News
WSJ | Data Deepen Spanish Gloom
Spain's economy contracted for the second consecutive quarter in a row in the first quarter of the year confirming that technical recession has taken hold in the country as it braces for a week of anti-austerity protests.
CNN Money | Spain falls into recession
Spain has fallen into its second recession since 2009 as its economy shrank for the second consecutive quarter, according to a government report Monday.
Bloomber | Consumer Spending in U.S. Increases as Incomes Rise
Consumer spending in the U.S. climbed in March after the biggest gain since August 2009, and incomes picked up, indicating the biggest part of the economy will help sustain the expansion.
WSJ | Housing Ends Slide but Faces a Long Bottom
Nearly six years after home prices started falling, more U.S. housing markets appear to be nearing a new phase: a prolonged bottom.
CNN Money | U.S. 'dirty oil' imports set to triple
U.S. imports of what environmentalists are calling "dirty oil" are set to triple over the next decade, raising concerns over the environmental impact of extracting it and whether pipelines can safely transport this Canadian oil.
WSJ | Slowing Growth Stirs Recovery Fears
The economy lost steam in the first quarter, as onetime engines of growth sputtered and robust consumer spending was unable to propel the recovery on its own.
Econ Comments & Analysis
WSJ | How Big Banks Threaten Our Economy
As of this past January, any bank operating in the United States with more than $50 billion in assets must have the business equivalent of a living will—plans for what to do in the event of catastrophe. Every well-managed business should have contingencies and ways to assess its health and viability. But the fact that the Dodd-Frank financial regulations require the largest banks to submit detailed plans for worst-case scenarios suggests something is seriously amiss.
Washington Times | Obama keeps poor in their place
President Obama revived his Buffett-rule talking points on how raising taxes on the wealthy will restore the middle class. Actions mean more than such empty rhetoric. The president speaks of supporting fairness, but some of his actions actually favor the wealthy over lower-income earners.
WSJ | Chile's Cautionary Lesson for Americans
Communists are not taking over Chile. But you wouldn't know it from watching the media frenzy surrounding 23-year-old student leader and avowed communist Camila Vallejo in Santiago.
Real Clear Markets | If I Wanted America to Fail: Free Market Agitprop With a Lesson
A powerful YouTube video essay that premiered on Earth Day has since gone viral. I first saw it when it cracked 100,000 views. At last count, over 1.7 million people have seen it, a number that grows daily. It started out being passed along by conservative Americans but has begun spreading into wider circles.
WSJ | The Growth Deficit
The weakest recovery on record continued in 2012's first quarter, with the Commerce Department's Friday report of 2.2% growth. That's down from 3% at the end of last year, but closer to the 1.7% for all of 2011. It's enough to give the word recovery a bad name.
Forbes | Obama's Plan To Seize Control Of Our Economy And Our Lives
President Obama has made clear that he’s determined to continue pushing his “progressive” agenda, regardless of constitutional limitations on his power. He aims to have his way by issuing more and more executive orders.
Reason Foundation | How Big Government Is Killing California
The new USC study pointing to a much-slower population growth rate in California has been greeted by demographers and urban planners as good news, in that it supposedly gives our state’s leaders a little breathing room to plan better for the future. The rate of growth has slowed to about 1 percent a year, the result of fewer immigrants coming here and so many Californians heading to other states.
Wharton School of Business | Optimism Is Up, but the U.S. Housing Market Faces a Painful Shift
It's spring, the time when Americans traditionally think about new homes -- trading up for growing families, downsizing for retirees, picking up a vacation home or buying a starter home to escape renting.
Washington Times | The cost of a collapsing Europe
The erosion of the Schengen Agreement, which permitted free movement within the EU, is an important indicator of how far the political situation has deteriorated.
Blogs
Calculated Risk | Schedule for Week of April 29th
The key report for this week will be the April employment report to be released on Friday, May 4th. Other key reports include the ISM manufacturing index and vehicle sales on Tuesday, and the ISM non-manufacturing (service) index on Thursday.
Political Calculations | A First Look at Where GDP Will Be in 2012-Q2
On 2 April 2012, we forecast that the U.S.' real GDP for the first quarter of 2012 would be $13,508.2 billion in terms of constant 2005 U.S. dollars. This value represents the midpoint of our projected forecast range for where GDP in 2012-Q1 would most likely be recorded.
Library of Economics | The Bottom One Percent
There are about 313 million people in America today. 1% of 313 million is 3,130,000. In our prisons today are 2,200,000 people. So the people in prison are 2/3 of one percent. And their wages are typically about 23 cents an hour. They are, essentially, the bottom 1%.
Calculated Risk | Recovery Measures
By request, here is an update to four key indicators used by the NBER for business cycle dating: GDP, Employment, Industrial production and real personal income less transfer payments.
Marginal Revolution | The Big Easy’s School Revolution
The population of New Orleans changed pre and post-Katrina so it’s difficult to compare pre and post-Katrina test scores; although given the state of the schools pre-Katrina it’s hard to believe that the schools have not greatly improved.
Calculated Risk | Unofficial Problem Bank list declines to 930 Institutions
Very busy week for the Unofficial Problem Bank List because of failures and the FDIC releasing its enforcement actions through March.
WSJ | Economists React: GDP Is ‘Disappointing but Also Puzzling’
Economists and others weigh in on the 2.2% increase in U.S. gross domestic product in the first quarter.
Monday, April 30, 2012
Health Care
News
Bloomberg | Fracking ‘Health Challenges’ to Be Examined by U.S. Advisers
The Institute of Medicine will examine whether the process of hydraulic fracturing to extract natural gas from rock “poses potential health challenges,” a Centers for Disease Control and Prevention official said.
Politico | States could be in a bind on mandate
If the Supreme Court strikes down the health reform law’s individual mandate, the states at the forefront of implementing the law could find themselves like Wile E. Coyote in the Road Runner cartoons: racing ahead only to discover there’s no ground underneath their feet.
Econ Comments & Analysis
Forbes | The Lone Path to Cheap Healthcare Is Expensive Healthcare
All of which brings us to the current debate about healthcare. As evidenced by the wailing on both sides about making healthcare “affordable” through legislative fiat, it’s apparent that the Right and Left both are unaware of the beautiful truth that much like all other market goods, expensive, largely inaccessible healthcare must be introduced free of government distortion at nosebleed prices so that those same prices can eventually fall.
NBER | Does Universal Coverage Improve Health? The Massachusetts Experience
In 2006, Massachusetts passed health care reform legislation designed to achieve nearly universal coverage through a combination of insurance market reforms, mandates, and subsidies that later served as the model for national health care reform.
Blogs
Heritage Foundation | Opening the Door to Health Care Rationing Under Obamacare
One of the biggest fears Americans have about Obamacare is who will ultimately control health care decisions: the government or patients and their doctors.
Bloomberg | Fracking ‘Health Challenges’ to Be Examined by U.S. Advisers
The Institute of Medicine will examine whether the process of hydraulic fracturing to extract natural gas from rock “poses potential health challenges,” a Centers for Disease Control and Prevention official said.
Politico | States could be in a bind on mandate
If the Supreme Court strikes down the health reform law’s individual mandate, the states at the forefront of implementing the law could find themselves like Wile E. Coyote in the Road Runner cartoons: racing ahead only to discover there’s no ground underneath their feet.
Econ Comments & Analysis
Forbes | The Lone Path to Cheap Healthcare Is Expensive Healthcare
All of which brings us to the current debate about healthcare. As evidenced by the wailing on both sides about making healthcare “affordable” through legislative fiat, it’s apparent that the Right and Left both are unaware of the beautiful truth that much like all other market goods, expensive, largely inaccessible healthcare must be introduced free of government distortion at nosebleed prices so that those same prices can eventually fall.
NBER | Does Universal Coverage Improve Health? The Massachusetts Experience
In 2006, Massachusetts passed health care reform legislation designed to achieve nearly universal coverage through a combination of insurance market reforms, mandates, and subsidies that later served as the model for national health care reform.
Blogs
Heritage Foundation | Opening the Door to Health Care Rationing Under Obamacare
One of the biggest fears Americans have about Obamacare is who will ultimately control health care decisions: the government or patients and their doctors.
