Thursday, September 1, 2011

General Economics

Bloomberg | EU Manufacturing Shrinks More Than Estimated
A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region fell to 49 from 50.4 in July, London-based Markit Economics said today. That’s the weakest in two years and below an initial estimate of 49.7 published on Aug. 23.
WSJ | Fitch Reiterates Warning on China's Banking System
While the central government has launched a series of measures to cool property prices, including higher mortgage rates and curbs on purchases of second homes, housing prices remain high in big cities including Shanghai, Beijing and Shenzhen.
Politico | Debt ceiling debate legacy: 'Scary erosion in confidence'
New data suggest that the bitter debate in Washington over raising the debt ceiling not only drove the United States to the edge of default and cost the nation its triple-A credit rating, but crushed American confidence like few recent events and may well help tip the economy back toward recession.

Econ Comments                                                                                                             
Washington Times | MILLER: Alaska’s regulatory stranglehold
Bureaucrats stymie economic development in the Last Frontier.
WSJ | Solar Flare-out
Another green government favorite goes belly up.
Washington Times | EDITORIAL: ‘Too big to fail’ is alive and well
Billionaire’s Bank of America buyout doesn’t get taxpayers off the hook.
CNN: Money | Four ways this economic recovery is different
From consumer spending to business investments, it seems nothing is the same this time around.
Forbes | Obama A Bad Economic President? Consider It "Proved"
Ten presidents have been elected since 1952: Let’s look at how each of them stacked up against the following five important measures of economic performance:
RCM | AT&T/T-Mobile Blocked: A Case For Anti Trust Repeal
It almost goes without saying that whenever a merger or corporate buyout is announced subsequent reporting will center on the anti-trust implications of such a combination.
Washington Times | PAUL: EPA regulations violate constitutional rights
Out-of-control agency turns everyday life into a federal crime.
WSJ | Justice's New War Against Lenders
The Obama administration repeats mistakes of the past by intimidating banks into lending to minority borrowers at below-market rates in the name of combatting discrimination.

Heritage Foundation | Valero Hits Back at ‘Misleading’ Report on Keystone Pipeline
The renewable energy advocacy group Oil Change International released a report on Wednesday claiming that oil from Canadian tar sands imported to the United States through the proposed Keystone XL pipeline “would primarily be exported rather than used domestically in the U.S,”.
Limericks Economiques | The Ten Limerick Principles of Economics
Although the study of economics has many facets, the field is unified by several central ideas. The Ten Principles of Economics offer an overview of what economics is all about."
Cato Institute | Federal Infrastructure Spending: How About This Boondoggle?
So that citizens know what the president is talking about, they should review the success of the government’s past infrastructure projects. Here’s one to consider:
Marginal Revolution | How ineffective was the stimulus really?
Labor market polarization, labor market polarization, labor polarization. Market-oriented economists don’t like to stress this theme, but it’s true and it’s a big reason why the stimulus didn’t work better. It’s not an idea we should suddenly leave behind.
Minyanville | There Is No Housing Bottom in Sight
To test this assertion, here is a brief look at three major metro markets: Phoenix, Las Vegas, and Miami.

AEI | Systemic Risk Returns: Is the Current Crisis Worse Than the Lehman Collapse?
The stimulus measures did fail during the first half of 2011, stock markets have dropped sharply, and we do indeed have a severely cold shower already in the summer of 2011. The risks to global economic health from this possible financial collapse are as bad as or perhaps worse than those that emerged in September 2008 with the Lehman Brothers crisis because policymakers have few tools left to combat a new crisis.
RCM: Wells Fargo | July Factory Orders Rebound
After declining 0.4 percent in June, factory orders bounced back in July, increasing 2.4 percent. Shipments of capital goods fell for the month, signaling some weakness in third quarter business fixed investment.

Health Care

National Journal | Study: E-Records Keep Patients Healthier
The findings are a boost to the Obama administration’s electronic health-records program, which offers doctors and hospitals financial incentives if they set up electronic health records. The program will start penalizing providers in 2015 by cutting Medicare reimbursement by 1 percent if they don’t use an electronic medical record.

