Monday, April 25, 2011

General Economics

CNN: Money | Drill baby drill won't lower gas prices
Drill baby drill won't lower gas prices.
Bloomberg | Sales of New Homes in U.S. Rose 11.1% in March to 300,000 Rate
Purchases of new houses in the U.S. rose in March from a record low as the weakest industry in the economy strained to recover.
Market Watch | ‘Limited’ first-quarter U.S. growth to be revealed
The nation’s economy in the first quarter didn’t grow nearly as quickly as it did in the fourth quarter, and on Thursday the government will release the grim data.
Market Watch | IMF bombshell: Age of America nears end
For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.

Econ Comments                                                                                                             
Cato Institute | The Green Energy Economy Reconsidered
Few seem to realize that we abandoned "green" energy centuries ago for five very good reasons.
AEI | Even US Can't Afford Generous Defined Benefits Systems
We need to adjust defined-benefit public policies to shift some short-term risk to individuals while reducing toward zero the huge systemic risk that exists now.

Calculated Risk | Schedule for Week of April 24th
The key economic report for the coming week is the Q1 advance GDP report to be released on Thursday. There are also two important housing reports to be released early in the week:
Calculated Risk | Unofficial Problem Bank list at 976 Institutions
Here is the unofficial problem bank list for Apr 22, 2011.

RCM: Wells Fargo | Weekly Economic & Financial Commentary
Better-than-expected first quarter earnings helped push the Dow Jones Industrial Average to its highest level in over three years. The upbeat earnings announcements overshadowed somewhat lackluster housing market data released during the week.

Health Care

National Journal | Supreme Court Says It Will Let Appellate Courts Rule on Health Law
The justices denied Virginia Attorney General Ken Cuccinelli’s motion to hear the case before appellate courts rule on the challenge. U.S. District Judge Henry Hudson in Virginia ruled the law’s requirement that individuals purchase health insurance was unconstitutional in December.

Café Hayek | But Not Sufficiently Sacred for Physicians to Work for Free
Admittedly, the politically engineered wedge separating the receipt of health-care services from the responsibility for paying for these services creates problems.
WSJ: Real Time Economics | Health Insurance Demand and the Uninsured
A common thread on how to bring down the nation’s heath tab is that the bigger stake we have in medical care costs – the more we have to pay for premiums and copays – the less likely we are to undergo expensive and unnecessary treatments.
Econlog | Where is My Free Lunch?
In other words, let's find the free lunch first, before we have to pay for lunch. Here are my remarks:

Cato Institute | The Case Against President Obama's Health Care Reform: A Primer for Non Lawyers
Multiple challenges to President Obama's health care reform are percolating through the federal courts. Soon the Supreme Court will be asked to weigh in on perhaps the most important question of the post–New Deal era: Are there any remaining limits on the breadth and scope of federal power?


WSJ | Fed Searches for Next Step
New Focus on Interest-Rate Plan as Controversial Bond-Buying Strategy Winds Up.
Fox News | Inflation Pressure not Easing on Bernanke
Skyrocketing prices – especially for energy – and concerns about whether the government will be able to address the untamed federal debt are threatening the already anemic recovery.
National Journal | With Easing Program Almost Over, Fed Grapples Over Next Step
Love it or hate it, the Federal Reserve’s much-debated “quantitative easing’’ program to shore up the economy is fast approaching its scheduled completion in June.
Bloomberg | Yen Falls as BOJ's Shirakawa Encourages Bets Interest Rates Will Stay Low
The yen fell versus most of its major counterparts on speculation Japan’s policy makers will maintain monetary stimulus while central banks elsewhere raise interest rates.

Econ Comments                                                                                                             
Minyanville | Brazil's Interest Rates Hit 12%, Lower Rise Than Expected
While Brazil's interest rates are some of the world's highest, the rise to 12% is not as high as many investors were hoping.
Minyanville | The "Miracle" of Compound Inflation
Inflation-adjusted GDP growth was just 1.9% on an annualized basis for the last decade, the lowest growth rate since the '30s.

The Economist | Who's disappointed in QE2?
The Fed's stimulus has not disappointed, in my view. The Fed itself, well, that's a different story.


CNN Money | Americans agree: The rich should pay higher taxes
Two new polls suggest there is broad support for raising taxes on households making more than $250,000 a year, and all in the name of deficit reduction.
Fox News | Tax Hikes on Top Earners? Bloomberg Says Now Is Not the Time
….asked about President Obama's pledge to let the Bush tax cuts for households earning more than $250,000 expire, Bloomberg said now is not the time for that kind of tax increase.
National Journal | Conservatives Remain at Odds over How to Define a Tax Increase
Tom Coburn-Grover Norquist battle could provoke an even bigger confrontation within the Republican Party.

Econ Comments                                                                                                             
AEI | Obama Says It's Only "Fair" to Raise Taxes on the Rich. He's Wrong.
...when a government that has overspent for years turns to tax increases instead of spending cuts simply for the sake of "fairness,"it weakens free enterprise, lowers opportunity and impoverishes us in many ways.

NY Times: The Caucus | Corporate Taxes Enter Debt Debate
Multinational corporations want America to follow other major economies in adopting a “territorial” tax system that excuses profits earned overseas from United States taxation.
Café Hayek | Taxing Facts
...over the course of these 29 years, the share of Uncle Sam’s income-tax receipts paid by the top one-percent of income earners rose significantly, from 18 percent to 40 percent.


Fox News | How S&P's warning could actually help US debt
One reason that traders say Treasurys have looked surprisingly stable is the belief that S&P's move could spur action in Washington to tackle the country's debt.
Roll Call | ‘Gang of Six’ Approaches Compromise on Deficit Proposal
The group’s recognition that compromise is required perhaps explains why Conrad is embracing plans to overhaul Medicare, Medicaid and Social Security.

Econ Comments                                                                                                             
Fox News | US default could be disastrous choice for economy
A default would likely trigger another financial panic like the one in 2008 and plunge an economy still reeling from high joblessness and a battered housing market back into recession.
Mercatus Center | Hitting the debt ceiling isn't the end of the line
The Treasury has a variety of options available, including drawing from the special programs it has in place to borrow money on the Fed’s behalf that doesn’t count toward the debt ceiling and selling assets the government now owns in GM, banks, and other financial institutions and use the proceeds to pay bills.
Fortune | A U.S. debt downgrade isn't the real problem
Standard & Poor's has a lot of people worried about the implications of a downgrade of the U.S. credit rating. The real worry is what our debt levels will do to the value of the dollar.

Heritage Foundation | Morning Bell: Uncontrolled Spending Is the Real Threat would take essentially everything that Americans produced in all of last year to pay off the existing national debt. That comes out to $45,000 of debt for each American.
Heritage Foundation | Former CBO Director: Let Debt Limit Debate Be Short, Sweet and Successful
The debt limit debate waits for the return of a recess-refreshed Congress, but if conservatives are ready for it, they can leverage the issue to enact spending caps and advance the budget the House passed last week…


Econ Comments                                                                                                             
WSJ | Show Me the Jobs
Losing economically to its neighbors, Missouri debates right-to-work reform.

Political Calculations | Refined: Major Trends in U.S. Layoffs
If the current trend does hold, we can expect new seasonally-adjusted unemployment insurance claim filings to fall in the range between 360,540 and 409,963 for the week of 23 April 2011, the limits of which would then steadily fall by about 2,270 filings each week until reaching a range between 337,835 and 387,257 by 2 July 2011.