Monday, May 23, 2011

General Economics

News                                                                                                                             
WSJ | Euro-Zone Growth Slows to 7-Month Low
Growth in the euro zone's private sector eased more than expected to its weakest pace in seven months in May, led by a sharp slowdown in manufacturing, the preliminary results of a survey by financial-information firm Markit showed Monday.
Bloomberg | Crude Oil Drops on Concern Europe Debt Crisis Will Slow Demand
Oil fell in New York amid concern that Europe’s sovereign debt situation may weaken fuel demand while the dollar rose to a nine-week high against the euro.
Market Watch | Consumer spending expected to slow down
Despite persistent unease over their personal finances, consumers remain the backbone of the economy, and data to be released this week will show the state of their spending.

Econ Comments                                                                                                             
Washington Post | Stuck in a post-crisis gloom
It may be time to move beyond pessimism. Ever since the financial crisis, Americans have wallowed in fear and anxiety. Understandably. Although a recovery — as defined by academic economists — started about two years ago, it hasn’t felt like one.
Politico | How to fix American transportation
The committee hopes to consolidate more than 100 federal surface transportation programs. Over the past 50 years, dozens of new programs have been created to address the issues beyond the original programmatic goals.
Market Watch | Italy, Spain trigger fresh sovereign-debt fears
Europe’s sovereign-debt crisis reclaimed the spotlight Monday, sending investors around the world in search of safety after voters in Spain provided a thumbs-down on further austerity measures and Standard & Poor’s threatened to cut Italy’s credit rating.
CNN: Money | Why oil prices will spike again soon
How long till the next oil shock?

Blogs                                                                                                                             
Café Hayek | Beware of Celebrating Decreases in the Current-Account Deficit
Keynesians – or, more generally, economists obsessed with aggregate demand – are fond of exports because foreigners’ expenditures on exports are demand for ‘our’ country’s goods and services. 
Calculated Risk | Schedule for Week of May 22nd
The key reports this week will be New Home Sales on Tuesday (more depression for homebuilders), the second estimate for Q1 GDP on Thursday (expect an upward revision), and the Personal Income and Outlays report for April on Friday (an early hint at consumer spending in Q2).
Café Hayek | Another for the ‘I Miss Julian Simon’ File
So in light of this overwhelming evidence that growing population and greater population densities are positively associated with improvements in the human condition, why suppose that growing population nevertheless is a “bomb” destined to explode and hurl us into hell for our sinful refusal to follow the teachings of wild-eyed preachers such as Paul Ehrlich and Lester Brown?  Theirs is a fact-immune religious creed that I thoroughly reject.
Calculated Risk | Unofficial Problem Bank list increases to 988 Institutions
Here is the unofficial problem bank list for May 20, 2011.

Reports                                                                                                                         
RCM: Wells Fargo | Weekly Economic & Financial Commentary
Manufacturing Cools While Housing Remains Frozen.

Taxes

News                                                                                                                             
WSJ | Local Governments Hit as Tax Revenue Falters
The nation's economy is adding jobs and state finances are starting to mend. But for many local governments—the 89,000 cities, counties and school districts that provide the most-visible government services—more pain is coming.
Roll Call | Corporate Tax Holiday Bill Unites Foes
The policy has collected an unusual roster of supporters on and off the Hill. Those backers say it may infuse the domestic economy with about $1 trillion.

Econ Comments                                                                                                             
Washington Post | Golden State blues
Brown’s plan for balancing the budget is to close about half of the deficit with reductions and fund shifts already approved and the rest by tax increases.

Blogs                                                                                                                             
NRO: The Agenda | Megan McArdle and Kevin Drum on the Impact of Marginal Tax Rates
If raising revenue is our goal, there are far less costly ways to do it, e.g., eliminating tax expenditures.

Health Care

News                                                                                                                             
Fox News | AP-GfK Poll: Medicare doesn't have to be cut
They're not buying it. Most Americans say they don't believe Medicare has to be cut to balance the federal budget, and ditto for Social Security, a new poll shows.
Roll Call | Corporate Tax Holiday Bill Unites Foes
A coalition called the Win America Campaign is pushing for the tax holiday with the help of lobbying firms Cauthen Forbes & Williams and Capitol Counsel, whose roster includes ex-Rep. Jim McCrery (R-La.), the former ranking member on the Ways and Means Committee.

Econ Comments                                                                                                             
WSJ | Republicans and Mediscare
Paul Ryan's GOP critics are ObamaCare's best friends.
Washington Times | WOLF: Obamacare waiver corruption must stop
If some Americans deserve exemption from a bad law, then all Americans do.

Monetary

Econ Comments                                                                                                             
Minyanville | All for One Euro and One Euro for All?
Have the powers that be in the ECB quietly decided to let Greece go, since it never have been allowed it into the eurozone to begin with?
WSJ | Mundell: Deflation Risk for the Dollar
The Nobel winner says a stable dollar-euro rate is the best economic medicine.
Minyanville | Is Paul Krugman Right to Praise the Dollar's Decline?
Krugman has a valid point in that the US has seen improvement in its manufacturing sector. But at what cost?
Source | Will Fed Insist on Trying to Ignite Unhelpful Wealth Effect?
The Bernanke Federal Reserve has been playing a card that used to win the hand but no longer does. But that doesn't mean it will deter it from trying again.

Blogs                                                                                                                             
Daily Capitalist | Bernanke Will Be Forced To Do QE3
There are several aspects of this conclusion that I wonder about. The basic issue is whether or not the Fed will let their balance sheet “freeze” at its current $2.75 trillion level or will the Fed be eventually encouraged to undertake QE3.

Employment

News                                                                                                                             
Fox News | States shorten duration for unemployment benefits
Some of the states that have drained their unemployment insurance funds are cutting the number of weeks that a laid-off worker can count on those benefits.

Econ Comments                                                                                                             
WSJ | Another Labor Board Power Play
The latest attempt to restrict the movement of business and capital.
CNN Money | Confronting the coming American worker shortage
Predictions of a shortage of American math and science professionals have grown dire. What can be done to bridge the gap?

Budget

News                                                                                                                             
MarketWatch | Debt fight endangers U.S. creditworthiness
Earlier this week, Rep. Paul Ryan, chairman of the House Budget Committee, said holders of U.S. government debt would be willing to miss payments “for a day or two or three or four” if it puts the country in a stronger position to pay them later on.
Fox News | Ryan Challenges Democrats to Propose Alternative to His Budget
The architect of the House Republican plan for overhauling Medicare says it's time to move beyond petty politics and focus on dealing with the nation's fiscal problems, and he's challenging Democrats to show leadership on budget cuts.

Econ Comments                                                                                                             
FT | America’s deepening default chasm
A week ago on Monday the US government hit its statutory debt ceiling of $14,300bn...

Blogs                                                                                                                             
Cato@Liberty | Why Budgets Are Busted
Three stories in today’s Washington Post help us to understand why governments around the world are facing unmanageable deficits.