Friday, June 10, 2011

General Economics

News                                                                                                                             
Financial Times | China trade surplus hits $13bn in May
China’s trade surplus in May was smaller than expected, adding to evidence that the country is slowly cutting its reliance on exports...
USA TODAY | Fed: Dallas is only area of country to show improving growth
Fed banks in New York, Philadelphia, Atlanta and Chicago said growth weakened in those regions. By contrast, the Fed regions in Boston, Cleveland, Richmond, St. Louis, Minneapolis, Kansas City, and San Francisco said growth there remained steady.

Econ Comments                                                                                                             
Bloomberg | Economy’s I-Told-You-So Naysayers Hold a Reunion: Caroline Baum
Economists of the Austrian School have been saying I-told you-so for generations. A slump is the natural progression after a period of malinvestment, better known as an asset bubble, which is why the goal should be bubble avoidance. Any attempt to prevent prices -- in this case home prices -- from falling prolongs the agony, which is something policy makers have been slow to grasp
Bloomberg | Government Is More to Blame for Weak Recovery Than Fading Stimulus: Echoes
Moreover, any reduction in government purchases associated with the fading-out of the 2009 stimulus is tiny in comparison with 1937 because the stimulus didn't increase government purchases in any material way. At most, federal-government purchases rose by only 0.2 percent of GDP as a result of the 2009 stimulus, and data show that state and local governments didn't use stimulus grants to increase purchases. Even the much-debated deal on the 2011 budget wasn't able to reduce government discretionary outlays by more than $1 billion this year.

Blogs                                                                                                                             
NRO: The Corner | ‘Prison Math’ and the War on Drugs
Nonviolent drug offenders now account for about one-fourth of all inmates in the United States, up from less than 10 percent in 1980. The costs, of course, are staggering: State correctional spending now totals $52 billion a year, consuming one out of 14 general fund dollars; spending on corrections is the second fastest growth area of state budgets, following Medicaid.

Reports                                                                                                                         
RCM: Wells Fargo Economics Group | Special Factors Helped to Reduce Trade Deficit in April
The trade deficit narrowed sharply in April, which will lead to some upward revisions to Q2 GDP growth. However, the deficit likely will rise over the next few months as some special factors unwind.
Mercatus Center | Freedom in Virginia
Overall, Virginia has much of which to be proud though it could benefit from improving some of its fiscal policies and its policies affecting personal freedom.

Health Care

News                                                                                                                             
CNN Money | Parents won't pay uninsured adult kids' health care
A new survey of parents by eHealthInsurance, an online seller of individual health care from 180 insurers, shows the new benefit may not be as popular with parents as hoped.

Taxes

Econ Comments                                                                                                             
IBD | Government Motors Pushes Gas Tax Bailout
Unable to sell its electric cars, a failing General Motors wants to "nudge" you out of your gasoline-powered vehicle by upping the federal gas tax a buck a gallon. We don't think consumers will buy that either.

Budget

News                                                                                                                             
WSJ | Lawmakers Step Up Talks on Cutting Deficit
Congressional leaders from both parties agreed on Thursday to accelerate their negotiations over reducing the federal deficit, signaling a heightened sense of urgency to avoid a potential default on the government's debt.

Econ Comments                                                                                                             
Washington Times | ARMEY & KIBBE: Obama’s big, fat Greek bailout redux
President promotes the culture of expansive fiscal irresponsibility.
CNN Money | America's own 'Lost Decade'
Many experts say private debt owed by households, as well as businesses, is an even bigger problem than the government debt that's getting so much attention lately.

Blogs                                                                                                                             
Bankrupting America | Gang of Six budget to cut $4.7 trillion from deficit
...The New York Times reports that despite facing a number of obstacles since its inception, the group is close to releasing a proposal that would cut $4.7 trillion from the deficit over the next 10 years.

Employment

Econ Comments                                                                                                             
RCM | Obama's Jobs Plan Takes a Page From Marx
The president has unveiled a plan to cut joblessness with an industrial policy from the 19th century. In this "new" economy, government will pick winners and losers for industry. It didn't work then, it won't work now.
WSJ | The Lone Star Jobs Surge
The Texas model added 37% of all net U.S. jobs since the recovery began.

Blogs                                                                                                                             
WSJ: Real Time Economics | Three Jobs Scenarios: Which Is Most Likely?
A new report from the McKinsey Global Institute estimates that the U.S. needs to add 21 million jobs to by 2020 to reach pre-recession unemployment of about 5%. The report sketches out one scenario for how the U.S. will get there — and two others for how it won’t.
EconLog | The Long Recalculation
The point that I make often is that the NBER declared the end of the 2001 recession much too early. From an employment standpoint, that recession lasted through most of 2003, perhaps longer.
WSJ: Real Time Economics | Will Stronger Exports Lead to Significant Job Growth?
April’s news on trade was quite good, and U.S. manufacturers can thank the Federal Reserve. But improving growth falls far short of solving all the economy’s problems, especially with job growth.