Friday, April 1, 2011
JEC Employment Hearing April 1, 2011
Opening Statement:
"Today's employment report shows some positive signs. Everyone wants the economy to improve, particularly the labor market, and we are glad for the increases in jobs we are seeing. But let us be frank, while there are jobs gains, the rate of job creating has not accelerated enough to keep up with population growth and encourage all the people who lost their jobs that they soon can find work again. It has been 21 months since the recession ended and we are still down 7.2 million nonfarm payroll jobs from when it started. The unemployment rate at 8.8%, of course, remains unacceptably high but also is not telling us the whole story...."
-Congressman Kevin Brady
Vice Chairman Designate
Joint Economic Committee
Additional Employment Hearing Resources:
Vice Chairman Designate Brady's first round of questioning
Vice Chairman Designate Brady's second round of questioning
Representative Mick Mulvaney's first round of questioning
Representative Mick Mulvaney's second round of questioning
Representative Justin Amash's first round of questioning
Representative Sean Duffy's first round of questioning
Representative Sean Duffy's second round of questioning
Commissioner of Bureau of Labor Statistics, Dr. Keith Hall's opening statement
Bureau of Labor Statistics Report on Employment Situation for March 2011
General Economics
News
WSJ | Investors Move Onward and Upward
Dow Gains 6.4%, Posts Best First Quarter in 12 Years in Tumultuous Period
Washington Post | New Portuguese, Irish economic disclosures deepen European financial struggles
Portugal on Thursday disclosed new and larger budget deficits for last year, and Ireland said its banks need tens of billions of dollars in additional capital. The fresh round of bad news is likely to further shake confidence in Europe’s ability to resolve its lingering financial problems anytime soon.
Fiscal Times | TARP’s $24 Billion Profit: Some Demand a Recount
The Treasury Department is crowing about a new analysis that claims the government’s massive bank bailout in response to the 2008 financial crisis will actually end up turning a profit of nearly $24 billion.
Bloomberg | Manufacturing in U.S. Expands at Close to Seven-Year High
Manufacturing in the U.S. expanded in March at close to the fastest pace in almost seven years, reinforcing signs the industry will propel growth in the world’s largest economy.
Econ Comments
Cato Institute | The Green Energy Economy Reconsidered
How much will this particular dream cost?
Reason | "The big message of the financial crisis is that you want to become too big to fail"
George Mason economics professor Garett Jones on TARP, moral hazard, and the true costs of bailing out the financial sector.
NRO | The President’s New Energy Plan
What’s wrong with it? Just about everything.
Blogs
Washington TimesL: Water Cooler | Barack Obama: Losing $84 billion big success
Barack Obama has some 'splaining to do about taxpayers' profitable "investment" in General Motors. It turns out the president is imagining things.
Cato@Liberty | Energy Error Continued
When Barack Obama emerged as a serious contender for the presidency, he offered a core menu of curing everything by increased federal intervention in health care, education, and energy.
NRO: The Corner | Just Say No
This oral testimony (around 25 minutes) by Arnold Kling, a former Freddie Mac economist and now my colleague at the Mercatus Center, is a must-watch. Speaking before the Senate Banking Committee on Tuesday, he urged Congress to “just say no,” to more government involvement in the housing market.
Cato@Liberty | Are Farm Subsidies Progressive?
An economist in the Department of Agricultural and Consumer Economics at the Univeristy of Illinois posted an interesting entry on the FarmDocDaily blog yesterday, claiming that farm subsidies flowing to the biggest farms is a sign of progressivity.
AEI: The American | Obama’s Energy Blueprint: Same Silliness, Different Day
The president offers a list of ideas that fly in the face of fundamental realities.
AEI: The American | Is Startup America Bound to Fail?
The White House’s Startup America program’s diversity goals clash with its economic aim of boosting growth.
