Friday, June 17, 2011

General Economics

Fox News | AARP Pivots on Social Security Benefit Cuts
AARP, the powerful lobbying group for older Americans, was dropping its long standing oppostition to cutting Social Security beneifts, a move that could rock Washington's debate over how to revamp the nation's entitlement programs.
Market Watch | June Philly Fed manufacturing gauge turns negative
Exacerbating worries about a slowing U.S. economy, an important regional gauge of manufacturing activity showed contraction in June, according to figures released Thursday.
Bloomberg | Corn Gains on Speculation U.S. Ethanol Output Won’t Decline
Corn rebounded after falling to a three-week low on speculation that ethanol producers won’t reduce purchases of the grain after the U.S. Senate voted to repeal industry tax incentives.
Market Watch | Senate votes to end ethanol subsidies
The Senate voted to kill two tax breaks for the ethanol industry on Thursday, with more than half of the chamber’s Republicans joining Democrats to approve the measure.
Bloomberg | IMF Cuts Forecast for U.S. Growth Again Amid Risk of Contagion From Europe
The International Monetary Fund cut its forecast for U.S. growth in 2011 for the second time in two months, warning that further setbacks to a recovery pose growing threats to the world economy, along with potential contagion from the European debt crisis.
Market Watch | How to fix crumbling U.S. roads, rails and airways
If America’s prosperity depends on its roadways, the future looks pretty rough.
RCM | What Is a Real Economic Recovery?
The economy begins to suddenly and "unexpectedly" weaken just as monetary stimulus ends. The flames of Greece radiate throughout Europe, pressuring banks in Germany and, especially, France. The euro comes under pressure as LIBOR rates trip warnings, and eurodollar exposures are re-evaluated with a keener eye toward counterparty risk.
Bloomberg | Faster Inflation Causes ‘Trade Down’ Boost for McDonald’s, Wal-Mart
McDonald’s Corp. (MCD) and Wal-Mart Stores Inc. (WMT) are getting a boost from value-minded consumers as rising commodity costs constrain discretionary income and confidence in the economy wanes.

Econ Comments                                                                                                             
Washington Post | Rebuild American infrastructure? Companies’ offshore profits can help.
America needs investment in its infrastructure. We need someone to invest hundreds of billions of dollars into for-profit trains, roads, airports, clean electricity generation, high-voltage transmission lines and more.
Washington Times | BARBER: Energy independence, jobs within reach
Obama and greens have locked up nation’s natural resources.
Washington Times | SMITH: States rise up against federal overreach
Labor board’s attack on Boeing seen as threat to state commerce.
Bloomberg | Oil Heads for Biggest Weekly Decline in Six on Concern Over European Debt
Oil dropped to its lowest level in four months in New York on concern the Greek debt crisis will derail Europe’s economic recovery, curbing fuel demand.

Reason Foundation | Type the Title You Want People to See
The past month has yielded a host of negative news about housing. And despite the range of federal programs to save the housing market, we are currently faced with five big problems:
Café Hayek | Cotton This
Buried in this bad news, however, is a speck of good news: over the objection of a majority of House Republicans, that chamber voted to end the crazy year-old scheme of sending more than $12 million monthly to Brazil in order to induce the government there not to raise tariffs on U.S. exports to Brazil.
Econlog | The Republican Candidates on Manufacturing
During the Republican debate in New Hampshire on Monday, Mike Patinsky asked how the candidates planned to return manufacturing jobs to the United States. Ron Paul answered first, claiming that we have exported our jobs. He connected it with Federal Reserve policy. I did not understand him.

NBER | Mortgage Modification and Strategic Behavior: Evidence from a Legal Settlement with Countrywide
We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with subprime mortgages throughout the country.