Monetary
News
Market Watch | Euro-zone April annual inflation slows to 2.6%
The annual pace of inflation in the 17-nation euro zone slowed less than expected to 2.6% in April from 2.7% in March, the European Union statistics agency Eurostat reported Monday.
WSJ | Banks Push Fed on Rule
Giant banks are making a major push to blunt the impact of a proposed rule that could further constrain their trading profits.
Econ Comments & Analysis
Atlantic | The 2% Catastrophe: How One Number Explains the Miserable Economy
The Federal Reserve balance sheet contains roughly $2.5 trillion worth of Treasuries, Fannie Mae bonds and mortgage-backed securities. But there is one asset the Fed considers invaluable. Credibility.
US News | To Fix the Federal Reserve, Fix Congress First
You might have thought the most broken thing in Washington is Congress, not the Fed. But the mirrors on Capitol Hill apparently don't work, so legislators aren't aware of their own abject ineptitude. All they see are problems elsewhere, which of course require Congressional action.
Blogs
Daily Capitalist | Monetary Policy, The Real Economy, And Asset Prices: Where Are We?
As the Federal Reserve staff prepares for this week’s meetings of the Open Market Committee, it is worth taking stock of the current situation from Fed Chairman Ben Bernanke’s perspective, now three years into economic recovery. Whether or not the prediction of some that 2012 will result in yet a new recession is correct or not, the U.S. economy remains sluggish
Market Watch | Euro-zone April annual inflation slows to 2.6%
The annual pace of inflation in the 17-nation euro zone slowed less than expected to 2.6% in April from 2.7% in March, the European Union statistics agency Eurostat reported Monday.
WSJ | Banks Push Fed on Rule
Giant banks are making a major push to blunt the impact of a proposed rule that could further constrain their trading profits.
Econ Comments & Analysis
Atlantic | The 2% Catastrophe: How One Number Explains the Miserable Economy
The Federal Reserve balance sheet contains roughly $2.5 trillion worth of Treasuries, Fannie Mae bonds and mortgage-backed securities. But there is one asset the Fed considers invaluable. Credibility.
US News | To Fix the Federal Reserve, Fix Congress First
You might have thought the most broken thing in Washington is Congress, not the Fed. But the mirrors on Capitol Hill apparently don't work, so legislators aren't aware of their own abject ineptitude. All they see are problems elsewhere, which of course require Congressional action.
Blogs
Daily Capitalist | Monetary Policy, The Real Economy, And Asset Prices: Where Are We?
As the Federal Reserve staff prepares for this week’s meetings of the Open Market Committee, it is worth taking stock of the current situation from Fed Chairman Ben Bernanke’s perspective, now three years into economic recovery. Whether or not the prediction of some that 2012 will result in yet a new recession is correct or not, the U.S. economy remains sluggish
Taxes
Econ Comments & Analysis
AEI | The new age of anxiety
Taxmegeddon is coming. This grim prophecy refers to the scheduled termination of a wide array of tax policies at the end of this year. The list is staggering. It includes the expiration of the Bush-era tax cuts, the end of the payroll-tax holiday, and the start of the new healthcare surtax and the Medicare payroll-tax increase.
Blogs
WSJ | State Governments Are Big Mega Millions Winners
Just as cash-strapped states began to worry about bridging gaps in their annual budgets, a nationwide lottery craze took hold last month when the world’s biggest Mega Millions jackpot swelled to $640 million.
AEI | The new age of anxiety
Taxmegeddon is coming. This grim prophecy refers to the scheduled termination of a wide array of tax policies at the end of this year. The list is staggering. It includes the expiration of the Bush-era tax cuts, the end of the payroll-tax holiday, and the start of the new healthcare surtax and the Medicare payroll-tax increase.
Blogs
WSJ | State Governments Are Big Mega Millions Winners
Just as cash-strapped states began to worry about bridging gaps in their annual budgets, a nationwide lottery craze took hold last month when the world’s biggest Mega Millions jackpot swelled to $640 million.
Employment
Econ Comments & Analysis
Washington Times | Obama’s weakly job numbers
The credibility gap is widening between what the Obama administration says about the jobs picture and what Americans sense is the grim reality. Despite the official line that things are getting better, the employment situation is growing progressively worse.
Blogs
FOX Business | What's Keeping Jobs Overseas
Today's new Dreamliner is a triumph for American labor. Six thousand workers are busy at Boeing's South Carolina plant. And don't forget that building the state of the art facility provided jobs for ten thousand construction workers. But victories like this one are becoming rarer and rarer in this country.
Atlantic | How to Get a Bigger Keynesian Multiplier
In a normal economy, 40% of new hires are people who switched right over from another job: Friday at Walmart, Monday at Target. The other 60% come from some mix of the unemployment lines and the ether.
Washington Times | Obama’s weakly job numbers
The credibility gap is widening between what the Obama administration says about the jobs picture and what Americans sense is the grim reality. Despite the official line that things are getting better, the employment situation is growing progressively worse.
Blogs
FOX Business | What's Keeping Jobs Overseas
Today's new Dreamliner is a triumph for American labor. Six thousand workers are busy at Boeing's South Carolina plant. And don't forget that building the state of the art facility provided jobs for ten thousand construction workers. But victories like this one are becoming rarer and rarer in this country.
Atlantic | How to Get a Bigger Keynesian Multiplier
In a normal economy, 40% of new hires are people who switched right over from another job: Friday at Walmart, Monday at Target. The other 60% come from some mix of the unemployment lines and the ether.
Budget
News
CNN Money | The $7 trillion fiscal cliff
Congress has invented a new extreme sport: Skating on the edge of a $7 trillion fiscal cliff.
Bloomberg | Father of Treasury Floaters Says Now Worst Time for Sales
Almost two decades after advising the U.S. to sell floating-rate notes to lower debt expenses, Campbell Harvey says starting to issue the securities now would be a costly mistake for American taxpayers.
Econ Comments & Analysis
Politico | Obama’s deficit attention disorder
President Barack Obama seems to be governing in some parallel universe — where the United States exists without mortal dangers threatening its economy and the nation’s most pressing exigency is the reelection of its president.
WSJ | How Retirement Benefits May Sink the States
Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state's future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, "You won't recruit a business, you won't recruit a family to live here."
Fortune | How to cut Social Security mercifully
Well, there's at least one virtue to the depressing numbers that Social Security's trustees unveiled last week -- they prove that I was right in February when I wrote that the system's finances had deteriorated badly thanks largely to the energy price boosts created by Arab Spring. Those increases were the primary factor in Social Security's inflation adjustment being 3.6% this year rather than the 0.7% assumption that had been baked into the trustees' 2011 report.
CATO | How the Swiss 'Debt Brake' Tamed Government
Americans looking for a way to tame government profligacy should look to Switzerland. In 2001, 85% of its voters approved an initiative that effectively requires its central government spending to grow no faster than trendline revenue.
Blogs
American | Senate transportation bill opens door to more bailouts
House and Senate conferees will meet on May 8 to iron out differences between the two chambers’ versions of the highway reauthorization bill. In addition to the transportation policy under debate, the 47 Senate and House members serving on the conference committee will decide the fate of an unrelated and troubling provision in the Senate-passed bill: Defined-benefit pension plan funding relief for corporations.
National Review | Can Spending Caps Constrain the Size of Government?
The reform, called a “debt brake” in Switzerland, has been very successful. Before the law went into effect in 2003, government spending was expanding by an average of 4.3% per year. Since then it’s increased by only 2.6% annually.
American | GDP and the slowdown in government spending
An across-the-board fall in government consumption and investment subtracted 0.60 percentage points from overall economic growth, the bulk coming from a fall in defense spending, which fell at an 8.1 percent annualized rate. State and local government expenditures fell at a 1.2 percent rate in the quarter, subtracting 0.14 percentage points from growth in GDP.
National Review | There’s Austerity and Then There’s Austerity
Austerity means different things to different people. For some people, austerity means adopting a debt-reduction package made of a mix of spending cuts and tax increases. For others, it means adopting a package made mainly of spending cuts — including reforms of social programs.
CNN Money | The $7 trillion fiscal cliff
Congress has invented a new extreme sport: Skating on the edge of a $7 trillion fiscal cliff.
