Tuesday, June 21, 2011

General Economics

Market Watch | Oil rises on softer dollar, Greek bailout optimism
Crude-oil futures edged higher Tuesday, as relative optimism about Greece’s debt situation and a softer dollar helped support prices.
Market Watch | Japan disaster recovery confronts funding dilemma
More than three months after the earthquake and tsunami ravaged Japan’s Tohoku region, reconstruction moves ahead at an uneven pace, and so does the debate about how the government will fund it.
National Journal | Banks are Finally Lending, But Some Fear They Aren't Charging Enough for the Risk
Investors want loans. Banks want to boost their revenues. But recent data has caused analysts and regulators to fear that in their bid for business from corporate borrowers, banks aren’t charging enough to cover the risks they are assuming.
Bloomberg | To Avoid Double-Dip Recession, Remember Lessons of 1980s: Echoes
Is our economy headed back into a recession? A look at a past double-dip, the recessions of 1980 and of 1981-1982, suggests we are due. That double-dip also suggests the Federal Reserve should raise interest rates earlier and faster than you might think.
MSN | China's ticking time bomb
the fast growing economy is fueled by low paid migrant workers who have watched others profit from their sweat. How much longer will they be willing to do it?

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Retire the kernel, release the gas
Era of fuel subsidies should end.
NYT | Banking’s Moment of Truth
Capital matters. Let me put that another way. The current fight over additional capital requirements for the banking industry, eye-glazing though it is, also happens to be the most important reform moment since the financial crisis broke out three years ago.
National Journal | FTC Investigation: Is the Oil Industry Manipulating Gas Prices?
After months of more expensive gasoline driven by wildly fluctuating oil prices, the Federal Trade Commission has launched an investigation of oil and gas markets to determine whether or not they engaged in anti-competitive conduct and price manipulation.
Politico | Toward better patent reform
The America Invents Act, and a similar bill in the Senate, have been introduced to "reform" our patent system. Both bills, however, weaken our unique U.S. system by forcing out courntry to harmonize U.S. patent standards downward to the level of the weaker systems in Europe and Asia.
AEI | Effective Intellectual Property Protections are Key to Future
Some political leaders apparently don't see the value in IP protection. Some have explicitly said they would not agree to anything that improves domestic Indian laws and World Trade Organisation standards from 20 years ago. One negotiator went so far as to say his hands were tied, as any new IP protections would be in breach of the existing Indian law -- refusing to recognise that a change in existing Indian law is exactly what we need.

The Economist: Free Exchange | Banks are safe, say banks
In 2010 Europe’s stress testers had no power to challenge data submitted by banks. Only national regulators had this privilege. Yet national regulators had a clear interest in state-owned or state-recapitalised banks passing the stress tests. Most did. Many questioned how well bank data was scrutinised.
The Economist: Free Exchange | Will housing save America's economy?
Back in February of 2009, Paul Krugman was worrying about an insufficient policy response to the recession and he pondered the question: if America is to muddle through with too little stimulus, then how will growth return?
WSJ: MarketBeat | Falling Oil Prices Finally a Good Thing for Stocks?
Today, oil prices are lower, off about 0.3% at $92.75 a barrel. At the same time, the stock market is edging higher. This marks a small change. In the past few weeks, stocks seemed to track oil prices, viewing crude as a barometer of global growth expectations.
Calculated Risk | Lawler: Closed Home Sales Down, Pending Sales Up in May
Existing home sales for May will be released tomorrow and the Pending Home Sales Index on Wednesday June 29th. Hopefully the NAR will provide an update tomorrow on the timing of the benchmark revisions.
Econlog | Dynamic Free Markets
One interesting post and one interesting news article, seemingly unrelated, but actually quite related: both contain evidence of the dynamic wonders of free, or somewhat free, markets.

NBER | Financial Protectionism: the First Tests
We provide the first empirical tests for financial protectionism, defined as a nationalistic change in banks’ lending behaviour, as the result of public intervention, which leads domestic banks either to lend less or at higher interest rates to foreigners.
Cato Institute | Cato Institute The Subprime Lending Debacle: Competitive Private Markets Are the Solution, Not the Problem
The United States' market-government hybrid mortgage system is unique in the world. No other nation has such heavy government intervention in housing finance. This hybrid system nurtured the excessively risky loans, financed with too much leverage, that fueled the U.S. housing bubble of the last decade and resulted in the systemic collapse of the global financial system.

Health Care

National Journal | AMA Says Health Law Not the Reason for Membership Decline
The American Medical Association, once the undisputed voice of America’s physicians, announced on Sunday that it now has “just under” 216,000 member doctors, down about 5 percent from the end of 2009. That means the group, which lobbies heavily in Washington, now represents about a third of the 660,000 or so physicians and surgeons in the United States.
Politico | Weaning the Hill off Medicare formula
The Medicare physician payment formula is often attacked as a budget gimmich that holds down federal spending on paper, even though everyone knows the cuts it imposes will never come into effect.


