Wednesday, July 13, 2011

General Economics

Market Watch | Corn up 4% on lower-than-expected ending stocks
Corn futures climbed 4% Tuesday to mark their highest closing level in nearly three weeks after the U.S. Department of Agriculture predicted lower-than-expected corn ending stocks for the current marketing year and next.
Bloomberg | Treasuries Decline Before U.S. Auctions $21 Billion in 10-Year Securities
U.S. debt pared losses as Federal Reserve Chairman Ben S. Bernanke told Congress the central bank is prepared to take additional action if the economy appears to be in danger of stalling. Ten-year yields touched 2.81 percent yesterday, the lowest level this year, as Treasuries rallied amid concern the sovereign-debt crisis in Europe was spreading.
Market Watch | Import prices drop 0.5% in June
Prices paid for goods imported into the U.S. fell in June for the first time in a year, largely because of declining fuel costs, according to government data.
CNBC | Can Corporate Mergers Help Save the Weak US Economy?
The plodding US economy had one significant bright spot in the first half of the year—a bustling mergers and acquisitions market that stands a good chance of continuing through the second half.
National Journal | Report Calls for Overhaul of Nuclear Safety Rules
The “patchwork” of safety rules governing U.S. nuclear power plants is in need of a comprehensive overhaul, according to a report commissioned by the Nuclear Regulatory Commission and sent to the agency’s five commissioners on Tuesday.
Market Watch | China economic growth slows to 9.5%
China’s economy expanded a fraction faster than expected in the April-to-June quarter, while other data released Wednesday suggested domestic conditions remain relatively upbeat, even as concerns spread over the resilience of the global economy.

Econ Comments                                                                                                             
Daily Caller | Our economy needs small businesses, and small businesses need regulatory reform
Small businesses are key to getting our economy back on track, but they bear the brunt of the increasing cost of regulation.
Politcio | Big government is not way to stronger economy
California demonstrates that even one of the world’s largest economies can reach a tipping point — where the disincentives for economic growth and job creation overwhelm even extraordinary human talent and natural resources.
NYT | Banking on the Future
President Obama has proposed a $30 billion infrastructure bank that, unlike the Senate proposal, would not necessarily sustain itself over time. His proposal is tied to the reauthorization of federal highway transportation money and is not, in my view, as far-reaching or well designed as the Senate proposal.

Heritage Foundation | Youth Hardest Hit in Obama Economy
Whom has the recession hurt the most? There is no easy answer to that question—job opportunities have diminished for every ethnic and demographic group. But one of the worst hit groups has attracted little media attention: the youth. Younger Americans overwhelmingly voted for Obama in 2008, but the Obama economy has not treated them well:
Financial Times | Wealth no longer wilting, just tilting
Here are a few slides, charts and graphs that piqued our interest from the Boston Consulting Group’s latest annual wealth report — see the press release if you just want the main points.

Heritage Foundation | Free the Housing Finance Market from Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac—the government-sponsored mortgage giants—must be shut down. Both entities distort the market by issuing mortgage-backed securities with subsidized government guarantees that the mortgages will be repaid. If such guarantees are necessary, they should be priced and issued by the private sector, not by the state.
RCM: Wells Fargo | Trade Deficit Widens Sharply on Jump in Crude Oil Imports
The trade deficit widened sharply in May as crude oil imports jumped on higher prices and volume. Exports fell on a big decline in industrial supplies demand. Both exports and imports of autos rebounded.


Econ Comments                                                                                                             
Washington Times | FOSTER: Economy needs tax reform, not tax hikes
President Obama’s repeated harping on tax loopholes, real and imagined, as part of the debt-limit debate is cause for alarm and hope.
WSJ | Raise Revenues, Not Taxes
Legalizing Internet gambling and marijuana are two easy ways to cut the deficit.

Health Care

Fox News | Lawmakers Debate Cost-Effectiveness of Medicare
The new healthcare law seeks to cap future Medicare spending to a measure of inflation, but if it grows faster, something called the Independent Payment Advisory Board, or IPAB, is charged with finding savings.
National Journal | The Future of Medicine: The Doc-in-a-Phone
The thrilling news is that the health care field is teeming with possibility. In the developing world, seemingly simple oral-rehydration therapy for children is an innovation that saves lives and money.
WSJ | Most Hospitals Face Drug Shortages
The vast majority of U.S. hospitals have restricted the use of life-saving chemotherapy drugs and other critical-care medications in the past six months to cope with unprecedented shortages, according to a survey released Tuesday.

Econ Comments                                                                                                             
AEI | IPAB: The Controversial Consequences for Medicare and Seniors
Changes to the way Medicare pays for and covers medical services affect too many people in significant ways to be made behind the closed doors of an insulated committee. How Medicare prices medical products and services has sweeping implications across the entire private marketplace.
WSJ | Will Washington Find the Cure for Cancer?
Americans generally agree that our economic future depends on nurturing new ideas. "The first step in winning the future," as President Obama said in his 2011 State of the Union speech, "is encouraging American innovation." Unfortunately, the actions of the administration and the proposals of some in Congress may significantly impede innovation in my industry—biopharmaceuticals—for the foreseeable future.

