Thursday, July 14, 2011

General Economics

News                                                                                                                             
Bloomberg | Retail Sales Stagnate on Unemployment
The 0.1 percent increase reported by the Commerce Department in Washington today compared with the median forecast of a 0.1 percent drop in the Bloomberg News survey of 80 economists. Excluding auto sales, purchases were little changed, the weakest performance since July 2010.
Market Watch | Foreclosures jump 4% in June: RealtyTrac
Foreclosure activity was down 29% in June compared with a year ago — the ninth month in a row that activity was down compared with data from a year before, RealtyTrac reported Thursday.
Bloomberg | Wholesale Prices in U.S. Fell 0.4% in June
U.S. wholesale costs dropped more than forecast in June, restrained by the biggest decrease in energy prices in two years.
WSJ | Gold Soars to Fresh Record
Economic and political tensions on both sides of the Atlantic have burnished gold's allure as a "safe-haven" investment, one that's likely to retain value while other asset classes have fluctuated wildly. Of particular concern for conservative investors are the actions of central banks as they try to balance the pursuit of economic growth against inflation fears.
NYT | China’s Economy Slowed a Bit in the 2nd Quarter
The Chinese economy expanded at an unexpectedly robust pace during the second quarter of this year, data released Wednesday showed, but a slowdown from the sizzling pace of previous quarters also underlined the challenges that now face policy makers in Beijing.

Econ Comments                                                                                                             
WSJ | The Disappearing Recovery
Barack Obama, John Boehner and Mitch McConnell have been performing an intricate scorpion dance over spending, taxes and the debt ceiling, premised on the belief that this is the deal that would ignite the recovery.
CNN: Money | Economy shows a pulse
The economy certainly isn't rolling, but it also isn't rolling over just yet.
AEI | A US Oil Boom--Unless Greens Abort It
Just a year after the BP oil spill, America is on the verge of a new golden era of oil exploration and production -- unless President Obama and his environmentalist friends get their way.
AEI | Should the Retirement Age be Raised?
Social Security’s retirement age should not be increased for anyone on the verge of retirement, but there’s a good case for doing so over coming decades, as the Baby Boomers retire and the population ages.
WSJ | The World Says China Will Overtake America
In the past decade, anti-Americanism grew around the world. This was in response to concerns about the unchecked global power of the U.S., when it invaded Iraq in the face of very wide international opposition. In sharp contrast, today America is seen as on its way to losing its status as the dominant global superpower.
WSJ | Blocking Freer Trade
Congress can advance trade agreements that will help businesses sell more American-made goods and services to Asia and South America, supporting thousands of jobs here at home. That could be done right now.

Blogs                                                                                                                             
The Economist | Is this the soft landing?
There has been a fair amount of anxiety over the state of the Chinese economy of late. News of unexpectedly large debt burdens among Chinese local governments generated a wave of concern that recent Chinese growth has been entirely unsustainable.

Reports                                                                                                                         
RCM: Wells Fargo | Import Prices Fall in June
Largely on the back of receding oil prices, total import prices fell 0.5 percent in June—the first monthly decline in a year. Export prices increased again, but monthly gains have moderated over the past few months.

Taxes

News                                                                                                                             
Politico | Bridging the no-new-taxes divide
A short list of revenue ideas, floated for weeks among congressional leaders and the White House, points to some wiggle room behind the black-and-white positions — and therefore, more leeway for a deal than the rhetoric suggests.

Econ Comments                                                                                                             
Politico | Public supports taxing the rich
With negotiations over the debt ceiling nearing a climax, the issues of revenue and taxes are at the forefront of the debate. President Barack Obama and most Democrats insist that revenue increases be included in the final deal, while most Republicans insist that all “tax increases” are off the table.
USA TODAY | Who exactly has the tax target on them?
But individuals earning $200,000, couples earning $250,000 and, to a lesser extent, all taxpayers could lose money in the deal as their tax rates rise or they move into higher tax brackets.

Health Care

News                                                                                                                             
National Journal | Georgia Governor Asks GOP to Spare Home Health Benefit
Georgia’s Republican governor is asking members of his party in Congress to ditch a cost-saving plan to require copayments for Medicare- and Medicaid-covered home health care services.
National Journal | AIDS Studies Raise Pressure for Funding
Two studies published on Wednesday show that giving uninfected men and women a once-a-day anti-AIDS pill can protect them from the virus that causes it—a finding sure to raise pressure on Congress and President Obama to do more to support government funding of the drugs.

Econ Comments                                                                                                             
Politcio | Dems can win on Medicare
As deficit talks come down to the wire, both parties have a lot to gain — and just as much to lose — when it comes to Medicare. Whoever wins the debate could very likely win the senior vote and the November 2012 elections along with it. The stakes could not be higher.

Blogs                                                                                                                             
Heritage Foundation | Can’t Teach an Old Dog New Tricks? Tell That to Current Medicare Recipients
Conservatives, including The Heritage Foundation, support reforming Medicare to provide seniors with a defined contribution to apply to the health care plan of their choice.
Heritage Foundation | Medicaid Blend Rate Misses the Point
Conservatives should beware of policies that simply meet a budget target number without considering whether the underlying policy changes move a program in the right direction. Case in point: the Medicaid blend rate, which would replace the various federal matching rates for different categories of enrollees with one unified federal rate.

Budget

News                                                                                                                             
Fox News | McConnell Proposal Sets Stage as Debt Meetings Continue
Congressional leaders will again meet with the president at the White House on Wednesday, marking the fourth meeting in the last four days in which they try to hammer out a large-scale deal to cut the federal budget and raise the nation’s debt ceiling.