Bloomberg | Father of Treasury Floaters Says Now Worst Time for Sales
Almost two decades after advising the U.S. to sell floating-rate notes to lower debt expenses, Campbell Harvey says starting to issue the securities now would be a costly mistake for American taxpayers.
Econ Comments & Analysis
Politico | Obama’s deficit attention disorder
President Barack Obama seems to be governing in some parallel universe — where the United States exists without mortal dangers threatening its economy and the nation’s most pressing exigency is the reelection of its president.
WSJ | How Retirement Benefits May Sink the States
Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state's future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, "You won't recruit a business, you won't recruit a family to live here."
Fortune | How to cut Social Security mercifully
Well, there's at least one virtue to the depressing numbers that Social Security's trustees unveiled last week -- they prove that I was right in February when I wrote that the system's finances had deteriorated badly thanks largely to the energy price boosts created by Arab Spring. Those increases were the primary factor in Social Security's inflation adjustment being 3.6% this year rather than the 0.7% assumption that had been baked into the trustees' 2011 report.
CATO | How the Swiss 'Debt Brake' Tamed Government
Americans looking for a way to tame government profligacy should look to Switzerland. In 2001, 85% of its voters approved an initiative that effectively requires its central government spending to grow no faster than trendline revenue.
Blogs
American | Senate transportation bill opens door to more bailouts
House and Senate conferees will meet on May 8 to iron out differences between the two chambers’ versions of the highway reauthorization bill. In addition to the transportation policy under debate, the 47 Senate and House members serving on the conference committee will decide the fate of an unrelated and troubling provision in the Senate-passed bill: Defined-benefit pension plan funding relief for corporations.
National Review | Can Spending Caps Constrain the Size of Government?
The reform, called a “debt brake” in Switzerland, has been very successful. Before the law went into effect in 2003, government spending was expanding by an average of 4.3% per year. Since then it’s increased by only 2.6% annually.
American | GDP and the slowdown in government spending
An across-the-board fall in government consumption and investment subtracted 0.60 percentage points from overall economic growth, the bulk coming from a fall in defense spending, which fell at an 8.1 percent annualized rate. State and local government expenditures fell at a 1.2 percent rate in the quarter, subtracting 0.14 percentage points from growth in GDP.
National Review | There’s Austerity and Then There’s Austerity
Austerity means different things to different people. For some people, austerity means adopting a debt-reduction package made of a mix of spending cuts and tax increases. For others, it means adopting a package made mainly of spending cuts — including reforms of social programs.
Friday, April 27, 2012
General Economics
News
Bloomebrg | Stocks Advance as Earnings Overshadow GDP; Euro Climbs
U.S. stocks rose for a fourth straight day as improving consumer confidence and earnings overshadowed lower-than-forecast economic growth and a downgrade of Spain’s credit rating. The dollar weakened versus most major peers while Treasuries were little changed.
USA Today | AAA study finds driving costs get small increase
There's bad news and good news for economically battered drivers in auto club AAA's annual report on the cost of owning and operating a vehicle.
Politico | Poll: Feds' favorability at 15-year low
Today, just one in three has a favorable view of the federal government — the lowest level in 15 years, according to a Pew survey. The majority of Americans remain satisfied with their local and state governments — 61 percent and 52 percent, respectively — but only 33 percent feel likewise about the federal government.
National Journal | First-Quarter GDP Underwhelms, Fueling Concern Over a Possible Slowing Recovery
Real gross domestic product grew by 2.2 percent from the fourth quarter of 2011 to the first of 2012, less than the 2.6 percent expected by economists polled by Dow Jones Newswires. That number is roughly in line with consensus estimates conducted by other organizations.
Market Watch | Student loan fees may be capped as House vote set
A step was taken Wednesday by the House Republican leadership to cap federal student loan fees, in a development that could take away an issue President Barack Obama has been campaigning on this week.
Econ Comments & Analysis
Forbes | The 99% Need Growth, Not Economic Fairness
President Obama and his merry band of Progressives are beating the drums for big tax increases on “The 1%” for the sake of “fairness”. This is about the only campaign strategy left to him, because he has proved over the past three years that he doesn’t have a clue as to how to produce jobs and economic growth. However, if you look at the numbers, “The 99%” needs faster economic growth a lot more than it needs Obama’s version of “tax fairness”.
Real Clear Markets | Europe Is In Recession, the U.S. Isn't Far Behind
The global banking system in 2012 has seen a marked transition from the monetary concept that gained universal traction nearly 100 years ago. The United States in 1912 was the only economic power without a central bank, but by 1913 one had been created, though its creators, both bankers and government officials, were very cautious about having the words "central bank" in the title of the agency. Instead the Federal Reserve System was born as a private corporation capitalized by individual regional banking interests, by far the largest being the banks in New York City.
Politico | Keystone XL feeds dangerous addiction
With all the talk on Capitol Hill and Main Street about gas prices, it is critical to start discussing ways of decreasing the demand for gasoline by weaning ourselves off oil—for our energy security and our national security. This ought to be top priority for all politicians, regardless of party.
Forbes | Yo-Yo Economics?
President Obama recently disparaged free-market economics as “you’re-on-your-own economics.” It’s a catchy phrase—rhythmic, alliterative, clever. I like the sound of it. Too bad it’s bunk.
Economist | New rivers of gold
Last year Mexicans received an estimated $24 billion from friends and family working abroad, mainly in the United States, with which Mexico forms the world’s busiest remittance corridor. But a closer look at the Tapachulan queue shows how the remittance business is changing. Many are not Mexicans receiving cash from America, but migrant workers sending it back home to Guatemala or Honduras.
Politico | Big Labor’s big moment
For years Big Labor has been looking small, but it doesn’t feel that way now. Unions won an Ohio referendum overturning Gov. John Kasich’s effort to restrict collective bargaining for government employees.
AEI | Would you settle your claims on Social Security for 80 cents on the dollar? (I would)
The problem is pretty basic: According to the new calculations of the Social Security Trustees’ 2012 Report, Social Security’s future costs are a lot bigger than its future income.
Blogs
Economist | The black hole
For much of the past few years, China has been at the centre of heated rhetoric over its contribution to global imbalances and a corresponding shortfall in global aggregate demand.
WSJ | New Grads’ Pay Gap Is Lasting Legacy of Recession
A new study by the Conference Board measures how median wages within different labor groups fared during and after the Great Recession that ran from December 2007 until June 2009.
National Review | The Crucial Distinction Between Being Pro-Business and Pro-Market
There is nothing wrong about lowering tax rates to promote economic growth or attract investments. However, it is wrong to dole out lower rates to specific and well-connected businesses or to target these lower rates based on size.
WSJ | What’s Wrong With Education in the U.S.?
Like home ownership, Americans are obsessed with the importance of obtaining a college degree, and so it gets over-emphasized and over-subsidized through student loans that lead in many cases to too many people paying ever-higher tuition rates at mediocre colleges and obtaining a worthless degree.
Bloomebrg | Stocks Advance as Earnings Overshadow GDP; Euro Climbs
U.S. stocks rose for a fourth straight day as improving consumer confidence and earnings overshadowed lower-than-forecast economic growth and a downgrade of Spain’s credit rating. The dollar weakened versus most major peers while Treasuries were little changed.
USA Today | AAA study finds driving costs get small increase
There's bad news and good news for economically battered drivers in auto club AAA's annual report on the cost of owning and operating a vehicle.
Politico | Poll: Feds' favorability at 15-year low
Today, just one in three has a favorable view of the federal government — the lowest level in 15 years, according to a Pew survey. The majority of Americans remain satisfied with their local and state governments — 61 percent and 52 percent, respectively — but only 33 percent feel likewise about the federal government.
National Journal | First-Quarter GDP Underwhelms, Fueling Concern Over a Possible Slowing Recovery
Real gross domestic product grew by 2.2 percent from the fourth quarter of 2011 to the first of 2012, less than the 2.6 percent expected by economists polled by Dow Jones Newswires. That number is roughly in line with consensus estimates conducted by other organizations.
Market Watch | Student loan fees may be capped as House vote set
A step was taken Wednesday by the House Republican leadership to cap federal student loan fees, in a development that could take away an issue President Barack Obama has been campaigning on this week.
