Friday, June 24, 2011

General Economics

Market Watch | U.S. durable-goods orders rise 1.9% for May
Stronger orders for airplanes translated into a better-than-expected 1.9% increase in durable-goods orders in May, the Commerce Department estimated Friday.
Bloomberg | U.S. Economy Expanded at 1.9% Pace in First Quarter, Above Prior Estimate
The U.S. economy grew at a 1.9 percent pace in the first quarter, marking the start of what Federal Reserve policy makers project is a temporary slowdown in growth.
WSJ | Euro-Zone Growth at 20-Month Low, According to Survey
Economic growth in the euro zone slowed in June to its weakest pace in 20 months, according to a closely watched business survey, raising doubts about the strength of the currency bloc's recovery at a time when robust growth is needed to lift some of the euro's struggling members out of a debt crisis.
Bloomberg | Americans See Debt Threat, Reject Tax ‘Scare’
Americans say that the $14.3 trillion U.S. debt threatens the economy and that entitlement programs may go broke even as they dismiss as “scare tactics” the arguments offered by Republicans and Democrats who are debating a solution.
CNN: Money | New economic stimulus: lower oil prices
They say that if the move by the Obama administration -- part of a 60 million barrel release announced by the International Energy Agency -- helps to further drive down the price of oil, that could act as a stimulus for the economy.
Politico | President Obama struggles with economic message
A growing number of Democratic strategists including Obama senior compaign adviser David Axelrod said the party needs to let go of George W. Bush and the past once and for all. Democrats now "own" the economy, says party chief Debbie Wasserman Schultz.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Obama’s failed state
White House says it’s time for ‘nation-building’ in America.
Financial Times | How China plans to reinforce the global recovery
China has moved swiftly to fight the financial crisis, adjusting macroeconomic policty to expand domestic demand, and introducing a stimulus package to maintain growth, advance reform and improve people's lives.
Bloomberg | Fed’s Fisher Sees Growth Accelerating in Second Half While Remaining Slow
“It’s going to take quite some time to achieve a glide path that brings unemployment down significantly,” Fisher said today in an interview with Bloomberg Television in Dallas. “It’s a slow recovery and it’s going to continue to be slow.”
WSJ | Of Wealth and Incomes
Why Americans are so unhappy with this economic recovery.
RCM | The Half-Life of the Welfare State
What do all of these things have in common? They are manifestations of the modern welfare state--and that is what is unsustainable.

Heritage Foundation | Please Don’t Expect Too Much from Bill Bringing Earnings to USA
The bill cuts taxes, and tax cuts generally are good things, but the American people should not expect too much from enactment of the legislation. In particular, they should not expect the creation of lots of jobs as a result of the legislation.
Forbes | Why The Recession Recovery Remains Anemic
Amidst lingering unemployment and moribund consumer confidence, fears of a double dip recession grow increasingly frightening. The recovery is now two years old, yet job markets sputter, home prices continue plunging and our leaders appear impotent.
Econlog | Obama's Criminalization of Business
I'm visiting a friend who does due diligence for his private equity fund's investments in various U.S. companies. For many months now, he has found businessmen complaining about the Obama administration's criminalization of various failures, many of them small, to comply with detailed regulations.

RCM: Wells Fargo | New Home Sales Slip in May
Following back-to-back monthly gains, new home sales fell 2.1 percent in May to an annualized 319,000-unit pace. Inventories slipped to another record low, while prices rose on the month.
Mercatus | Taking Institutions Seriously
Despite the current fashion for issues such as institutional transparency or corruption, the modern policy development literature does too little to integrate the core ideas of modern political economy with standard economic theory.


WSJ | Tax Dispute Stalls Debt Talks
GOP Team Withdraws, Leaving Obama and Boehner to Negotiate a Final Deal.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Virginia beats Maryland
Low-tax, pro-growth policies deliver greater economic opportunities.

