Wednesday, August 31, 2011

General Economics

News                                                                                                                             
Market Watch | Consumer confidence plunges as hope dims
Consumer confidence plunged in August as expectations dived, with worsening views on future business conditions, jobs and income.
CNN: Money | Bank of America still not out of the woods
Days after receiving $5 billion vote of confidence form the legendary investor, the list of opponents to BofA's proposed $8.5 billion settlement with investors in mortgage-backed bonds continues to grow.
Market Watch | Home prices edge up 1.1% in June: Case-Shiller
Prices rose 1.1% during June from May but are down 4.5% over the past year, according to the closely followed S&P/Case-Shiller 20-city composite home price index.

Econ Comments                                                                                                             
WSJ | Who Would Bail Out the European Central Bank?
The ECB has been 'talking its book' by opposing sovereign debt restructurings.
Financial Times | Struggling with a great contraction
What has the market turmoil of August been telling us? The answer, I suggest, is three big things:
Cato Institute | Yes, It Is a Ponzi Scheme
Social Security, forces people to invest in it through a mandatory payroll tax. A small portion of that money is used to buy special-issue Treasury bonds that the government will eventually have to repay, but the vast majority of the money you pay in Social Security taxes is not invested in anything.
WSJ | Mere Proposals
Among the core assumptions of modern liberalism is that future regulations have no more effect on the economy than future taxes, as if expectations don't matter and businesses don't prepare now for their costs tomorrow.
Forbes | Paul Krugman Demands More From Hurricane Irene: A Satire
Paul Krugman lamented as Hurricane Irene failed to live up to its economic potential. “Compared to the utility of preparing for an alien invasion the massive destruction and subsequent rebuilding that would have occurred had Irene become the Storm of the Century could have provided a much needed boost to the ailing economy.”

Blogs                                                                                                                             
Café Hayek | The Microeconomics of the Broken Window Fallacy
The Keynesian defense of breaking windows or the economic virtues of hurricanes would go something like this:
Calculated Risk | Recession Measures
Here is an update to four key indicators used by the NBER for business cycle dating: GDP, Employment, Industrial production and real personal income less transfer payments.
Café Hayek | Finding ways to raise costs and make us poorer
So why does Apple, for example, outsource so much of its production? Because it’s cheaper and it allows more people to be able to afford more Apple products. Making stuff the cheapest way is the road to prosperity.

Reports                                                                                                                         
RCM: Wells Fargo | Consumer Confidence Tumbles in August
Uncertainty surrounding the debt-ceiling agreement, the S&P downgrade and a shaky stock market pulled consumer confidence down 14.7 points in August, with reduced expectations accounting for most of the drop.
Mercatus Center | No Such Thing as Shovel Ready
Since 2008, support for effective fiscal stimulus has been premised on the belief in the existence of hundreds of billions of dollars worth of what became popularly known as "shovel-ready projects." These infrastructure construction and improvement projects would simultaneously lower unemployment, provide value to taxpayers, stimulate private sector growth, and begin in 90 days of less.

Health Care

News                                                                                                                             
National Journal | Republican Governors Continue Push to Revamp Medicaid
Medicaid has been a major focus for governors on both sides of the aisle. The program has grown to become the largest piece of state budgets, eating up 21.8 percent of total state spending, according to the National Association of State Budget Officers.

Blogs                                                                                                                             
Cato @ Liberty | Nearly Two-Thirds of ObamaCare’s Supposed Beneficiaries Think It Won’t Help Them
The law’s supposed beneficiaries are the uninsured. Yet 61 percent of them think the law will either not help them or will hurt them. The main takeaway: Congress can repeal ObamaCare and its supposed beneficiaries won’t even care.
Heritage Foundation | In Obamacare, the President’s Disregard for Consent of the Governed
Congress and the President have low approval ratings because Congress and the President continue to ignore the will of the American people. One reason for this disapproval is ObamaCare – the President’s signature health care “reform” law.

