Thursday, April 28, 2011

General Economics

Market Watch | First-quarter U.S. economic growth slows to 1.8%
The U.S. economy slowed markedly in the first quarter and inflation accelerated, clear evidence of the double whammy on the economy from higher gasoline prices.
Bloomberg | Oil Drops From 31-Month High on Speculation of Slower U.S. Economic Growth
Crude futures earlier climbed to a new 31-month high after Fed Chairman Ben S. Bernanke said yesterday that it will keep record low interest rates in place and stop buying bonds in June. The gains were trimmed after the U.S. said its economy grew at a slower pace than the last quarter of 2010.
Washington Time | Start ups seek new form of microfinance
‘Crowd funding’ of small businesses faces hurdle in decades-old SEC rules.
WSJ | Drivers Cut Back on $4 Gas
Economy Won't Get a Lift as Overseas Demand Is Expected to Keep Prices High.
CNN: Money | Exxon hits back at gas price anger
In an attempt to deflect rising anger among American drivers and political leaders, Exxon Mobil said Thursday that it makes relatively little money producing and selling gasoline, even as the oil company reported a nearly $11 billion quarterly profit.
National Journal | Record Gas Prices Will Put Obama's Reelection Chances, Big Oil's Tax Breaks on the Line
Gasoline prices already dominate the political debate, as the national average for a gallon of regular on Thursday reached $3.89. That number is climbing at the rate of one-half to one-tenth of a cent per day. And with each ratchet higher, the partisan sniping gets more heated and consumers' anger at politicians—particularly the president—grows.

Econ Comments                                                                                                             
WSJ | Obama's Millionaire Obsession
The president has no understanding of the unique role wealth plays in American life.
RCM | Let's Sunset the Ethanol Subsidy
Unfortunately, the lawmakers heard not a word from the president about the $6 billion a year in ethanol subsidies that are paid to corn growers and ethanol producers. For corn farmers, federal support for ethanol is a windfall that lifts corn prices and makes it profitable to plant additional acres.
NYT | Pain at the Pump? We Need More
Our trade deficit arises in large measure from the hundreds of billions of dollars we pay for foreign oil. The imbalances threaten America’s economic stability and national security.
AEI | Tap Natural Gas for Energy
The American economy prospers on the new and the ingenious. A technology that's being used to reach vast quantities of clean burning natural gas has given us both.

Café Hayek | The Fight of the Century
My second rap video with John Papola is now live. Please spread it wide and far.
Econlog | A Misconception Worth Emphasizing
Back at the top of the bubble, the middle class had $6 trillion more assets on the books. Considering the Mortgaged Middle Class now owns about $6 trillion in net assets, then the bursting of the housing bubble caused their net worth to drop by 50%.
Daily Capitalist | American Exceptionalism And Standard & Poor’s
America, the world’s greatest country, whose financial strength and dollar were supreme for the past 100 years, has been put on notice by Standard & Poor’s that it is on the road to second rate status.
Heritage Foundation | China’s Bullet Train Fiasco: A Warning to America
Well, the Chinese finally have a green-energy idea worth stealing: arrest government officials who foist overpriced, under performing, debt-ballooning, money-losing projects on taxpayers.

Health Care

National Journal | Reassuring Republicans Claim Precedents for Medicare Plan, but Comparisons Reveal Skimpy Coverage
As Republican members of Congress face questions from constituents over their near-unanimous support for a fiscal year 2012 budget that calls for the overhaul and privatization of the Medicare program, they cite two comparisons to disarm their critics: Their plan is nearly the same as the health care coverage provided to members of Congress, and to exchanges created by the new health care law.

Heritage Foundation | Pay-for-Performance in Medicare Could Do More Harm Than Good
Liberals’ solution to rising health care costs has consistently been to take control of health care decisions away from patients and their doctors and to place it in the hands of government.


NYT | Most States Seen Raising Jobless Tax on Businesses
As persistently high unemployment has drained the funds that are used to pay jobless benefits, more than two-thirds of the states expect to raise taxes on businesses this year to replenish them, according to a survey of labor agencies released Wednesday.

Cato@Liberty | White House to Propose 26 Percent Corporate Tax Rate?!? Look before You Leap
The Obama administration is preparing to inject an unpredictable new variable into its economic policy clash with Republicans: a plan to overhaul corporate taxes. Economic advisers have nearly completed the process initiated in January by the Treasury secretary, Timothy F. Geithner, at President Obama’s behest.