Econ Comments & Analysis
Forbes | The 99% Need Growth, Not Economic Fairness
President Obama and his merry band of Progressives are beating the drums for big tax increases on “The 1%” for the sake of “fairness”. This is about the only campaign strategy left to him, because he has proved over the past three years that he doesn’t have a clue as to how to produce jobs and economic growth. However, if you look at the numbers, “The 99%” needs faster economic growth a lot more than it needs Obama’s version of “tax fairness”.
Real Clear Markets | Europe Is In Recession, the U.S. Isn't Far Behind
The global banking system in 2012 has seen a marked transition from the monetary concept that gained universal traction nearly 100 years ago. The United States in 1912 was the only economic power without a central bank, but by 1913 one had been created, though its creators, both bankers and government officials, were very cautious about having the words "central bank" in the title of the agency. Instead the Federal Reserve System was born as a private corporation capitalized by individual regional banking interests, by far the largest being the banks in New York City.
Politico | Keystone XL feeds dangerous addiction
With all the talk on Capitol Hill and Main Street about gas prices, it is critical to start discussing ways of decreasing the demand for gasoline by weaning ourselves off oil—for our energy security and our national security. This ought to be top priority for all politicians, regardless of party.
Forbes | Yo-Yo Economics?
President Obama recently disparaged free-market economics as “you’re-on-your-own economics.” It’s a catchy phrase—rhythmic, alliterative, clever. I like the sound of it. Too bad it’s bunk.
Economist | New rivers of gold
Last year Mexicans received an estimated $24 billion from friends and family working abroad, mainly in the United States, with which Mexico forms the world’s busiest remittance corridor. But a closer look at the Tapachulan queue shows how the remittance business is changing. Many are not Mexicans receiving cash from America, but migrant workers sending it back home to Guatemala or Honduras.
Politico | Big Labor’s big moment
For years Big Labor has been looking small, but it doesn’t feel that way now. Unions won an Ohio referendum overturning Gov. John Kasich’s effort to restrict collective bargaining for government employees.
AEI | Would you settle your claims on Social Security for 80 cents on the dollar? (I would)
The problem is pretty basic: According to the new calculations of the Social Security Trustees’ 2012 Report, Social Security’s future costs are a lot bigger than its future income.
Blogs
Economist | The black hole
For much of the past few years, China has been at the centre of heated rhetoric over its contribution to global imbalances and a corresponding shortfall in global aggregate demand.
WSJ | New Grads’ Pay Gap Is Lasting Legacy of Recession
A new study by the Conference Board measures how median wages within different labor groups fared during and after the Great Recession that ran from December 2007 until June 2009.
National Review | The Crucial Distinction Between Being Pro-Business and Pro-Market
There is nothing wrong about lowering tax rates to promote economic growth or attract investments. However, it is wrong to dole out lower rates to specific and well-connected businesses or to target these lower rates based on size.
WSJ | What’s Wrong With Education in the U.S.?
Like home ownership, Americans are obsessed with the importance of obtaining a college degree, and so it gets over-emphasized and over-subsidized through student loans that lead in many cases to too many people paying ever-higher tuition rates at mediocre colleges and obtaining a worthless degree.
Health Care
News
National Journal | Health Groups Rally for Public Health Fund
Public health groups are rallying the troops to try to help preserve the public health fund created under the 2010 health reform law, which Republicans now say they’ll raid to help pay for a student loan program.
National Journal | Health Groups Rally for Public Health Fund
Public health groups are rallying the troops to try to help preserve the public health fund created under the 2010 health reform law, which Republicans now say they’ll raid to help pay for a student loan program.
Monetary
News
Bloomberg | Bank of Japan Expands Stimulus as Economy Set to Slow
The Bank of Japan (8301) expanded its plan for government-bond purchases by 10 trillion yen ($124 billion) after the world’s third-largest economy showed signs of slowing and lawmakers pressed for more aggressive steps.
Econ Comments & Analysis
WSJ | Money-Market Funds Still Need Reform
In the fall of 2008, the world learned what financial stability is, through its absence. Over a few short weeks, Fannie Mae and Freddie Mac entered federal conservatorship, Lehman Brothers filed for bankruptcy, Merrill Lynch was purchased by Bank of America, and AIG received an $85 billion loan from the Federal Reserve to continue operating.
Heritage Foundation | Volcker Rule May Make the Financial and Banking System Riskier
By now, it should be clear even to casual observers that the Volcker Rule, which was intended to limit the “risky” activities of banks by banning them from certain types of transactions, will be nearly impossible to implement without severe unintended damage to the U.S. financial system and many other types of businesses both here in the U.S. and overseas.
Bloomberg | Bank of Japan Expands Stimulus as Economy Set to Slow
The Bank of Japan (8301) expanded its plan for government-bond purchases by 10 trillion yen ($124 billion) after the world’s third-largest economy showed signs of slowing and lawmakers pressed for more aggressive steps.
Econ Comments & Analysis
WSJ | Money-Market Funds Still Need Reform
In the fall of 2008, the world learned what financial stability is, through its absence. Over a few short weeks, Fannie Mae and Freddie Mac entered federal conservatorship, Lehman Brothers filed for bankruptcy, Merrill Lynch was purchased by Bank of America, and AIG received an $85 billion loan from the Federal Reserve to continue operating.
Heritage Foundation | Volcker Rule May Make the Financial and Banking System Riskier
By now, it should be clear even to casual observers that the Volcker Rule, which was intended to limit the “risky” activities of banks by banning them from certain types of transactions, will be nearly impossible to implement without severe unintended damage to the U.S. financial system and many other types of businesses both here in the U.S. and overseas.
Taxes
News
Politico | Buffett rule serious or gimmick?
Although voters differ on whether raising taxes on wealthy Americans would help or hurt the economy, a slight majority believe the “Buffett rule” is “an election-year gimmick,” according to a Fox News poll.
Econ Comments & Analysis
NBER | Gasoline Taxes and Consumer Behavior
Gasoline taxes can be employed to correct externalities associated with automobile use, to reduce dependency on foreign oil, and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes.
Blogs
Tax Foundation | States Without Income Taxes Rely on Varying Forms of Revenue
According to the latest U.S. Census Bureau data, state-level individual income taxes make up the largest share of total state government tax collections. In 2011, state governments brought in $259 billion through these taxes, approximately 34 percent of total collections. However, there are currently 9 states that do not tax wage income
Keith Hennessey | Government doesn’t give tax cuts, it takes more or less taxes
Wednesday the President spoke to a college crowd in favor of raising taxes on the rich to subsidize low interest rates on student loans. His comments provide an opportunity to explain the signficance of how one talks about taxes.
Politico | Buffett rule serious or gimmick?
Although voters differ on whether raising taxes on wealthy Americans would help or hurt the economy, a slight majority believe the “Buffett rule” is “an election-year gimmick,” according to a Fox News poll.
Econ Comments & Analysis
NBER | Gasoline Taxes and Consumer Behavior
Gasoline taxes can be employed to correct externalities associated with automobile use, to reduce dependency on foreign oil, and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes.
Blogs
Tax Foundation | States Without Income Taxes Rely on Varying Forms of Revenue
According to the latest U.S. Census Bureau data, state-level individual income taxes make up the largest share of total state government tax collections. In 2011, state governments brought in $259 billion through these taxes, approximately 34 percent of total collections. However, there are currently 9 states that do not tax wage income
Keith Hennessey | Government doesn’t give tax cuts, it takes more or less taxes
Wednesday the President spoke to a college crowd in favor of raising taxes on the rich to subsidize low interest rates on student loans. His comments provide an opportunity to explain the signficance of how one talks about taxes.
Employment
News
WSJ | U.S. Firms Add Jobs, but Mostly Overseas
Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.
CNN Money | White House: Middle class jobs are trickling back
The middle class may be starting to heal from a decades-long decline, President Obama's chief economic adviser said Thursday.
Econ Comments & Analysis
Motley Fool | More Jobs, Less Work, Low Wages, Dark Future: Part 2
We looked at a paradox yesterday: While unemployment rose, average working hours fell, incomes stagnated, savings increased, and debt was repaid, Americans kept their wallets open and spent a decent amount of money. Those don't add up. What gives?
Blogs
WSJ | Are Jobless Claims Tracking Gas Prices?