Monetary

News                                                                                                                             
Market Watch | Fed weighed several tools at last meeting: minutes
There was no clear consensus among Federal Reserve officials at their August 9 meeting about what the next easing step would be, according to the minutes of the meeting released on Tuesday.
Market Watch | China inflation winding down: analysts
China’s consumer inflation may have tapered off, with consumer-price-index growth slowing in the remaining months of this year from a three-year high of 6.5% in July.
WSJ | Economy Deeply Divides Fed
New Records Show Central Bank Officials at Odds Over How to Revive Recovery.

Econ Comments                                                                                                             
WSJ | Beyond the Gold and Bond Bubbles
Shouldn't the Fed try to improve incentives to invest in growing businesses?
AEI | It's Time for Plan B from the IMF
By now the IMF must recognize that its strategy for the European periphery of draconian budget belt-tightening, and of wage and price deflation to restore fiscal sustainability and international competitiveness has failed.

Blogs                                                                                                                             
Daily Capitalist | The Fed’s War Against Savers v.2.0
The Fed needs to stop this war against savers, raise rates immediately, and stop destroying capital from “printing” money through quantitative easing. Our government should be rewarding savers, not punishing them. Only when savers are rewarded with positive yields will the destruction of capital stop and the economy will grow again.
Minyanville | How the Fed Has Distorted the Nature of the TIPS Market
Both implied real rates and inflation expectations have been distorted by the Fed's money-printing. As a result, the Fed has distorted the information it relies upon and bamboozled itself.

Employment

News                                                                                                                             
Politico | State, local governments cut 200,000 workers
U.S. Census data show that state and local governments had 203,321 fewer full-time employees and 27,567 fewer part-time workers in 2010, compared with 2009.
MarketWatch | August private-sector jobs up 91,000: ADP
Private-sector payrolls increased 91,000 in August, led by the service-producing sector and small businesses, according to the ADP employment report released Wednesday.
Fox News | On The Job Hunt: Unfilled Jobs Across America, Are You Qualified?
While millions of people can’t find work, there are many American companies who can’t find people to fill open jobs. Thousands of jobs. Good paying jobs.
WSJ | Business Irked as Labor Board Backs Unions
The National Labor Relations Board sided with unions in several cases involving rules for organizing and representing workers, further riling business groups as the board continues to push through decisions by year's end.

Econ Comments                                                                                                             
Washington Times | ALLEN: Job growth
Restoring American dream means rekindling entrepreneurial spirit.
WSJ | The Labor Board Wants You
The NLRB will now require union posters.
Washington Times | LAMBRO: Obama jobs plan: Plan on being unemployed
No new economic strategy will work while the fundamentals are wrong.

Blogs                                                                                                                             
Marginal Revolution | Why didn’t the stimulus create more jobs?
One major problem with ARRA was not the crowding out of financial capital but rather the crowding out of labor.

Reports                                                                                                                         
Mercatus Center | Did Stimulus Dollars Hire the Unemployed?
Answers to Questions about the American Recovery and Reinvestment Act.

Taxes

News                                                                                                                             
WSJ | GOP Tax Expert to Lead Deficit-Committee Staff
The panel's co-chairmen chose as their staff director Mark Prater, a senior aide and chief tax counsel to Republicans on the Senate Finance Committee.

Econ Comments                                                                                                             
Forbes | The Fingerprints of 2000-01 Are All Over the Crisis
Coming through with a real tax cut in 2001 could have changed everything.

Budget

News                                                                                                                             
National Journal | War Contracting Commission Estimates $31 Billion to $60 Billion Wasted
Estimates $12 million squandered every day for the last 10 years.

Econ Comments                                                                                                             
Daily Caller | Debt ceiling is only first step in debate over federal spending
“The fiscal consolidation plan … falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” S&P, August 5
Fox News | Real Economic Recovery Demands a Balanced Budget Amendment
The bottom line is that we need more effective policies that will ensure the efforts made to cut spending today aren’t undone by politicians in the future.
WSJ | Bank of Political Works
A Fannie Mae for 'infrastructure.'

Blogs                                                                                                                             
Cato@Liberty | Federal Spending Hits $4.1 Trillion
The $3.6 trillion figure is “net” outlays. But “gross” outlays, or total spending, is quite a bit higher.