Thursday, March 17, 2011

General Economics

News                                                                                                                              USA Today | North Dakota economy booms, population soars
North Dakota, the state with the nation's lowest unemployment rate, capped a decade of economic prosperity with dramatic population growth in its biggest cities.
CNN Money | $5 ATM fees coming our way?
ATM fees are on the rise at some of the country's biggest banks.
WSJ | With Fifth Third Out, Banks Have Repaid 99% of TARP
Six banks repaid nearly half a billion dollars in funds they received from the government bailout of Wall Street, the Treasury Department said, bringing the total bank repayment under the Troubled Asset Relief Program to 99%.
CNN Money | Consumer prices up 2.1% in past year
Food and energy prices are surging. Still, underlying inflation remains low, the government said Thursday.
Politico | Poll: 81% fear for Social Security
The vast majority of Americans see Social Security headed toward a crisis, and most think the system needs a major overhaul, a new poll suggests.
CNN Money | Rising wholesale prices ring inflation alarm bells
The cost of producing goods is rising, and consumers could soon pay the price.
Fox | Florida Governor to Sign Teacher Merit Pay Legislation
Florida public school teachers would lose job security but could make more money if their students do well on standardized tests under a trailblazing bill that went to Gov. Rick Scott on Wednesday after a party-line vote in the Republican-controlled state House.
Politico | Japan crisis takes toll on U.S. economic recovery
The unfolding crisis in Japan has begun to have an impact on the fragile recovery of the U.S. economy despite assurances by Obama administration officials and many analysts that it does not pose a significant threat to economic growth here or across the globe.

Econ Comments                                                                                                             
WSJ | The Anemic Recovery Continues
Who can blame consumers for holding back when 50 million Americans depend on taxpayer-supported programs? The modern-day soup line is a check in the mail.
Cato | Freedom Means Faster Growth
How do we measure economic freedom, and how relevant is it for economic growth? Some answers come from Economic Freedom of the States of India 2011, a report just brought out by the Friedrich Naumann Foundation , Cato Institute and Indicus Analytics.
Minyanville | Tragedy in Japan Highlights Challenges of Economic Forecasting
The only thing we really know for sure is that the earthquake, the tsunami, and the aftermath have destroyed significant infrastructure and inflicted heavy loss of life.
WSJ | How Washington Ruined Your Washing Machine
The top-loading washer continues to disappear, thanks to the usual nanny state suspects.
RCM | Advice for Mr. Obama On Energy
With Japan's nuclear disaster and Senate Majority Leader Harry Reid blocking the disposal of spent nuclear fuel in Nevada's Yucca Mountain, prospects for approving more U.S. nuclear power plants are dimming. But what about oil and natural gas?

Coordination Problem | Stimulus Spending and Jigsaw Puzzles
In a series of newspaper columns last year, Don Boudreaux compared the economy to a giant jigsaw puzzle with billions of pieces that can fit together in numerous combinations only a small number of which produce a meaningful pattern or picture.  We learn which combos work because they “beep” every time we get one “right” and those beeps give us pleasure.  I like that metaphor and I want to make use of it to talk about Austrians, Keynesians and stimulus spending.
Café Hayek | Essay on Keynesianism, Part the First
Running the risk of over-simplifying only a teeny bit, I propose that the key difference between the Keynesian/man-in-the-street view of the economic problem and a non-Keynesian view of the economic problem is the following: Keynesians/men-(and-women)-in-the-street sense that the dominant economic problem is super-abundance (and its attendant problem, excess capacity), while non-Keynesians understand that the dominant economic problem is, and will always be, the ubiquity of scarcity.
Mercatus Center: Neighborhood Effects | What Does An Artificially High Discount Rate Mean?
What, exactly, does a low discount rate mean? More importantly: what does a low rate say about the assumptions of those who prefer to use it?

RCM: Wells Fargo | PPI: Mixed Results in February
The PPI for February showed a very strong increase in the finished goods index of 1.6 percent, but a more modest increase in the core PPI, which posted a more moderate 0.2 percent increase.

Health Care

NationalJournal | Abortion Bill Would Hit Businesses - Report
Employers might lose major health insurance tax breaks in a sweeping bill that aims to prevent the use of federal dollars to pay for abortions, the nonpartisan Congressional tax committee told a House tax panel Wednesday.
NationalJournal | Pretty Soon We'll All Live Forever: U.S. Death Rates Continue Decline
The U.S. death rate has fallen again for the 10th straight year, the National Center for Health Statistics reported on Wednesday, and life expectancy has gone up to an average of 78.2 years for babies born in 2009.

Econ Comments                                                                                                             
Heritage Foundation | Welfare Reform The Next Steps
A look at welfare reform's recent history.
RCM | Why Do Hospitals Want Higher Taxes?
Health care providers, led by hospitals and nursing home operators, are stepping forward to support taxes on their revenues. They are hoping states will take the tax money, use it to get Medicaid matching funds from the federal government, and then leave health care out of the fray when cutting state budgets.

Heritage Foundation | Obamacare and the Fight to Preserve America’s Founding Principles
Since the passage of Obamacare, the federal government’s role in American citizens’ lives has grown significantly.
Cato@Liberty | Likely Voters Oppose ObamaCare by Nearly a 20-Point Margin
It has been a while since I generated a chart showing support/opposition to ObamaCare among only likely voters, so here goes.
Heritage Foundation | Medicaid Flexibility Still Missing from Wyden-Brown
Sen. Wyden contends that states could include Medicaid waivers in any submission to HHS under his bill. He is correct only in the narrow sense that they can continue to do that to a very limited degree now, as under the previous law and during the previous administration.

