Thursday, July 7, 2011

General Economics

News                                                                                                                             
National Journal | Mica to Unveil New Highway Bill
House Transportation and Infrastructure Chairman John Mica, R-Fla., on Thursday will introduce a six-year, $230 billion surface-transportation authorization blueprint for highways, bridges, and other transportation projects.
Fox News | U.S. Timber Exports to China Have Lessened the Economic Blow for Some
Even as the housing market continues to sputter and home building remains stuck at levels one-third of the boom times of 2006, exports to China have softened the blow.
National Journal | Virginia Dems Introduce Offshore-Drilling Measure
The bill, according to a press release, builds on a House-passed drilling measure by directing half of any leasing revenues to be paid to Virginia to support land and water conservation projects as well as clean-energy development, transportation, and infrastructure improvement projects in the state.
Market Watch | Service sector growth slows in June
Some executives see ‘some softening’ in U.S. economy.
Bloomberg | Oil Rises in New York on Signs U.S. Crude Stockpiles Shrank a Fifth Week
Oil surged to a three-week high in New York on signs that the U.S. economic recovery is whittling down crude inventories in the world’s largest user of the commodity.
CNN: Money | Housing prices: No rebound in sight
Housing prices are likely to keep falling the rest of this year, and probably won't show much improvement next year either, according to a survey of economists.
WSJ | 401(k) Law Suppresses Saving for Retirement
Under the law, companies are allowed to automatically enroll workers in their 401(k) plans, rather than require employees to sign up on their own. The measure was intended to encourage more people to bulk up their retirement nest eggs—a key goal in a country where millions of people aren't saving enough.
Business Insider | The End Of The Soft Patch In The Global Economy?
Global equity markets rallied in the final days of the second quarter as investors became increasingly confident that a default by Greece will not occur in the near term.

Econ Comments                                                                                                             
Financial Times | American power requires economic sacrifice
Looking into the future, the pendulum seems almost certain to swing back. Even if the US were to maintain military spending at a constant share of its own GDP, the nation’s shrinking weight in the world economy would cause its share of global spending to decline to 39 per cent by 2015.
Project Syndicate | Technology and Inequality
Until now, the relentless march of technology and globalization has played out hugely in favor of high-skilled labor, helping to fuel record-high levels of income and wealth inequality around the world. Will the endgame be renewed class warfare, with populist governments coming to power, stretching the limits of income redistribution, and asserting greater state control over economic life?
Politico | Senators: Ethanol deal possible
The three senators — along with ethanol subsidy foe Sen. Tom Coburn (R-Okla.) — started negotiations when 73 senators voted June 16 for an amendment from Feinstein and Coburn immediately repealing a 45 cent per gallon blender tax credit and a 54 cent per gallon tariff on imported ethanol set to expire at the end of the year.

Blogs                                                                                                                             
Atlantic: Megan McArdle | Why Pensions are Underfunded
Because people don't understand what these obligations cost:
Political Calculations | The Permanence of Poverty
If you are in poverty today, or fall into it tomorrow, will you be doomed to be in poverty for the rest of your life?
Econlog | Competitive Government
The theory and some of the practical issues involved in this are discussed in the widely-unread Unchecked and Unbalanced. There, I argue against the notion that there are scale economies at work in large governmental units.
Forbes | The Cost Of Government Regulation
That is essentially the Obama administration’s message to businesses. This is an administration that seems to believe that $1 million spent on pollution control will create more than 1.5 net jobs. Who comes up with such numbers?
Calculated Risk | Reis: Apartment Vacancy Rate falls to 6% in Q2
Reis reported that the apartment vacancy rate (82 markets) fell to 6.0% in Q2 from 6.2% in Q1. The vacancy rate was at 7.8% in Q2 2010 and peaked at 8.0% at the end of 2009.

Reports                                                                                                                         
RCM: Wells Fargo | ISM Non-Manufacturing Soft, Watch Out for Order Backlogs
The headline ISM non-manufacturing reading was a bit weaker than expected, though the employment component edged higher and the inventories component came down slightly. Order backlogs fell below 50.
Heritage Foundation | Federal Highway Program: How Opting Out Would Help States
Growing dissatisfaction with federal transportation policy and government’s mismanagement of the highway trust fund have encouraged many in Congress and in state governments to seek ways to overhaul the system or to extract themselves from it.