Jonathan Basile of Credit Suisse observes an interesting pattern in gasoline prices and jobless claims: Since the start of the year, prices and claims have risen in almost the same percentage terms.
WSJ | U.S. Firms Add Jobs, but Mostly Overseas
Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.
CNN Money | White House: Middle class jobs are trickling back
The middle class may be starting to heal from a decades-long decline, President Obama's chief economic adviser said Thursday.
Econ Comments & Analysis
Motley Fool | More Jobs, Less Work, Low Wages, Dark Future: Part 2
We looked at a paradox yesterday: While unemployment rose, average working hours fell, incomes stagnated, savings increased, and debt was repaid, Americans kept their wallets open and spent a decent amount of money. Those don't add up. What gives?
Blogs
WSJ | Are Jobless Claims Tracking Gas Prices?
Jonathan Basile of Credit Suisse observes an interesting pattern in gasoline prices and jobless claims: Since the start of the year, prices and claims have risen in almost the same percentage terms.
Budget
News
USA Today | Heavy debt loads may be holding down consumer spending
Households have whittled down the massive debt they racked up in the mid-2000s credit bubble, but apparently not enough to nudge them into a spending binge that could jump-start the recovery, some economists say.
Econ Comments & Analysis
Bloomberg | Spain Rules Out Bailout as De Guindos Says Banks Funded
Spanish Economy Minister Luis de Guindos ruled out seeking a bailout hours before Standard & Poor’s cut the country’s credit rating to three levels above junk and a report showed unemployment jumped close to a record.
Blogs
Tax Foundation | CBO: President’s Budget Worse than Taxmageddon
The Congressional Budget Office (CBO) has released their estimate of the economic impact of the President's 2013 budget. It's not good. It's not even good relative to Taxmageddon, which is the roughly $500 billion tax increase scheduled to happen at the end of this year due to expiring provisions such as the Bush tax cuts, the payroll tax holiday, and the Alternative Minimum Tax (AMT) patch.
The American | Why Hubbard is right, and Geithner and Goolsbee are wrong
President Obama’s budget proposes to continue elevated levels of federal spending relative to GDP. So how does the president propose to pay for this?
Think Markets | European Austerity in Perspective
Attempts to rein in government spending necessarily have unpleasant side effects. Thus the Dutch government collapsed amid budget talks to control the deficit. And British national output appears to be shrinking.
USA Today | Heavy debt loads may be holding down consumer spending
Households have whittled down the massive debt they racked up in the mid-2000s credit bubble, but apparently not enough to nudge them into a spending binge that could jump-start the recovery, some economists say.
Econ Comments & Analysis
Bloomberg | Spain Rules Out Bailout as De Guindos Says Banks Funded
Spanish Economy Minister Luis de Guindos ruled out seeking a bailout hours before Standard & Poor’s cut the country’s credit rating to three levels above junk and a report showed unemployment jumped close to a record.
Blogs
Tax Foundation | CBO: President’s Budget Worse than Taxmageddon
The Congressional Budget Office (CBO) has released their estimate of the economic impact of the President's 2013 budget. It's not good. It's not even good relative to Taxmageddon, which is the roughly $500 billion tax increase scheduled to happen at the end of this year due to expiring provisions such as the Bush tax cuts, the payroll tax holiday, and the Alternative Minimum Tax (AMT) patch.
The American | Why Hubbard is right, and Geithner and Goolsbee are wrong
President Obama’s budget proposes to continue elevated levels of federal spending relative to GDP. So how does the president propose to pay for this?
Think Markets | European Austerity in Perspective
Attempts to rein in government spending necessarily have unpleasant side effects. Thus the Dutch government collapsed amid budget talks to control the deficit. And British national output appears to be shrinking.
Thursday, April 26, 2012
General Economics
News
USA Today | U.S. home prices fall again, but some markets see gains
Nationwide, prices fell 0.8% in February, the sixth-consecutive month of price declines, according to the Standard & Poor's/Case Shiller index released Tuesday. When adjusted for seasonal factors, prices rose 0.2%.
WSJ | Euro-Zone Economic Confidence Drops
Another vital sign for the euro-zone economy took a sudden turn for the worse this month as an economic confidence indicator fell, raising the risk of a prolonged contraction even as government leaders begin poring over formulas for promoting growth.
Econ Comments & Analysis
Washington Times | Obama crucifies business
Let there be no mistake about how the Obama administration views its regulatory role. America’s oil and gas producers are under siege from agencies such as the Environmental Protection Agency (EPA), and it’s hitting consumers in their pocketbooks.
Bloomberg | Conservatives Need Better Blueprint for New Economy
The first priority for governments in the U.S. and Europe is to engineer the fastest possible recovery from the Great Recession -- a job that the European Union, in particular, is bungling. Despite it all, recovery will come, and when it does the world economy is going to look different.
Blogs
Atlantic | Memory As A Consumer Durable
According to the arcane conventions of economic statistics, a "consumer durable" is any physical product that lasts longer than three years: cars, fridges, computers (Strangely, Levi's don't count as a durable).
Coordination Problem | Lawrence White on The Clash of Economic Ideas
Yesterday (Wed., April 25th, 2012), the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center hosted a public event highlighting Lawrence H. White's The Clash of Economic Ideas. Providing formal comments on the book were Doug Irwin of Dartmouth, and Perry Mehrling of Barnard College and INET.
Marginal Revolution | Austan Goolsbee is now blogging
I agree with Glenn that one of the key debates in the election should be about how America should deal with our long run budget challenge (that comes from the aging of our population).
USA Today | U.S. home prices fall again, but some markets see gains
Nationwide, prices fell 0.8% in February, the sixth-consecutive month of price declines, according to the Standard & Poor's/Case Shiller index released Tuesday. When adjusted for seasonal factors, prices rose 0.2%.
WSJ | Euro-Zone Economic Confidence Drops
Another vital sign for the euro-zone economy took a sudden turn for the worse this month as an economic confidence indicator fell, raising the risk of a prolonged contraction even as government leaders begin poring over formulas for promoting growth.
Econ Comments & Analysis
Washington Times | Obama crucifies business
Let there be no mistake about how the Obama administration views its regulatory role. America’s oil and gas producers are under siege from agencies such as the Environmental Protection Agency (EPA), and it’s hitting consumers in their pocketbooks.
Bloomberg | Conservatives Need Better Blueprint for New Economy
The first priority for governments in the U.S. and Europe is to engineer the fastest possible recovery from the Great Recession -- a job that the European Union, in particular, is bungling. Despite it all, recovery will come, and when it does the world economy is going to look different.
Blogs
Atlantic | Memory As A Consumer Durable
According to the arcane conventions of economic statistics, a "consumer durable" is any physical product that lasts longer than three years: cars, fridges, computers (Strangely, Levi's don't count as a durable).
Coordination Problem | Lawrence White on The Clash of Economic Ideas
Yesterday (Wed., April 25th, 2012), the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center hosted a public event highlighting Lawrence H. White's The Clash of Economic Ideas. Providing formal comments on the book were Doug Irwin of Dartmouth, and Perry Mehrling of Barnard College and INET.
Marginal Revolution | Austan Goolsbee is now blogging
I agree with Glenn that one of the key debates in the election should be about how America should deal with our long run budget challenge (that comes from the aging of our population).
Health Care
Econ Comments & Analysis
Market Watch | Health law’s demise would save big bucks, for some
Whatever their opinion of the health-care reform law, wealthy Americans have a lot of money at risk in the Supreme Court’s coming decision on the law’s constitutionality.
Market Watch | Health law’s demise would save big bucks, for some
Whatever their opinion of the health-care reform law, wealthy Americans have a lot of money at risk in the Supreme Court’s coming decision on the law’s constitutionality.
Monetary
News
WSJ | Fed Holds Rates Steady, but Outlooks Shift
Federal Reserve officials reaffirmed their plan to keep short-term interest rates near zero until late 2014 to support economic growth, but hints emerged of policy makers' diverging views about how the central bank might proceed.
Econ Comments & Analysis
WSJ | Congress Finally Takes on the Fed
Two bills now before Congress make it clear that legislators are finally giving serious attention to a much-needed reform of the Federal Reserve System.