CBPP | Ryan-Rivlin Plan Would End Guaranteed Medicare, Shift Medicaid Costs To States And Beneficiaries
Under the Ryan-Rivlin proposal, Medicare beneficiaries would no longer have access to a guaranteed set of health benefits but would instead receive a voucher to be used to purchase private health insurance.   Similarly, the federal government would no longer pay a specified share of states’ Medicaid costs but would pay each state only a fixed amount, or block grant.
Heritage Foundation | Secretary Sebelius Cannot Fix CLASS
While the Secretary now acknowledges that CLASS is fundamentally flawed, she has argued that the law grants her flexibility to make changes that ensure its solvency.


WSJ | Tax Plan Aims for 25% Cap
Republican Ways and Means Chief Also Would End or Trim Popular Deductions.
NY Times | Europeans Introduce Corporate Tax Plan
The European Commission, which made the proposal, estimated that the plan could save businesses 700 million euros ($973 million) a year in reduced compliance costs and an additional 1.3 billion euros ($1.8 billion) in tax benefits.
WSJ | Taking On Tax Breaks
The new provisions also come with a host of caveats and many lack permanency, making it difficult for owners to know which tax breaks are coming and going, and whether or not they qualify.

Econ Comments                                                                                                             
WSJ | TARP Was No Win for the Taxpayers
Treasury's claim that the bank bailouts will return a profit ignores the other, more costly programs enabling the banks to repay their TARP funds.

EconLog | Your Taxes at Work
From Third Way comes this clever exercise in numeracy: seeing how important various parts of the federal budget are by translating it into what you pay in taxes for each part.


The Telegraph | US backing for world currency stuns markets
US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is "quite open" to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund.
CNN Money | Dollar hits all-time low against yen
The dollar fell as low as 76.54 against the yen in late trading Wednesday, dipping under the previous all-time low of 79.75 set in April 1995.
Fox News | Higher prices for food are about to get worse
Food prices at the wholesale level rose last month by the most in 36 years. Cold weather accounted for most of it, forcing stores and restaurants to pay more for green peppers, lettuce and other vegetables, but meat and dairy prices surged, too.
NYT | European Central Bank Appears Firm on Interest Rate Increase
This month, the European Central Bank all but promised a rate increase when its governing council meets on April 7. There is no sign, however, that the earthquake in Japan and its aftermath have dissuaded policy makers from their view that rates must rise to pre-empt inflation.

The American | How the Fed Should Operate in Treacherous Waters
Federal Reserve Chairman Ben Bernanke would be wise to learn from the Titanic and slow his second experiment with quantitative easing, the expansion of the central bank’s balance sheet known as QE2.
WSJ: Real Time Economics | Q&A: Eichengreen on the End of Dollar Dominance
Is this a good thing for the U.S. if the dollar’s role in the world economy shrinks relative to Europe and China?


CNS News | U.S. Debt Jumped $72 Billion Same Day U.S. House Voted to Cut Spending $6 Billion
If Congress were to cut $6 billion every three weeks for the next 36 weeks, it would manage to save between now and late November as much money as the Treasury added to the nation’s net debt during just the business hours of Tuesday, March 15.
Fox News | Spending Debate in Congress Divides GOP
Tea Party-backed Republicans, including many of the party's 94 freshmen lawmakers, favor a GOP spending bill that cuts more than $60 billion…
Washington Times | In face of government shutdown, it’s still party time
There usually are up to a half dozen fundraisers happening at once across the city over breakfast, lunch, dinner or after-hours get-togethers.
WSJ | Bowles Predicts Support for Deficit Deal
Democrat Erskine Bowles, who co-chaired the White House's deficit-reduction panel last year, predicted Wednesday evening that 35 to 40 additional U.S. senators would back a deficit reduction plan being drafted by a group of lawmakers known as the "Gang of Six."

Econ Comments                                                                                                             
Minyanville | Will Earthquake in Japan Trigger Country's Debt Problems?
Japan has many serious problems, but the lack of ways and means to finance public deficits and debts related to disaster reconstruction is not one of them.
Reason Foundation | Downgradocalypse 2015
How out of control debt could tangibly hurt America.
Washington Times | KIRK: Already too late to stop debt crisis?
We are borrowing more than $5 billion per day. That’s $35 billion per week to run our government, totaling more than $1.5 trillion in borrowed money just to run it this year.

Cato@Liberty | Tough Breaks for the Blame-Cheap-States Crowd
...external factors such as decreasing state subsidies are not the main culprit behind skyrocketing prices. Student aid is, because it allows colleges to increase their prices with impunity.
NRO: The Corner | The Trust Fund Is an Asset to Social Security, But So What?
The fact that the assets are real isn’t changing anything for taxpayers, and it’s certainly making our deficit and our debt bigger.


Bloomberg | Initial Jobless Claims in U.S. Fell 16,000 Last Week to 385,000
Fewer Americans filed first-time claims for unemployment insurance payments for a third week in the last four, indicating progress in the labor market.
Washington Times | Republicans say regulations, taxes stifle new jobs
Democrats accuse House GOP of not focusing on employment

NRO: The Corner | Public Jobs as the Ticket to Middle Class Status
The continuing debate over public sector compensation has obscured a fact that isn’t controversial.