News
WSJ | China Boosts Lead in Global Exports
More than a year after China started letting its currency climb against the dollar, the nation is a bigger force in exports than ever, adding to its dominance as a trading power and complicating efforts by other nations to wrest away manufacturing jobs.
Market Watch | China GDP growth may slow on global weakness
China’s economic growth rate is decelerating, data due out later this week is expected to show, though analysts said the moderation is likely a part of a healthy cooling rather than a hard landing with destructive consequences.
WSJ | A Falling Dollar Pushes Exports, Draws Risks
Since hitting a peak in February 2002, the dollar is down about 28%, according to an inflation-adjusted index from the Federal Reserve based on the values of a wide variety of other currencies. That has helped boost U.S. exports—the latest international trade figures, for May, are due out Tuesday—and raised the dollar value of U.S. corporations' overseas earnings.
CNN: Money | China's trade gap widens
China recorded a $22.3 billion surplus in June, up from a $13.05 billion surplus in May, China's General Administration of Customs said Saturday. A trade surplus occurs when a country's exports outnumber its imports.
Econ Comments
Barron's | Beneficiaries of Trade: You and Me
America isn't the loser when imports exceed exports, despite popular perceptions to the contrary.
Financial Times | Don’t blame Moody’s for a messy euro crisis
The most interesting aspect of Moody’s rating was not the downgrade itself, but the reasoning. Moody’s expects that Portugal, like Greece, will need another loan. Moody’s also expects that the politics will be just as messy.
Barron's | Horror Story
For decades, the rise in the cost of living has been greater than official measurements indicate—but Washington is determined to ignore that fact.
Washington Times | GHEI: The unstimulated economy
Presidential spending binge brings more unemployment, not less.
Politico | Dodd-Frank blocks road to recovery
The Dodd-Frank Act has been described by supporters and opponents alike as the most sweeping reform of the financial services industry since the Great Depression. It can also be described as a story of the “good, the bad and the ugly.”
Blogs
Heritage Foundry | EPA Set to Implement Economically Ruinous Regulations on Power Plants
The Environmental Protection Agency announced Thursday that it has finalized a pair of new regulations on power plants expected to produce massive economic damage and unemployment in coming years. The regulations aim to reduce pollution in down-wind states, and replace similar regulations created by George Bush’s EPA in 2005 and struck down by a federal court.
Calculated Risk | Unofficial Problem Bank list increases to 1,004 Institutions
this is an unofficial list of Problem Banks compiled only from public sources. This post includes an update to stress rates at the state level .
Heritage Foundation | President Obama Admits Welfare Encourages Dependency
Of the more than 70 welfare programs in operation today, only one requires able-bodied recipients to work or look for work. The President’s suggestion that today “there are work obligations attached to welfare” is vastly out of touch with what is really taking place.
WSJ: Real Time Economics | Consumer Borrowing Jumped in May
U.S. consumer borrowing rose in May as credit-card debt climbed for only the second time since the financial crisis flared, sounding a rare positive note for an economy that is barely generating any jobs.
Calculated Risk | Schedule for Week of July 10th
Several key reports will be released this week: U.S. Trade, Retail Sales, Industrial Production, and the Consumer Price Index (CPI). In addition, Fed Chairman Ben Bernanke will present his semiannual Monetary Policy Report to Congress.
Heritage Foundation | From Hope to Defeatism: White House Changes Message on Economy
June’s job numbers– 9.2 percent unemployment and the creation of only 18,000 new jobs — has brought a fundamental shift in the White House’s message on the economy. The Heritage Foundation’s Michael Franc sums it up: “Bye-bye, hope and change.
Reports
RCM: Wells Fargo | Weekly Economic & Financial Commentary
This week’s employment report is a challenge to our view that the economy is leaving the spring slowdown behind and moving into a period of trend-like growth of 3 percent with moderate job growth as well.
Monday, July 11, 2011
Budget
News
Washington Times | U.S. debt default could be ‘real nasty’
The International Monetary Fund’s new chief foresees “real nasty consequences” for the U.S. and global economies if the U.S. fails to raise its borrowing limit.
FT | EU stance shifts on Greece default
European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing.
WSJ | Deficit Negotiators Hit Reset
Divisions on Spending Cuts and Tax Increases Remain as Debt-Limit Clock Ticks.
