raise taxes, Ohio Gov. John Kasich Tuesday unveiled a budget that slashes spending for many agencies and seeks to privatize certain government functions to eliminate an $8 billion budget deficit.

Econ Comments                                                                                                             
Fortune | Don't bank on a Japanese debt crisis yet
As Japan reels in the aftermath of the most powerful earthquake in its history and worries grow about a nuclear reactor meltdown, some economists wonder whether the disaster will push the country closer to a sovereign debt crisis, too.
NRO | Ryan: No More Empty Promises
According to the Government Accountability Office, the United States currently has $88.6 trillion in unfunded liabilities. Talk about a generous empty promise.

Blogs                                                                                                                             
Reason: Out of Control Policy Blog | Why We Need a Serious Budget Change
The message from the report is simple: if we do not change from our current path, we will run straight off of cliff into serious fiscal instability.
Cato@Liberty | Federal Spending Cap: Corker vs. 3%
The major difference is that the 3 percent cap has the advantage of being easier to explain to the public. Public support is important for spending limitation legislation to gain traction.
Marginal Revolution | Earthquakes and spending and deficits
“When the Titanic was sinking everyone eventually rushed to the stern of the ship. That didn’t mean that that part of the ship was actually safe.”
Political Calculations | Rising and Fading World Powers
Looking forward, given the magnitude of the earthquake and tsunami-related destruction in Japan, we should expect that the Japanese will act to cash in a good portion of their U.S. debt holdings to help raise the money that they'll need for recovery, which will further reduce that nation's share of U.S. government-issued debt.

Employment

News                                                                                                                             
MSNBC | Union: 19K teacher layoff slips so far in Calif
School districts in California have issued nearly 19,000 layoff notices so far to teachers amid uncertainty over the state budget, the California Teachers Association estimated Tuesday.

Blogs                                                                                                                          
The Atlantic | What Caused Inequality to Grow?
Rising inequality (and slower income growth) have been a rising trend across most of the developed world for three decades.  We need a better explanation than greedier rich people, or stupider politicians.
EconLog | Effect of Monopoly Unions on Income Distribution
As I noted in my post, "Do Labor Unions Promote the Middle Class?", the main effect of unions is not to strengthen the middle class but to transfer wealth from non-union to union workers.