Tuesday, July 12, 2011

JEC HEARING: Manufacturing in the USA: Training America’s Workforce

"Manufacturing in the United States has changed dramatically over the last 60 years. Low-tech, labor-intensive goods such as apparel, shoes, sporting goods, and toys that were once made in America are now imported, while U.S. manufacturers export high-tech, capital-intensive goods to the rest of the world.

Computer-driven machinery has replaced routine labor in manufacturing. This has boosted productivity growth, averaging 2.9 percent a year. What took 1,000 workers to manufacture in 1950 now takes only 184 workers. Consequently, manufacturing jobs as a share of total non-farm jobs have declined from 30.6 percent in 1950 to 8.9 percent in 2010.

Six decades ago, a high school dropout with no special skills could get a job on an assembly line, work hard, and over time enter the middle class. Today, a job in manufacturing demands special skills and may even require a college degree.

The changing nature of manufacturing demonstrates the impor of job training for the success of both America’s manufacturers and their workers. Congress enacted the Workforce Investment Act in 1998 to consolidate the federal government’s fragmented job training system into a coherent one-stop system that could serve the needs of employers and workers....."

Vice Chairman of Joint Economic Committee
Rep. Kevin Brady's
Opening Statement

General Economics

Bloomberg | Crude Oil Falls for a Third Day on European Debt Concern, U.S. Stockpiles
Futures fell as much as 1.7 percent as soaring yields on Italian bonds heightened concern Europe’s third-largest economy won’t be able to finance its debt. U.S. gasoline supplies probably grew for the first time in four weeks, according to a Bloomberg News survey before a government report tomorrow.
Market Watch | U.S. May trade gap widens to $50.2 billion
The U.S. trade deficit jumped 15.1% in May to the highest level in almost three years, largely because of the increased cost of oil imports.
CNN: Money | Was the recession a good thing?
The Great Recession had many lasting negative effects -- high unemployment, falling home prices, stunted growth -- just to name a few. But the news isn't all bad.
Market Watch | Small businesses see large challenges
Small-business owners have a dim view of the future, according to a gauge of their optimism for June that stands “solidly in recession territory,” the National Federation of Independent Business reported Tuesday.

Econ Comments                                                                                                             
Washington Times | Clinton tells Congress to pass trade deals soon
Secretary of State Hillary Rodham Clinton on Tuesday urged Congress to pass three stalled trade deals before its summer recess, calling the agreements vital to U.S. economic and strategic interests.
Washington Times | OTOOLE: Fueling freedom
While the Interstate Highway System and most state highways were funded almost entirely out of road user fees, transit and cycling proponents think other people should pay for bike paths, rail lines and other facilities dedicated exclusively to their use.
Roll Call | Trade Agreements Hung Up on Spending to Train Workers
The trade fight itself is not free of its own partisan rancor as Members of Congress and the White House negotiate a deal to provide billions of dollars in federal benefits to people who lose jobs as a consequence of free trade. The talks have been further complicated by a disagreement in the Senate over parliamentary procedure for how that measure, known as Trade Adjustment Assistance, should be considered.
Market Watch | Economy will regain terra firma
The U.S. economy is wobbling, but should be able to regain its footing in the second half of the year, said economist Stu Hoffman, who won the Forecaster of the Month award from MarketWatch for having the most accurate forecasts in June.

AEI: American | Obama’s Stunning Admission
Just last month, Democrats were crowing about how they had used Rep. Paul Ryan’s Medicare plan to win a special election in New York. The Ryan plan, they said, was political manna from heaven that would help them win back a congressional majority.
Atlantic: McArdle | The Center on Budget and Policy Priorities Thinks We're Still in the Bush Era
Another day, another chart from the "non-partisan" Center on Budget and Policy Priorities on what "accounts" for the public debt. At some level, these exercises are silly: all prior legislation could be equally said to "account" for public debt, including, of course, Social Security and Medicare.
Calculated Risk | Trade Deficit increased sharply in May to $50.2 billion
The trade deficit with China increased to $24.96 billion, so once again the deficit is mostly oil and China.


Bloomberg | High-Speed Rewrite of Tax Code Falters as Lawmakers Bicker Over the Basics
The collapse of efforts to kick off a U.S. tax code overhaul through a debt-ceiling compromise demonstrates how difficult it will be for lawmakers to rewrite the nation’s revenue laws.
NY Times | Amazon Backs End to Online Sales Tax in California
Amazon said Monday that it would back a California ballot initiative that would roll back a new state law that forces more online retailers to collect sales tax.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Obama’s coal tax
New EPA rules mean 1.4 million fewer jobs, higher electric bills.
Daily Caller | I’d replace the income tax with the Fair Tax
Paying taxes is a fact of life, because there are certain things that our federal government must provide, as enumerated in the Constitution. But paying taxes does not have to be unfair, burdensome and costly. Our current system of taxation is all three.
Cato Institute | Patriotic Taxation or Unpatriotic Redistribution?
A more peculiar advocate for higher taxes is "Patriotic Millionaires for Fiscal Strength." The group has a website and its members wrote an open leader urging the president and congressional leaders "to put our country ahead of politics." How? By increasing taxes on incomes greater than a million dollars.

