Wednesday, July 20, 2011

General Economics

Politico | GOP: Ease rules to aid recovery
“Indisputably, we require an economic game-changer to reverse the disturbing and lasting trend of 9 percent unemployment,” said Sen. Olympia Snowe (R-Maine). “Removing needless red tape and inefficient bureaucratic barriers to job creation will promote economic growth nationwide.”
CNBC | Housing Starts Hit 6-Month High in Surprise Jump, Permits Up
U.S. housing starts rose more than expected in June to touch a six-month high and permits for future construction unexpectedly increased, a government report showed on Tuesday, likely reflecting growing demand for rental apartments.
Market Watch | Sales of existing homes slip 0.8% in June
Sales of existing homes slipped in June to a seven-month low, and a real estate trade group attributed the surprise downturn to a weak economy and a spike in cancellations.
USA Today | Bad economy may be mother of invention
Five years ago, electrical engineer Denis Place and two partners left Suss MicroTec, in Waterbury, Vt., a German-owned manufacturer of machines, to make microchips, and formed their own company based on an idea they had for testing those chips.
Washington Times | Coalition hits tougher air-pollution rules
Business Roundtable sees millions of jobs being lost under new ozone limits.

Econ Comments                                                                                                             
Politico | Put a ceiling on overregulation
Though both parties now want the debt ceiling package to address issues of economic growth, no one has put measures to rein in regulation on the table. Since Obama and GOP leaders are saying that overregulation is a barrier to job creation, it’s time to make regulatory curbs part of the debt ceiling negotiations.
AEI | Will the College Bubble Burst from Public Subsidies?
We are still suffering from the bursting of the housing bubble and now some people see signs that another bubble is bursting--the higher education bubble.
Cato Institute | "Stronger" Banks, Weaker Economies
U.S. Treasury officials and those at the Federal Reserve, as well as their advisers and supporting cast of journalists, often operate as if they were blind to the potential unintended consequences of their policy prescriptions. And because groupthink reigns supreme in establishment circles, blunders can go unchecked for long periods of time and be catastrophic.
Minyanville | Is China Facing an American Future?
Minyanville's daily roundup of some of the best commentary from around the Web.
Financial Times | Little to celebrate on Dodd-Frank’s birthday
America’s Dodd-Frank act is one year old on Thursday. The act made some useful corrections in the regulation of American financial markets, but it has failed to respond effectively to the root causes of the financial crisis and its impact on the global financial system.
WSJ | Toying With Deregulation
Another agency ignores Mr. Obama's executive order.

Econlog | Keynes and Anti-Keynes
In terms of theoretical outlook, I would say that anyone who works with the GDP factory model and the textbook version of aggregate demand and aggregate supply is conducting the conversation in a way that is understandable to the Keynesian tradition. However, there are those on the far left and far right who do not like the GDP factory story and who see things as more complicated.
Volokh Conspiracy | Foot Voting for Freedom
Political scientist Jason Sorens presents some interesting new data showing that people tend to “vote with their feet” for states with greater freedom when they make migration decisions.
Cato @ Liberty | Federal Government Subsidizes and Penalizes Boeing Co.
When an entity is as mammoth and undisciplined as the $3.8 trillion U.S. federal government, it’s inevitable that its programs will be working at cross purposes. Just ask the civil aircraft manufacturer Boeing Company.

NBER | Globalization, Structural Change and Productivity Growth
Large gaps in labor productivity between the traditional and modern parts of the economy are a fundamental reality of developing societies. In this paper, we document these gaps, and emphasize that labor flows from low-productivity activities to high-productivity activities are a key driver of development.
Cato Institute | The Elephant That Became a Tiger: 20 Years of Economic Reform in India
India ranks very low on ease-of–doing-business indicators. Rigid labor laws prevent Indian companies from setting up large factories for labor-intensive exports, as in China. Both governance and economic reforms are needed, but progress on the former lags far behind, is thus more urgent, and can help sustain and promote economic reform.
Heritage Foundation | Recovery Stalled After Obamacare Passed
Private-sector job creation initially recovered from the recession at a normal rate, leading to predictions last year of a “Recovery Summer.” Since April 2010, however, net private-sector job creation has stalled. Within two months of the passage of Obamacare, the job market stopped improving.
RCM: Wells Fargo | Housing Starts Perk Up in June
Housing starts rose a larger-than-expected 14.6 percent in June. While a 30.4 percent jump in multifamily starts accounts for much of the gain, single-family starts rose 9.4 percent and permits also increased.


Political Calculations | The Distribution of the U.S. Mortgage Interest Tax Deduction by Income
If the federal government tries to increase the amount of its tax collections by eliminating or limiting the mortgage interest tax deduction, who's most at risk of seeing their taxes go up?

CRS | Tax Gap: Should the 3% Withholding Requirement on Payments to Contractors by Government Be Repealed?
The Internal Revenue Service (IRS) defines the gross tax gap as the difference between the aggregate tax liability imposed by law for a given tax year and the amount of tax that taxpayers pay voluntarily and timely for that year. It defines the net tax gap as the amount of the gross tax gap that remains unpaid after all enforced and other late payments are made for the tax year.

Health Care

National Journal | Institute of Medicine Report Recommends Free Women's Health Services
Health insurers should pay for a range of services for women at no cost, including birth control, counseling on sexually transmitted diseases, and AIDS screening, the influential Institute of Medicine recommended on Tuesday.

Econ Comments                                                                                                             
Washington Times | ROSENBLOOM: Fixing medicine: Don’t try, just spy
Uncle Sam wants to snoop on physicians and their patients.

AEI: The American | The Logic of Making Seniors Pay More: Healthcare Fact of the Week
Among many matters being discussed in the debate over the debt limit are proposals to reform health insurance policies used to supplement Medicare, such as so-called Medigap plans.

Heritage Foundation | Health Care Reform in Maine: Reversing “Obamacare Lite”
This spring, after living under the costly failures of Obamacare-like health care legislation for two decades, the Maine Legislature enacted a set of patient-centered, market-based health care reforms. The Maine experience is both a warning of Obamacare’s likely effects and a practical demonstration to other states of how to enact sound free-market health care reforms in spite of Obamacare.


Market Watch | IMF on Japan: stimulus first, then austerity
The executive board of the International Monetary Fund backed plans by the Japanese government to spend money to repair the damaged country but noted that an ambitious budget- cutting program would soon be needed to tackle the nation’s deficit.
Bloomberg | China Signals More Yuan Gains After Enabling 17-Year High Against Dollar
China said that it can allow more yuan moves without jeopardizing its foreign-exchange reserves after letting the currency rise today to a 17-year high against the dollar.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Treasury: Stop the presses
The Obama administration has only one answer to bad economic news: more spending. It’s no surprise, then, that there’s now talk of printing up billions in currency to accommodate the reckless fiscal policies that have already sent the economy on a downward spiral.
Financial Times | Let Europe pay for its policy failures
The run-up to the summit, which was supposed to design a second and much larger bail-out for Greece, has been sadly typical of Europe’s shambolic and convoluted policy process.
Bloomberg | Treasuries Decline Amid Optimism on European Crisis, Concern on U.S. Debt
Treasuries fell on speculation European leaders are approaching an accord on the region’s debt crisis and concern U.S. lawmakers have further to go before agreeing to cut the deficit and raise the borrowing ceiling.

Political Calculations | Teens and the U.S. Federal Minimum Wage
What percentage of employed teens make the minimum wage? And what percent of all minimum wage workers are teens?
Free Banking | Free banking and the historical gold standard
Over at his recently established blog “Uneasy Money,” David Glasner has a post on “Gold and Ideology.” He claims that “the gold standard never managed itself; in its classical period from 1870 till World War I it was under the constant management of the Bank of England with the occasional assistance of the Bank of France and other major banking institutions.”


Econ Comments                                                                                                             
Washington Times | GRISWOLD: E-Verify threatens American jobs and liberties
A government-commissioned study by Westat found that the system failed to flag more than half of the unauthorized immigrants who applied to work at companies using the system.
AEI | Repeal the Democrats' Complex and Expensive Legislation
What's the single best idea to jumpstart job creation?
Fox Business | The American Jobs Conference: A New Way to Create Job Growth
When it comes to the labor market and creating jobs, we as a nation are going in the wrong direction. Something has to be done.


CNN Money | Debt ceiling impasse imperils states' credit ratings
Moody's Investors Services placed five states on review for possible downgrade if the United States fails to resolve its debt ceiling impasse and has its own stellar credit rating downgraded.
NY Times | Debt Anxiety Raises Cost of Borrowing for Spain
Spain sold one-year bills on Tuesday at the highest yield since 2008, underlining broader concerns about the ailing euro zone economies amid tense negotiations over another rescue package for Greece.
WSJ | Obama Backs Latest Bargain
President Barack Obama, in a last-ditch bid for a bipartisan "grand bargain" on the budget, threw his weight Tuesday behind a $3.7 trillion deficit-reduction plan unveiled by six Republican and Democratic senators.

Econ Comments                                                                                                             
Washington Times | LAMBRO: Taming the deficit monster
None of the current plans likely to do the job.
Daily Caller | Kick the can or kick the habit?
President Obama’s dire alarms over the approach of the federal debt ceiling, and subsequent calls for $4 trillion in debt reductions over 10 years, are starkly lacking key ingredients: substance and coherence as to what such a fiscal package should contain.
Cato Institute | There Is No Alternative
With the clock ticking down toward what the administration calls "fiscal Armageddon," the president still has not put an actual plan for increasing the debt ceiling on the table.
Washington Times | MILLER: Gang of squish
The latest debt-ceiling offer is even worse than Obama’s tax-and-spend bid.

Heirtage Foundation | McConnell-Reid “Just Borrow More” Plan Fails to Cut Spending and Degrades America’s Creditworthiness
ny Senator foolish enough to think the McConnell-Reid “Just Borrow More” Plan solves the debt ceiling problem should look again at what the Moody’s debt rating service said.
Reason Foundation | The Facts About the Debt Ceiling
Separating economic myths from economic truths.
Cato@Liberty | The Gang of Six Is Back from the Dead: Contemplating the Good, the Bad, and the Ugly in Their Budget Plan
The entire package is based on dishonest Washington budget math. Spending increases under the plan, but the politicians claim to be cutting spending because the budget didn’t grow even faster.
Atlantic: McArdle | Slouching Toward Default, on Both Sides of the Atlantic
...the credit ratings agencies have announced that they will view any voluntary restructuring as a default--as they should, because voluntary or not, Greece would still be arranging to pay less than they owe.
Marginal Revolution | The Benefits of Fiscal Illusion
...if the Republican base reads it as a tax cut and the Democrat base reads it as a tax increase, we just might get a deal.

AEI | Is Obama's New Deal Better Than the Old One?
The New Deal failed to reduce unemployment, and the policies of the Obama administration and the Democratic Congress since the financial crisis look to be a repeat performance.