Wednesday, June 22, 2011

General Economics

News                                                                                                                             
CNBC | U.S. Competitiveness Becoming a Tale of Two Economies
The World Eocnomic Forum ranks the U.S. fourth out of 139 countries in its competitiveness survey.
National Journal | How Did 2011 Go So Wrong? America's Two-Speed Recovery
It's not just high gas prices. America has a growth problem and a jobs problem that might be beyond Washington's control.
Market Watch | May existing home sales fall to six-month low
Sales of existing U.S. single-family homes and condos fell 3.8% as activity remains muted even with a slump in prices, according to data released Tuesday.
Market Watch | China growth to cool as credit, trade ebb: Duncan
China’s era of rapid economic growth is drawing to a close, with a great moderation now inevitable, according to economist and author Richard Duncan.
CNBC | High Oil Prices Threaten to Derail Growth: IEA
High crude prices may derail growth in China and India, the two natiosn that have helped the global economy overcome the financial crisis, the International Energy Agency said.
WSJ | Trade Data Suggest Slowdown
Figures released Wednesday by the Netherlands Bureau for Economic Policy Analysis, also known as the CPB, showed trade volumes fell 2.5% from March, having risen by 1.1% in that month. Trade flows last fell in September 2010, by 0.6%.
Fiscal Times | Post Office Suspends Retirement Contributions
The financially troubled Postal Service is suspending its employer contribution to the Federal Employee Retirement System.

Econ Comments                                                                                                             
Daily Caller | Six steps for jump-starting the U.S. economy
With unemployment stuck at a stubborn 9.1 percent, it's time to finally free American innovation and ingenuity - long held hostage by a regulatory regime which is as great a threat to our prosperity as any foreign regime.
Fox Business | Where is the bottome for the housing market?
You may have seen the recent headline that the housing downturn we are currently in is worse than the one experienced during the Great Depression. According to Case-Shiller data, prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that geban in the late 1920's.
Source | The U.S. Trade Agenda: Comedy, Tragedy, or Thriller?
The U.S. trade agenda, of late, has featured plot twists worthy of a summer blockbuster. After two years of neglect, the beleaguered agenda seemed poised to advance when the Obama administration reworked the free trade agreement with Korea, agreed on an Action Plan for moving ahead with Colombia, and pressed ahead with negotiations for a Trans-Pacific Partnership. It looked like the White House and congress could work together, the three pending FTAs (Panama, too) could pass this summer, and the trade agenda would be free of its partisan rut at last.
Financial Times | Time for common sense on Greece
"Albert Einstein is reported to have said that insanity consists of doing the same thing over and over again and expecting different results. By those standards, the deal with Greece that is about to be agreed looks insane. The only justification, as I argued in a column on May 10, is that it is needed to play for time. This is a bad strategy. Something more radical is required."

Blogs                                                                                                                             
Cato @ Liberty | Are We Building Enough Housing?
One of the primary reasons the labor market remains weak is that construction activity is relatively low, resulting in a reduced demand for construction workers.  My friends in the building industry argue that because housing starts are at historic lows, we are actually not building enough housing.
Heritage Foundation | Why Ethanol and Natural Gas Don’t Deserve Subsidies
Two of the energy subsidy debates in Washington focus on tax credits for the ethanol and natural gas industries. The growing opposition to the $6 billion ethanol blender’s tax credit became quite clear when the Senate voted 73–27 to remove the subsidy—even though the credit is set to expire at the end of the year.
Coordination Problem | It’s Time to Call It a Failure
Recently Mario Rizzo gave us permission to say “we told you so” with respect to the failure of the fiscal and monetary stimulus policies that have been the predominant policy response to the Great Recession.  I think he was quite right to do so, and also quite right to note that many of us predicted that stimulus advocates would argue, in return, that it simply wasn’t big enough to do the trick.
Volokh Conspiracty | Many black New Yorkers Vote With Their Feet for the South
In a reversal of historical trends, many black New Yorkers are voting with their feet and moving to the South. In the early twentieth century, hundreds of thousands of southern blacks moved to northern cities in part to escape southern racism and oppressive Jim Crow laws.

