Monday, April 11, 2011

General Economics

News                                                                                                                             
Reuters | U.S. gallon of gas jumps to $3.76, could see $4-survey
Pump prices less than 10 pct below record high
ABC | Drivers Start to Cut Back on Gas as Prices Rise
At the pump, some early signs that Americans are conserving fuel as gas prices soar
Fiscal Times | Consumer Spending Slowdown Threatens Recovery
Consumers are struggling. Despite the pickup in job growth in recent months and the big 2 percent cut in payroll taxes starting in January, their inflation-adjusted spending in the first quarter appears to have grown at only about half the fourth quarter’s 4 percent clip.
WSJ | Economists See Growth Accelerating Later in Year
The U.S. economic recovery is expected to gain momentum over the rest of the year, despite a sharp pullback in growth during the just-finished first quarter, according to economists surveyed by The Wall Street Journal.
CNN Money | IMF cuts economic forecasts for U.S.
The global recovery is moving at two speeds, with emerging countries like China still expanding rapidly as advanced economies like the United States grow at a snail's pace.
Fox Business | Trade Deficit Continues to Squeeze U.S. Economy
Tuesday, analysts expect the Commerce Department to report the deficit on international trade in goods and services was $44 billion in February, up from $27 billion in mid-2009, when the economic recovery began.
CNN Money | China posts quarterly trade deficit
China posts quarterly trade deficit.

Econ Comments                                                                                                             
WSJ | Cap and Evade
How Senate Democrats maneuvered to kill a bill to rein in the EPA's carbon rule.
WSJ | How to Get a Real Education
Forget art history and calculus. Most students need to learn how to run a business, says Scott Adams.
AEI | The Gas Revolution
It would be best if politicians left well enough alone and allowed the marketplace to compete over the uses of natural gas, but politics and energy have always mixed like gin-ethanol and tonic, so don't count on it.
NRO | The Rich Aren’t Getting Richer
Actual super-wealthy households saw their income decline.
Fortune | Failure is less of an option
So says Dun & Bradstreet's latest look at U.S. business trends.

Blogs                                                                                                                          
Café Hayek | Obama embraces regime uncertainty
Maybe massive unspecified changes in the regulation of the health and financial sectors wasn’t such a good idea in the middle of a recession.
Calculated Risk | Unofficial Problem Bank list at 982 Institutions
Here is the unofficial problem bank list for Apr 8, 2011.
Café Hayek | The ‘con’ in econometrics made visible
Ed Leamer’s brilliant paper, Let’s Take the Con out of Econometrics makes the point that classical statistical tests don’t hold when you go on a fishing expedition.
Daily Capitalist | The True Cost Of TARP
Click on the link to Garett Jones’s interview at Reason on the “true legacy of TARP.” He makes some good points.
Calculated Risk | Schedule for Week of April 10th
The key reports this week are March Retail Sales on Wednesday, and the Consumer Price Index (CPI) on Friday. The monthly Trade Balance report will be released on Tuesday, and Industrial Production/Capacity Utilization on Friday. Also J.P. Morgan (Weds) and Bank of America (Fri) report Q1 results this week and they might provide comments on foreclosure issues.
AEI: The American | Just How Is Medicare Spending Our Money?
One of President Obama’s first acts as president was to declare that he was going to create an “unprecedented level of openness” in government. Apparently, that does not include the Medicare program.
Calculated Risk | Economic Outlook and Downside Risks
Here is a brief update to a list from last month with my view if the risk to the economy is increasing or decreasing:
WSJ: Real Time Economics | Government Shutdown Would Delay Economic Statistics
A partial shutdown of the U.S. government would delay the release of economic data, possibly complicating policymakers’ efforts in managing the economy.
Cato@Liberty | Do We Need China to Fund Our Mortgage Market?
Earlier this week I repeatedly heard the claim that if the federal government does not guarantee credit risk in the mortgage market, foreigners won’t buy U.S. mortgage-related debt.  Before we test whether that claim is true, let’s first determine just how important are foreign investors in the U.S. mortgage market.