Market Watch | Bernanke to tell investors, public: Don’t jump
What the Federal Reserve will do on Wednesday is of little debate. What Federal Reserve Chairman Ben Bernanke will say is a different matter.
WSJ | Change in China Hits U.S. Purse
Washington has long pushed China to let its yuan appreciate and to encourage domestic consumption, both of which it has done to varying extents. The yuan is up 28% against the dollar in six years. The weaker dollar helps U.S. exporters, but the stronger yuan and the higher costs within China from domestic demand press upward on the costs of things U.S. shoppers want.
Bloomberg | Canadian Dollar Appreciates on Boost in Risk Demand Before Greece’s Vote
Canada’s dollar advanced the most in a week versus its U.S. counterpart as stocks and commodities rallied before a Greek government confidence vote that may determine whether it avoids default.
Fiscal Times | How the Fed Could Set Off a New Recession
Until recently, it seemed unlikely that we were headed for a double-dip recession. We were clearly looking at  a very slow recovery, especially for employment, but there was little reason to worry about a second recession.

Econ Comments                                                                                                             
Bloomberg | Bernanke May Prolong Record Stimulus
Federal Reserve Chairman Ben S. Bernanke will probably delay the central bank’s exit from record stimulus, economists said in a survey, giving the flagging economy a boost without resorting to additional asset purchases.
Financial Times | Political union cannot fix the euro
As the Greek crisis worsens, so voices are being raised demanind new and more radical approaches. Froget the sticking plaster bailouts and slice by slice austerity packages. The ultimate solution to the eurozone debt crisis is "political union".
Minyanville | The Great Stagnation of 2011
Consumers aren't going to save our economy from stagnation, but rather it will continue along with inflation.

Forbes | Why The Fed Should Choose Quantitative Neutrality
The increase in monetary stability provided by QN, however, could provide an important step toward once again making the dollar as good as gold.  With the dollar’s purchasing power stabilized, restoring the link between the dollar and a fixed weight of gold would be a way to formalize Quantitative Neutrality, thereby ushering in a new era of price stability, economic growth, high paying jobs and rising standards of living associated with the gold standard throughout most of history.
Heritage Foundation | Federal Reserve Bank Presidents: Washington is Killing Business
Want to know why the economy is still dragging along with stagnant growth and 9.1 percent unemployment? Travel back in time over the past 18 months and listen to what some Federal Reserve Bank presidents predicted would result from the Obama Administration’s public policy path.


CNN: Money | One California budget fix: Abolish death row
Taxpayers have spent $4 billion since 1978 on California's capital punishment system -- and with only 13 executions to show for it. That’s about #308 million per execution.
Fox News | Europe debt crisis shadows Fed meeting on economy
Financial markets have been gripped by fears gthat Greece will default on its debt. Orther European natiosn with heavy debt burdens such as Ireland Portugal Spain and perhaps Italy, could be at risk, too.
National Journal | White House Mum on Possibility of Short-Term Debt-Ceiling Hike
The White House would not say whether President Obama would accept a short-term debt-ceiling increase as a stopgap measure if the deficit-reduction talks being led by Vice President Joe Biden fail to advance any action by the time the U.S. hits the limit on August 2. The idea was floated by Senate Minority Leader Mitch McConnell, R-Ky., on CBS’s Face the Nation over the weekend.

Econ Comments                                                                                                             
WSJ | The Fiscal Pledge We Need: Cut, Cap, Balance
Congress has never failed to increase the debt limit. This makes having a debt limit functionally useless.
Daily Caller | Marc Nuttle’s debt wall and why Barack Obama’s presidency may crash into it
Administration officials say that what’s happening in Greece can’t happen here. They should consider the work of my friend Marc Nuttle.

Heritage Foundation | Make Easy Spending Cuts, But Don’t Disregard Entitlement Reform
Getting the nation’s spending—and ultimately the debt—under control cannot be done solely by cutting funding for research on pickle technology or eliminating subsidies for the Brazilian Cotton Institute, other examples the ad mentions.


CNN: Money | Unemployment will plague cities for years
Seventy-five metro areas will struggle with double-digit unemployment through the end of the year, according to a U.S. Conference of Mayors report released Monday.
National Journal | Mayors Push White House on Jobs
President Obama met with the mayors of some of the nation’s largest cities on Monday and heard dire predictions about deepening joblessness and prolonged effects of the recession. While pressing the president to do more to combat persistent urban unemployment, the mayors also pleaded with Congress to stop “dithering” on raising the debt limit, warning that lawmakers are confusing local officials and businesses trying to plan for the future.