Reports                                                                                                                         
AEI | The State of US Manufacturing
Chairman Casey, Vice Chairman Brady, and other members of the Committee, thank you for the opportunity to appear before you this morning and discuss the U.S. manufacturing sector--a key part of our economy.
CRS | Proposed U.S. – South Korea Free Trade Agreement: Potential National Sector-Specific and State Export Effects
In February 2011, the United States and South Korea finalized negotiations on a bilateral free trade agreement. As a result, the Obama Administration is expected to submit implementing legislation to the 112th Congress on the proposed U.S.-South Korea Free Trade Agreement (KORUS FTA).

Taxes

News                                                                                                                             
MarketWatch | Some tax cheats work at the IRS
Almost 3% of IRS workers caught cheating but some slip through cracks.
Bloomberg | Tax Writers Caution That Raising Revenue Now Could Hurt Tax Overhaul Later
The chief Republican tax writers in Congress are warning that Democratic attempts to raise revenue as part of a deficit reduction package could threaten a comprehensive tax code overhaul.
MarketWatch | China may cut some export-tax rebates
Beijing yet to release details on trade tax-policy discussions.

Blogs                                                                                                                             
Heritage Foundation | Morning Bell: The Truth About Tax Cuts
The tax cuts enacted by the U.S. Congress in 2003 were an important cause of an economic expansion that roared for some 50 months and created 8.1 million jobs.
Political Calculations | The Link Between Business Taxes and U.S. Business Investment Abroad
If you've been running your own business since 1978, you've probably noticed that you pay a lot more taxes in the form of the employers' portion of federal payroll taxes than you do in outright corporate income taxes.
Heritage Foundation | Breaking Research: Obamacare Tax Subsidies a Drag on the Economy
While economic growth remains sluggish, the last thing the United States needs is another weight holding it back. Unfortunately, the new health care subsidy program created under Obamacare for low- and middle-income Americans does precisely that.

Reports                                                                                                                         
Mercatus Center | Excise Taxes in the States
Taxes on the sale of goods and services are an important source of revenue for state governments within the United States. In 2010, states collected $344 billion or nearly 49 percent of their total tax revenue from sales taxes, and in the past this ratio was even higher.

Health Care

News                                                                                                                             
National Journal | Health Care Law Should Boost Employer Insurance, Research Finds
Fewer and fewer Americans get health insurance from employers, but the trend will likely reverse after the major provisions of the health care law come into effect in 2014, according to two new reports released Tuesday.
National Journal | AP: Millions of Early Retirees Could Qualify for Medicaid
Under the health care law, most Social Security benefits would no longer be counted as income in determining eligibility. Because of that, a married couple with a combined annual income of $64,000 would still qualify for the insurance program for the poor.

Econ Comments                                                                                                             
NYT | Seriously, Some Consensus About Health Care
But beneath this veneer of partisanship lie a few fundamental agreements. Consider health care, which will be at the center of the political debate. Here are four aspects of the issue in which Republicans and Democrats have stumbled into consensus.

Blogs                                                                                                                             
Volokh Conspiracy | An End to ObamaCare Waivers
The Department of Health and Human Services has announced that it will cease issuing waivers from the health care reform law’s requirements in September.
Heritage Foundation | More Americans Using HSAs—Under Threat from Obamacare
HSAs represent a market-based solution which, as America’s Health Insurance Plans (AHIP) explains, “give[s] consumers incentives to manage their own health care costs by coupling a tax-favored savings account used to pay medical expenses with a high-deductible health plan (HDHP).”
AEI: American | Have Rising Health Costs Driven Income Inequality?
The conclusions from all this aren’t clear: the increase in income inequality could be more benign than we’d originally thought, but if there’s a lot of waste in U.S. health outlays then low earners are still seeing a greater share of their compensation thrown away than high earners simply because health coverage is a larger share of their overall pay.