Blogs
Smart Money | The Fed in 57 Words
Here’s the full text of Wednesday’s Fed statement, plus a translation for those who don’t speak Fed.
WSJ | Fed Holds Rates Steady, but Outlooks Shift
Federal Reserve officials reaffirmed their plan to keep short-term interest rates near zero until late 2014 to support economic growth, but hints emerged of policy makers' diverging views about how the central bank might proceed.
Econ Comments & Analysis
WSJ | Congress Finally Takes on the Fed
Two bills now before Congress make it clear that legislators are finally giving serious attention to a much-needed reform of the Federal Reserve System.
Blogs
Smart Money | The Fed in 57 Words
Here’s the full text of Wednesday’s Fed statement, plus a translation for those who don’t speak Fed.
Taxes
Econ Comments & Analysis
CNN Money | Why half of us don't pay income tax
It's a provocative fact about the tax code: Nearly half of U.S. households end up owing no federal income tax
CNN Money | Why half of us don't pay income tax
It's a provocative fact about the tax code: Nearly half of U.S. households end up owing no federal income tax
Employment
News
CNN Money | Jobless claims remain elevated
First-time claims for unemployment benefits remained elevated for the third straight week, the government said Thursday, a sign that a job recovery might be stalling.
Econ Comments & Analysis
WSJ | Dial Williston for Jobs
The North Dakota shale boom is by now well known—so much so that the Chamber of Commerce in tiny Williston (population: who knows?) in the heart of the Bakken Shale has had to automate its phone system because it can no longer respond to individual calls or emails.
CNN Money | Jobless claims remain elevated
First-time claims for unemployment benefits remained elevated for the third straight week, the government said Thursday, a sign that a job recovery might be stalling.
Econ Comments & Analysis
WSJ | Dial Williston for Jobs
The North Dakota shale boom is by now well known—so much so that the Chamber of Commerce in tiny Williston (population: who knows?) in the heart of the Bakken Shale has had to automate its phone system because it can no longer respond to individual calls or emails.
Budget
Econ Comments & Analysis
Real Clear Markets | The Mysterious White House/CBO Deficit Disparity
It's a perennial Washington mystery, one that probably increases public skepticism about politics and politicians. How does the White House calculate that the administration's fiscal 2013 budget would reduce the deficit by $4 trillion, whereas the Congressional Budget Office estimates that the same budget would raise the deficit by $3.6 trillion?
Market Watch | The day austerity died
Lots of little things seem to be contributing to the strength of the market, but there does also seem to be a belief that Germany finally “gets it.”
Politico | Social Security trustees: We’re going broke
Here’s some bad news: The latest report of the Social Security and Medicare trustees shows an unfunded liability for both programs of $63 trillion. That is equal to about 4.5 times the entire U.S. gross domestic product.
Blogs
Neighborhood Effects | To Cut Spending, Focus on the Rules of the Game, Not the Players
It might seem that the natural solution is to elect politicians committed to reining in spending, especially on the entitlement programs and pensions at the heart of state and federal overspending.
Real Clear Markets | The Mysterious White House/CBO Deficit Disparity
It's a perennial Washington mystery, one that probably increases public skepticism about politics and politicians. How does the White House calculate that the administration's fiscal 2013 budget would reduce the deficit by $4 trillion, whereas the Congressional Budget Office estimates that the same budget would raise the deficit by $3.6 trillion?
Market Watch | The day austerity died
Lots of little things seem to be contributing to the strength of the market, but there does also seem to be a belief that Germany finally “gets it.”
Politico | Social Security trustees: We’re going broke
Here’s some bad news: The latest report of the Social Security and Medicare trustees shows an unfunded liability for both programs of $63 trillion. That is equal to about 4.5 times the entire U.S. gross domestic product.
Blogs
Neighborhood Effects | To Cut Spending, Focus on the Rules of the Game, Not the Players
It might seem that the natural solution is to elect politicians committed to reining in spending, especially on the entitlement programs and pensions at the heart of state and federal overspending.
Wednesday, April 25, 2012
General Economics
News
WSJ | U.K. Back in Recession
The U.K. slid back into recession in the first quarter of 2012, dealing a fresh blow to Prime Minister David Cameron's governing coalition and complicating its efforts to fix the nation's public finances.
NY Times | With Venezuelan Food Shortages, Some Blame Price Controls
By 6:30 a.m., a full hour and a half before the store would open, about two dozen people were already in line. They waited patiently, not for the latest iPhone, but for something far more basic: groceries.
WSJ | S&P Cuts India Outlook to Negative
Standard & Poor's Ratings Services cut the outlook on India's long-term credit rating Wednesday in a surprise move that could see Asia's third biggest economy lose its investment-grade status if the government fails to solve deep-seated problems that have clouded its economic prospects and spooked investors.
USA Today | Economy's recovery caught between opposing forces
Economists may have finally learned CEOs' first rule of dealing with Wall Street: It's better to underpromise and overdeliver.
WSJ | Housing Notches Tiny Gains
Fresh economic benchmarks painted a mixed picture of the nation's housing market, reflecting a sector that is inching forward amid fits and starts.
Market Watch | Orders for big-ticket items fall 4.2% in March
Orders for long-lasting U.S. goods fell sharply in March, largely because of fewer bookings for commercial jets, the Commerce Department reported Wednesday.
Econ Comments & Analysis
CNN Money | Companies see slower growth ahead
In what could be yet another sign that the recovery is losing momentum, a new survey shows medium-sized companies are still not confident enough to hire.
The American | Right in the Middle: The Midwest’s Growth Lessons for America
Middle America is a clear picture of how much the basics matter: Cost of living, job quality, schools, and opportunities to develop the right skills for the best jobs.
Fortune | Don't blame the 1% for America's pay gap
It's time to end the myth that the nation's wealthy are getting rich off the backs of the poor. Instead let's figure out what they're doing right.
WSJ | Europe's Phony Growth Debate
Growth or austerity? That's the choice facing Europe these days—or so the Keynesian consensus keeps saying. According to this view, which has dominated world economic councils since the 2008 crisis began, "growth" is mainly a function of government spending.
Washington Times | Not so high-speed rail
Trainmakers interested in getting a big slice of taxpayer cash have until May 11 to notify federal officials that they want to build America’s next-generation high-speed rail cars. Over $550 million is being made available for these next-generation purchases through a program meant to fulfill the White House vision of “trains zipping along at up to 220 miles per hour in our most densely populated corridors.”
Blogs
Atlantic | Does Stimulus Grow the Private Economy?
Let's start off by rehashing the battle over whether the 2009 stimulus bill--ARRA, the American Reinvestment and Recovery Act--really worked. I'm not talking about the tax cuts--I'm talking about the spending: green jobs, new government buildings, health clinic staffers.
WSJ | U.K. Back in Recession
The U.K. slid back into recession in the first quarter of 2012, dealing a fresh blow to Prime Minister David Cameron's governing coalition and complicating its efforts to fix the nation's public finances.
NY Times | With Venezuelan Food Shortages, Some Blame Price Controls
By 6:30 a.m., a full hour and a half before the store would open, about two dozen people were already in line. They waited patiently, not for the latest iPhone, but for something far more basic: groceries.
WSJ | S&P Cuts India Outlook to Negative
Standard & Poor's Ratings Services cut the outlook on India's long-term credit rating Wednesday in a surprise move that could see Asia's third biggest economy lose its investment-grade status if the government fails to solve deep-seated problems that have clouded its economic prospects and spooked investors.
USA Today | Economy's recovery caught between opposing forces
Economists may have finally learned CEOs' first rule of dealing with Wall Street: It's better to underpromise and overdeliver.
WSJ | Housing Notches Tiny Gains
Fresh economic benchmarks painted a mixed picture of the nation's housing market, reflecting a sector that is inching forward amid fits and starts.
Market Watch | Orders for big-ticket items fall 4.2% in March
Orders for long-lasting U.S. goods fell sharply in March, largely because of fewer bookings for commercial jets, the Commerce Department reported Wednesday.
Econ Comments & Analysis
CNN Money | Companies see slower growth ahead
In what could be yet another sign that the recovery is losing momentum, a new survey shows medium-sized companies are still not confident enough to hire.
