Tuesday, May 10, 2011

General Economics

News                                                                                                                             
Market Watch | China’s trade surplus widens sharply
China’s trade surplus for April widened at a pace far exceeding analysts’ expectations, as export growth surged while imports grew by a smaller margin, according to customs’ data released Tuesday.
Fiscal Times | Double Dip? Home Values Fall for the 57th Month
Home prices have fallen for 57 consecutive months, and Zillow is forecasting that price declines will continue for the rest of 2011. Home values are falling by about 1 percent per month so far this year, says Stan Humphries, economist with Zillow. “We now believe a bottom will come in 2012, at the earliest,” he says. He predicts home prices will drop by as much as 9 percent due to stubbornly high unemployment and large quantities of foreclosures.
Fox News | China urges US to lift controls on hi-tech exports
China is using high level meetings to urge the US to allow more technology exports into the
Fiscal Times | Credit Card Defaults Heading to 20-yr Low
After writing off billions in uncollectible credit card debt over the past few years, banks have started to hand out new cards again. But they are doing so slowly and only lending to those with higher credit scores.
WSJ | Greece Says Audit Will Show €60 Billion Need
Greece is projected to need around €27 billion in new assistance next year and another €32 billion in 2013.

Econ Comments                                                                                                             
Washington Post | The myth of American exceptionalism
The phrase has an odd history. As Princeton history professor Sean Wilentz reminds me, American exceptionalism once applied to the hostility that the American worker — virtually alone in the industrialized world — had toward socialism. Now, though, it is infused with religious meaning, which makes it impervious to analysis. Once you say God likes something, who can quibble?
Bloomberg | Cost of U.S. Imported Goods Rose More Than Forecast
The 2.2 percent increase in the import-price index followed a revised 2.6 percent gain in March, Labor Department figures showed today in Washington. Economists projected a 1.8 percent increase, according to the median estimate in a Bloomberg News survey. Prices excluding fuel advanced 0.6 percent.
Bloomberg | Rear-View Mirror Can’t Forecast 2011 Economy: Caroline Baum
There are more reasons to think 2011 won’t repeat 2010’s start-stop pattern.

Blogs                                                                                                                             
Reason Foundation | Fannie Mae Drains Another $8.5 Billion from Taxpayers
Here is a breakdown of the bailout payment requests from Fannie Mae since 2008:
The Economist: Free exchange | Is housing holding back recovery?
Falling prices may delay a recovery in construction activity, but even during the housing boom years the most residential investment ever contributed to the real GDP growth rate was 1.04 percentage points, and most quarters the contribution was well below that. Housing simply isn't going to lift GDP growth from 1.7% to 5%.
WSJ: Real Time Economics | Small-Business Pessimism Deepens
Small-business owner pessimism worsened in April for a second consecutive month, even though current sales performance was the best in 40 months, according to data released Tuesday
Calculated Risk | NY Fed Q1 Report on Household Debt and Credit
New York Fed's Quarterly Report on Household Debt and Credit Shows Signs of Healing in Consumer Credit Markets Since Last Quarter
WSJ: Real Time Economics | Euro Zone’s Fundamental Flaws Must Be Addressed, Says Roubini Economist
Fundamental flaws within the euro zone must be addressed or else the euro could “end up in smithereens,” said a managing director at Roubini Global Economics Tuesday.

Reports                                                                                                                         
NBER | Dissecting the Effect of Credit Supply on Trade
We estimate the elasticity of exports to credit using matched customs and firm-level bank credit data from Peru. To account for non-credit determinants of exports, we compare changes in exports of the same product and to the same destination by firms borrowing from banks differentially affected by capital flow reversals during the 2008 financial crisis.

Health Care

News                                                                                                                             
Daily Caller | Pulling the plug on Obamacare
Obamacare is like turnip greens: bitter and hard to swallow, but Mommy made you choke them down anyway. The difference is that turnip greens are constitutional. They're also likely to extend your life rather than cut it short.
National Journal | Health Law Gets First Day in Appellate Court
The health reform law gets its first day in Appellate Court on Tuesday, as the U.S. Court of Appeals for the 4th Circuit in Richmond hears oral arguments on Virginia's suit challenging the law's constitutionality. The Obama administration is sending the nation’s top lawyer, acting Solicitor General Neal Katyal, to argue -- an unusual move that experts say indicates that the White House is taking the issue very seriously.
Roll Call | Kyl Will Push for Medicare Changes
The House GOP’s plan to overhaul Medicare isn’t likely to go anywhere in the bipartisan debt limit talks, but that doesn’t mean Medicare reform of some kind won’t be included, Senate Minority Whip Jon Kyl told reporters Monday.