Reports
AEI | Uncertainty Mounts
Hope that the global economy has shaken off the dust of the 2007–2008 financial crisis is giving way to uncertainty as the Arab Spring and disaster in Japan threaten to reverse recovery momentum. Market behavior is signaling a slowdown in US growth, but there are few options left for policymakers as fiscal and monetary stimulus fade. Budget pressures will make further stimulus unlikely, leading to mounting uncertainty about the way forward.
WSJ | Investors Move Onward and Upward
Dow Gains 6.4%, Posts Best First Quarter in 12 Years in Tumultuous Period
Washington Post | New Portuguese, Irish economic disclosures deepen European financial struggles
Portugal on Thursday disclosed new and larger budget deficits for last year, and Ireland said its banks need tens of billions of dollars in additional capital. The fresh round of bad news is likely to further shake confidence in Europe’s ability to resolve its lingering financial problems anytime soon.
Fiscal Times | TARP’s $24 Billion Profit: Some Demand a Recount
The Treasury Department is crowing about a new analysis that claims the government’s massive bank bailout in response to the 2008 financial crisis will actually end up turning a profit of nearly $24 billion.
Bloomberg | Manufacturing in U.S. Expands at Close to Seven-Year High
Manufacturing in the U.S. expanded in March at close to the fastest pace in almost seven years, reinforcing signs the industry will propel growth in the world’s largest economy.
Econ Comments
Cato Institute | The Green Energy Economy Reconsidered
How much will this particular dream cost?
Reason | "The big message of the financial crisis is that you want to become too big to fail"
George Mason economics professor Garett Jones on TARP, moral hazard, and the true costs of bailing out the financial sector.
NRO | The President’s New Energy Plan
What’s wrong with it? Just about everything.
Blogs
Washington TimesL: Water Cooler | Barack Obama: Losing $84 billion big success
Barack Obama has some 'splaining to do about taxpayers' profitable "investment" in General Motors. It turns out the president is imagining things.
Cato@Liberty | Energy Error Continued
When Barack Obama emerged as a serious contender for the presidency, he offered a core menu of curing everything by increased federal intervention in health care, education, and energy.
NRO: The Corner | Just Say No
This oral testimony (around 25 minutes) by Arnold Kling, a former Freddie Mac economist and now my colleague at the Mercatus Center, is a must-watch. Speaking before the Senate Banking Committee on Tuesday, he urged Congress to “just say no,” to more government involvement in the housing market.
Cato@Liberty | Are Farm Subsidies Progressive?
An economist in the Department of Agricultural and Consumer Economics at the Univeristy of Illinois posted an interesting entry on the FarmDocDaily blog yesterday, claiming that farm subsidies flowing to the biggest farms is a sign of progressivity.
AEI: The American | Obama’s Energy Blueprint: Same Silliness, Different Day
The president offers a list of ideas that fly in the face of fundamental realities.
AEI: The American | Is Startup America Bound to Fail?
The White House’s Startup America program’s diversity goals clash with its economic aim of boosting growth.
Reports
AEI | Uncertainty Mounts
Hope that the global economy has shaken off the dust of the 2007–2008 financial crisis is giving way to uncertainty as the Arab Spring and disaster in Japan threaten to reverse recovery momentum. Market behavior is signaling a slowdown in US growth, but there are few options left for policymakers as fiscal and monetary stimulus fade. Budget pressures will make further stimulus unlikely, leading to mounting uncertainty about the way forward.
Health Care
News
Fox News | Virginia Governor Adds Abortion Coverage Restrictions to Fed Health Insurance Exchange
Furthering an anti-abortion push by Virginia Republicans, Gov. Bob McDonnell is seeking to ban abortion coverage by the state health insurance exchanges that are being created as part of the federal health care overhaul.
NationalJournal | Cancer Deaths Still Falling in U.S
Lung cancer deaths are falling for the first time among U.S. women—showing that smoking-cessation efforts targeting women are finally showing results, according to new cancer statistics released on Thursday. The new report shows cancer rates fell by about 1 percent a year between 2003 and 2007, although rates rose for kidney cancer and melanoma in both sexes.
RollCall | Senate to Vote on Repealing Portion of Health Care Law
The Senate set up a vote for Tuesday on a bill that would make the first significant change to President Barack Obama’s signature health care overhaul law.
Politico | New reform regulations fire up health debate
The Senate wrapped up its work Thursday without repealing the hated paperwork requirement of the health care law. Again. But the long delayed accountable care organization regulation finally came out providing details on a part of the law with the potential to thoroughly transform care delivery.
Politico | GOP plans $1 trillion Medicaid cut
House Republicans are planning to cut roughly $1 trillion over 10 years from Medicaid, the government health insurance program for the poor and disabled, as part of their fiscal 2012 budget, which they will unveil early next month, according to several GOP sources.
Blogs
EconLog | John Goodman on Medicaid
Health economists tend to think Medicaid insurance is really valuable - worth a lot more, say, than $20. Many patients, through their actions, communicate that they disagree.
NRO: Critical Condition | Repeal Obamacare’s 1099 Reporting Provision? No Way!
The 1099 provision refers to the justly reviled clause in Obamacare that compels any business spending at least $600 on a supplier to issue a 1099 to that supplier. Its supposed to raise some tax revenue by giving the IRS more accurate information about business transactions, but it's an easy target for a "mini repeal" of an obviously ridiculous provision of Obamacare.
Fox News | Virginia Governor Adds Abortion Coverage Restrictions to Fed Health Insurance Exchange
Furthering an anti-abortion push by Virginia Republicans, Gov. Bob McDonnell is seeking to ban abortion coverage by the state health insurance exchanges that are being created as part of the federal health care overhaul.
NationalJournal | Cancer Deaths Still Falling in U.S
Lung cancer deaths are falling for the first time among U.S. women—showing that smoking-cessation efforts targeting women are finally showing results, according to new cancer statistics released on Thursday. The new report shows cancer rates fell by about 1 percent a year between 2003 and 2007, although rates rose for kidney cancer and melanoma in both sexes.
RollCall | Senate to Vote on Repealing Portion of Health Care Law
The Senate set up a vote for Tuesday on a bill that would make the first significant change to President Barack Obama’s signature health care overhaul law.
Politico | New reform regulations fire up health debate
The Senate wrapped up its work Thursday without repealing the hated paperwork requirement of the health care law. Again. But the long delayed accountable care organization regulation finally came out providing details on a part of the law with the potential to thoroughly transform care delivery.
Politico | GOP plans $1 trillion Medicaid cut
House Republicans are planning to cut roughly $1 trillion over 10 years from Medicaid, the government health insurance program for the poor and disabled, as part of their fiscal 2012 budget, which they will unveil early next month, according to several GOP sources.
Blogs
EconLog | John Goodman on Medicaid
Health economists tend to think Medicaid insurance is really valuable - worth a lot more, say, than $20. Many patients, through their actions, communicate that they disagree.
NRO: Critical Condition | Repeal Obamacare’s 1099 Reporting Provision? No Way!
The 1099 provision refers to the justly reviled clause in Obamacare that compels any business spending at least $600 on a supplier to issue a 1099 to that supplier. Its supposed to raise some tax revenue by giving the IRS more accurate information about business transactions, but it's an easy target for a "mini repeal" of an obviously ridiculous provision of Obamacare.
Taxes
News
MSNBC | Average income tax refund this year will be $3,000
Here's a potential boost for the economy: The Internal Revenue Service expects to issue up to $300 billion in tax refunds this year.
CNN Money | We're getting a $54,000 tax refund!
The Wards couldn't believe the news when their tax preparer called to tell them they're getting a $54,000 refund this year.
MSNBC | Average income tax refund this year will be $3,000
Here's a potential boost for the economy: The Internal Revenue Service expects to issue up to $300 billion in tax refunds this year.
CNN Money | We're getting a $54,000 tax refund!
