Monday, October 24, 2011

General Economics

News                                                                                                                             
WSJ | Lean Companies Ready to Cut
Despite another quarter of robust corporate profits, an ominous impulse is stirring at many big companies—restructuring.
Market Watch | Third-quarter U.S. growth: Not so bad
Economy likely sped up in late summer, but outlook still murky.
National Journal | Obama to Propose New Housing Loan Program
President Obama will unveil a plan to allow homeowners to switch to cheaper loans even if they have no equity on their current homes.
WSJ | China Manufacturing Index Rebounds
An indicator of manufacturing activity in China hit positive territory for the first time in four months, easing worries that the economy faces a sharp slowdown and that tight credit is seriously hurting small and midsize businesses, key drivers of employment.
WSJ | Glimmers in Recent Data Brighten Economic Views
Analysts have been raising their estimates of U.S. economic growth, an about-face from just a month ago, when they were lowering those forecasts and fretting that the country was on the cusp of recession.

Econ Comments                                                                                                             
AEI | Debit Card Surcharge Is a Free Market Reaction to Government Controls on Swipe Fees
Banks are not the most popular institutions these days, but they can hardly be faulted for raising fees in one area of their business after Congress imposed price caps in another.
NY Times | Four Nations, Four Lessons
If American policy makers don’t rein in entitlement spending over the next several decades, they will have little choice but to raise taxes close to European levels. We can then see whether the next generation of Americans spends less time at work earning a living and more time sipping espresso in outdoor cafes.
WSJ | So Much for the Volcker Rule
Even in 298 pages, regulators can't decide what to regulate.
Market Watch | The real bear market
Your cost of living went up about 0.2% in September, says the government. Meanwhile your U.S. stocks went down about 8%.
WSJ | The Wild Ride of the 1%
The once-stable incomes of America's biggest earners now fluctuate dramatically from year to year. And as go the rich, so goes much of the economy.
CNN: Money | Fed's Dudley calls for housing aid
"If prospective homeowners no longer fear that prices could decline further they will be more willing to enter the market to take advantage of reduced prices and lower financing costs, and existing homeowners will feel more confident about increasing their spending."

Blogs                                                                                                                             
AEI: American | Income inequality can be explained by household demographics
Here is a summary of some of the key demographic differences between American households in the bottom and top income quintiles in 2010:
Atlantic: Megan McArdle | The Limits of Stimulus
While I was at Chicago last weekend I sat down with Raghu Rajan, formerly Chief Economist of the IMF. And one of the things he pointed out is that the Great Moderation bred this assumption that policy can always do something. That may not be the case.
AEI: American | Adult baby is a symptom of a broken Social Security system
Currently, there is little to nothing in the system that signals the costs to both workers and employers—both are inclined to increase the SSDI rolls on the federal dollar.
Daily Capitalist | A Macro and Micro Austrian Look at Current Markets: No Anorexia Consumptionosa
First and foremost, my view is that the markets and the mainstream media have been giving insufficient attention (if any at all) to the core problem that was revealed by the meltdown in 2008. Massive amounts of capital was misspent (“malinvested”) during the boom.
Calculated Risk | Schedule for Week of Oct 23rd
The key U.S. economic report for the coming week is the Q3 advance GDP report to be released on Thursday.
Econlog | Newspaper Macroeconomics
From the perspective of a macroeconomic textbook, journalists write as if the aggregate supply curve is nearly vertical with respect to monetary policy and nearly horizontal for fiscal policy.
Calculated Risk | Unofficial Problem Bank list declines to 976 Institutions
With four removals and one addition, the Unofficial Problem Bank List finished the week at 976 institutions with assets of $401.9 billion.

Reports                                                                                                                         
RCM: Wells Fargo | Weekly Economic & Financial Commentary
The triumph of thoughtful analysis over hype continues. This week’s data on leading indicators, jobless claims, housing starts and the Philadelphia Fed survey suggest moderate growth ahead.

Health Care

News                                                                                                                             
National Journal | Providers Praise Administration Revisions to Health Law
One of the strongest critics of an important provision to the 2010 health care law just loves the revisions announced yesterday by the Obama administration.
Politico | High court zeroes in on health care
If the Supreme Court decides to review President Barack Obama’s health reform law, it will also have to choose which issues it wants to hear — and that decision could have a significant impact on the law’s final fate.