The American | Right in the Middle: The Midwest’s Growth Lessons for America
Middle America is a clear picture of how much the basics matter: Cost of living, job quality, schools, and opportunities to develop the right skills for the best jobs.
Fortune | Don't blame the 1% for America's pay gap
It's time to end the myth that the nation's wealthy are getting rich off the backs of the poor. Instead let's figure out what they're doing right.
WSJ | Europe's Phony Growth Debate
Growth or austerity? That's the choice facing Europe these days—or so the Keynesian consensus keeps saying. According to this view, which has dominated world economic councils since the 2008 crisis began, "growth" is mainly a function of government spending.
Washington Times | Not so high-speed rail
Trainmakers interested in getting a big slice of taxpayer cash have until May 11 to notify federal officials that they want to build America’s next-generation high-speed rail cars. Over $550 million is being made available for these next-generation purchases through a program meant to fulfill the White House vision of “trains zipping along at up to 220 miles per hour in our most densely populated corridors.”
Blogs
Atlantic | Does Stimulus Grow the Private Economy?
Let's start off by rehashing the battle over whether the 2009 stimulus bill--ARRA, the American Reinvestment and Recovery Act--really worked. I'm not talking about the tax cuts--I'm talking about the spending: green jobs, new government buildings, health clinic staffers.
Health Care
News
CNN Money | Pollution report: More Americans breathing easier
While dangerous pollutants still threaten the health of millions of Americans, the United States has made great strides in clearing the air, according to the American Lung Association.
Econ Comments & Analysis
NBER | Effects of Medicare Payment Reform: Evidence from the Home Health Interim and Prospective Payment Systems
Medicare continues to implement payment reforms that shift reimbursement from fee-for-service towards episode-based payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies.
Blogs
Library of Economics | Economists on Health-Care Licensing
Loosening current licensing restrictions on the range of services that nurses, physician assistants, dental hygienists and pharmacists are permitted to perform would help patients on balance, because the additional safety risks would be small compared to the decreased costs in waiting time and fees.
National Review | The Trustees’ Report: Things Aren’t Looking up
The annual reports of the Social Security and Medicare trustees were released yesterday. As always, the reports present a grim and deteriorating picture of the two programs’ financial outlooks. Here are a few highlights
CNN Money | Pollution report: More Americans breathing easier
While dangerous pollutants still threaten the health of millions of Americans, the United States has made great strides in clearing the air, according to the American Lung Association.
Econ Comments & Analysis
NBER | Effects of Medicare Payment Reform: Evidence from the Home Health Interim and Prospective Payment Systems
Medicare continues to implement payment reforms that shift reimbursement from fee-for-service towards episode-based payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies.
Blogs
Library of Economics | Economists on Health-Care Licensing
Loosening current licensing restrictions on the range of services that nurses, physician assistants, dental hygienists and pharmacists are permitted to perform would help patients on balance, because the additional safety risks would be small compared to the decreased costs in waiting time and fees.
National Review | The Trustees’ Report: Things Aren’t Looking up
The annual reports of the Social Security and Medicare trustees were released yesterday. As always, the reports present a grim and deteriorating picture of the two programs’ financial outlooks. Here are a few highlights
Monetary
News
Bloomberg | Draghi Softens Tone on Inflation, Calls for Growth Compact
European Central Bank President Mario Draghi softened his tone on the inflation outlook and called for a “growth compact” as the sovereign debt crisis weighs on the euro-area economy.
USA Today | Fed not likely to change rates Wednesday; statement is key
The Federal Reserve will have plenty to say about the economy Wednesday, when its two-day policy meeting ends with a statement, updated forecasts and Chairman Ben Bernanke's news conference.
Politico | Stimulus expected to lapse in June
The Federal Reserve looks ready to take the training wheels off the recovery, despite signs that the economy is wobbling again.
Bloomberg | Fed Officials Weigh Rules-Based Policy That Stay Flexible
Federal Reserve officials are struggling to find consensus on a policy rule that’s predictable to investors yet flexible enough to adjust to shifts in the economy or markets.
Econ Comments & Analysis
Forbes | Maintaining America's Prosperity Requires A Single Fed Mandate
In 2008 and 2009, the Federal Reserve joined with the Administration and Congress to take bold and pervasive steps, some might even argue outside their boundaries, to successfully stabilize a teetering global economy.
CATO | A Gold-based Currency Board, Please
Until early in the 20th century, gold played a central role in the world of money. Gold had an incredible run — almost three thousand years. And why not?
Bloomberg | Draghi Softens Tone on Inflation, Calls for Growth Compact
European Central Bank President Mario Draghi softened his tone on the inflation outlook and called for a “growth compact” as the sovereign debt crisis weighs on the euro-area economy.
USA Today | Fed not likely to change rates Wednesday; statement is key
The Federal Reserve will have plenty to say about the economy Wednesday, when its two-day policy meeting ends with a statement, updated forecasts and Chairman Ben Bernanke's news conference.
Politico | Stimulus expected to lapse in June
The Federal Reserve looks ready to take the training wheels off the recovery, despite signs that the economy is wobbling again.
Bloomberg | Fed Officials Weigh Rules-Based Policy That Stay Flexible
Federal Reserve officials are struggling to find consensus on a policy rule that’s predictable to investors yet flexible enough to adjust to shifts in the economy or markets.
Econ Comments & Analysis
Forbes | Maintaining America's Prosperity Requires A Single Fed Mandate
In 2008 and 2009, the Federal Reserve joined with the Administration and Congress to take bold and pervasive steps, some might even argue outside their boundaries, to successfully stabilize a teetering global economy.
CATO | A Gold-based Currency Board, Please
Until early in the 20th century, gold played a central role in the world of money. Gold had an incredible run — almost three thousand years. And why not?
Taxes
News
Market Watch | Taxpayers still on hook for $119 bln in TARP funds
Taxpayers are still owed $119 billion in outstanding Troubled Asset Relief Program funds, a watchdog for the government crisis response program said Wednesday in a quarterly report to Congress.
Econ Comments & Analysis
WSJ | A Payroll Tax Cut Could Help Social Security
After decades of delay, Congress and the next president will need to take steps to restore Social Security's finances and improve Americans' retirement income security. Although it might seem counterintuitive, one positive step toward achieving both goals is to cut the 12.4% payroll tax for workers nearing retirement, say, at age 62.
Real Clear Markets | What If We Had Overhauled Our Tax Code?
One of the biggest economic policy decisions facing our nation this year will be whether to extend the Bush tax cuts come December 2012. Ominously labeled "Taxmageddon," a host of tax policy changes are set to occur at year-end, and there truly is much at stake: $3.67 trillion of additional tax revenue over 10 years from the Bush tax cuts alone.
WSJ | Obama's Budget Means a Tax Increase on Everyone
The defeat in the Senate of the so-called "Buffett Rule"—that targets millionaires for a tax increase—marks one more step in the election-year discussion about raising taxes on higher-income individuals to close the nation's yawning budget gap.
CBO | Federal Support for State and Local Governments Through the Tax Code
My testimony focuses on two particular aspects of current policy: (1) the use of tax-preferred bonds by state and local governments for subsidizing investment in capital-intensive projects for such things as highways, water resources, and school buildings and (2) the deductibility of state and local taxes.
Blogs
Tax Foundation | Nobel Laureate Economist: Prices Don’t Matter
In today's Wall Street Journal, Nobel laureate Peter Diamond and Emmanuel Saez write "High Tax Rates Won't Slow Growth". This is certainly out of the box thinking - the box that defines the foundation of economics.
The American | 7 reasons why higher tax rates hurt economic growth (A response to Diamond and Saez)
Diamond and Saez argue that high tax rates tend to “go with higher economic growth.” As evidence, they note that per capita GDP growth averaged 1.68% between 1980 and 2010 when top tax rates were “relatively low,” while growth averaged 2.23% between 1950 and 1980 when rates were at or above 70%. In addition, they find “no clear correlation between economic growth since the 1970s and top tax-rate cuts across Organization for Economic Cooperation and Development countries.”
Heritage Foundation | Of Course Higher Taxes Slow Growth — A Response to Diamond and Saez
In The Wall Street Journal on Tuesday, Peter Diamond and Emmanuel Saez present a rambling defense of higher taxes on the rich to fund an engorged federal government. That they needed to throw out so many tired and errant arguments shows their entire argument is so much hot air.