The Wards couldn't believe the news when their tax preparer called to tell them they're getting a $54,000 refund this year.
Monetary
News
Bloomberg | Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Bloomberg | Libya-Owned Arab Banking Corp. Drew at Least $5 Billion From Fed in Crisis
Arab Banking Corp., the lender part- owned by the Central Bank of Libya, used a New York branch to get 73 loans from the U.S. Federal Reserve in the 18 months after Lehman Brothers Holdings Inc. collapsed.
WSJ | Fed Official Sees Rates Inching Up This Year
The president of the Minneapolis Federal Reserve Bank said Thursday the Fed may need to increase short-term interest rates by year's end if underlying inflation rises as he anticipates.
The Economist | They’re bust. Admit it.
Greece, Ireland and Portugal should restructure their debts now.
The Economist | The muck of the Irish
The stress-tests results unveiled today by Ireland’s central bank require that four banks—Allied Irish Banks, Bank of Ireland, EBS Building Society and Irish Life & Permanent—must raise an extra €24 billion of capital to meet a minimum core Tier-1 capital ratio of 6% under the tests’ worst-case assumptions.
The Economist | Trigger-happy
The European Central Bank is planning to raise rates too soon.
The Economist | Hard landing
Land has gone from being the safest of bets to the riskiest.
CNN: Money | Fed lent to all comers in crisis
Banks weak and strong from all over the world flocked to the Fed's discount window during the financial crisis.
Econ Comments
Barron's | What Can Y2K Tell Us About QE2?
The tech bubble was inflated and burst by the Fed's injection of liquidity. Will the past prove to be prologue?
Minyanville | Brazil's Inflation Targets Postponed Until 2012
Brazilian authorities are looking to bring inflation down to 4.5% by 2012 rather than this year.
Minyanville | Wal-Mart Sees Inflation, Fed Sees iPad Price Counterbalance
The benefit of falling iPad prices is only felt by a few million consumers. The extreme rise in food prices is felt by anyone who eats.
Blogs
Daily Capitalist | OECD Inflation Watch For February
The annual inflation rate jumped to 2.6% from 2.4% in February, the highest level since October 2008 when the rate was 3.2%, the European Union’s Eurostat agency said in a flash, or preliminary, estimate.
NRO: Exchequer | Ben Bernanke and the Second Deficit
Of course there are trade-offs from inflation: but practically all of the costs fall on savers and investors, and all of the benefits accrue to debtors and spenders. I do not much like those incentives. Two percent inflation costs $1.4 trillion a year: Don’t forget the second deficit.
Bloomberg | Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Bloomberg | Libya-Owned Arab Banking Corp. Drew at Least $5 Billion From Fed in Crisis
Arab Banking Corp., the lender part- owned by the Central Bank of Libya, used a New York branch to get 73 loans from the U.S. Federal Reserve in the 18 months after Lehman Brothers Holdings Inc. collapsed.
WSJ | Fed Official Sees Rates Inching Up This Year
The president of the Minneapolis Federal Reserve Bank said Thursday the Fed may need to increase short-term interest rates by year's end if underlying inflation rises as he anticipates.
The Economist | They’re bust. Admit it.
Greece, Ireland and Portugal should restructure their debts now.
The Economist | The muck of the Irish
The stress-tests results unveiled today by Ireland’s central bank require that four banks—Allied Irish Banks, Bank of Ireland, EBS Building Society and Irish Life & Permanent—must raise an extra €24 billion of capital to meet a minimum core Tier-1 capital ratio of 6% under the tests’ worst-case assumptions.
The Economist | Trigger-happy
The European Central Bank is planning to raise rates too soon.
The Economist | Hard landing
Land has gone from being the safest of bets to the riskiest.
CNN: Money | Fed lent to all comers in crisis
Banks weak and strong from all over the world flocked to the Fed's discount window during the financial crisis.
Econ Comments
Barron's | What Can Y2K Tell Us About QE2?