NY Times | Italian Debt Adds to Fears in Euro Zone
Top European officials planned to meet on Monday to wrestle with threats to the currency union as fears mounted that Italy could become a victim of the debt crisis even as discussions stalled over a second bailout for Greece.
CNN Money | Minnesota shutdown: No resolution in sight
More than a week after Minnesota shuttered all but essential government services, there's no end in sight to the budget impasse.
Econ Comments
National Journal | Why This Default Debate Is Different
Wall Street’s warnings will carry far less weight than they did in the ‘90s.
Washington Times | DONATELLI: Federal budget can be balanced with spending cuts
Republican-led states already have succeeded with no new taxes.
FT | Obama’s failed debt ceiling gamble
Amid disturbing signs that the US recovery has stalled, President Barack Obama took a huge gamble in his approach to the debt-ceiling talks last week.
NY Times | Choices for Greece, All of Them Daunting
WITHOUT outside help, Greece is probably insolvent right now. In evaluating the country’s prospects, it’s worth asking what it would take for Greece to pay all of its bills and what kind of damage we might expect along the way.
AEI | Not Taking Other People's Money
The problem with socialists, according to Margaret Thatcher, is that "they always run out of other people's money." We haven't hit that point just yet, but we have hit our nation's legal credit limit of $14.3 trillion. To avoid defaulting on our loans, policymakers must raise that limit.
Minyanville | Why Congress Won't Lift the Debt Ceiling By August 2
The stakes are huge, as everyone knows. So why isn't it going to happen? Here, the four important constituencies in play.
Blogs
Atlantic: McArdle | Hoover Was No Budget Cutter
According to the historical tables of the Office of Management and Budget, spending in 1929 was $3.1 billion, up from $2.9 billion the year before. In 1930 it was $3.3 billion. In 1931, Hoover raised spending to $3.6 billion. And in 1932, he opened the taps to $4.7 billion, where it basically stayed into 1933 (most of which was a Hoover budget).
Atlantic: McArdle | Why the 14th Amendment Doesn't Solve the Debt Ceiling Problem
I've always thought this was a long-shot--even if you think the president does have this authority, actually carrying through on it would trigger a pretty ugly constitutional crisis, as the House would almost certainly impeach the president.
Reports
CRS | A Balanced Budget Constitutional Amendment: Background and Congressional Options
One of the most persistent political issues facing Congress in recent decades is whether to require that the budget of the United States be in balance. Although a balanced federal budget has long been held as a political ideal, the accumulation of large deficits in recent years has heightened concern that some action to require a balance between revenues and expenditures may be necessary.
Washington Times | U.S. debt default could be ‘real nasty’
The International Monetary Fund’s new chief foresees “real nasty consequences” for the U.S. and global economies if the U.S. fails to raise its borrowing limit.
FT | EU stance shifts on Greece default
European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing.
WSJ | Deficit Negotiators Hit Reset
Divisions on Spending Cuts and Tax Increases Remain as Debt-Limit Clock Ticks.
NY Times | Italian Debt Adds to Fears in Euro Zone
Top European officials planned to meet on Monday to wrestle with threats to the currency union as fears mounted that Italy could become a victim of the debt crisis even as discussions stalled over a second bailout for Greece.
CNN Money | Minnesota shutdown: No resolution in sight
More than a week after Minnesota shuttered all but essential government services, there's no end in sight to the budget impasse.
Econ Comments
National Journal | Why This Default Debate Is Different
Wall Street’s warnings will carry far less weight than they did in the ‘90s.
Washington Times | DONATELLI: Federal budget can be balanced with spending cuts
Republican-led states already have succeeded with no new taxes.
FT | Obama’s failed debt ceiling gamble
Amid disturbing signs that the US recovery has stalled, President Barack Obama took a huge gamble in his approach to the debt-ceiling talks last week.
NY Times | Choices for Greece, All of Them Daunting
WITHOUT outside help, Greece is probably insolvent right now. In evaluating the country’s prospects, it’s worth asking what it would take for Greece to pay all of its bills and what kind of damage we might expect along the way.
AEI | Not Taking Other People's Money
The problem with socialists, according to Margaret Thatcher, is that "they always run out of other people's money." We haven't hit that point just yet, but we have hit our nation's legal credit limit of $14.3 trillion. To avoid defaulting on our loans, policymakers must raise that limit.