Health Care

News                                                                                                                             
Fox News | Study: Medicaid does make a difference after all
Signing up for Medicaid could improve your overall health and financial security, says a surprising new study that offers clues on how President Barack Obama's health care overhaul might affect millions of low-income uninsured Americans.
National Journal | Secret to Medicaid Savings: More Doctors
State and federal lawmakers alike want and need to save money on Medicaid. Tight budgets have squeezed states’ ability to contribute to their Medicaid programs, while Congress and the White House look to make significant savings off Medicaid in talks to reduce the deficit and raise the debt ceiling.

Econ Comments                                                                                                             
Cato Institute | Oregon's Verdict on Medicaid
For a century, the Left has advocated universal health insurance despite not knowing what benefits it might bring.

Blogs                                                                                                                             
Econlog | John Goodman Hits a Home Run
On his health policy blog this morning, John Goodman asks whether there's a moral case for the Affordable Care Act. The whole thing is worth reading. Some excerpts:
AEI: American | Low Reimbursements Main Factor in Doctors Limiting Treatment of Medicaid Kids
A new GAO survey out last week shows that many children in Medicaid programs across the country have limited access to physicians and some are even slightly worse off under Medicaid (and CHIP) than children not covered by any form of insurance.
Heritage Foundation | Criticism of McKinsey Survey on Employer Health Coverage Falls Short
The recent McKinsey survey showing that 30 percent of employers would drop coverage shouldn’t be controversial. Economists have consistently shown how an employer mandate will negatively affect employment and wages. In fact, even the Congressional Budget Office (CBO) concede such affects.

Taxes

News                                                                                                                             
WSJ | Higher Taxes Yield to Budget Cuts in States
Forty-six states began a new fiscal year Friday after lawmakers spent the spring hashing out budgets that largely avoid big tax increases in favor of budget cuts and curbs on pay and benefits for public employees.

Econ Comments                                                                                                             
Washington Times | MILLER: Tax for tax
Debt ceiling deal hinges on balancing tax hikes and tax relief.
NYT | Taxes and Billionaires
So take a look at one of the tax loopholes that Congressional Republicans are refusing to close — even if the cost is that America’s credit rating blows up. This loophole has nothing to do with creating jobs and everything to do with protecting some of America’s wealthiest financiers.

Budget

News                                                                                                                             
Market Watch | Obama expects deficit deal within two weeks
Congress and the White House can strike a deal to cut the deficit and raise the debt ceiling “over the next week to two weeks,” President Barack Obama said Wednesday.
CNN: Money | Debt ceiling: Cut, cap and balance ... or else
The proposal, made by a big group of House Republicans, would: cut federal spending in the next fiscal year by $380 billion; cap spending at 18% of the size of the economy within five to six years from now; and amend the Constitution to require Congress to balance the budget every year and make it more difficult for lawmakers to raise taxes.
Politico | EPA funding cuts outlined by GOP
Following on April’s budget agreement, the Environmental Protection Agency is again a major target, and the reduced $7.15 billion EPA funding would mean a $1.53 billion or 18 percent cut from current spending, much of which would come at the expense of clean water programs.

Econ Comments                                                                                                             
Daily Caller | D.C. never cuts spending
Here’s some friendly fiscal advice: Any time some Washington big shot like Ben Bernanke or Tim Geithner claims that immediate spending cuts in the debt deal will harm the economy — ignore them. Completely. You know why? Because in this great country of ours, spending never goes down. Never.
WSJ | The Easy Way Washington Could Save $1 Trillion
How an independent agency could squeeze $1 trillion in savings from the bureaucracy.
Washington Post | Political math makes a debt deal harder
President Obama’s main goal is to get through this fight with the government still running and his support from the political center intact, even if this means substantial concessions to Republicans.
WSJ | The Only Reform That Will Restrain Spending
All 47 Senate Republicans now support changing the Constitution to balance the federal budget.
Washington Post | Dishonesty in the debt talks
Every serious observer knows that we need to increase our country’s debt ceiling and get behind a comprehensive, balanced, bipartisan solution to our $14 trillion debt and our $1.5 trillion annual deficit.