The tech bubble was inflated and burst by the Fed's injection of liquidity. Will the past prove to be prologue?
Minyanville | Brazil's Inflation Targets Postponed Until 2012
Brazilian authorities are looking to bring inflation down to 4.5% by 2012 rather than this year.
Minyanville | Wal-Mart Sees Inflation, Fed Sees iPad Price Counterbalance
The benefit of falling iPad prices is only felt by a few million consumers. The extreme rise in food prices is felt by anyone who eats.
Blogs
Daily Capitalist | OECD Inflation Watch For February
The annual inflation rate jumped to 2.6% from 2.4% in February, the highest level since October 2008 when the rate was 3.2%, the European Union’s Eurostat agency said in a flash, or preliminary, estimate.
NRO: Exchequer | Ben Bernanke and the Second Deficit
Of course there are trade-offs from inflation: but practically all of the costs fall on savers and investors, and all of the benefits accrue to debtors and spenders. I do not much like those incentives. Two percent inflation costs $1.4 trillion a year: Don’t forget the second deficit.
Budget
News
WSJ | Congress Spending Talks Stir Unease
Republican leaders on Thursday began laying the groundwork to win conservative House members' support for a potential spending agreement that could cut significantly less in 2011 than the $61 billion GOP lawmakers want.
Human Events | McConnell: All 47 GOP Senators Co-Sponsor New Balanced Budget Amendment
The key provisions of the new balanced budget amendment (BBA) are: Congress must pass a balanced budget; the President has to submit a balanced budget; spending is capped at 18% of the Gross Domestic Product (GDP); “supermajority” vote (two-thirds of House and Senate) to raise taxes; and “new supermajority” vote (three-fifths of House and Senate) to raise the debt ceiling.
Fox News | Obama Official: GOP Budget Would Kill 70,000 Kids
Shah is seeking $59.5 billion in funding for his agency, up 22 percent, or $10.7 billion, from the current level.
Econ Comments
WSJ | The Spending Fight
The White House says it will accept spending cuts of $33 billion, compared to the $62 billion the House passed earlier this year.
NRO | The Failure of Obama’s Conventional Wisdom
The experts say a shutdown will help the Dems. Wouldn’t be the first time time they were wrong.
Blogs
NRO: The Corner | Debt and Deficits: When Symptoms Become Symptomatic
...the persistent failure of lawmakers to cut spending has resulted in a situation where these symptoms have started provoking other symptoms.
NRO: The Corner | The Real Budget Debate
...the debate soon to begin about trillions of dollars over the coming decades is by far the most important policy challenge this congress will confront.
Reports
Heritage Foundation | Balanced Budget Amendment: Cut Spending Later, Cut Spending Now
An effective BBA will include three elements to: (a) control spending, taxation, and borrowing, (b) ensure the defense of America, and (c) enforce the requirement to balance the budget.
WSJ | Congress Spending Talks Stir Unease
Republican leaders on Thursday began laying the groundwork to win conservative House members' support for a potential spending agreement that could cut significantly less in 2011 than the $61 billion GOP lawmakers want.
Human Events | McConnell: All 47 GOP Senators Co-Sponsor New Balanced Budget Amendment
The key provisions of the new balanced budget amendment (BBA) are: Congress must pass a balanced budget; the President has to submit a balanced budget; spending is capped at 18% of the Gross Domestic Product (GDP); “supermajority” vote (two-thirds of House and Senate) to raise taxes; and “new supermajority” vote (three-fifths of House and Senate) to raise the debt ceiling.
Fox News | Obama Official: GOP Budget Would Kill 70,000 Kids
Shah is seeking $59.5 billion in funding for his agency, up 22 percent, or $10.7 billion, from the current level.
Econ Comments
WSJ | The Spending Fight
The White House says it will accept spending cuts of $33 billion, compared to the $62 billion the House passed earlier this year.