Reports                                                                                                                          
RCM: Wells Fargo | Economics Group
Weekly Economic & Financial Commentary
Cato Institute | The Trade-Balance Creed: Debunking the Belief that Imports and Trade Deficits Are a "Drag on Growth"
A nearly universal consensus prevails that the goal of U.S. trade policy should be to promote exports over imports, and that rising imports and trade deficits are bad for economic growth and employment.

Health Care

News                                                                                                                             
MSNBC | Ryan defends plan for fundamental Medicare redesign
Obama aide says president will offer his own deficit-cutting ideas this week.
Fox News | Budget Deal Targets Pieces of Health Care Law
The agreement would eliminate a provision of the health-care law enabling low-income workers to opt out of employer-offered health insurance and shop for more affordable coverage on insurance exchanges to be created in 2014, according to congressional aides and business groups. 

Econ Comments                                                                                                             
Laurence Kotlikoff | The Purple Health Plan
We are at a crossroads. Neither piecemeal reform nor maintenance of the status quo will suffice. Economists and other concerned citizens can play a pivotal role in providing our political leaders with a set of principles to guide fundamental health care reform as well as a specific plan to fix our health care system from the ground up.
Cato Institute | Medicare CPR
Even if you accept the Obama administration's most rosy scenario, Medicare is facing unfunded liabilities in excess of $45 trillion.

Blogs                                                                                                                             
Political Calculations | Costing Out the Top 50 Medicare Procedures
With so many politicians focused on controlling the costs of Medicare, we thought it might be time to review what the most popular medical procedures paid for by U.S. taxpayer dollars actually are.
NRO: Critical Condition | Obamacare Health Benefits Exchanges Are Flailing and Failing
The most disappointing news on the Obamacare front these days is that at least two Republican governors cannot wait to implement Obamacare in their states. Apparently, one Republican state senator in Oklahoma has finally decided to prevent an Obamacare exchange bill from reaching Gov. Mary Fallin for signature. Fair enough, but how did it get this far in the first place?

Taxes

News                                                                                                                             
WSJ | Obama Puts Taxes on Table
...will call for tax increases for people making over $250,000 a year, a proposal contained in his 2012 budget, and changing parts of the tax code he thinks benefit the wealthy.

Econ Comments                                                                                                             
CNN Money | Debt reduction: The voters are ready. Is Washington?
Heralding this as a success is like cheering me on at the office for handing in my taxi receipts. Late.
Cato Institute | Tax Freedom Day -- Not
Taxpayers are bailing out virtually every interest known to man — plus a few not previously recognized.

Blogs                                                                                                                             
Atlantic: McArdle | How Safe Is Your Roth IRA?
When I look at the budget problems we face, I'm skeptical that Congress is going to live up to its promise to keep its hands off that money. At the very least, I'd bet that high earners are going to see some sort of surtax on their Roth withdrawals.
Cato@Liberty | Reckless IRS Regulation Would Put Foreign Tax Law over American Tax Law and Drive Investment out of the United States
The IRS issued this proposal, even though Congress repeatedly has voted not to tax this income because of an understandable desire to attract job-creating capital to the U.S. economy.

Reports                                                                                                                         
Tax Foundation | Ryan Plan Smartly Marries Tax Reform with Spending Reform
The plan calls for cutting the top individual and corporate tax rates from 35 to 25 percent while ridding the tax code of the vast number of preferences and loopholes in the system.
Tax Foundation | Census Bureau Releases 2010 State Tax Collection Data
All the major sources of state revenue (sales taxes, individual income taxes, and corporate income taxes) fell in 2010.

Monetary

News                                                                                                                             
Reuters | Iceland voters reject plan to repay bank debt
Voters in Iceland issued a resounding “no” in a referendum on whether to approve a renegotiated deal to compensate Britain and the Netherlands over the 2008 collapse of Icesave Bank, leaving the issue to be settled in court.
Telegraph | Britain will take Iceland to court over £2.3bn bail-out
The Government is preparing to take Iceland to court to demand it repay every penny of the £2.3bn Britain lost when the Icelandic banking system collapsed.
CNN: Money | No rate change will 'dampen' the dollar
The fate of the U.S. dollar for the remainder of the year will hinge on the Federal Reserve's actions, as analysts try to look into their central bank crystal ball for clues about the Fed's future monetary plans.

