Friday, September 9, 2011

General Economics

News                                                                                                                             
Bloomberg | Risk of Worldwide Recession Has Increased to 50%, Krugman Says
Krugman, who last month said the risk of a global decline may be “a bit higher” than one-in-three, urged advanced economies to reverse fiscal belt-tightening and central banks to adopt a more expansionary monetary policy.
National Journal | Energy Absent From Jobs Speech
Obama didn’t utter the word “energy” at all in his roughly 30-minute speech, and the few bones he did throw to the sector – such as fleetingly mentioning biofuels and fuel-efficient cars -- didn’t do much to satisfy either side.
CNBC | Japan Second-Quarter GDP Revised Down to 0.5% Decline
The second-quarter data translated into an annualized contraction of 2.1 percent in real, price-adjusted terms, against an initial reading of a 1.3 percent contraction and economists' forecast for a 2.2 percent decline.

Econ Comments                                                                                                             
Washington Times | RUANE: Road builders don’t want your stimulus
Last time feds boosted spending, states just cut back.
WSJ | The Euro Threat to Obama
An economic shock from abroad is the last thing that the U.S. economy now needs.
Washington Times | MURDOCK: Reaganomics trounces Obamanomics
In head-to-head match-up of economic records, it’s no contest.
Washington Times | VERSACE: Slow growth causes ripples worldwide
In recent weeks, a slew of analysts and economists have slashed the U.S. gross domestic product forecasts, and in my view we have yet to see earnings expectations catch up to those growth revisions. However there are signs that the emerging markets are not growing fast enough to carry a global recovery.
WSJ | A Union Goes Too Far
Violence by unionized longshoreman is noticed by the NLRB.
WSJ | The Solyndra Scandal
The FBI raids a beneficiary of federal loan guarantees.

Blogs                                                                                                                             
Heritage Foundation | 20 Drilling Rigs in Jeopardy of Leaving Gulf Over Permit Delays, Report Warns
If the pace of Gulf oil drilling permit awards does not increase, as many as 20 drilling rigs could soon leave the Gulf, a major investment bank announced. BER Capital Investments called the current rate of permitting unsustainable in a report released Wednesday.
Calculated Risk | Mortgage Rates fall to Record Low
With 30 year mortgage rates now at record lows, mortgage refinance activity will probably pick up some more in September - but so far activity is lower than in '09 - and much lower than in 2003.
Café Hayek | Is Scarcity On Hold?
It’s certainly not clear that even a 10 or 12 percentage-point increase in the unemployment rate above the natural rate justifies the assumption of sufficiently widespread topsy-turviness – sufficient idleness of potentially productive resources – that policies meant to work only in a world of super-abundant resources are justified.
Marginal Revolution | A further note on the broken windows fallacy
The declines in housing prices in recent years really have taken their toll on AD so the wealth multiplier is not to be ignored. The notion that a stable and sustainable restoration of AD actually requires some increases in perceived wealth is one of the most underrated ideas among today’s Keynesians.
Café Hayek | The Source of the Problem Ain’t Inadequate Aggregate Demand
The problem isn’t that consumers aren’t spending; it’s that businesses aren’t investing.
Calculated Risk | Trade Deficit decreased sharply in July
Exports increased and imports decreased in July (seasonally adjusted). Exports are well above the pre-recession peak and up 15% compared to July 2010; imports are up about 13% compared to July 2010.
Atlantic: Megan McArdle | Words to Live By
The problem is not in our economics stars--it is in ourselves. As Robert Heinlein once wrote, "Man is not a rational animal--he is a rationalizing animal." We are constantly trying to make the universe make sense.
Café Hayek | Everything that’s wrong with macroeconomics
This quote from the New York Times article on the president’s speech, highlights everything wrong with macroeconomics as practiced in the public domain: "Preliminary analyses of the White House plan estimate that the tax cuts could create more than 50,000 jobs a month, a significant boost considering that employment climbed by 35,000 jobs, on average, in each of the last three months."
Econlog | Econlog EconTalk
EconTalk is an award-winning weekly talk show about economics in daily life. Featured guests include renowned economics professors, Nobel Prize winners, and exciting speakers on all kinds of topical matters related to economic thought.

Reports                                                                                                                         
AEI | Reforming Washington State Pensions
Defined benefit pension plans require that governments accurately anticipate future benefit costs and make regular contributions that will be sufficient to meet those costs. Around the country, citizens have become concerned regarding the solvency, cost, generosity and risk of public sector pension plans. Washington's pension plans are well funded by public sector standards. Nationwide, public pensions report unfunded liabilities of around $770 billion.

Health Care

News                                                                                                                             
National Journal | Virginia Appeals Court Upholds Obama Health Care Law
“Virginia, the sole plaintiff here, lacks standing to bring this action. Accordingly, we vacate the judgment of the district court and remand with instructions to dismiss the case for lack of subject-matter jurisdiction,” the 4th Circuit wrote in its decision, the second major ruling to uphold the law.
Politico | Medicare eligibility age should go up, hospitals say
The American Hospital Association has a strategy for heading off any more Medicare payment cuts: Tell Congress to get the money from Medicare beneficiaries instead. The association is urging its nearly 5,000 members to lobby Congress to raise the Medicare eligibility age from 65 to 67, in addition to other money-saving alternatives, according to spokeswoman Marie Watteau.