Market Watch | Bernanke pledges continued easy policy
Federal Reserve Chairman Ben Bernanke on Wednesday used his first-ever press conference to tell an uncertain global market that he’s quite comfortable with the current policy stance and is not contemplating any quick policy moves to combat higher inflation or slower growth.
Bloomberg | Bernanke Begins Public Dialogue With Pledge to Maintain Record Stimulus
Ben S. Bernanke, at the first press conference by a Federal Reserve Chairman following a policy meeting, said the economy still requires monetary support while the need to contain inflation means further easing is unlikely.
WSJ | Fed Takes Foot Off the Gas
The Federal Reserve used its first-ever news conference to signal it will phase out a controversial bond-buying program—and to reassure a skeptical public that the central bank is doing everything it can to control inflation and expand an uneven recovery that has yet to reach many Americans.
Bloomberg | Thailand Says Inflation Risks Exceed Threats to Growth as Output Tumbles
Thailand’s borrowing costs are inappropriate as inflation risks exceed threats to growth, the central bank said as the government predicted industrial output will revive from the worst slide since 2009 after Japan’s quake.
Market Watch | Bank of Japan holds steady, details quake loans
The Bank of Japan on Thursday held policy steady, rejected a proposal to increase the size of its asset-buying program and detailed a lending program for banks in disaster-struck areas.

Econ Comments                                                                                                             
Minyanville | Did Ben Bernanke Hint at QE3 During Historic Fed Press Conference?
Bernanke did not indicate there would be a third round of quantitative easing, but many traders feel the central bank is headed in that direction. Here's why.
RCM | The Fed's Low Rates Are Restraining Recovery
The prevailing view among economists, policymakers and Federal Reserve Board governors -- and the conventional Washington wisdom more broadly -- remains that zero or near-zero short-term interest rates (negative 2% in real terms) have some unavoidable adverse side effects, but unquestionably stimulate the economy.  Put more simply, the lower the rate, the more economic stimulation.
WSJ | Bernanke Meets the Press
He favors a 'strong' dollar as the dollar falls.
CNN: Money | The coming commodity price nightmare
Here's another sign we have much bigger inflation problems than Ben Bernanke.
Minyanville | The Fed's Dilemma and the Straw Man Economy
This week's podcast discusses economic growth signals, the end of QE2, and more.
AEI | Jobs, Inflation, and What Bernanke Said
Did the Fed chairman come clean in his first press conference?

The Economist: Free exchange | Diced dollars
The current denizens of Washington, DC have been accused of doing many things to the once mighty dollar: debauching it, devaluing it, even dropping it from helicopters. But for the moment they seem behind the curve on dicing it.
WSJ: Real Time Economics | Parsing the Fed: How the Statement Changed
The Fed’s statement following the April meeting noted no change in policy, as the central bank signaled it will complete its bond-buying program this quarter as planned. (Read the full April statement.)
The Economist: Free exchange | Is the Fed satisfied?
So, the big question: is this the right policy path? Just listening to Mr Bernanke, one might be excused for thinking that it actually is not. The chairman said that the FOMC is confident that its purchases supported growth and job creation, and he said that the FOMC was confident that it could tighten effectively when it needed to, and it projected that employment would remain above target and inflation below target.


Washington Times | Fed sees mounting debt as biggest challenge
Federal Reserve chairman Ben S. Bernanke on Wednesday called the mounting federal debt the biggest economic challenge facing the country and said the threat that it will tarnish the nation’s top credit rating should prompt Congress to address it.
Fox News | Reid: Add deficit 'cap' to debt legislation
The leader of the Democratic-controlled Senate said Wednesday that any legislation increasing the government's ability to borrow more money to meet its obligations should contain a cap on how big the deficit can be in any given year.
Source | Harry Reid to force Senate vote on Paul Ryan's Budget
As Congress hurtles toward its late spring deadline to raise the nation's debt limit, Reid says he wants to force GOP senators to take a stand on the Ryan plan, which would overhaul Medicare and Medicaid, and cut trillions over the next decade.

Econ Comments                                                                                                             
WSJ | The Debt Ceiling: Myths and Facts
Default won't happen, since we're collecting plenty in taxes to pay our interest obligations.
WSJ | Why the 2025 Budget Matters Today
Governments with no plausible plan to meet their obligations risk a run by investors. It's happened abroad, and it can happen here.
Washington Post | How serious are we really about the deficit?
House Republican leaders have passed the test, supporting a politically risky budget that changes Medicare into a premium-support program and eventually returns federal spending to sustainable levels.

Econlog | 10-year Budget Projections
Tell me what you think about the usefulness/uselessness of 10 year budget/ deficit projections.
Heritage Foundation | Gen Xers, Baby Boomers and Seniors Prefer Ryan’s Budget Over Obama’s Plan
A surprising USA Today/Gallup poll today revealed that a plurality of Americans over the age of 30 — including Gen Xers, Baby Boomers and seniors — support Ryan’s proposal to reduce the deficit over President Obama’s plan.


Bloomberg | Jobless Claims in U.S. Unexpectedly Rise to Three-Month High
Jobless claims increased by 25,000 to 429,000 in the week ended April 23, the most since late January, Labor Department figures showed today in Washington. The government anticipates a drop in unadjusted applications during the Good Friday holiday week, something that didn’t happen this year, a Labor Department spokesman said.

The Economist | The unemployment trap
America is unusual, though not unique, in the extent of its long-term unemployment problem: