Friday, July 15, 2011

General Economics

Market Watch | U.S. industrial production up 0.2% in June
Industrial production rose in June for the first time in two months but at a slender rate, and without any help from manufacturing, the Federal Reserve reported Friday.
Bloomberg | Weakening U.S. Consumer Income Expectations Point to Slowdown in Spending
Consumers are turning more pessimistic about their income prospects, an indication that household spending will grow at a slower pace compared with a year earlier.
CNBC | Type the Title You Want People to SeeFactory Activity Remains Weak in June
U.S. auto factories produced fewer goods in June than the previous month, and overall factory production was flat. It marked the third straight month of weak manufacturing output.
CNN: Money | U.S. losing grip on world's largest companies
The energy industry continues to enjoy a strong representation among the world's largest corporations. In 2005, six out of the top 25 biggest companies in the Global Fortune 500 were in the petroleum refining industry. The industry has only grown in stature: nine out of the top 25 on the 2011 list are in the energy sector.
Fox News | Business stockpiles rose for 17th month in May
Economists worry that businesses may have miscalculated consumer demand and could be stuck with unwanted inventories. That would trigger cutbacks in orders and cause manufacturing activity to slow.

Econ Comments                                                                                                             
Washington Times | GHEI: Losing out on trade
Obama’s union pandering carries a price in jobs and economic growth.
WSJ | Cellulosic Ethanol and Unicorns
The EPA punishes oil refiners for not buying a product no one makes.
National Journal | Clean Energy Stifled by Debt Stalemate
“We need to deal with the budget. If you can’t deal with that, they can’t attract the investors they need to invest in these new technologies,” Sen. Mark Begich, D-Alaska, told National Journal Daily as he left the meeting and headed to the session with Geithner.
Bloomberg | U.S. Stocks May Slide 24% as Recession Looms, GMI Macro’s Raoul Pal Says
The Standard & Poor’s 500 Index may fall as much as 24 percent and the euro might tumble to $1.20 if the U.S. economy slows further and Europe’s debt crisis widens, said Raoul Pal, the former GLG Partners Inc. fund manager currently writing the Global Macro Investor strategy sheet.
CNN: Money | The de-banking of America
Unpopular charges from big banks are driving customers into the arms of local banks and credit unions.

Heritage Foundation | $76 Trillion to Engineer a Green Economy?
A new report from the United Nations Department of Economic and Social Affairs demonstrates that the U.N. has no business meddling in economic or social issues.
Café Hayek | Aggregate Healthiness
The main determinant of GBH is called “aggregate healthiness” (AH). Aggregate healthiness changes for any number of reasons – for example, a change in the frequency of a person’s exercise or a change in a person’s diet. Higher AH, common sense tells us, causes higher GBH.
Heritage Foundation | One Year After Oil Spill Was Stopped, Drilling Permits Down Sharply
The Obama administration is approving deepwater drilling permits at a pace of just 1.7 per month — a dramatic drop that is jeopardizing thousands of jobs for struggling families in Louisiana and neighboring states.
Café Hayek | It’s the PSST, Stupid!
Ultimately it’s an empircal question – or, rather, a series of empirical questions. The most germane of these questions is this two-part one:
Heritage Foundation | Free Markets Are Good for China—and Us, Too
The Heritage Foundation’s China Global Investment Tracker has just been updated. Through June 30, it shows over $60 billion in Chinese investment in Latin America. This worries some people. They think that China is gaining economic benefits and cementing strategic ties in our backyard.
Café Hayek | Keynes vs. Reality-2
The usual way that Keynesians explain the post-war expansion despite the huge cut in government spending is to say, well of course the economy boomed, there was a lot of pent-up demand. What does that mean? There is always pent-up demand in the sense there is a stuff I wish I could have but can’t.

RCM: Wells Fargo | Consumers Still Lack Purchasing Power
Falling gasoline prices restrained retail sales in June. Overall sales rose 0.1 percent, with sales at gasoline stations plummeting 1.3 percent. Discounting helped boost sales elsewhere, particularly at department stores.


CNN Money | Republican tax stand a bust with public
House Republicans who refuse to consider tax increases as part of a debt ceiling deal are out of step with most Americans, according to two new polls.
Washington Times | California, Amazon still bickering over online sales tax
California’s clash with over online collection of the state’s sales tax has become a political battle for the Golden State and it could rattle Internet commerce nationwide.

Econ Comments                                                                                                             
WSJ | The No-New-Taxes Democrats
Obama and Reid need to convince their own caucus to raise taxes.

Health Care

National Journal | Senate Dem Wants to Undo Over-the-Counter Rules
Sen. Ben Nelson, D-Neb., introduced legislation Thursday undoing a piece of the law that annoys both doctors and patients—one that requires people to get a prescription from a doctor in order to use money in their tax-free health spending accounts to buy over-the-counter drugs.
National Journal | Employer-Provided Health Insurance Costs
Just over 51 percent of workers enrolled only themselves in employer-sponsored health insurance plans, the Agency for Health Research and Quality found. Average premiums were $4,940 for one person; $9,664 for employee plus-one coverage; and $13,871 for family coverage.

Econ Comments                                                                                                             
AEI | Medicare Reform and Fiscal Reality
Demographic, economic, and political forces have placed unprecedented demands on Medicare that cannot be met without major program reform. The oldest baby boomers have just turned 65, heralding the start of a 70 percent expansion in the Medicare population over the next two decades.


Bloomberg | Dollar Gains on Core U.S. Inflation, Euro Weakens Before Stress Test Data
The dollar strengthened for a second day against the euro after a report showed U.S. consumer prices excluding food and energy increased for a second month, adding to optimism the economic recovery will accelerate.
Fox News |
Taking Liberties: Legislator Proposes Alternative Currency in Response to the Diminished Dollar

Marshall, who is a Virginia State Representative, says it’s time for something radical. “I want to see the states step in,” he said. “It’s time. Past time.” Marshall wants the state of Virginia to have its own currency to create what he calls “competition with the U.S. dollar.” He also says it will protect Virginia if the dollar falls even further. He points out the dollar’s value has fallen nearly 40 percent since 2001, and he says with a record debt and deficit it’s, only going to get worse.
WSJ | Fed Chief Cool on More Bond Purchases
Federal Reserve Chairman Ben Bernanke said Thursday that the central bank isn't inclined to launch a third round of bond-buying soon to boost the U.S. economy, dashing hopes of investors who had concluded the day before that the Fed might be moving in that direction.

Econ Comments                                                                                                             
Minyanville | Will the Fed's Last Bullet be Pointed Inward?
Russian Roulette for the Washington set.
CNN: Money | Republican tax stand a bust with public
House Republicans who refuse to consider tax increases as part of a debt ceiling deal are out of step with most Americans, according to two new polls.
Minyanville | The Tease of More Quantitative Easing
If a rally occurs on the next round of monetary stimulus, will stocks be right or are investors simply responding to stimulus without thinking?


NY Times | China Urges U.S. to Protect Creditors by Raising Debt
China, one of the United States’s biggest creditors, urged American policy makers on Thursday to act to protect investors’ interests, highlighting rising concerns around the globe about the protracted budget talks taking place in Washington.
WSJ | J.P. Morgan's Dimon: U.S. Default Would Cause 'Catastrophe'
The head of J.P. Morgan Chase & Co. issued the loudest warning yet from Wall Street to U.S. politicians about the economic impact of the stalemate over raising the U.S. debt ceiling.
Washington Times | Bernanke: Default on debt would increase deficit
Federal Reserve Chairman Ben S. Bernanke warned U.S. lawmakers Thursday that they would deliver a “self-inflicted” wound to the nation’s economy by holding up efforts to raise the government’s borrowing limit.
WSJ | Plan B Emerges on Debt
Sens. Reid, McConnell Quietly Discuss Way to Keep Government From Default.
NY Times | Deal Is Made for Ending Shutdown in Minnesota
The governor of Minnesota and the state’s Republican lawmakers announced on Thursday that they had, at last, reached a deal on the state’s budget, bringing what is expected to be a swift reopening of government services.

Econ Comments                                                                                                             
Washington Times | LAMBRO: High-stakes dealing on debt ceiling
The gulf between President Obama and a divided Congress grows ever wider as the debt limit crisis stumbles toward a potentially catastrophic deadline.
Washington Post | Call Obama’s bluff
President Obama is demanding a big long-term budget deal. He won’t sign anything less, he warns, asking, “If not now, when?”
Daily Caller | Debt or default: A false choice
There’s a third option: Washington can cut spending.
WSJ | The Obama Downgrade
The real reason the U.S. could lose its AAA rating.
USA TODAY | If U.S. defaults on debt: How to protect your investments
You're walking across the street, minding your own business, when you look up and see a tractor-trailer bearing down on you. It should stop, you think. Suddenly, you realize that there's a good chance it won't stop. What do you do?
WSJ | Can Obama Pull a 'Clinton' on the GOP?
He's following the budget-showdown script Bill Clinton used to win re-election. But the economy added 434,000 new jobs in February 1996.

Atlantic: McArdle | Federal-Debt Downgrade Would Affect Muni Market
In part that's because there's no way of foreseeing all the fallout of such a disaster--the economy is too interlinked, too complicated. But we are starting to see the outlines of some of the potential results...
ThinkMarkets | The Current Debt and Budgetary Impasse
One of the most important, but frequently ignored, aspects of the current negotiations about raising the debt ceiling is the lack of credible commitment on each side.
EconLog | Clarity on the Budget Debate
Most of the media have done a worse job than usual of reporting on the debt ceiling/budget debate.
Daily Capitalist | U.S. Default? Why Are We Surprised?
It always takes a crisis for politicians to act. Years of reckless spending are starting to run into a wall of huge debt, voter resistance to new taxes, and the realities of the bond markets.
Mercatus Center: Neighborhood Effects | “It’s a very messy time.”
So says Veronique De Rugy in this elucidating discussion of the debt-limit and options to deal with it.

Heritage Foundation | The House and Senate Balanced Budget Amendments: Not All Balanced Budget Amendments Are Created Equal
Republicans in the House and Senate have announced that they will force votes on balanced budget constitutional amendments. While the Senate and House versions of the current BBA are similar, there are some important differences that Members of Congress and the American people need to understand. For example, the Senate version makes it more difficult to enact revenue-neutral tax reform, while the House version would waive its tax limitation in times of military conflict. How Congress resolves these differences could determine whether future Congresses and Presidents balance the budget without increasing taxes.
CBO | The Macroeconomic and Budgetary Effects of an Illustrative Policy for Reducing the Federal Budget Deficit
If debt held by the public continues to expand faster than the economy—as it has since 2007—the growth of people's incomes will slow, the share of federal spending devoted to paying interest on the debt will rise more quickly, and the risk of a fiscal crisis will increase. At the same time, the recovery from the recent recession has been anemic, and the economy remains in a severe slump. CBO and many private forecasters expect that the unemployment rate will remain high, and that output will remain well below the economy's potential, for a number of years.


WSJ: The Juggle | In Anemic Job Market, Benefits Take Hit
The anemic job market doesn’t just mean it’s tough for many people to find a job. It also means that those who have jobs may also be getting fewer benefits.

NBER | Time for Children: Trends in the Employment Patterns of Parents, 1967-2009
Utilizing data from the 1967-2009 years of the March Current Population Surveys, we examine two important resources for children’s well-being: time and money.