NRO | The Failure of Obama’s Conventional Wisdom
The experts say a shutdown will help the Dems. Wouldn’t be the first time time they were wrong.
Blogs
NRO: The Corner | Debt and Deficits: When Symptoms Become Symptomatic
...the persistent failure of lawmakers to cut spending has resulted in a situation where these symptoms have started provoking other symptoms.
NRO: The Corner | The Real Budget Debate
...the debate soon to begin about trillions of dollars over the coming decades is by far the most important policy challenge this congress will confront.
Reports
Heritage Foundation | Balanced Budget Amendment: Cut Spending Later, Cut Spending Now
An effective BBA will include three elements to: (a) control spending, taxation, and borrowing, (b) ensure the defense of America, and (c) enforce the requirement to balance the budget.
Employment
News
Yahoo Finance | Unemployment rate falls to 8.8 pct., two-year low
Unemployment rate falls to 2-year low of 8.8 pct.; employers add 216K jobs in March
Gallop Daily | Underemployment Rises to 20.3% in March
Gallup Daily tracking finds that 20.3% of the U.S. workforce was underemployed in March -- a slight uptick from the relatively flat January and February numbers.
WSJ | Trading Places
The recession has driven many young people out of the job market and back to school. At the same time, many people over age 55, with their savings depleted, are back at work or looking for work.
CNN Money | Job growth could be good for Obama's job
A pickup of 216,000 jobs in March is good news for President Obama's bid to keep his own job.
Econ Comments
WSJ | We've Become a Nation of Takers, Not Makers
More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined.
Fox Business | Not Out of the Woods Yet
Friday, the Labor Department reported the economy added 216,000 jobs in March. After adding 194,000 jobs in February, this indicates the economy is finally accomplishing momentum. First quarter growth will likely be a bit higher than 3%.
Blogs
Calculated Risk | Employment Summary and Part Time Workers, Unemployed over 26 Weeks
Here are a few more graphs based on the employment report ...
The Economist: Free Exchange | Labour markets
Good but not great job growth continues
Heritage Foundation: The Foundry | Morning Bell: Stop Sending Jobs Overseas
Today, the Labor Department released its monthly jobs report showing that the U.S. economy added 216,000 jobs in March and unemployment fell to 8.8 percent. Despite these encouraging numbers, Americans still consistently tell pollsters that jobs and the economy are the most important problems facing the country.
Yahoo Finance | Unemployment rate falls to 8.8 pct., two-year low
Unemployment rate falls to 2-year low of 8.8 pct.; employers add 216K jobs in March
Gallop Daily | Underemployment Rises to 20.3% in March
Gallup Daily tracking finds that 20.3% of the U.S. workforce was underemployed in March -- a slight uptick from the relatively flat January and February numbers.
WSJ | Trading Places
The recession has driven many young people out of the job market and back to school. At the same time, many people over age 55, with their savings depleted, are back at work or looking for work.
CNN Money | Job growth could be good for Obama's job
A pickup of 216,000 jobs in March is good news for President Obama's bid to keep his own job.
Econ Comments
WSJ | We've Become a Nation of Takers, Not Makers
More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined.
Fox Business | Not Out of the Woods Yet
Friday, the Labor Department reported the economy added 216,000 jobs in March. After adding 194,000 jobs in February, this indicates the economy is finally accomplishing momentum. First quarter growth will likely be a bit higher than 3%.
Blogs
Calculated Risk | Employment Summary and Part Time Workers, Unemployed over 26 Weeks
Here are a few more graphs based on the employment report ...
The Economist: Free Exchange | Labour markets
Good but not great job growth continues
Heritage Foundation: The Foundry | Morning Bell: Stop Sending Jobs Overseas
Today, the Labor Department released its monthly jobs report showing that the U.S. economy added 216,000 jobs in March and unemployment fell to 8.8 percent. Despite these encouraging numbers, Americans still consistently tell pollsters that jobs and the economy are the most important problems facing the country.
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