AEI: American | We Have Met the Enemy and It Is Us: Healthcare Fact of the Week
A new study projects that U.S. healthcare spending will rise by as much as $66 billion a year by 2030 because of obesity. That’s about 2.6 percent of current health spending. While this trend is of obvious concern (and would be good to avoid), those figures pale in comparison to the total amount of U.S. health spending that can be attributed to behavior, lifestyle, and other avoidable causes.


Econ Comments                                                                                                             
Fox Business | Europe Rejects IMF Call for More Bank Capital
The clash highlights diverging views about the underlying safety of the European banking system. The IMF and the International Accounting Standards Board (IASB) have both voiced concerns, while European regulators, politicians and banking associations argue that banks have a sufficient capital cushion to cope with market turbulence and worries over sovereign debt after several rounds of capital raising across the continent.
AEI | Does the Fed Need to Ease Even More?
There are no clear and easy solutions to the many problems facing the U.S. and European economies. In the United States, we need, as we have all along, fundamental tax reform with lower marginal tax rates financed by closure of arbitrary tax loopholes. The Fed still needs to guard against a return of deflation.

Reason Foundation | The Fight at the Fed
A number of the voting members of the FOMC began arguing for naming a specific time to keep interest rates low, but others preferred linking low interest rates to trends in the economy. We know now that the majority won out, voting for a policy that keeps the federal funds rate at zero until mid-2013.
Daily Capitalist | FDR, Gold Confiscation, And Quantitative Easing
I found this really interesting comment from the St. Louis Fed on the first event of quantitative easing in the U.S. by Franklin Roosevelt in 1933. It is interesting for several reasons. First, it has been done before. Second, it was “sterilized” by gold purchases, and third, it appears they printed money to pay for the gold they confiscated from U.S. citizens.


MarketWatch | Do you know your taxpayer rights? Take this quiz Every time you get a notice from the IRS, you also get a one-page document on newsprint-type paper, called Publication 1. The title is “Your Rights as a Taxpayer.” Have you ever read it? You should.
Fox News | Obama Picks Gas Tax For First Round of Fiscal Fight President Obama wants Congress to quickly pass an unconditioned extension of the federal gasoline tax, which is set to expire at the end of the government’s fiscal year on Sept. 30.


MarketWatch | U.S. initial jobless claims off slightly last week The number of Americans seeking new jobless benefits fell last week but remained at a level associated with slow hiring trends, government data showed.
Fox News | Unemployment rates fell in most US cities in July Unemployment rates fell in a majority of U.S. cities in July, despite a weak economy that is producing few jobs.
CNN Money | Business and unions agree: More roads and bridges Leading representatives of big business and labor unions laid out their plans Wednesday for how Congress could create jobs and kick start the faltering economic recovery.

Econ Comments                                                                                                             
RCM | The NLRB's "Gift" Of Job Loss
...the National Labor Relations Board is making sure that unemployment remains high in America. Just in time for the Labor Day holiday, the National Labor Relations Board is giving employers a "gift" of more labor-for them to perform. Washington Times | KEATING: Obama’s kind of economist
Alan Krueger can be counted on to ignore fundamental economic principles.

NBER | Employment, Wages and Voter Turnout This paper argues that, since activities that provide political information are complementary with leisure, increased labor market activity should lower turnout, but should do so least in prominent elections where information is ubiquitous.


Washington Times | Obama enlists business, labor in spending push A day after enlisting veterans to help him fight congressional Republicans for a second economic stimulus plan, President Obama joined forces with big labor and big business Wednesday to pressure lawmakers for more spending on federal construction projects.

Econ Comments                                                                                                              
Washington Times | WOLF: Prosperity starts with Americans, not Uncle Sam All told, our governing class - Republicans and Democrats - has spent on the order of $5 trillion we don’t have on jobs that never materialized, in some cases in zip codes that don’t even exist.
Financial Post | Voters and debt Time to stop overlooking the fiscal flaws of democracy.

Telegraph | When debt levels turn cancerous My own suspicion is that debt has very powerful “intertemporal effects” that are not factored into the models. It steals growth from tomorrow, until there is little left to steal.