Monday, June 6, 2011

General Economics

News                                                                                                                             
National Journal | Government Blocks Oil-Sands Pipeline
The Transportation Department announced late on Friday afternoon its decision to block a Canadian oil company from restarting a controversial oil-sands pipeline that began operating at this time last year.
Bloomberg | Natural-Gas Use May Increase 50 Percent by 2035 in ‘Golden Age,’ IEA Says
While a surge in gas use will improve air quality in many cities, cut coal use and lower energy costs, climate-change targets would be missed and temperatures would rise beyond a goal of 2 degrees Celsius (3.6 Fahrenheit), the Paris-based organization said today in a report.
Market Watch | State of U.S. economy grows murkier
The sharp decline in hiring during May is likely to hang over U.S. markets this week owing to a thin slate of economic data.
CNN: Money | Don't count on stimulus. It's not coming
Economic indicators are pointing to slower growth. More Americans are looking for jobs, and the housing market is in a confirmed double dip.

Econ Comments                                                                                                             
Washington Times | GHEI: China races ahead
Asian giant’s economic expansion reveals need for pro-growth policies.
WSJ | The Real Cost of the Auto Bailouts
The government's unnecessary disruption of the bankruptcy laws will do long-term damage to the economy.
NYT | When a Nobel Prize Isn’t Enough
Last October, I won the Nobel Prize in economics for my work on unemployment and the labor market. But I am unqualified to serve on the board of the Federal Reserve — at least according to the Republican senators who have blocked my nomination. How can this be?
RCM | Sixty Questions From the Class Warfare Front
How can poverty be eliminated if it is defined in relative rather than absolute terms? What is the real goal of the War on Poverty and how much do pandering politicians stand to gain by keeping it going forever?
Financial Times | America is too tethered to take off
Concern is growing that the US is falling back into recession. Consumers are scared. The housing market is crippled, with prices still falling. Last week saw more disappointing figures on jobs and manufacturing. Friday’s closely watched payroll numbers were worse than expected. Analysts had predicted 175,000 new private sector jobs, which would have been low; there were 83,000. The unemployment rate rose to 9.1 per cent.
Richmond Times Dispatch | Bet on the market
In this secular age, not much ink need be spilled convincing people to ignore doomsaying based on the Bible. But this "secular" age is also the age of Gaia — an age of increasingly unthinking, faith-based following of preachers who warn of the hell and damnation awaiting us if we don't renounce the devil of fossil-fuel-fueled economic growth.
Politico | Social Security reform now, not later
Explaining that the trust fund is made up of Treasury bonds backed by the government never quite satisfied our members who thought Congress should have protected payroll taxes so the money was "saved." And truth be told, Congress and previous administrations could have done more with Social Security contributions to pay down debt and have taken other steps to reduce it.
Daily Caller | The real answer to our problems
We hear all about America's problems every day. We can't get away from them, especially when the bad news is compounded with more bad news about natural disasters. The latest economic and jobs news is yet another indication that this nation's problems are getting worse and stifling our prosperity.

Blogs                                                                                                                             
Calculated Risk | Schedule for Week of June 5th
The key economic release this week will be the trade balance report on Thursday.
Calculated Risk | Unofficial Problem Bank list at 997 Institutions
Here is the unofficial problem bank list for June.
Daily Capitalist | Slow Pace Of Bank Failures Holding Back Recovery
The Trepp bank failure report confirmed that the problems with banks are mainly with commercial real estate (CRE) (76%) followed by residential real estate (16%). They noted that the number of failed banks in May was way down (5):
Volokh Conspiracy | A Book Length Account of Fannie and Freddie and Their Role in the Financial Crisis
Among the scores of books I’ve accumulated on the financial crisis, one always seemed to be missing: a book length account of the role of Fannie and Freddie in bringing about the financial crisis, following their rise and fall.  Many books had important sections devoted to the GSEs (e.g., Roger Lowenstein’s The End of Wall Street), but despite the outpouring of books on the crisis, until now we’ve lacked one that has both financial acumen and investigative journalism fused together, directly on Fannie and Freddie.

Reports                                                                                                                         
RCM: Wells Fargo | Weekly Economic & Financial Commentary
Have We Hit a Soft Patch or Something a Bit Worse?

Health Care

News                                                                                                                             
Politico | Democrats stay quiet on Medicaid cutbacks
Since Rep. Paul Ryan introduced his budget blueprint in April, Democrats have held countless news conferences and issued even more press releases condemning the plan as they say to eliminate end or kill Medicare as we know it.

Econ Comments                                                                                                             
WSJ | Feds to Biotech Firms: Shut Up
Medicine will suffer if Washington controls the flow of scientific information.
Washington Post | Why we must end Medicare ‘as we know it’
Almost everyone agrees that America’s health-care system has the incentives all wrong. Under the fee-for-service system, doctors and hospitals get paid for doing more, even if added tests, operations and procedures have little chance of improving patients’ health. So what happens when someone proposes that we alter the incentives to reward better care, not more care?