NRO: The Corner | The Problem with Payroll Tax Relief
...interest payments and revenue from taxation of benefits are credited to the trust funds out of the federal government’s general revenue and borrowing, thus currently adding to the deficit.
NRO: The Corner | What Is a Tax Increase?
while we are fighting over the question of what is a tax increase, we are not focusing on fixing our tax system. Our tax code is broken, unfair, and inefficient from the tax collectors’ and taxpayers’ point of view.

Health Care

Politico | Health care’s move from paper to pixels slow
Electronic health records are at the center of some of the key reforms of the Affordable Care Act, because having reliable data to track patients, trends and possible fraud is one of the ways reformers think they will eventually be able to bend the cost curve.

NBER | Estimates of Crowd-Out from a Public Health Insurance Expansion Using Administrative Data
We use a combination of administrative and survey data to estimate the fraction of individuals newly enrolled in public health coverage that had access to private, employer-sponsored health insurance at the time of their enrollment and the fraction that dropped this coverage. We estimate that after expansion of eligibility for public coverage, approximately 20% of new enrollees had access to private health insurance at the time of enrollment and that only 8% dropped this coverage (with the remaining.


Econ Comments                                                                                                             
Bloomberg | Euro Weakens Versus Most Major Counterparts on Greece Debt-Crisis Concern
The euro fell versus a majority of its 16 most-traded counterparts amid speculation a Greek austerity plan and a European Union pledge to stabilize the region’s economy won’t resolve its sovereign-debt crisis.
Minyanville | Deflation in America's Future
Once the countertrend rally runs its course the market should have another leg down. Expect Bernanke to freak out and initiate a third round of quantitative easing.
RCM | Bernanke Admits He Just Does Not Know
Early on in his June 22, 2011, press conference, Federal Reserve Chairman Ben Bernanke was asked about why the Fed had just lowered its growth outlook for 2011 and 2012. After attributing some of the reduction in expected economic growth to temporary factors that he feels should be self-clearing, he finally admitted that:

CRS | Brief History of the Gold Standard in the United States
The U.S. monetary system is based on paper money backed by the full faith and credit of the federal government. The currency is neither valued in, backed by, nor officially convertible into gold or silver. Through much of its history, however, the United States was on a metallic standard of one sort or another


CNBC | Greece Agrees on Austerity Plan With EU, IMF
Greece won the consent of international lenders on Thursday for a five-year austerity plan intended to avoid looming bankruptcy and its prime minister pledged to push radical economic reforms through parliament.

Econ Comments                                                                                                             
Washington Times | FERRARA: The final ticks of America’s bankruptcy bomb
Counting the overlooked liabilities make it even later than we thought.
Politico | Balance the budget by locking in savings
A bipartisan array of commentators, budget experts and former lawmakers — including New Mexico Sen. Pete Domenici, a Republican and former Budget Committee chairman, and Alice Rivlin, a Democrat and former White House budget director — agree SAVEGO has the potential to rein in deficits and restore fiscal sanity.

Heritage Foundation | New Stimulus Plan Same as the Old: Spend, Spend, Spend
While the rest of the country talks about the urgent need to reduce the crushing debt burden and get the U.S. fiscal house in order, Senators such as Harry Reid (D–NV) and Charles Schumer (D–NY) propose spending even more.
NRO: The Corner | Re: Spend Our Way Out of Debt
I am stunned that Democrats would be asking for a new stimulus. First, this new request is an admission that the previous stimulus hasn’t worked — if it had they wouldn’t be asking for more stimulus would they? But then, why ask for more of something that failed in the past?


Econ Comments                                                                                                             
WSJ | Why the Old Jobs Aren't Coming Back
A stimulus package that temporarily restores demand isn't the answer.
Politico | Time to ax federal jobs programs
Federal programs for unemployed and disadvantaged workers now cost $18 billion a year, yet the Government Accountability Office recently concluded that “little is known about the effectiveness of employment and training programs we identified.”