Monetary

News                                                                                                                             
Bloomberg | Federal Reserve Frets Over Fiscal Recklessness Behind Calm of 0.09% Yield
The central bank chief and his lieutenants are expressing concern that Congress’s failure to close what Dallas Fed President Richard Fisher called the nation’s “fiscal sinkhole” puts the economy at risk. At the same time, they say that acting too quickly may choke off a recovery hobbled by an unemployment rate above 9 percent.
CNN: Money | Economy's 'training wheels' to come off
"I don't think the end of QE2 will have any significant immediate impact on interest rates, stock prices, jobs or the broader economy," said Mark Zandi, chief economist with Moody's Analytics.

Econ Comments                                                                                                             
WSJ | QE2 Proves No Silver Bullet
Fed Program Keeps Deflation at Bay but Ends Amid Weak Economy and Dollar.
Market Watch | Who really benefited from QE2 anyway?
The Federal Reserve’s $600 billion program of “quantitative easing” has been great for Wall Street.

Blogs                                                                                                                             
Cato @ Liberty | Why Fed Ed Fails, and Proposals to Stop the Madness
On Monday, we took the word right to Capitol Hill: The federal government has been an abject education failure, and the only acceptable solution to the problem is for Uncle Sam to leave our kids alone
WSJ: Real Times Economics | Fed Statement Following June Meeting
The following is the full text of the statement following the Fed’s June meeting:

Budget

News                                                                                                                             
Fiscal Times | Negotiators Tempted by Gimmickry in Budget Talks
Negotiators seeking to carve trillions of dollars from the deficit are facing temptation to use iffy assumptions and outright gimmickry to exaggerate the size of spending cuts to accompany any increase in the government's ability to borrow to stay afloat.
Washington Times | CBO: Debt crisis looms absent major policy changes
A new report says the national debt is on pace to equal the annual size of the economy within a decade, levels that could provoke a European-style debt crisis unless policymakers in Washington can slam the brakes on spiraling deficits.

Econ Comments                                                                                                             
Washington Times | Bernanke: Spending cuts won’t boost jobs
Federal Reserve Chairman Ben S. Bernanke on Wednesday rejected an argument frequently made by Republican deficit hawks that immediate, deep cuts in federal spending will help produce jobs.
FT | Time for common sense on Greece
The question about the prospects for Greece is not whether the country will default. That is, in my view, as near to a certainty as any such thing can be.
Washington Times | MILLER: Short-term debt fix
Democrats exploit crunch-time advantage to preserve status quo.
Daily Caller | House’s proposed balanced budget amendment is flawed
After years of indifference to constitutional fiscal discipline, Congress is once again stirring. Excessive, outrageous spending, deficits and debt, the Tea Party movement and the last election have provided a motivated majority in the House of Representatives.
Washington Times | LAMBRO: Debt tsunami surges toward Washington
Bereft of ideas, Obama resorts to gimmickry.

Blogs                                                                                                                             
Enterprise Blog | Rep. Brady Touts ‘Realistic’ Spending Plan as ‘Complement’ to Ryan’s Budget Bill
The vice chairman of the Joint Economic Committee unveiled a spending-control plan at AEI today that he says will “complement” House Budget Committee Chairman Paul Ryan’s “Path to Prosperity” and put “guardrails” around it.
NRO: The Corner | A Better Debt-Ceiling Compromise
While it would be very serious if the U.S. had to default on its debt, it would be just as irresponsible to continue to pass debt-limit increases without putting in place a credible plan to reduce future government spending and put the nation back on the right fiscal track so that Treasury can eventually reduce the nation’s debt.

Reports                                                                                                                         
CBO | CBO's 2011 Long-Term Budget Outlook
If policymakers are to put the federal government on a sustainable budgetary path, they will need to increase revenues substantially as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches.

Employment

News                                                                                                                             
WSJ | Plan to Ease Way for Unions
Labor Board Proposes Speeding Up Organizing Votes; Employers, GOP Cry Foul.
WSJ | Government Jobs, Outside Income
Sen. Harry Reid's top aide received $1.2 million from Comcast Corp. after he began working for the Senate majority leader, joining a long list of congressional staffers who have collected money from past employers after starting on Capitol Hill.

Econ Comments                                                                                                             
Bloomberg Businessweek | The Real U.S. Fiscal Crisis Is Joblessness
Anemic job creation plagues the U.S. economy. Here's how information technology could play a key role in addressing it, says Chris Farrell.