Minyanville | Why Congress Won't Lift the Debt Ceiling By August 2
The stakes are huge, as everyone knows. So why isn't it going to happen? Here, the four important constituencies in play.
Blogs
Atlantic: McArdle | Hoover Was No Budget Cutter
According to the historical tables of the Office of Management and Budget, spending in 1929 was $3.1 billion, up from $2.9 billion the year before. In 1930 it was $3.3 billion. In 1931, Hoover raised spending to $3.6 billion. And in 1932, he opened the taps to $4.7 billion, where it basically stayed into 1933 (most of which was a Hoover budget).
Atlantic: McArdle | Why the 14th Amendment Doesn't Solve the Debt Ceiling Problem
I've always thought this was a long-shot--even if you think the president does have this authority, actually carrying through on it would trigger a pretty ugly constitutional crisis, as the House would almost certainly impeach the president.
Reports
CRS | A Balanced Budget Constitutional Amendment: Background and Congressional Options
One of the most persistent political issues facing Congress in recent decades is whether to require that the budget of the United States be in balance. Although a balanced federal budget has long been held as a political ideal, the accumulation of large deficits in recent years has heightened concern that some action to require a balance between revenues and expenditures may be necessary.
Health Care
News
National Journal | Sebelius To Release Rules For Health Exchanges
Today, we will be releasing draft proposals that set minimum requirements for exchanges while giving states the flexibility they need to design an exchange that works for them," Sebelius writes in a blog for the Huffington Post.
National Journal | Feds Introduce State Medicaid Saving Plans
The federal government, in an effort to help states reduce Medicaid costs, announced two new ways for states to pay for people enrolled in both Medicare and Medicaid.
Politico | Democrats split on Independent Payment Advisory Board
For the past year, Democrats have been mostly united on health care issues, especially in the face of Republican efforts to repeal President Barack Obama’s landmark law. But this week, House Republicans plan to fire their opening salvos against the Independent Payment Advisory Board — an issue on which Democrats are far from united.
Econ Comments
WSJ | Why Medicare Patients See the Doctor Too Much
Relying on unelected bureaucrats, such as ObamaCare's Independent Payment Advisory Board, to ratchet down Medicare price controls won't control overutilization.
Cato Institute | Health Care Ruling Was "Constitutionally Corrupt"
Perhaps most surprising was Judge Jeffrey Sutton's concurrence upholding the mandate. A former clerk to Justice Antonin Scalia who was appointed to the bench by President George W. Bush, Sutton is considered one of the leading conservative jurists in the country. Many are hailing Sutton's opinion as an admirable example of non-partisan judicial reasoning because of this reputation.
National Journal | Sebelius To Release Rules For Health Exchanges
Today, we will be releasing draft proposals that set minimum requirements for exchanges while giving states the flexibility they need to design an exchange that works for them," Sebelius writes in a blog for the Huffington Post.
National Journal | Feds Introduce State Medicaid Saving Plans
The federal government, in an effort to help states reduce Medicaid costs, announced two new ways for states to pay for people enrolled in both Medicare and Medicaid.
Politico | Democrats split on Independent Payment Advisory Board
For the past year, Democrats have been mostly united on health care issues, especially in the face of Republican efforts to repeal President Barack Obama’s landmark law. But this week, House Republicans plan to fire their opening salvos against the Independent Payment Advisory Board — an issue on which Democrats are far from united.
Econ Comments
WSJ | Why Medicare Patients See the Doctor Too Much
Relying on unelected bureaucrats, such as ObamaCare's Independent Payment Advisory Board, to ratchet down Medicare price controls won't control overutilization.
Cato Institute | Health Care Ruling Was "Constitutionally Corrupt"
Perhaps most surprising was Judge Jeffrey Sutton's concurrence upholding the mandate. A former clerk to Justice Antonin Scalia who was appointed to the bench by President George W. Bush, Sutton is considered one of the leading conservative jurists in the country. Many are hailing Sutton's opinion as an admirable example of non-partisan judicial reasoning because of this reputation.
Monetary
News
Bloomberg | Fed on Hold Longest Since 1940s
Slower expansion means the Fed is unlikely to tighten credit until June 2012, the longest static period since the government forced the central bank to buy Treasuries during the 1940s.
Market Watch | Oil futures drop as U.S. dollar gains
Crude-oil futures dropped Monday, as a stronger dollar and worries about the strength of the U.S. recovery dampened oil’s investment appeal.
