Monday, April 4, 2011

General Economics

News                                                                                                                             
CNN Money | Oil above $108 breaks 30-month high
Oil prices breached a fresh 30-month high Monday, as investors continued to cheer a better-than-expected report on the U.S. job market.
The Economist | Broken links
The disruption to manufacturers worldwide from Japan’s disasters will force a rethink of how they manage production
WSJ | A 'Wage-Less' Recovery in the U.S.
These are pretty heady times for companies, in part because they are painful for many workers.
Fiscal Times | Cherry Blossom Festival: $126M Bonanza for D.C.
The 16-day National Cherry Blossom Festival is a cherished rite of spring, coloring the capital with delicate pink and white blossoms — and attracting tourists from far and wide. The festival, which began in 1935, brings in at least $126 million to the D.C. metro area each year, according to the National Park Service, making it the city’s largest annual tourism event by far. (Some $3 billion a year from 25 million tourists is pumped into the D.C. economy overall.)

Econ Comments                                                                                                            
Washington Post | In St. Louis, a protest sign meets government arrogance
A dialectic of judicial deference and political arrogance is on display in St. Louis.

Blogs                                                                                                                          
Heritage Foundation: The Foundry | Income Inequality, Round Two
In a recent post arguing that income inequality is a problem, Mr. Mitchell charges that “most American households have seen little gain in income in the last three decades despite rising productivity growth.”
Calculated Risk | Schedule for Week of April 3rd
This will be a light week for economic data.
Coordination Problem | DeLong and Others on Recalculation
Since Brad DeLong has politiely noted my role in starting the use of the jigsaw puzzle metaphor in thinking about responses to the recession (though Don Boudreaux was the inspiration for its use in a broader context), I want to note the brief discussion that has ensued at his blog this morning and point out that the argument that expansionary fiscal policy is necessary to provide the required boost in aggregate demand to generate the recalculation process overlooks the ways in which fiscal policy interferes with the very recalculation process DeLong and others profess to be concerned about.
Café Hayek | Krugman and Expectations
Here’s a short clip of Paul Krugman asserting that the only reason businesses today aren’t investing more than they are is because businesses have “tons and tons of excess capacity.”
WSJ: Real Time Economics | Number of the Week: PCs Make Americans $500 Billion Richer
$1,700: The annual benefit the average American derives from personal computers

Reports                                                                                                                          
RCM: Wells Fargo | Economics Group
Weekly Economic & Financial Commentary

Health Care

News                                                                                                                             
NationalJournal | New Health Care Regs Favor the Big Boys
Regulations released on Thursday have set the bar high for accountable-care organizations, requiring all participants to take on some financial risk. That may mean only the big players will get to play on the new field, at least at first.
CNN: Money | Arizona Medicaid fees loom for smokers, obese
The governor of Arizona has proposed a novel way of helping to pay burgeoning Medicaid costs -- imposing a fee on smokers, diabetics and obese people who receive the state aid.
Politico | Mitt Romney defends Massachusetts health care law in Las Vegas speech
Mitt Romney directly addressed the Obama administration's backhanded plaudits of his Massachusetts health care law Saturday, defending the law's controversial individual mandate for the first time and promising that it wouldn't impede an aggressive attack on the president and his health care policy.
CNN | House budget chairman to propose Medicare, Medicaid changes
The plan, to be released Tuesday, calls for a controversial overhaul of Medicare, the health care program for seniors, and would impose deep cuts in Medicaid, which provides health benefits to low-income Americans.

Econ Comments                                                                                                             
Politico | VA holds lessons for health care
Using sophisticated information technology and supply management systems has allowed VA to drive innovation throughout its health care system. This has made VA more productive and better equipped to deliver the highest level of care to a group our nation has always honored: men and women who have served and sacrificed for our freedom.
AEI | Dear Congress: Medicare Is Dying
A Letter to Speaker Boehner, Leader Pelosi, Leader Reid, and Leader McConnell.

Blogs                                                                                                                             
Marginal Revolution | General principles for evaluating Medicare reforms
You’ll be hearing lots about the Paul Ryan entitlement reform proposals, but here are a few more general points to keep in mind:

Taxes

News                                                                                                                             
CSM | Tax Day 2011 has been put off. And that's no April Fool's joke.
Tax Day humor is not your standard April Fool's fare, but this year, a D.C. holiday called Emancipation Day is giving most Americans something to smile about: extra time to file.
WSJ | Potential Tax Change Is Red Flag for Some Firms
...members of Congress are focusing on code provisions that encourage companies to finance their activities through issuing debt, instead of equity.
Washington Post | IRS eases tax-debt policies
The IRS says it will file fewer tax liens, which give the government legal claim to a taxpayer’s property for the amount of his unpaid taxes…
WSJ | Rich Are Targeted in IRS Audit Offensive
According to the agency's latest statistical report for the fiscal year ended Sept. 30, the percentage of taxpayers who were audited increased in every category of adjusted gross income above $500,000, compared with a year earlier.

Econ Comments                                                                                                             
The American | Slay This Tax 'Monster'
...the AMT’s reach has expanded over time to hit middle-income people it was never intended to tax.

Blogs                                                                                                                             
Cato@Liberty | A Victory for the Laffer Curve, a Defeat for England’s Economy
A new study from the Adam Smith Institute in the United Kingdom provides overwhelming evidence that class-warfare tax policy is grossly misguided and self-destructive.

Monetary

News                                                                                                                             
CNN: Money | End of QE2? No problem for stocks
By the end of the second quarter, the Fed's QE2 program, which has helped fuel a six-month stock rally, will come to an end. But that won't stop the momentum.
Reuters | Rep. Paul planning hearing on Fed foreign lending
Persistent Federal Reserve critic Representative Ron Paul plans to hold a hearing on the U.S. central bank's emergency loans to the branches of non-U.S. banks.
The Economist | They’re bust. Admit it.
Greece, Ireland and Portugal should restructure their debts now.