Monetary

News                                                                                                                             
Market Watch | Inflation is on its way down, Bernanke says
Federal Reserve Chairman Ben Bernanke said Thursday that he was not worried that the pickup in inflation earlier this year would persist, but did not outline how or whether the central bank could ease the costs of borrowing further.
CNN: Money | China's rising prices slow in August
Rapidly rising prices in China finally started to slow in August, giving some relief to consumers in the world's second largest economy.

Econ Comments                                                                                                             
Washington Post | The scapegoating of Ben Bernanke
Since the panic, Bernanke’s policies — essentially zero percent short-term interest rates and vast securities purchases to inject cash into the economy — have disappointed in spurring recovery. These policies, including the possibility of unintended inflation, are a legitimate source of debate and disagreement.
Forbes | Boost Employment By Ending The Fed And Resurrecting Gold
Money is so fundamental to investment that bolstering the dollar represents the surest route to prosperity. Unfortunately, the dollar glides downhill as if on a rollercoaster. It suffers new lows against a host of currencies. Gold poises for $2,000/oz.

Blogs                                                                                                                             
WSJ: Real Time Economics | Fed’s Plosser: Monetary Policy Can’t Help Jobs Market Much Right Now
I am really doubtful that monetary policy is a tool that is going to help us very much.

Taxes

News                                                                                                                             
WSJ | Small Business Is Focus of Tax Cuts
President Barack Obama's new jobs plan seeks to coax wary employers to invest and hire more by slicing their share of payroll taxes next year.
Politico | Obama tax cut wouldn't guarantee quick boost, economists say
Economists generally praised the plan, saying the cuts are probably the fastest, most direct form of stimulus — but that doesn’t mean they’ll give the economy the quick boost Obama desperately needs to firm up his chances of re-election.
WSJ | Amazon Pursues Internet Tax Deal
Amazon.com Inc. could soon have California's blessing to continue making tax-free sales in the state for one year.

Econ Comments                                                                                                             
CNN Money | Washington's gridlock tax in full effect
Washington is not helping the economy. In fact, the opposite.

Blogs                                                                                                                             
Calculated Risk | The American Jobs Act
Some of the major proposals (total is around $450 billion).

Employment

News                                                                                                                             
CNN Money | Obama proposes sweeping changes to unemployment benefits
The nation's unemployment benefits system would undergo extensive changes under the jobs proposal President Obama outlined Thursday.
WSJ | BofA Cutbacks May Hit 40,000
Bank of America Corp. officials have discussed eliminating roughly 40,000 positions during the first wave of a restructuring that Chief Executive Brian Moynihan is expected to discuss Monday, said people familiar with the plans.

Econ Comments                                                                                                             
WSJ | The Latest Jobs Plan
More temporary and targeted tax cuts and spending increases.
Daily Caller | One job-training program conservatives should embrace
The program recognizes that unemployment not only costs workers their lost wages but robs them of valuable experience they need to move up the ladder.
Washington Times | NFIB: Speech not enough to restore confidence in job creators
Gushers of federal cash, temporary tax breaks don’t help small business.
CNN Money | The unemployment facts we'd rather not face
The harsh reality is that many job applicants can't find work because they aren't qualified for today's open jobs.

Blogs                                                                                                                             
Cato@Liberty | One Expensive New Job Forward, Two Existing Jobs Back
As the president was pitching his jobs plan last night, his current policies were hard at work discouraging job creation and incentivizing layoffs. 
Atlantic: McArdle | Obama's Job Plan: Mostly More of the Same
So we've been standing by all week for Obama's big jobs speech, promised in response to the awful jobs numbers last month.
Cato@Liberty | For Jobs, Cut the Corporate Tax Rate
The way to think about jobs is to think first about investment. Workers are expensive, so businesses don’t hire them willy nilly.
NRO: The Corner | Unemployment Rates: Promised vs. Actual
White House economists forecast that without ARRA spending, the unemployment rate would increase from 7 percent to 8.8 percent. Unfortunately, the administration’s estimates were wrong by a vast margin.
WSJ: Real Time Economics | Economists React: Gauging Impact of Obama Jobs Proposal
Economists and others weigh in with some early reactions to the president’s jobs proposal.
NRO: The Corner | Why Infrastructure Spending Is a Bad Bet
We have heard many times that infrastructure spending, in one form or another, is the key to growth and job creation — and, in the president’s defense, he certainly isn’t the only one who refers to stimulus and government spending as “investing” in infrastructure.

Reports                                                                                                                         
RCM: Wells Fargo Economics Group | Long-Term Unemployment: Costs & Consequences
At Jackson Hole, the issue of long-term unemployment came up in several sessions, and we would like to highlight some views on this issue.

Budget

Blogs                                                                                                                             
Mercatus: Neighborhood Effects | Is Infrastructure Spending Stimulative?
The problem with this is that it assumes that infrastructure projects will be executed in exactly the way that Keynesian theorists say that they ought to be (“timely, targeted, and temporary” in Lawrence Summers’s words).
Daily Capitalist | Obama Goes ‘Japanese’ — $447 Billion Of New Infrastructure Spending
He didn’t exactly say “how much” spending, but reports are saying $447 billion. An outline of the bill can be found here.
WSJ: Real Time Economics | Consumer Debt Rises on Nonrevolving Surge; Credit Cards Fall
U.S. consumer credit made another gain during July, led by a big increase in nonrevolving debt, including student loans.

Reports                                                                                                                         
CBO | Monthly Budget Review
The federal budget deficit totaled $1.23 trillion through the first 11 months of fiscal year 2011, CBO estimates--$28 billion less than the deficit incurred in the same period last year.