Thursday, July 21, 2011

General Economics

National Journal | Money Fight Muddles Offshore Drilling Bill
The revenue fight comes at the peak of the roiling debate over how to raise the $14.3 trillion debt ceiling—but also as cash-strapped state governments, forced to slash expenditures on everything from teachers to prisons, are desperately casting about for new sources of revenue.
Financial Times | Eurozone manufacturing output falls
Growth measured across the eurozone’s service and manufacturing sectors in the Markit purchasing managers’ index slowed much more than analysts had forecast, suggesting a rapid loss of momentum in the region’s economy.
WSJ | Debating Dodd-Frank: Is 'Too Big to Fail' Gone?
Regulators and administration officials argue that the law has effectively ended the phenomenon called "Too Big To Fail"—the idea that a company is so large and interconnected that its collapse could harm the whole financial system, essentially guaranteeing a bailout.
Bloomberg | U.S. Home Prices Decreased 6.3% in May From Previous 12 Months, FHFA Says
The decline was led by a 9.9 percent decrease in the region that includes California, the Federal Housing Finance Agency said today in a report from Washington. The second-largest drop was 9.2 percent in the area that includes Nevada and Arizona.
Bloomberg | U.S. Economic Indicators Post Meager Gain
The Conference Board’s gauge of the outlook for the next three to six months climbed 0.3 percent after a 0.8 percent gain in May, the New York-based research group said today.
Financial Times | Chinese manufacturing set to contract
The HSBC flash purchasing managers’ index for China, designed to provide an early snapshot of industrial conditions, has fallen to 48.9 in July, the lowest in 28 months. The final figure for this month will be published on August 1. A reading below 50 would denote a retrenchment in activity.
Market Watch | Social Security tools can help maximize benefits
One of the most critical decisions older Americans face is when to start their Social Security benefits.
WSJ | Business Blasts Ozone Limits
Trade Groups Warn White House That New EPA Curbs Would Choke Off Growth.

Econ Comments                                                                                                             
Washington Times | DUFFY: Dodd-Frank: One year later
Promises are unfulfilled while the costs are real.
Washington Times | EDITORIAL: Class warfare, Obama-style
Liberals have driven the debt-ceiling debate into the class-warfare swamp, promising most Americans they will continue to get something for nothing. This is a painless proposition for demagogues.
WSJ | The Danger of an Unaccountable 'Consumer-Protection' Czar
The SEC and FDIC are led by boards. Why should one person have sweeping powers over the economy?
Washington Times | MILLOY: Show us the bodies, EPA
Green agency uses phony death statistics to justify job-killing rules.
Washinton Times | GHEI: The crony-capitalist triumph
Dodd-Frank anniversary highlights dangers of socializing risk.

WSJ: Real Time Economics | U.S. Consumers May Cede Shopping Crown.
The growing split within the U.S. consumer sector isn’t simply a function of haves and have-nots, since that is a gap that’s been around since the pilgrims landed.
Calculated Risk | Philly Fed Survey: "Regional manufacturing remained weak in July"
The demand for manufactured goods, as measured by the current new orders index, improved from last month but suggests flat demand:
Heritage Foundation | Obamacare: No Prescription for Economic Recovery
The economy is recovering at an unusually slow pace. Typically, employment grows strongly after a severe recession. Not this time. Unemployment remains stuck above 9 percent more than two years after the recession officially ended. What is going on?
AEI: The American | Thanks to Regulatory Burdens, We’ve Got a Jobless and Creditless Recovery
There’s little disagreement that the U.S. labor market is struggling to create jobs in what is probably the worst “jobless recovery” in history.

RCM: Wells Fargo | Existing Home Sales Slide as Contract Cancellations Jump
Existing home sales fell 0.8 percent in June to a 4.77 million-unit pace. Contract cancelations spiked, likely reflecting the ongoing tug from unusually conservative appraisals and tight mortgage underwriting.


Politico | Grover Norquist on debt talks: OK to let Bush tax cuts expire
Allowing the Bush tax cuts to expire to close the budget deficit would not constitute a tax increase or violate an anti-tax pledge signed by many Republicans, Grover Norquist told the Washington Post’s editorial page.
Source | Capital Gains Rate Could See Big Jump Under Gang Of Six
If the Gang of Six plan followed the same course, some taxpayers now in the 28% bracket would face a rate of about 34%.

ThinkMarkets | Taxes Are Already Scheduled To Rise
Nevertheless, in all of the discussion, few seem to be reminding us that there are already tax increases built into the current system largely to support the so-called entitlement programs.
Poltical Calculations | Tax Deductions for Charity by Income Level
In 2009, Americans reported nearly $34.9 billion worth of donations to private charities serving the public interest on their federal tax forms, as they claimed the federal government's tax deduction for charitable contributions on their taxes.

Health Care

Econ Comments                                                                                                             
Minyanville | Brazil Interest Rate Up, Increased Foreign Investment Expected
The country's central bank has raised its benchmark rate to 12.5%, the fifth rise in 2011, as it attempts to curb inflation and prevent its economy overheating.
Source | Type the Title You Want People to See
Type the sentence(s) summarizing the link here.
Washington Times | GRAHAM: Obamacare’s raid on the medicine cabinet
Political appointees, not doctors, will choose medications.
RCM | Health Insurance Exchanges: A Race To the Bottom
President Obama says that his health plan's popularity will grow once its provisions start being implemented. But peculiar rules tucked into the legislation are likely to make the entire scheme even more disliked as its implementation approaches.
AEI | Health Insurance Exchanges: A Race to the Bottom
President Obama says that his health plan's popularity will grow once its provisions start being implemented. But peculiar rules tucked into the legislation are likely to make the entire scheme even more disliked as its implementation approaches.

Heritage Foundation | Mandating Coverage of Contraceptives Is Bad Health Policy
This week, the Institute of Medicine (IOM) released its recommendation of women’s preventive services that should be covered with no co-pay or deductible under Obamacare—a list that included birth control and emergency contraception.


Bloomberg | IMF Urges Stronger Yuan to Protect World From ‘Shocks’ in China’s Growth
Currency appreciation combined with reforms to rebalance the Chinese economy “would yield substantial benefits,” the fund said in a statement late yesterday in Washington. A “major disruption in China’s so-far steady growth would have material adverse consequences,” IMF directors said.

Econ Comments                                                                                                             
Barron's | The Fed's Risky Business
Why Uncle Sam doesn't want you to know about this government gamble.
Minyanville | Fractional Reserve Banking is Not the Problem
The trouble comes from "rolling" one's liabilities, or borrowing short to lend long.
Minyanville | Brazil Interest Rate Up, Increased Foreign Investment Expected
The country's central bank has raised its benchmark rate to 12.5%, the fifth rise in 2011, as it attempts to curb inflation and prevent its economy overheating.

Daily Capitalist | Fractional Reserve is Not the Problem
There is a common misconception that via Fractional Reserve Banking, banks lend out more money than they have. But the very definition of fractional reserve banking is that the banks lend out less than their deposits, though they keep less than 100% of their deposits on “reserve”. This misconception comes from the failure to distinguish between money and credit. This is particularly easy to do today because our perverse fiat system has banished money altogether. Gold and silver have no official role. Everything that remains is credit.


WSJ | Obama Open to Debt-Cap Deal
The White House encouraged congressional leaders to reach a major deficit-reduction deal by offering them a little more time, as they scrambled to find a way to prevent a government default in less than two weeks.

Econ Comments                                                                                                             
National Journal | Fact Check: Can Spending Cuts Stick?
A key obstacle to a bipartisan budget deal that raises taxes and cuts spending is the belief among conservatives that such deals lock in tax rates while promised cuts never materialize, but an independent budget analysis shows that isn’t the case.
WSJ | The Gang of Six Play
A conceptual breakthrough that has too few details.
Washington Times | MILLER: Debt sealing America’s future
Senate leaders scheme to maintain the big spending that’s bankrupting the country.
WSJ | How Spending Cuts—Not Higher Taxes—Saved Canada
Liberals up there listened to voters, and their economy is now growing faster than ours.
Daily Caller | Cut, Cap and Balance: What would Reagan do?
Reagan understood — as did few presidents before, and none since — that unsustainable government borrowing and spending would threaten the economic opportunity that makes America exceptional.
Cato Institute | The Futility of the Gang of Six Budget Plan
I've opined that a budget deal yielding just $4 trillion in budget savings is unlikely to improve the U.S. fiscal condition by 2020.

Cato@Liberty | Budget Plans: Gang of Six and Senator Coburn
My summer homework assignment for every congressional office is to go through a Coburn/Paul-style budget downsizing exercise. That could lead to more serious spending debates and more concrete proposals than the generally meaningless bullets points issued by the Gang of Six.
American: Enterprise Blog | How Does the Gang of Six Budget Plan Measure Up?
Overall, we need to see more details on how much is raised, how much is cut, and how those cuts are distributed. Hopefully, by the time the details are published, the Gang of Six will have decided to include bigger entitlement reforms as well.
Mercatus Center: Neighborhood Effects | Balanced Budget Rules and Unintended Consequences
If belt-tightening leads to muffin-tops, maybe we need more than a balanced budget amendment?  Perhaps spanxs?


Bloomberg | Jobless Claims in U.S. Rose 10,000 Last Week
Applications for jobless benefits increased 10,000 in the week ended July 16 to 418,000, Labor Department figures showed today.
WSJ | Layoffs Deepen Gloom
Companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery.

Econ Comments                                                                                                             
RCM | Innovative New Ideas for Job Creation
Kauffman data show that immigrants found new companies in America at greater rates than do native-born Americans. So if we allowed more immigrants to enter, and gave green cards to those who created jobs, employment would rise.
MarketWatch | Why we’ll have 10% unemployment soon
Commentary: 3 key sectors show just how weak job market is.

Heritage Foundation | Proposed Union Rules Harm Workers and Job Creation
Congress should specifically bar the NLRB and the Department of Labor from using any funding to implement these regulations.