Monday, November 7, 2011

General Economics

Market Watch | Euro zone set for 2012 recession: SocGen
French bank Societe Generale said Monday it expects the euro-zone economies to fall into recession next year, adding that growth is also likely to be on the weaker side for the U.S. and China.
Bloomberg | World Dodges Slump With China-U.S. Buoy
The U.S. unemployment rate fell to 9 percent last month, the lowest since April, from 9.1 percent in September, the Labor Department reported Nov. 4. Chinese manufacturing continued to expand in October, based on an index compiled by the China Federation of Logistics and Purchasing. Even in Japan, the world’s third-largest economy, growth is coming to life:
National Journal | Pew Research: Older Americans' Net Worth Up; Younger Americans' Net Worth Down
Pew, in a report analyzing government information, said that in 2009 households headed by adults 65 and older had 42 percent more median net worth than their counterparts in 1984. At the same time, American households headed by adults 35 and younger had 68 percent less wealth than their counterparts in 1984.
CNN: Money | Europe: The worst-case scenarios
Worries about Greece's future are front and center yet again, as Greek Prime Minister George Papandreou gets ready to officially resign on the condition that Greece's €130 billion bailout gets approval.That upheavel serves as just another reminder that the the crisis is far from over.
Politico | How to fix Fannie and Freddie
In fact, HARP’s shortcomings have nothing to do with its limited mandate but with its design. To make this refinancing plan a success, four obstacles need to be eliminated:

Econ Comments                                                                                                             
Market Watch | Senate blocks another part of Obama jobs bill
Another piece of President Barack Obama’s jobs bill hit a wall in the Senate on Thursday, as Republicans blocked a $60 billion infrastructure plan from advancing.
WSJ | A Free-Trade Plan to Save Japan
The mercantilist Japan Inc. model is worn out.
Washington Times | LAMBRO: Hopes dashed for economic turnaround
Fed forecasts gloom through election 2012.
WSJ | Look at What We Do'
The CFPB's first major regulatory guide exposes its political agenda.
WSJ | Hooray, a Financial Firm Fails!
Taxpayers aren't on the hook. Failure isn't a crime. Let's call it the new normal.
Bloomberg | How Populist Outrage Gave Birth to the Federal Reserve: Echoes
This week marked the 104th anniversary of the night that ultimately gave birth to the Federal Reserve.
WSJ | Government Unions Strike Back in Ohio
They're spending $30 million to repeal the state's collective-bargaining reforms.

AEI: American | Why OWS and Obama are obsessed with inequality
It wasn’t supposed to work out this way. Barack Obama’s presidency was supposed to usher in The Great Liberal Restoration.
Source | 57.4 Percent of 1996′s Privileged 1% Are Now Among the Beleaguered 99%
Paul Krugman labels those who interpret data on income distribution differently than he does “obfuscators” (“Oligarchy, American Style,” Nov. 4). Mr. Krugman is surely aware, however, that people can legitimately disagree over how best to construe the vast quantities of data gathered on so complex a topic as the varied and changing income-earning profiles of 150 million workers living in 121 million households, all in an economy as dynamic as America’s.
Calculated Risk | Unofficial Problem Bank list declines to 985 Institutions
Very quiet week for changes to the Unofficial Problem Bank List as there were only two removals. After the removals, the list holds 985 institutions with assets of $406.3 billion.
AEI: American | Quick primer: origins of the housing crisis
Fannie and Freddie’s affordable housing goals (authorized by the ironically named Federal Housing Enterprises Financial Safety and Soundness Act—the GSE Act—and enforced by HUD) were responsible for many distortions of the housing finance market.
WSJ: Real Time Economics | What Percent Are You?
The Occupy Wall Street movement seeks to speak for the bottom 99% of the population by income, which includes pretty much everyone who makes less than $500,000 a year.
AEI: American | The dirty little secret of income inequality alarmists
For most people, income increases over time as they move from a usually low-paying first job to better-paying jobs later in life. Some others, however, may lose income over time due to business cycle contractions, demotions, career changes, retirement, and so on.

CRS | U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes
As estimates for the amount of U.S. natural gas resources have grown, so have the prospects of rising U.S. natural gas exports. Projects to export liquefied natural gas (LNG) have been proposed—cumulatively accounting for about 12.5% of current U.S. natural gas production—and are at varying stages of regulatory approval.

Health Care

Politico | Ohio's battle for health care freedom
Since passage of President Barack Obama’s health care legislation in March 2010, this attempted government takeover of health care has drawn protests across the country from Americans concerned about their loss of liberty. Ohioans went a step further — circulating petitions for an amendment to their state’s constitution to protect health care freedom.


Fox News | Fed's moves to aid economy since financial crisis
The Federal Reserve has taken many unprecedented steps in the past three years to try to boost the economy and counter the effects of a financial crisis that triggered a painful recession. It's kept the short-term interest rate it controls at a record low near zero since December 2008.

WSJ | Most Primary Dealers See More Fed Stimulus Coming
Most of Wall Street’s biggest banks expect Ben Bernanke‘s Federal Reserve to provide additional monetary policy stimulus to the economy at some point over coming months.
Daily Capitalist | Trouble Ahead: Employment, Inflation, And The Fed
If you believe that the Fed is isolated from political influence you would be wrong. They have always catered to the needs of the existing Administration. The recently released diaries of Arthur Burns (Fed chief under Nixon) detailed his willingness to please the president. I believe Bernanke and the FOMC will respond to the demands of Representatives. Senators, and the Administration to “do something.”