Reports                                                                                                                         
Cato Institute | Could Mandatory Caps on Medical Malpractice Damages Harm Consumers?
If the medical malpractice liability insurance industry does indeed protect consumers, then policies that reduce liability or shield physicians from oversight by carriers may harm consumers.

Monetary

Econ Comments                                                                                                             
Washington Times | DECKER: Europe’s savior: A new Deutsche Mark
Viable economies need to break away from collapsing euro currency.
Market Watch | Fed to try talking first with QE3 in reserve
The Federal Reserve will try to give greater guidance to markets about its low interest rate policy at its November meeting while keeping more quantitative easing in its back pocket for use if if the economy starts to weaken.
Cato Institute | Fed Created a Recipe for Disaster in Housing Market
Using the Fed balance sheet to absorb the losses that should have been borne by creditors and shareholders is not conducting monetary policy.

Blogs                                                                                                                             
Daily Capitalist | Inflation, Women, And DivorceVast sociological trends have occurred in the U.S. which have required women to work. That has led to a high divorce rate (50%), a high birthrate to unmarried women (41% of births), and a greater amount of single-mother households(24%). Whatever you think the reasons for these trends, it has been occurring since the 1970s.
Free Banking | Once more: central banking is a form of central planning
Central planning need not extend to every economic activity. It is enough for the government to control key institutions. The monetary system is obviously one such institution.

Taxes

News                                                                                                                             
Washington Times | Withholding tax comes back to bite businesses
What seemed good deal now up for repeal.

Econ Comments                                                                                                             
Washington Times | MILLER: Bring home $1 trillion
Territorial tax system would make America more competitive.
WSJ | The Tax Reform Evidence From 1986
Experience implies that the combination of base broadening and rate reduction would raise revenue equal to about 4% of existing tax revenue.

Employment

News                                                                                                                             
Bloomberg | Employment Outlook in U.S. Worst Since 2010: Survey
Within the employment outlook, 29 percent of companies said they would increase hiring, down from 43 percent in July, while 59 percent reported they plan no change in staff, a 10-point jump.
NY Times | Jobs Plan Stalled, Obama to Try New Economic Drive
According to an administration official, Mr. Obama will kick off his new offensive in Las Vegas, ground zero of the housing bust, by promoting new rules for federally guaranteed mortgages so that more homeowners, those with little or no equity in their homes, can refinance and avert foreclosure.

Econ Comments                                                                                                             
WSJ | Why Companies Aren't Getting the Employees They Need
The conventional wisdom is that our education system is failing our economy. But our companies deserve a lot of the blame themselves.

Blogs                                                                                                                             
Calculated Risk | State Unemployment Rates "little changed" in September
Two states and D.C. are at 2007 recession highs: Arkansas (8.3%), D.C. (11.1%), and Texas (8.5%).
Café Hayek | Is a Large Proportion of American Adults Stuck in Poverty-Level Jobs?
It is quite possible for nearly all minimum-wage jobs (or “poverty-level jobs”) to be transitory while, at the same time, “a large proportion of adults in poverty-level jobs remain in those jobs over their careers.”

Budget

News                                                                                                                             
WSJ | Spenders Become Savers, Hurting Recovery
...total household debt—through payment or default—fell by $1.1 trillion, or 8.6%, from mid-2008 through the first half of 2011, according to the Federal Reserve Bank of New York. Auto loan and credit-card balances in August had their biggest drop since April 2010, the Federal Reserve said.

Econ Comments                                                                                                             
Washington Post | Where are the Clinton and Bush apologies for our budget crisis?
They would apologize for not tackling Social Security and Medicare when they had the chance.

Blogs                                                                                                                             
NRO: The Corner | Austan Goolsbee Flunks ‘Cash for Clunkers’
Austan Goolsbee recognizes that there is a lot he doesn’t know. Yet this lack of knowledge doesn’t stop him — and many others — from making policy recommendations and pushing for spending programs that will cost taxpayers billions.