Econ Comments                                                                                                             
NRO | How to Narrow the Fed’s Mandate
Target nominal-GDP growth.

Blogs                                                                                                                             
Café Hayek | Open Letter to Mike Norman
"The government exchanges dollars for those Treasuries. Holders of the debt give back their Treasuries to the gov’t in exchange for dollars and Voila! no more debt."
Curious Capitalist | Another PIIG to slaughter: What's next for Europe?
It came as no surprise to anyone following the ongoing euro zone debt crisis that Portugal on Wednesday finally asked the European Union for a bailout. Pressure on the country's beleaguered leadership had been intensifying for weeks, as it became harder and harder for the cash-strapped government to raise money on international markets at an acceptable cost.

Budget

News                                                                                                                             
Yahoo! Finance | White House: Obama to lay out spending plan
...the House and Senate are expected to vote on a budget for the remainder of this fiscal year and Obama reveals his plan to reduce the deficit, in part by scaling back programs for seniors and the poor.
National Journal | Graphic: A History of Rising Debt Ceilings
Congress has raised the federal debt ceiling limit nine times in the past 10 years, and Treasury officials say the government will hit the current $14.3 trillion limit no later than May 16.

Econ Comments                                                                                                             
Reason Foundation | The Truth About Spending Cuts
Separating economic myth from economic fact.
RCM | Define Radical: Pros and Cons of Ryan Plan
It won't balance the budget in the near term, but it places it on the right track toward balance and ultimately a reduction in the national debt.
CNN Money | Now for the real budget war
Its signature feature: $38.5 billion in spending cuts or, as it's referred to by the key players, "the largest spending cut in American history."
Washington Examiner | Ryan budget a good step on the road to prosperity
The proposed cuts are of the right size. But the plan waits too long to take action, making it unlikely to forestall the coming crisis.
USA Today | Boehner: Next fight to be about trillions, not billions
The agreement will reduce government spending by $38.5 billion over the next few months — and by hundreds of billions of dollars in the coming decade.
Mercatus Center | Mercatus Scholars on Chairman Ryan's Budget Plan
Mercatus Center scholars consider the commendable and improvable aspects of the plan.
Barron's | Painful, but Inadequate
Only the next year or two can be taken seriously, for events are more powerful than laws.
WSJ | The Tea Party's First Victory
Obama opposes spending cuts right up to the time he calls them historic.
AEI | Spending Cuts Are Hot in the Political Marketplace
Every serious analyst knows that these programs are on a trajectory to balloon government to a share of gross domestic product unprecedented except in World War II.

Blogs                                                                                                                             
Café Hayek | What a Joke
...negotiations that concluded last night on Capitol Hill – negotiations in which Congress agreed to cut 1 percent from a budget that rose 27 percent in just the past three years.
Enterprise Blog | Government by the Hour, Day, and Month
All this budget talk got me wondering how much the federal government spends using various time conversions.
NRO: The Corner | One of the Best Things About the Ryan Plan
I agree with David Brooks’s piece yesterday that one of the best things about Chairman Ryan’s plan is that “it forces Americans to confront the implications of their choices.”
Cato@Liberty | $61 Billion in Cuts vs. Prior Spending Increases
In 2009, federal spending leaped $384 billion in a single year, or six times more than this year’s relatively tiny cut.

Employment

News                                                                                                                             
CNN Money | As economy slows, jobs recovery continues
The economy may be losing steam, but that won't stop companies from hiring.

Econ Comments                                                                                                               
Washington Times | VERNUCCIO: Obama administration covers up union welfare program
The Obama administration is more than a year late in releasing an important report on federal government union costs.

Blogs                                                                                                                          
Mercatus Center: Neighborhood Effects | Another Look at Income Mobility
As far as I am concerned, the important thing is to have a dynamic and growing economy with plenty of opportunities for those who are the least well-off among us. We can debate about whether or not ours is that sort of economy—especially given the current economic climate—but a simplistic analysis of income groups gives us very little information on this score.