Health Care

National Journal | Report: Obama Fears Social Security Checks May Halt
Lawmakers from both parties are using that deadline to work out a broader package on long-term deficit reduction, with Republicans looking to cut trillions of dollars in federal spending and Democrats pushing for both spending cuts and increased revenue through higher taxes.
Politico | Health reform rule unveiled
The administration released a proposed regulation Monday that sets the standards for new marketplaces — health insurance exchanges — that are supposed to launch in every state by 2014. They’re supposed to be where individuals and small businesses can browse a wide selection of easily comparable health plans and pick the one that’s best for them.
National Journal | Feds Exchange Rules Give States Wiggle Room
The federal government released the first details on Monday of what state insurance exchanges might look like in 2014, giving states considerable flexibility to choose which insurance plans will qualify for an exchange.

Econ Comments                                                                                                             
AEI | Triggering a Policy Response to the Medicare Funding Warning
Because of Medicare's complicated structure, it can be difficult to ascertain fully the program's financial status. The date at which the Hospital Insurance (HI, or Part A) trust fund is exhausted is one easily-understood indicator but it focuses on only a portion of Medicare that accounts for less than half of program spending.
Cato @ Liberty | O’s 159th Report on Medicare/Medicaid Fraud Finds Anti-Fraud Measures ‘Inadequate’
Today, the Government Accountability Office will release a new report on fraud in Medicare and Medicaid. By my count, it is the 159th report the GAO has issued on fraud in these programs since 1986.

Heritage Foundation | Less Than Meets the Eye: The Obamacare Exchange Regulations
Yesterday, the Department of Health and Human Services (HHS) released its proposed regulations for the Obamacare version of health insurance exchanges. State lawmakers are a key audience for these regulations, which is why HHS wrapped its announcement in talk of “state flexibility.”


Market Watch | Bank of Japan holds steady, raises economic view
The Bank of Japan on Tuesday maintained its policy interest-rate range, as widely expected, and was more upbeat in its overall economic assessment — though its policy board is keeping a wary eye on developments in Europe and the U.S.
Bloomberg | China Money Supply Growth, New Lending Rebound Even After Cooling Measures
New loans were 633.9 billion yuan ($98 billion), compared with the 622.5 billion yuan median estimate in a Bloomberg News survey of economists. M2, the broadest measure of money supply, rose by a more-than-forecast 15.9 percent, and foreign-exchange reserves climbed to $3.2 trillion.
Fox Business | Fed Officials See Slower Economic Recovery
Some Federal Reserve officials are ready to provide more monetary policy easing if the recovery is too sluggish to cut the lofty U.S. unemployment rate and if inflation eases as expected, minutes of their June meeting released on Tuesday show.

Econ Comments                                                                                                             
Minyanville | Fed Can Manipulate Markets, But Can't Reverse Economy
We cannot cure the problem of too much borrowing and spending by borrowing more and spending more.


MarketWatch | Obama, Congress haggle over debt deal
Parties divided on taxes; president says it’s time to ‘eat our peas’.
Fox Business | U.S. Debt Debate: Where We Stand
Despite the heated rhetoric, investors still assume that Washington will ultimately avert a crisis. But the impasse has investors' attention, and as the clock ticks toward Aug. 2 with no deal in sight, it is contributing to a broadly negative sentiment on Wall Street. 
CNN Money | Geithner: We need a deal by next week
Treasury Secretary Tim Geithner said Tuesday that he wants a deal to raise the debt ceiling and cut the budget by the end of this week -- or next week at the latest -- to give Congress enough time to turn the deal into law.

Econ Comments                                                                                                             
Washington Times | RAHN: Yes, we can - cut spending
Obama’s government bloat fails international test.
WSJ | Conrad Wants $2 Trillion
Senate Democrats see Obama's taxes and raise. That's a lot of 'peas.'
Washington Times | FEULNER: Doing more by doing less
Uncle Sam’s only effective move is out of the way.
RCM | Get Over It, We've Already Defaulted
There is traditional default whereby creditors experience a "haircut" or a delay in payments, and then there's a stealth default. Looked at in terms of stealth defaults, all those countries, including the U.S., have most definitely stiffed creditors over the years.
Washington Times | MILLER: Debt talk debacle
Lasting fiscal reform is being derailed by political posturing.
AEI: The American | How the Debt Tussle Can Help Move Toward a Flat Tax
Setting a fixed-percentage tax credit for itemized deductions would signal Republican sensitivity to fairness, appeal to redistributionist Democrats, and create another precedent for a flat tax.

NRO: The Corner | Is a Budget Deal Impossible?
A pretty interesting reminder, especially considering how much lower our debt was back then and how much farther away the explosion of autopilot programs like Social Security, Medicare, and Medicaid was.
EconLog | The Case for Fiscal Expansion
They will throw around terms like "zero bound" or "liquidity trap," but I doubt that even Paul Krugman is prepared to commit himself to the proposition that the Fed lacks the means to cause inflation if it wants.
NRO: The Corner | Are We Misquoting S&P?
If I am reading correctly, the technical default occurs after a failure to pay interests on our debt, not all of our bills.
Calculated Risk | BLS: Job Openings unchanged in May
In general job openings (yellow) has been trending up - and job openings increased slightly again in May - and are up about 7% year-over-year compared to May 2010.


Econ Comments                                                                                                             
CNN Money | Immelt: Businesses must do more on jobs
The head of General Electric told a jobs summit at the U.S. Chamber of Commerce Monday that businesses needed to take the lead on job creation.
CNN Money | The U.S. has waged a war on jobs
As long as Wall Street and venture capitalists continue to reward corporations for off-shoring and downsizing, we continue to play the fool when we express shock that the U.S. economy is not creating many new jobs.

Heritage Foundation | EPA Regulations Will Kill Coal, Jobs in Texas
The Environmental Protection Agency (EPA) wants to ensure that everything is bigger in Texas, including the state’s electricity rates and unemployment lines.