The American | Actually, the Diamond-Saez op-ed in the WSJ is even worse than I first thought
Why would Diamond and Saez start from 1970s instead of 1980? Margaret Thatcher didn’t take office until 1979, Ronald Reagan until 1981? If you run the numbers from 1981-2010, you find out, for instance, that the U.S. economy grew by 62% vs. 46% for France. And the UK grew by 78% vs. 57% for Germany.
Market Watch | Taxpayers still on hook for $119 bln in TARP funds
Taxpayers are still owed $119 billion in outstanding Troubled Asset Relief Program funds, a watchdog for the government crisis response program said Wednesday in a quarterly report to Congress.
Econ Comments & Analysis
WSJ | A Payroll Tax Cut Could Help Social Security
After decades of delay, Congress and the next president will need to take steps to restore Social Security's finances and improve Americans' retirement income security. Although it might seem counterintuitive, one positive step toward achieving both goals is to cut the 12.4% payroll tax for workers nearing retirement, say, at age 62.
Real Clear Markets | What If We Had Overhauled Our Tax Code?
One of the biggest economic policy decisions facing our nation this year will be whether to extend the Bush tax cuts come December 2012. Ominously labeled "Taxmageddon," a host of tax policy changes are set to occur at year-end, and there truly is much at stake: $3.67 trillion of additional tax revenue over 10 years from the Bush tax cuts alone.
WSJ | Obama's Budget Means a Tax Increase on Everyone
The defeat in the Senate of the so-called "Buffett Rule"—that targets millionaires for a tax increase—marks one more step in the election-year discussion about raising taxes on higher-income individuals to close the nation's yawning budget gap.
CBO | Federal Support for State and Local Governments Through the Tax Code
My testimony focuses on two particular aspects of current policy: (1) the use of tax-preferred bonds by state and local governments for subsidizing investment in capital-intensive projects for such things as highways, water resources, and school buildings and (2) the deductibility of state and local taxes.
Blogs
Tax Foundation | Nobel Laureate Economist: Prices Don’t Matter
In today's Wall Street Journal, Nobel laureate Peter Diamond and Emmanuel Saez write "High Tax Rates Won't Slow Growth". This is certainly out of the box thinking - the box that defines the foundation of economics.
The American | 7 reasons why higher tax rates hurt economic growth (A response to Diamond and Saez)
Diamond and Saez argue that high tax rates tend to “go with higher economic growth.” As evidence, they note that per capita GDP growth averaged 1.68% between 1980 and 2010 when top tax rates were “relatively low,” while growth averaged 2.23% between 1950 and 1980 when rates were at or above 70%. In addition, they find “no clear correlation between economic growth since the 1970s and top tax-rate cuts across Organization for Economic Cooperation and Development countries.”
Heritage Foundation | Of Course Higher Taxes Slow Growth — A Response to Diamond and Saez
In The Wall Street Journal on Tuesday, Peter Diamond and Emmanuel Saez present a rambling defense of higher taxes on the rich to fund an engorged federal government. That they needed to throw out so many tired and errant arguments shows their entire argument is so much hot air.
The American | Actually, the Diamond-Saez op-ed in the WSJ is even worse than I first thought
Why would Diamond and Saez start from 1970s instead of 1980? Margaret Thatcher didn’t take office until 1979, Ronald Reagan until 1981? If you run the numbers from 1981-2010, you find out, for instance, that the U.S. economy grew by 62% vs. 46% for France. And the UK grew by 78% vs. 57% for Germany.
Employment
News
CNN Money | Plan to fix Postal Service likely to pass Senate
The Senate is expected Wednesday to pass a plan to save the struggling U.S. Postal Service, an effort that could save thousands of jobs and 100 mail processing plants now slated to be closed or consolidated next month.
CNN Money | Plan to fix Postal Service likely to pass Senate
The Senate is expected Wednesday to pass a plan to save the struggling U.S. Postal Service, an effort that could save thousands of jobs and 100 mail processing plants now slated to be closed or consolidated next month.
Budget
News
WSJ | Europe Struggles With Painful Deficit Cures
A pledge by European Union governments to bring their swollen budget deficits back in line with EU rules by the end of 2013 is causing economic pain and political discontent across Europe, prompting officials to begin a politically sensitive discussion on how the goal could be changed to avoid driving the Continent further into turmoil.
Econ Comments & Analysis
Real Clear Markets | Some State Budgets Will Never Be the Same
When the U.S. Census announced earlier this month that state tax collections had increased robustly last year, by 10 percent, the news was hailed as further evidence that the economy was bouncing back and that state and local budget pressures were sure to diminish as a result of all that extra tax money.
Blogs
Keith Hennessey | America’s entitlement spending problem (part 1)
We must change policy to address both demographics and health cost growth, and we must address demographics in all three major entitlement programs: Social Security, Medicare, and Medicaid.
Tax Foundation | 1944 Tax Foundation Report Foreshadows Social Security Insolvency
In 1944, less than a decade after the enactment of Social Security, the Tax Foundation issued a dire report on the system's finances - specifically warning about the false sense of security of allowing balances to accrue in the so-called trust fund.
WSJ | Europe Struggles With Painful Deficit Cures
A pledge by European Union governments to bring their swollen budget deficits back in line with EU rules by the end of 2013 is causing economic pain and political discontent across Europe, prompting officials to begin a politically sensitive discussion on how the goal could be changed to avoid driving the Continent further into turmoil.
Econ Comments & Analysis
Real Clear Markets | Some State Budgets Will Never Be the Same
When the U.S. Census announced earlier this month that state tax collections had increased robustly last year, by 10 percent, the news was hailed as further evidence that the economy was bouncing back and that state and local budget pressures were sure to diminish as a result of all that extra tax money.
Blogs
Keith Hennessey | America’s entitlement spending problem (part 1)
We must change policy to address both demographics and health cost growth, and we must address demographics in all three major entitlement programs: Social Security, Medicare, and Medicaid.
Tax Foundation | 1944 Tax Foundation Report Foreshadows Social Security Insolvency
In 1944, less than a decade after the enactment of Social Security, the Tax Foundation issued a dire report on the system's finances - specifically warning about the false sense of security of allowing balances to accrue in the so-called trust fund.
Tuesday, April 24, 2012
General Economics
News
WSJ | Spain's Economy Dwindling
Spain's economy contracted 0.4% in the first quarter from the fourth, the country's central bank said Monday, the latest evidence that Spain's efforts to rein in government spending could be feeding a downward economic spiral.
Washington Times | Senate debates curb on NLRB
The National Labor Relations Board as a political hot potato shows no signs of cooling off anytime soon.
Econ Comments & Analysis
WSJ | An Economic Approach to the Environment
Cost-benefit analysis, in particular, is a far more effective and moral approach than basing decisions on the media's roving gaze or the loudness of competing interest groups.
Real Clear Markets | President Obama Better Hope Life Never Becomes "Fair"
In speeches the great political thinker and satirist P.J. O'Rourke often addresses the tautological reality that life isn't fair through a retelling of conversations he's had with one of his daughters. It goes somewhat like this
Blogs
Marginal Revolution | Podcast with Russ Roberts
An Economist Gets Lunch: New Rules for Everyday Foodies
WSJ | Spain's Economy Dwindling
Spain's economy contracted 0.4% in the first quarter from the fourth, the country's central bank said Monday, the latest evidence that Spain's efforts to rein in government spending could be feeding a downward economic spiral.
Washington Times | Senate debates curb on NLRB
The National Labor Relations Board as a political hot potato shows no signs of cooling off anytime soon.
Econ Comments & Analysis
WSJ | An Economic Approach to the Environment
Cost-benefit analysis, in particular, is a far more effective and moral approach than basing decisions on the media's roving gaze or the loudness of competing interest groups.
Real Clear Markets | President Obama Better Hope Life Never Becomes "Fair"
In speeches the great political thinker and satirist P.J. O'Rourke often addresses the tautological reality that life isn't fair through a retelling of conversations he's had with one of his daughters. It goes somewhat like this
Blogs
Marginal Revolution | Podcast with Russ Roberts
An Economist Gets Lunch: New Rules for Everyday Foodies
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