Econ Comments                                                                                                             
WSJ | The Corporate Welfare State
Corporate welfare is the offer of special favors—cash grants, loans, guarantees, bailouts and special tax breaks—to specific industries or firms.
WSJ | The 'Go Big' Illusion
The super committee's best opportunity is corporate tax reform.


WSJ | Generation Jobless: Young Men Suffer Worst as Economy Staggers
The unemployment rate for males between 25 and 34 years old with high-school diplomas is 14.4%—up from 6.1% before the downturn four years ago and far above today's 9% national rate.
Daily Finance | Unemployment Hurting the Oldest and Youngest Workers
Total payroll employment is now back to the level of July 2004, according to The Wall Street Journal's David M. Wessel. Still, of the 8.8 million jobs lost in the recession, only a quarter have been regained so far.

Econ Comments                                                                                                             
WSJ | When 9% Is a Relief
Tepid job growth, but no recession.
Washington Times | EDITORIAL: Create jobs by cutting red tape
Radical reform is needed to improve the dire unemployment situation.
RCM | Unemployment: Best Stimulus Is No Stimulus
In France during the G-20 meeting Friday, Obama blasted Republicans for their failure to pass another round of stimulus spending - this time dubbed a "jobs bill."
Minyanville | Where Will the Jobs Come From? As Always, From Entrepreneurs
The entrepreneur with his venture capital firm is one of those millionaires that some want to raise taxes on. If you take another 5% from him, that is 5% less that he can invest.

WSJ: Real Time Economics | Why Did the Unemployment Rate Drop?
The U.S. added 80,000 jobs in October, not even enough to account for the roughly 100,000 new entrants to labor force every month, but the unemployment rate dipped slightly to 9% from 9.1% and a broader unemployment rate fell even more to 16.2% from 16.5%. Why?
Calculated Risk | Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
There were only 80,000 jobs added in October. There were 104,000 private sector jobs added, and 24,000 government jobs lost.
American: Enterprise Blog | Will machines finally steal all our jobs?
The economy is in a state of transition, in which the middle-class jobs that emerged after World War II have begun to decline.
WSJ: Real Time Economics | Long-Term Unemployment Ticks Down
Nearly 5.9 million Americans had been unemployed for at least 27 weeks in October, down from 6.2 million the prior month, the Labor Department said Friday.
Calculated Risk | Seasonal Retail Hiring, Duration of Unemployment, Unemployment by Education and Diffusion Indexes
According to the BLS employment report, retailers hired seasonal workers at close to the pre-crisis pace in October.
Political Calculations | October 2011 Jobs: A Surge for Young Adults?
In terms of jobs gained, October 2011 appeared to be the best month for young adults (Age 20-24) since the United States economy peaked before entering into recession in December 2007.
WSJ: Real Time Economics | Economists React: ‘Mixed’ Economic Soup After Jobs Report
Economists and others weigh in on the 80,000 gain in nonfarm payrolls and the drop in the unemployment rate to 9%.


WSJ | Old Debts Dog Europe's Banks
Lenders Slower Than Their U.S. Counterparts to Shed Risky Mortgage Assets.
USA TODAY | Federal borrowing mounts while household debt shrinks
The sharp rise in federal borrowing is overwhelming efforts of consumers to reduce debt, leaving the economy deeper in debt than when the recession began in December 2007, a USA TODAY analysis finds.

Econ Comments                                                                                                             
NY Times | Sad Proof of Europe’s Fallout
Suddenly, all of those claims that American financial institutions have little to no exposure to Europe rang hollow.
CNN Money | Europe: Debt crisis 1, G-20 zero
The debt crisis in Europe continues to hang over the global economy after a summit of world leaders last week failed to produce any tangible new solutions.
WSJ | A Look Inside the Super Committee
The GOP opposes raising tax rates, but one idea being considered is limiting deductions as a percentage of income.
RCM | Analysis: United States gets reprieve to deal with deficit
Financial markets appear willing to give the United States something they offer fewer and fewer countries these days -- time to get public finances in order.
WSJ | Jerry Brown's Canoe Lesson
California has a roughly $500 billion unfunded pension liability, thanks largely to the legislature's generous payouts to public unions. Last year pensions cost the state about $5 billion, and the annual bill could double in a decade without reform.
Cato Institute | Why We Can't Escape the Eurocrisis
The debt crisis is not just an EU problem, but a trans-Atlantic financial crisis. The overwhelming debt problems on either side of the pond are interlinked through the banking system.

American: Enterprise Blog | The ACRE Program: A budget nightmare
As the agriculture and super committees are discussing revisions to the Farm Bill, it’s essential to understand the ACRE program.
Mercatus Center: Neighborhood Effects | Pension News From Around the Country
Here, again, is Jeff Miron’s estimate of the date at which each state’s debt-to-GDP ratio will exceed 90 percent (the value at which economists believe debt tends to begin to hamper economic growth).
Think Markets | The Infrastructure Death Rattle
The case for infrastructure spending must be made on the value of what is to be built or repaired and the efficiency with which that is done, not on the number of jobs that may be created. Frederic Bastiat made this point in the middle of the nineteenth century.
NRO: The Corner | More on Stimulus Spending and Other Government Interventions
As you may recall from a previous post, the work of former Obama Council of Economic Advisers chairman Christina Romer and her economist husband, David Romer, shows how increasing taxes by 1 percent of GDP for deficit-reduction purposes leads to a 3 percent reduction in GDP. In other words, the project you finance through taxes had better be productive, to justify this negative effect.
Heritage Foundation | Chart of the Week: U.S. Debt on Track to Fuel Economic Crisis Like Greece
Greece’s troubles might seem a world away from what the United States is experiencing, but a new report and video from the Joint Economic Committee suggest the two countries have troubling similarities.