Econ Comments                                                                                                             
Minyanville | The US Dollar's Impact on Price Action in the S&P 500, Gold, and Oil
With earnings season rapidly approaching and a possible breakdown in the US Dollar Index likely, future price action is uncertain.
NationalJournal | Dudley Signals Fed's Not Ready To End Loose Monetary Policy
A top Federal Reserve official and close confidant of Chairman Ben Bernanke said on Friday that the accelerating pace of job growth doesn't mean it's time yet to start tightening monetary policy, as some of the Fed's inflation hawks have been suggesting.

Reports                                                                                                                         
Mercatus Center | Bretton Woods and International Monetary Arrangements
Before the First World War, under an international gold standard and a largely liberal trade regime, global commerce and investment had flourished. The 1920s and ’30s, by contrast, were chaotic. Adherence to the gold standard was spotty. National governments adopted mercantilist restrictions on trade and payments, triggering retaliations.
Mercatus Center | The Great Inflation and Monetarism
The economics profession initially struggled to understand the inflation. Keynesian economists of the day held a variety of non-monetary theories of inflation. All failed to explain why inflation rates had risen, and especially failed to explain why inflation remained high even during recession years of high unemployment and slack output. Into the breach stepped Milton Friedman and other "Monetarist" economists, offering an updated version of the Quantity Theory of Money, which might more accurately be called the quantity-of-money theory of the price level.

Budget

News                                                                                                                             
Fox News | Deal needed to avoid spending train wreck
At issue are cuts to so-called discretionary programs, the cost of running various government agencies that use only 12 percent of the federal budget.
CNN Money | Budget cuts: $10 billion down, $23 billion to go
Negotiators will be looking for $23 billion in savings, since Congress already agreed to cuts totaling $10 billion in two previous short-term spending bills.
NY Times on MSNBC | Budget battle to be followed by an even bigger fight
You are going to see major reforms in Medicare and Medicaid; you are going to see a change in the deficit trajectory that is pretty dramatic'
National Journal | Chaffetz Says He Would 'Absolutely Not' Back $33 Billion in Cuts
Thirty three billion, to a guy like me, it just doesn't sound like it's enough.'

Blogs                                                                                                                             
Fox News | The Spending Fight: Four Theatres of Conflict
...here's a look at the four, major theatres where Republicans and Democrats are locked in a pitched battle that threatens to shutter the government and could force the U.S. to default on its financial obligations.
Cato@Liberty | Largest Spending Cut Ever?
The $33 billion in Democratic-proposed cuts are less than 1 percent of this year's total spending, so we are considering very small cuts here.
NRO: The Corner | Ryan: GOP Budget Will Surpass Debt Panel Goals
In addition to spending cuts, Ryan said he plans to offer spending caps (as a percentage of GDP) in order to return federal spending to historic (pre-Obama, pre-stimulus) levels.

Reports                                                                                                                         
RSC | H.R. 1—FY 2011 Full-Year Continuing Appropriations Act
Overall, this is a $99.6 billion reduction compared to the President‘s budget: $81 billion of this reduction is non-security spending, $18.6 billion is security spending.

Employment

News                                                                                                                             
Yahoo Finance | McDonald's wants to fill 50K jobs on hiring day
McDonald's holds first-ever national hiring day to fill 50,000 jobs
Fox | How unemployment affects different groups
The Labor Department said employers added 216,000 jobs in March, more than February's gains of 192,000.
National Journal | March Job Growth May be the Real Thing
The beleaguered labor market passed a magic number on Friday, as the Labor Department reported that the nation added more than 200,000 jobs in March—the pace that analysts say is necessary to make a dent in unemployment.

Econ Comments                                                                                                             
Fortune | Why the Fed isn't going hiking this year
Don't get carried away by Friday's upbeat jobs report.
Fiscal Times | More Jobs, but Inflation, Lower Profits to Follow
The need for more workers is becoming increasingly evident. Companies have stretched production by existing employees about as far as they can in the face of stronger demand.
Fortune | Job seekers' lost decade
A solid jobs report is nothing to scoff at nowadays, but here goes.

Blogs                                                                                                                          
ReasonL: Out of Control Policy Blog | March Saw Strong Job Growth, Lingering Long-Term Unemployment
Today's employment numbers from the Bureau of Labor Statistics continues the trend of "good, but not great" reports we've had for a good 4-6 months now.
WSJ: Real Time Economics | Eight Years to Get Back to Full Employment?
The payroll gains in March were good. But we’d need eight years of consistent monthly gains just like that — taking us to the year 2019 — to bring the economy back to full employment.
The Economist: Free Exchange | The pieces are falling into place
Turn off the alarms. After several weeks when the data pointed to a recovery still struggling to achieve escape velocity, the March employment report provided reassuring evidence that, at a minimum, it is still gaining altitude.
WSJ: Real Time Economics | Hidden Bad Signs in a Good Jobs Report
There was lots of good news in Friday’s jobs report, but there are still some caveats to keep in mind.

Reports                                                                                                                         
Center on Budget and Policy Priorities | Statement by Chad Stone, Chief Economist, on the March Employment Report
Today’s employment report shows that the economy is creating jobs at a solid pace. But it also reminds us that without even stronger job growth, it will take years to erase the large jobs deficit that the 2007-2009 recession created (see chart) and to lower the unemployment rate to an acceptable level. Immediate sharp cuts in government spending of the kind that some policymakers are seeking will make it even harder to restore a healthy job market.