Bloomberg | Gold Gains to Two-Week High as Debt, Growth Concerns Spur Investor Demand
Gold climbed for a fifth day in New York, rising to a two-week high, as concerns over Europe’s debt crisis and slowing economic growth spurred demand for the metal as a protection of wealth.
CNN: Money | Pork prices drive Chinese inflation
China's Consumer Price Index -- a broad measure of prices consumers pay for food, housing, clothing and other common expenses -- showed prices rose 6.4% over the last 12 months ending in June, China's National Bureau of Statistics reported Saturday.
Fox News | Talks: Inflation change could cut Social Security
Once considered untouchable, Social Security is now in play in the debt-ceiling negotiations. And that could mean higher income taxes for many U.S. families in addition to shaved benefits for tens of millions of retirees as they age.
Bloomberg | Fed on Hold Longest Since 1940s
Slower expansion means the Fed is unlikely to tighten credit until June 2012, the longest static period since the government forced the central bank to buy Treasuries during the 1940s.
Market Watch | Oil futures drop as U.S. dollar gains
Crude-oil futures dropped Monday, as a stronger dollar and worries about the strength of the U.S. recovery dampened oil’s investment appeal.
Bloomberg | Gold Gains to Two-Week High as Debt, Growth Concerns Spur Investor Demand
Gold climbed for a fifth day in New York, rising to a two-week high, as concerns over Europe’s debt crisis and slowing economic growth spurred demand for the metal as a protection of wealth.
CNN: Money | Pork prices drive Chinese inflation
China's Consumer Price Index -- a broad measure of prices consumers pay for food, housing, clothing and other common expenses -- showed prices rose 6.4% over the last 12 months ending in June, China's National Bureau of Statistics reported Saturday.
Fox News | Talks: Inflation change could cut Social Security
Once considered untouchable, Social Security is now in play in the debt-ceiling negotiations. And that could mean higher income taxes for many U.S. families in addition to shaved benefits for tens of millions of retirees as they age.
Employment
News
WSJ | Little Hiring Seen by Small Business
The U.S. labor market could stay sluggish for a while, with small-business executives reluctant to hire amid the murky economic outlook.
CNN Money | Wages fall in sagging jobs market
Workers made less per week in June than anytime over the past 18 months, when adjusted for inflation.
WSJ | Worries Grow Over Jobs
Stocks Drop as Unemployment Rate Climbs to 9.2%; Private-Sector Hiring Sags.
CNN Money | Health care jobs a bright spot for hiring
As the pace of hiring slows and job opportunities dry up, one industry will remain the rare bright spot in an otherwise dismal job market: health care.
Econ Comments
Washington Times | GHEI: The unstimulated economy
Presidential spending binge brings more unemployment, not less.
Blogs
Heritage Foundation | Questions and Answers on America’s Unemployment
We asked The Heritage Foundation’s William Beach, Director of the Center for Data Analysis, to answer some questions about America’s economy and unemployment following the Department of Labor’s release of the June 2011 payroll report.
WSJ: Real Time Economics | Without Dropouts, Jobless Rate Would Be Over 11%
The unemployment rate increased to 9.2% in June, the Labor Department reported, but if the recession hadn’t pushed so many people out of the labor market it would have been much worse.
Political Calculations | June 2011 Jobs: Worse Than You've Heard
The surprising exception is the teen employment level, as June 2011 saw 59,000 more individuals between the ages of 16 and 19 enter the U.S. work force.
WSJ: Real Time Economics | Temp Help Shows Worrying Downward Trend
Temp jobs were down 12,000 in June and have dropped for three straight months — by 19,000 in all since April, according to the Labor Department.
Marginal Revolution | One reason why joblessness is so bad and so persistent
There is a new Kaufmann study by E.J. Reedy and Bob Litan and it echoes some of the themes raised in TGS...
WSJ: Real Time Economics | Economists React: Jobs Report an ‘Unmitigated Disaster’
Economists and others weigh in on the tepid rise in payrolls amid a increase in the unemployment rate.
Calculated Risk | How many jobs are needed over the next year to keep the unemployment rate steady?
Dean Baker writes: We Need 90,000 Jobs Per Month to Keep Pace With the Growth of the Population
Atlantic: McArdle | Why Unemployment Matters
Long-term unemployment is expecially bad--and that's what we're suffering from. It has been at unprecedented highs in this recession.