Blogs                                                                                                                             
Greg Mankiw's Blog | The Next Step on the Road to Serfdom
But nobody is proposing that the government deny you the right to have whatever medical care you want at your own expense. We’re only talking about what medical care will be paid for by the government.
Heritage Foundation | New Study Reveals Obamacare’s Threats to the Economy — And Medicine as We Know it
Moving into the 21st century, the practice of medicine is on the cusp of exciting new territory. Advances in medical and pharmaceutical research, particularly in personalized medicine, promise new cures to diseases that affect millions of Americans.
Greg Mankiw's Blog | The Demagoguing of Medicare Reform
One thing is not often pointed out: Ryan's proposed "premium support" structure is in some ways similar to the plan put in place under President Obama's healthcare reform law.  In both cases, an individual would shop among competing private insurers, on an exchange overseen by the government regulators.  In both cases, the government would provide financial support for the "needy".
Heritage Foundation | Hospitals’ Skepticism of New Obamacare Medicare Payment Scheme Grows
A frequent accusation against conservative Medicare reform proposals is that they would “end Medicare as we know it.” But the reality is that Obamacare has already accomplished this

Taxes

News                                                                                                                             
National Journal | De-stimulated: High Gas Prices Undid Gains from Tax-Cut Deal
High gas prices have erased the stimulative effects of the tax-cut deal President Obama and Republicans cut at the end of 2010.
National Journal | Levin Rebuts GOP Tax Plan
The ranking Democrat on the House Ways and Means Committee, Sander Levin, D-Mich., warned on Friday that the GOP's tax-reform plans could dismantle programs that have been vital to building and maintaining the middle class.

Monetary

News                                                                                                                             
Market Watch | Dollar steadies after hitting 1-month low vs. euro
The dollar traded little changed Monday, trimming a loss versus the euro after the 17-nation shared currency reached its strongest level in a month amid hopes for a new aid package for Greece and expectations that the European Central Bank will signal an interest-rate hike later this week.
Bloomberg | Plosser: Fed Exit Should Start Before Jobs Firm
“Somewhat tighter monetary policy is possible by the end of the year,” he said today at a press conference, after speaking at an event organized by the Bank of Finland in Helsinki. “We will have to begin exiting from our policies long before the unemployment rate is down to what people would like to have. That’s going to be a difficult decision.”

Econ Comments                                                                                                             
Barron's | The World After QE2
Despite investors' worries, the markets and economy won't be doomed when the Fed's massive stimulus program ends.
Minyanville | How Will the End of QE2 Impact Financial Markets?
Random musings on a Monday morning.

Blogs                                                                                                                             
Daily Capitalist | The End of Sound Money and the Triumph of Crony Capitalism
The triumph of crony capitalism occurred on October 3rd,2008. The event was the enactment of TARP — the single greatest economic-policy abomination since the 1930s,or perhaps ever.
Like most other quantum leaps in statist intervention,the Wall Street bailout was justified as a last-resort exercise in breaking the rules to save the system. In the immortal words of George W. Bush,our most economically befuddled President since FDR,“I’ve abandoned free market principles in order to save the free market system.”

Employment

News                                                                                                                             
CNN Money | State, local layoffs to hit record levels
...this cash-strapped sector is set to go on a record-breaking layoff binge when the new fiscal year starts on July 1.
Washington Times | Jobs report has White House playing defense
White House economic adviser Austan Goolsbee, in an appearance Sunday on ABC’s “This Week,” objected testily to the use of the term “jobless recovery.”
WSJ | Industry Puts Heat on Schools to Teach Skills Employers Need
Big U.S. employers, worried about replacing retiring baby boomers, are wading deeper into education and growing bolder about telling educators how to run their business.

Econ Comments                                                                                                             
Daily Caller | Obama's jobs recession
A couple of months ago, during the winter quarter, job gains looked to be picking up, unemployment was easing lower, and President Obama’s re-election hopes looked more secure. But things sure have changed.

Blogs                                                                                                                             
Calculated Risk | Birth/Death Model and Unemployment by Duration and Education
Last month I mentioned that anyone who subtracts the Not Seasonally Adjusted (NSA) birth/death model numbers from the headline SA payroll employment is making a mistake. Unfortunately some sites are still making this error.
Political Calculations | Teens Disappear from the U.S. Workforce
As of May 2011, over two million jobs (2,004,000) have disappeared from the U.S. economy since teen employment peaked in November 2006. Since the total employment level in the U.S. peaked a year later, some 1,671,000 fewer American teens are now being counted as being employed.
WSJ: Real Time Economics | Number of the Week: Profits Rise, but Unemployed Ranks Don’t Shrink
58.4%: Percentage of U.S. population employed.
Calculated Risk | Comparing Payroll Job Growth in 2011 to 2010
Although payroll job growth slowed sharply in May, with only 54,000 net jobs added, job growth this year is well ahead of 2010.

Budget

News                                                                                                                             
Washington Times | Maryland spending boost among largest
Study finds budget assigns 11% more despite $1B deficit.

Econ Comments                                                                                                             
WSJ | Pension Reform Goes to Washington
Much recent taxpayer fury has been directed toward state and municipal worker benefits, so it's only fair that federal pensions are finally drawing some scrutiny.
Washington Times | ROOT: Obama’s bailout plan goes bust
Teetering Greece demonstrates the failure of government spending.

Blogs                                                                                                                             
Mercatus Center: Neighborhood Effects | Which Governors Are Proposing Spending Increases and Which are Proposing Cuts?
In FY2012, the average Democratic governor proposed a spending increase of 5.8 percent, while the average Republican governor proposed a spending increase of 3.4 percent.
CafĂ© Hayek | Herbert Hoover didn’t cut spending
I don’t know anything about Mellon’s influence on Hoover. Or Hayek’s. But whatever it was, it didn’t yield spending cuts.