Health Care

National Journal | Ron Johnson and Douglas Holtz-Eakin: Health Reform Law Costs More than Obama Promised
The two argue that “the promises Obamacare supporters have made about the ultimate cost of the program are based on highly unlikely premises.” Health insurance exchanges will be more popular than the White House has predicted, they argue, causing the price of funding health care to skyrocket.
National Journal | Rural Poor More Likely to Use Emergency Room for Medical Care
Low-income adults accounted for 56 percent of visits made to rural emergency departments, the report released on Thursday found. About 28 percent of emergency room payments came from Medicaid, 25 percent came from Medicare, and 31 percent came from private insurance plans. About 16 percent of patients either did not have insurance or were not billed for services.


Econ Comments                                                                                                             
WSJ | Why 70% Tax Rates Won't Work
Memo to Robert Reich: The income tax brought in less revenue when the highest rate was 70% to 91% than it did when the highest rate was 28%.

Heritage Foundation | Tax Increases Should Be Off the Table in Debt Limit Negotiations
It is good tax policy to rid the tax code of distortions that favor one sector of the economy over another, yet it is bad tax policy to remove every single distortion as a means to raise money for a federal government that has already spent us into a $14.3 trillion hole.


Market Watch | China economists see interest rates headed up
Economists surveyed by Caixin said they expect the Chinese government will continue to tighten monetary policies in an aim to rein in inflation after key economic data released on June 14.
Bloomberg | Baum: Soft Patch 2, Not QE2, Is Main Influence on Rates
When it began, some thought it might not run its course. Now that it’s ending, there are those who think another installment is needed. The “it,” of course, is the Federal Reserve’s second round of large-scale asset purchases, better known as quantitative easing.

Econ Comments                                                                                                     | Roubini: QE3 Will be With us Before the End of the Year
Nouriel Roubini, a.k.a. “Dr. Doom,” the head of Roubini Global Economics, an independent, global economic and market strategy research firm, believes that the answer will be another round of quantitative easing by the end of the year, specifically if the stock market drops to 10 percent or if economic data continues to worsen.
Minyanville | Currency is Driving Precious Metals, Not Inflation
As the dollar weakens and questions about the US economy abound, resource holders may be using their gold as an alternate means of exchange.


CNN: Money | Jerry Brown vetoes California budget
Brown, who has promised for months that he would present Californians with a gimmick-free budget that solves the state's $26 billion deficit with a combination of tax extensions and spending cuts, said the legislators' budget was not a balanced solution.
CNN: Money | Is the U.S. like Greece?
Deficit hawks often cite Greece's debt nightmare as a cautionary tale for the United States
National Journal | Biden Group Gives Itself July 1 Deadline
Six lawmakers led by Vice President Joe Biden and charged with developing a deficit-reduction plan met for the third time this week and agreed on Thursday to give themselves until July 1 to come up with an agreement or decide not to continue.

Econ Comments                                                                                                             
Washington Times | GHEI: Lessons from the Great White North
Canadian economy shows spending cuts and tax cuts stimulate growth.
WSJ | How to Deal With the Debt Limit
The White House and Congress should agree to a hard cap on spending.
Bloomberg | Greenspan Says Greece Default ‘Almost Certain,’ May Trigger U.S. Recession
The problem you have is that it’s extremely unlikely the political system will work” in a way that solves Greece’s crisis, Greenspan, 85, said in an interview today with Charlie Rose in New York. “The chances of Greece not defaulting are very small.”

Heritage Foundation | Slay the Beast: How You Can Save Us From the Massive Debt
There’s a lot of talk in Washington these days about debt — and for good reason. The federal government reached the $14.3 trillion debt ceiling one month ago today. And the Obama administration has set a date of Aug. 2 for Congress to raise that limit.


CNN: Money | Made in USA: Overseas jobs come home
It's still only a trickle compared to the flood of jobs that America lost to overseas outsourcing in recent decades. But some American businesses are bringing jobs home again.
Fox News | How states fared on unemployment applications
Applications fell by 16,000 to 414,000, a postive sign that layoffs are slowing. But applicatiosn are still above the 375,000 level that signals sustainable job growth. Below are the sates with the biggest changes in applications.

Heritage Foundation | Why Does Obama Want to Destroy 265,000 Jobs?
Just how many jobs does President Barack Obama want to destroy in the name of going green?