Daily Capitalist | Unemployment: It’s More Than A “Soft Patch”
The fear brought about by today’s employment report is almost palpable. Reports express “surprise,” ”shock,” and “disappointment” at the news that employers only added a net 18,000 jobs in June, the slowest pace in nine months, and that the unemployment rate increased to 9.2%, the highest level since December 2010.
Atlantic: McArdle | Jobs Report: Dismal News for the Economy, and the Administration
The scales don't exactly compare, but as you can see, by this point in his presidency (mid-1983) Reagan was starting to see a sharp decline. For Obama, by contrast, the numbers seem to be moving in the wrong direction.
Mercatus Center: Neighborhood Effects | “Where are the jobs from the Bush tax cuts?”
Though he almost certainly didn’t intend it this way, Senator Franken’s observation that the Bush years were not massive growth years actually bolsters the case for both spending cuts AND tax cuts.
EconLog | The Great Factor-Price Equalization
Once again, I want to point out that low job creation and stagnation are not the same thing.
WSJ | Little Hiring Seen by Small Business
The U.S. labor market could stay sluggish for a while, with small-business executives reluctant to hire amid the murky economic outlook.
CNN Money | Wages fall in sagging jobs market
Workers made less per week in June than anytime over the past 18 months, when adjusted for inflation.
WSJ | Worries Grow Over Jobs
Stocks Drop as Unemployment Rate Climbs to 9.2%; Private-Sector Hiring Sags.
CNN Money | Health care jobs a bright spot for hiring
As the pace of hiring slows and job opportunities dry up, one industry will remain the rare bright spot in an otherwise dismal job market: health care.
Econ Comments
Washington Times | GHEI: The unstimulated economy
Presidential spending binge brings more unemployment, not less.
Blogs
Heritage Foundation | Questions and Answers on America’s Unemployment
We asked The Heritage Foundation’s William Beach, Director of the Center for Data Analysis, to answer some questions about America’s economy and unemployment following the Department of Labor’s release of the June 2011 payroll report.
WSJ: Real Time Economics | Without Dropouts, Jobless Rate Would Be Over 11%
The unemployment rate increased to 9.2% in June, the Labor Department reported, but if the recession hadn’t pushed so many people out of the labor market it would have been much worse.
Political Calculations | June 2011 Jobs: Worse Than You've Heard
The surprising exception is the teen employment level, as June 2011 saw 59,000 more individuals between the ages of 16 and 19 enter the U.S. work force.
WSJ: Real Time Economics | Temp Help Shows Worrying Downward Trend
Temp jobs were down 12,000 in June and have dropped for three straight months — by 19,000 in all since April, according to the Labor Department.
Marginal Revolution | One reason why joblessness is so bad and so persistent
There is a new Kaufmann study by E.J. Reedy and Bob Litan and it echoes some of the themes raised in TGS...
WSJ: Real Time Economics | Economists React: Jobs Report an ‘Unmitigated Disaster’
Economists and others weigh in on the tepid rise in payrolls amid a increase in the unemployment rate.
Calculated Risk | How many jobs are needed over the next year to keep the unemployment rate steady?
Dean Baker writes: We Need 90,000 Jobs Per Month to Keep Pace With the Growth of the Population
Atlantic: McArdle | Why Unemployment Matters
Long-term unemployment is expecially bad--and that's what we're suffering from. It has been at unprecedented highs in this recession.
Daily Capitalist | Unemployment: It’s More Than A “Soft Patch”
The fear brought about by today’s employment report is almost palpable. Reports express “surprise,” ”shock,” and “disappointment” at the news that employers only added a net 18,000 jobs in June, the slowest pace in nine months, and that the unemployment rate increased to 9.2%, the highest level since December 2010.
Atlantic: McArdle | Jobs Report: Dismal News for the Economy, and the Administration
The scales don't exactly compare, but as you can see, by this point in his presidency (mid-1983) Reagan was starting to see a sharp decline. For Obama, by contrast, the numbers seem to be moving in the wrong direction.
Mercatus Center: Neighborhood Effects | “Where are the jobs from the Bush tax cuts?”
Though he almost certainly didn’t intend it this way, Senator Franken’s observation that the Bush years were not massive growth years actually bolsters the case for both spending cuts AND tax cuts.
EconLog | The Great Factor-Price Equalization
Once again, I want to point out that low job creation and stagnation are not the same thing.
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