Blogs                                                                                                                             
Cato @ Liberty | I’m Willing to Go Along with President Obama’s ‘Balanced Approach’ to Deficit Reduction, but Only if We Use Honest Math
The President has issued an ultimatum that more tax revenue must be part of budget negotiations. Indeed, he endlessly repeats his desire for a “balanced approach,” implying that as much as 50 percent of the deficit reduction in any agreement should come from higher revenues.

Reports                                                                                                                         
Mercatus Center | Stimulus Spending and Unemployment
The administration’s promise that the ARRA bill would keep unemployment rates from breeching 8.8 percent and would create some 3 million jobs—90 percent of which would be in the private sector – did not materialize.

Monetary

News                                                                                                                             
Bloomberg | Trichet Signals Further ECB Rate Increase
European Central Bank President Jean- Claude Trichet signaled he may raise interest rates again in coming months and will ease Portugal’s access to emergency funds as officials battle both faster inflation and the debt crisis.
Market Watch | What will replace the dollar as global currency?
In London last week some smart businessmen launched the country’s first gold ATM. Stick in your credit card or some cash, and the machine will swap your plastic or paper money for a small bar of the real stuff.

Econ Comments                                                                                                             
AEI | Has the Financial Crisis Jeopardized the Fed's Independence?
Judging from the response to the Fed's three-year battle against systemic financial collapse and the risk of deflation, it is difficult to escape the conclusion that financial crises and their aftermaths can pose greater challenges to central bank independence than the more traditional pain associated with combating inflation.

Blogs                                                                                                                             
Daily Capitalist | Manufacturing Growth Is An Illusion Of Monetary Stimulus
The following is a quick analysis of current data releases related to industrial production, both manufacturing and services. These numbers, especially manufacturing, are key indicators of the health of the economy.
Café Hayek | A Source of Wealth or Stagnation?
One plausible consequence of this invention – and the material wealth it makes possible – is that Americans’ demand for leisure rises significantly. What happens to GDP? Would the replicator’s failure to ‘create’ lots of jobs cause it to be thought an innovation not quite on par with, say, the assembly line or the automobile?

Employment

News                                                                                                                             
Fox News |
Auto industry, seeing new life, is on hiring spree.

Two years after the end of the Great Recession, the auto industry is hiring again — and much faster than the rest of the economy. As an employer, it's growing faster than airplane manufacturers, shipbuilders, health care providers and the federal government.
RCM | How to Create Jobs Without Spending a Dime
Most Americans know the biggest problem in America today: too few jobs. Yet, by executive action alone, President Obama could create more jobs without spending another dime, generating billions of additional dollars in income tax revenues for Treasury coffers.

Econ Comments                                                                                                             
WSJ | Jobs in the Pipeline
With 9.1% unemployment and gasoline prices in the stratosphere, President Obama must sometimes wish that some big corporation would suddenly show up and offer a shovel-ready, multibillion-dollar project to create 100,000 jobs and reduce U.S. reliance on oil from dictatorships.

Blogs                                                                                                                             
Heritage Foundation | Obama Touts Federal Worker Pay Freeze That Isn’t
President Obama offered few concrete proposals for promoting fiscal responsibility during his “Twitter town hall” on Wednesday. One that he did mention was his drive to freeze federal employee salaries, though he offered the measure as an example of an effort to “make these adjustments that are necessary during these difficult fiscal times…in a way that preserves collective bargaining rights.”
Atlantic: Megan McArdle | Illegal Immgrants Might Be Undocumented, But They're Not Unskilled
To my mind, it's a good thing that we no longer have much skilled farm labor in our citizenry: Americans don't have these skills because they have better alternatives. They don't migrate with the crops because they have better options that let them stay put.
Calculated Risk | Weekly Initial Unemployment Claims decline to 418,000
This is the 13th straight week with initial claims above 400,000, and the 4-week average is at about the same the level as in January.

Reports                                                                                                                         
NBER | Children Left Behind: The Effects of Statewide Job Loss on Student Achievement
Given the magnitude of the recent recession, and the high-stakes testing the U.S. has implemented under the No Child Left Behind Act (NCLB), it is important to understand the effects of large-scale job losses on student achievement.