Tuesday, December 13, 2011

General Economics

WSJ | Economy Poised for Growth Spurt, but Risks Abound
The U.S. economy is on track to grow faster in the current quarter than any time since the second quarter of last year, though several risks—including a possible meltdown in Europe—are clouding the outlook.
NY Times | Top Earners Not So Lofty in the Days of Recession
The share of income received by the top 1 percent — that potent symbol of inequality — dropped to 17 percent in 2009 from 23 percent in 2007, according to federal tax data. Within the group, average income fell to $957,000 in 2009 from $1.4 million in 2007.
IBD | The Richest 1% Get $10 Billion A Year From Uncle Sam
Using IRS data, IBD found that the top 1% of income earners claimed approximately $7 billion in Social Security benefits in 2009. That year, the program paid super-rich seniors — those with adjusted gross incomes exceeding $10 million — an average of $33,000 each.

Econ Comments                                                                                                             
RCM | What Is Rich and Poor In America?
The "poor" in America are far richer in real economic terms than the rich in many places around the globe. Defining poverty and affluence is difficult when the bottom 20% in America has a higher standard of living than the top 20% in many other countries.
Market Watch | Europe’s bank meltdown will hit home here
Commentary: Without more capital, banking dominoes wobble.
Forbes | Occupy Wall Street And The Myth Of The 99%
The ‘Occupy’ movement will never succeed against its “one percent” adversaries until it begins to understand that there is not a single one percent, but rather many.
Market Watch | American privilege rots an empire from within
A rising empire rewards people who contribute to its growth and invest in its future. The empire’s decline begins when certain members of society are over-rewarded by means of privileges, and the empire’s money is wasted on outdated endeavors.
WSJ | The Euro Zone's German Crisis
Blame Teutonic efficiency for what ails Europe. The other countries just can't compete.

CafĂ© Hayek | Obama’s Math Works Only in BizzaroEcon World
Obama’s math works only in a bizzaro economic world – a world where changes in prices have no, or never more than a de minimis, effect on people’s behavior.
EconLog | Inside the New Poverty Measure
"...the SPM threshold is a relative concept. It equals what a family with two children at the 33rd percentile of spending devote to food, clothing, housing, and utilities plus another 20% of this amount. This threshold is then adjusted for family size and local housing costs."
Political Calculations | U.S.-China Trade: Reaching an Inflection Point
In October 2011, China set a new record for its exports to the United States, with the value of its goods and services being imported into the U.S. reaching an all-time high of $37.807 billion.
WSJ: Real Time Economics | Realtors to Revise 2007-2011 Sales Data Lower
A real-estate trade group said Monday it plans to lower its estimates of how many homes were sold in the U.S. since 2007, after analysts came up with evidence that the group was overestimating sales.
Daily Capitalist | Latest OECD Leading Indicators: Negative
The latest OECD leading indicators for October 2011 are still pointing south which has been reflected in other data they produce (especially manufacturing and exports). There is not one country of the 33 OECD nations whose economy is not indicating a slowdown...


LA Times | China's housing bubble is losing air
Home prices and sales plunge after China's government intentionally slams on the brakes. Some recent buyers stage demonstrations, destroy real estate offices and demand refunds of up to 40%.
CNN Money | Fed prepares for QY: Quantitative yakking
At this point, there is little left for the Fed to do other than talk about how it should be talking about the markets and economy. The central bank's policy committee gets together Tuesday, and the only news of note that might come from the meeting are possible changes to the Fed's communications strategy.

WSJ: Real Time Economics | Some Economists Speculate Fed Could Trim Discount Rate
With most of Tuesday’s Federal Reserve policy meeting expected to be devoted to central bank communications strategies, some economists are uncertain how policymakers will handle a largely symbolic but potential touchy facet of monetary policy.


Econ Comments                                                                                                             
CNN Money | How long should we help the unemployed?
Federal benefits have been lengthened or extended eight times since they were first authorized in June 2008. Some 17.6 million Americans have collected federal benefits over the past four years at a cost of nearly $185 billion to taxpayers.
American | Why Unemployment Is Worse Than You Think
The widely quoted unemployment rate misses an important factor: demographics.

EconLog | Two Papers on PSST
Howitt argues that we ought to think of unemployment as a coordination failure. He points out that even Keynes can be read that way. That is, savers want more future output, but entrepreneurs are not sure which type of output they want, and the result is a coordination failure.
Calculated Risk | Jobs needed to reach 8% unemployment rate by November 2012
Right now the FOMC is forecasting the unemployment rate will be in the 8.5% to 8.7% range in Q4 2012, and private forecasters are even more pessimistic. Goldman Sachs is forecasting 9% in Q4 2012, and Merrill Lynch is forecasting 8.8%.
NRO: The Corner | Arguments Against Extending Unemployment Benefits
The emotional argument is understandable: If you ignore what is unseen, there is no doubt that failing to extend UI would be painful for many current beneficiaries. That being said, it’s one thing to acknowledge the emotional aspect of UI and quite another to claim UI creates jobs.


Washington Times | Europe’s fiscal agreement falls short for global markets
Despite much fanfare at a summit last week, European leaders failed to convince global investors that they are on their way to solving their massive problems with debt and recession.
Washington Times | U.S. government on pace to run budget deficit below $1T
The Treasury Department said Monday that the deficit was $137 billion in October. That brings the total for the first two months of the budget year to $236 billion — $55 billion less than the same two months last year.

American: Enterprise Blog | New euro zone ‘fiscal rule’ is absurd and illegal
As if to illustrate the depths to which it has sunk, the European Union picked December 8, the day of the Feast of the Immaculate Conception, to produce an agreement that is rotten to its core. Its proposed creation of “a new fiscal rule”—that is, “automatic” sanctions for eurozone countries that run up excessive deficits—is both absurd and manifestly illegal.