Heritage Foundation | Paul Ryan Schools HHS Secretary on Patient-Centered Medicare Reform
As Budget Committee Chairman Paul Ryan (R-WI) pointed out during the hearing, there’s a better way to solve Medicare’s financial crisis and improve the quality of the program for those its serves at the same time—without government rationing, indirect or otherwise. As he explains,
AEI: American | Healthcare Jobs Keep a Listing Ship Afloat
In every decade since the 1930s, total health services employment has increased two to three times as fast as the number of workers in the general economy or private business. Since 1930, if health services employment had increased only as fast as in the rest of the economy, the health sector would have employed nearly 11 million fewer workers in 2009. That’s the equivalent of one-twelfth of all non-farm employment in that year.


Market Watch | Fed decides how, not when, to exit easy conditions
The Federal Reserve has basically decided how — if not when — it will exit its ultra-easy monetary policy, even as a minority of members think the next step may be to provide extra stimulus rather than remove it.
Market Watch | Gold rises to record on debt-crisis fears
Gold futures crowned a six-session winning streak with a nominal record Tuesday, overcoming a wobbly start with support from ongoing worries about the euro-zone debt crisis.
Source | Fed chairman Bernanke faces firestorm
"He's going to want to talk about economic outlook and they'll want to bring it back to debt ceiling debate, with both sides trying to score points on that about cutting deficits or raising taxes," said Mark Vitner, senior economist at Wells Fargo Securities.
Market Watch | Euro falls below $1.40; U.S. dollar index gains
The euro slid back under $1.40 Tuesday as a downgrade to Ireland’s credit ratings fed concerns over Europe’s debt woes, sending the U.S. dollar higher again.

Daily Capitalist | The Euro 1999 – 2012 R.I.P.
Contagion is the big fear in the euro zone. If Greece defaults on its sovereign obligations that lends credibility to an unwinding of the euro because German and French taxpayers will ultimately and reluctantly foot that bill.


National Journal | McConnell Fashions Escape for Republicans on Debt Ceiling
Complicated and elegant, in its own way, the plan would give Obama the power to raise the debt ceiling without congressional approval.
WSJ | Italy to Beef Up Austerity
ROME—Italy's economy minister Wednesday said the country's four-year fiscal plan will be made more stringent.
CNN Money | Big thinkers tackle the debt crisis
President Barack Obama's offer to reform federal tax policy would get a resounding thumbs-up from a number of the economic veterans who spoke at the 2011 Aspen Ideas Festival earlier this month.

Econ Comments                                                                                                             
WSJ | Debt-Limit Harakiri
If Mr. Obama insists on a tax increase, and Republicans won't vote for one, then what's the alternative to Mr. McConnell's maneuver?
WSJ | Budget Solution: Squeeze the Middle
...even if the plan that emerges shields the middle class—one rough definition of which is households between the lowest 40% and top 10% in income, or $33,500 to $163,200—they will surely be affected by spending or tax changes in some future round of deficit-cutting, budget analysts and economists agree.

The Economist: Free Exchange | My bills or yours?
Ireland, Greece, Portugal, Spain, and Italy don't get to make those choices for themselves. They have big debt loads and poor growth prospects, and there's absolutely nothing they can do to make dealing with the former easier by addressing the latter.
Heritage Foundation | America Treading Down Road to Serfdom with Big Spending
No country is immune to the dangers lurking from expanding government.
American: Enterprise Blog | Would Social Security Benefits Be Cut If the Debt Limit Is Not Increased?
First, recall that, unlike other federal programs, Social Security has its own dedicated tax that it doesn’t need to share. By itself, the payroll tax would cover around 93 percent of all Social Security payments.


National Journal | State Department Flexing Its Job-Creation Muscles
Land O’ Lakes President and CEO Chris Policinski said the concept for his favorite development project is simple: It starts with a cow.

Econ Comments                                                                                                             
Washington Times | SHAPIRO: Pass free-trade agreements to create U.S. jobs
Every day Congress does nothing, American workers and businesses lose.
IBD | War On Small Businesses Is Keeping Job Gains Low
Unemployment will likely stay surprisingly high because government is winning its long war of attrition against the primary driver of employment — small business.
Washington Times | EDITORIAL: Jobless summer continues
Reckless administration policies continue to depress the economic outlook.
WSJ | Where Have America's Jobs Gone?
Hiring at McDonald's; Wireless Networks' Job-Killing Effect; One Machine Doing The Work of Three
Washington Times | LAMBRO: Job growth decline sends Obama into orbit
President’s call for higher taxes not grounded in reality.

WSJ: Real Time Economics | Job Cutters May Reap What They Sow
...the U.S. economy as a whole suffers when weak labor markets hold back consumer spending. The same companies that are laying off workers today will soon wonder why they have no customers later on.
Political Calculations | Disappearing Teen Jobs and the Minimum Wage, Part 2
Is there really a connection between the rise of the minimum wage and the disappearance of teen jobs from the U.S. workforce over time?