Econ Comments                                                                                                             
WSJ | Budget Shell Games Are Contrary to Law
Congressional rules require public proposals and specific numbers that can be openly debated.
Washington Times | BROUN: Lowering the debt ceiling
Ending higher spending means doing the unthinkable.
AEI: The American | The Government’s Four-Decade Financial Experiment
Although agencies are not ‘officially government debt,’ they undoubtedly increase the required interest rates on Treasury securities, and thus increase the federal deficit.
Bloomberg | Reinhart, Rogoff: Economy Can’t Grow With Debt
As public debt in advanced countries reaches levels not seen since the end of World War II, there is considerable debate about the urgency of taming deficits with the aim of stabilizing and ultimately reducing debt as a percentage of gross domestic product.
AEI: The American | Yes, You Really Can Cut Your Way to Prosperity
The literature is clear: spending cuts, not tax increases, are more likely to succeed in reducing deficits and debt and are more friendly to economic growth.
RCM | The Virtues Of a Balanced Budget Amendment
Moody's threatened to downgrade American debt on Wednesday, as Congress appears unable to decide on a package of spending cuts and tax reform in exchange for raising the debt ceiling. In Europe, Italy and Spain are on the cusp of joining Greece as beggars for bailouts.

Blogs                                                                                                                             
Cato@Liberty | New Study from Swedish Economists Allows Us to Quantify the Cost of the Bush-Obama Spending Binge
The United States has been on a decade-long spending binge. Thanks to the profligate policies of both Bush and Obama, the burden of federal spending has climbed to about 25 percent of economic output, up from 18.2 percent of GDP when Bill Clinton left office.
Greg Mankiw's Blog | Why there is no budget deal
Keith Hennessey says that the reason Republicans are rejecting the President's budget proposal is that it is distinctly to the left of the one recommended by the bipartisan Bowles-Simpson commission.
NRO: The Corner | The President Needs to Stop Scaring Seniors
For a while now, President Obama has been suggesting that if Treasury were to prioritize payments in order to not default on the debt, it might do so on the backs of seniors by not paying their Social Security checks. I find this particularly bothersome.

Monetary

News                                                                                                                             
Bloomberg | India’s Inflation Accelerates to 9.44%, Adding to Interest-Rate Pressure
India’s inflation accelerated, sustaining pressure on the central bank to tighten monetary policy this month, even as price gains that were less than economists estimated boosted optimism the longest stretch of interest-rate increases in a decade is nearing an end.
Fox Business |
Producer Prices Post Steepest Drop Since February 2010

The Producer Price Index slumped 0.4 percent, twice as fast as expected, following a 0.2 percent rise in May, Labor Department data Thursday showed. Gasoline prices slumped 4.7 percent, and residential electric power costs declined a record 2 percent.
Market Watch | In China, interest follows inflation
China’s central bank announced the third interest rate hike of the year, three days after the National Bureau of Statistics released the consumer price index (CPI) figures for June which rose 6.4% year-on–year — a three-year high.
Bloomberg | Dollar Index Declines on Fed Stimulus Signal, Moody’s U.S. Credit Review
The Dollar Index declined for a third day after Federal Reserve Chairman Ben S. Bernanke said the central bank is prepared to take additional action to boost the economy.
CNBC | Don’t Fight the Fed' Has Worked for 20 Years: Analyst
However, at that time Ben Bernanke and his disciples started talking QE2, which was actually implemented a couple of months later. Inflation expectations rose, money moved into more risky assets in a rarely seen 'risk-on' move and the rest is history.
Market Watch | Fed weighing further easing, Bernanke says
Just two weeks after completing a second extraordinary effort to juice the moribund U.S. economy, the Federal Reserve is contemplating more “untested” steps, the head of the central bank said Wednesday.
WSJ | Fed Chief Open to New Options
"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support," Mr. Bernanke said, suggesting the central bank had several ways to ease financial conditions, if necessary.

Econ Comments                                                                                                             
Market Watch | PPI, import drops point to first CPI fall in year
The declines in producer and import prices during June have reinforced expectations the Labor Department on Friday will report the closely watched consumer price index dropped in June for the first time in a year. Economists polled by MarketWatch expect a 0.2% monthly drop in the consumer price index.
AEI | The Limits of Monetary and Fiscal Policy
Monetary policy has reached its limits. The significant risk of deflation that prompted last year's second round of quantitative easing has passed, and with inflation rising, monetary stimulus is no longer an option.

Blogs                                                                                                                             
Heritage Foundation | Fed Chairman Bernanke Projects Continued Slow Growth in Economy
Bernanke also reiterated a line that has become a White House talking point of late—that the soft economy can be chalked up to factors outside the Administration’s control (President Obama called them “bumps on the road to recovery.”) Here’s how Bernanke described those conditions:

Employment

News                                                                                                                             
CNN Money | 5 bright spots in a dim jobs picture
Dig deep into the latest employment numbers, and you can find a few sectors that shine.
Market Watch | Requests for jobless benefits fall to 405,000
New applications for unemployment benefits fell last week to the lowest level in three months, suggesting fewer layoffs in early July than usual, according to government data.

Econ Comments                                                                                                             
Washington Times | BURR: NLRB backs Boeing assault with new attack
Even as the National Labor Relations Board (NLRB) is pilloried by the editorial pages of mainstream newspapers from coast to coast for its ridiculous efforts to tell Boeing how - and where - to create jobs, the captured agency is already warning of its next target: the 6 million businesses, large and small, within the board’s grasp.

Blogs                                                                                                                             
Political Calculations | Disappearing Teen Jobs and the Minimum Wage, Part 3
Today we're going to show you that increases in the minimum wage are indeed very well correlated with the reduction in the employment to population ratio for teens.