Econ Comments                                                                                                             
WSJ | National Health Preview
The ObamaCare preview that Massachusetts has been conducting for the last several years grows more ominous by the month, not that anyone in Washington is paying attention. So let's check on the Bay State's latest warning, coming soon to a hospital or medical practice near you.

Reports                                                                                                                         
Heritage Foundation | New Research Shows That Medicare Part D Crowds Out Private Insurance—and Helps Some Seniors
Medicare Part D significantly changed the mechanism and scale of public subsidies for prescription drugs. The introduction of Part D had equally significant consequences for the private market for drug coverage, seniors’ out-of-pocket spending for medications, and the demand for prescription drugs.

Taxes

News                                                                                                                             
MarketWatch | Sparring ramps up over oil tax breaks
Industry slams plan to use cash for deficit; Senate gears up for vote.
Bloomberg | Republicans Rule Out Tax Increases in Debate Over Debt Cap
Republican congressional leaders are ruling out tax increases or a wider revenue base in talks on extending the U.S. government’s borrowing authority, creating a conflict with Democrats who would raise more money as well as cut spending.
National Journal | Eliminating Tax Breaks Would Be ‘Punishing the Economy,’ Industry Groups say
CEO's for the nation's five largest multinational oil and gas companies -- ExxonMobil, BP, Chevron, Shell, and ConocoPhillips -- have been invited to come before the Senate Finance Committee on Thursday to defend the need for the industry’s incentives embedded in the tax code.

Econ Comments                                                                                                             
AEI | Tax Cuts, Tax Reform, and Public Opinion
A comparison of public opinion today with public opinion in 1985 and 1986 suggests that the public may be less receptive to tax reform now than it was then.

Blogs                                                                                                                             
Heritage Foundation | Corporate Tax Reform Should Focus on Rate Reduction
The United States will soon have the highest corporate tax rate in the world once Japan enacts its pledge to cut its rate.

Monetary

Econ Comments                                                                                                             
Bloomberg | Bernanke’s QE2 Averts Deflation, Spurs Rally, Credit
Ben S. Bernanke’s $600 billion strike against deflation is paying off, as stock and debt markets rise, bank lending grows and economists forecast faster growth.

Budget

News                                                                                                                             
WSJ | Boehner's Debt-Limit Marker
The bond market would love a deal that reduced future U.S. borrowing.

Econ Comments                                                                                                             
National Journal | Flake, Kingston: Ryan's Budget the Way to Go
Appropriators say debt ceiling should be increased, but doing so without spending cuts would be 'irresponsible.'
Washington Times | EDITORIAL: Fiscal responsibility derailed
Wasteful choo-choo spending deepens America’s debt crisis.
WSJ | Why I Don't Support Europe's Bailouts
Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments.
Washington Times | RAHN: World’s biggest financial fraudsters
Political operators get away with swindles that would land others in jail.
Bloomberg | Obama Needs Navy SEALs to Target Budget Next: Amity Shlaes
The Obama plan promised to address the ratio of the national debt to the economy. But it cynically postponed the start of that project to an election year, 2014.
WSJ | Greece's Unsustainable Burden
A debt restructuring, by whatever name, looks inevitable.

Reports                                                                                                                         
Heritage Foundation | Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity
It squarely confronts Social Security, Medicare, and Medicaid, the three so-called entitlement programs, which together account for 43 percent of federal spending today.

Employment

Blogs                                                                                                                             
EconLog | Trade, Mechanization, and Displacement
There is an equivalence between mechanization and opening up new avenues of trade. Both increase average productivity. Both serve to displace existing workers. Both can be fit easily into the framework of Patterns of Sustainable Specialization and Trade.
Political Calculations | The Real Employment Situation in April 2011
...if you look closer at the seasonally-adjusted household survey portion of the report, you’ll find that 190,000 fewer Americans were counted as having jobs in April 2011 than had jobs in March 2011.
EconLog | Cyclical vs. Technological Unemployment
There are some awkward questions to be raised about the relationship between cyclical and technological unemployment. It would seem that productivity is increasing all the time. Why does the unemployment rate vary by so much across time?