News
CNN Money | Foreclosures made up 26% of U.S. home sales in first quarter
Homes in some stage of foreclosure accounted for more than one in four home sales during the first three months of the year, according to a report released Thursday.
WSJ | Swiss Growth Stirs Currency Doubts
Switzerland's economy surged ahead in the first quarter at a time when many of its European neighbors are struggling to generate growth, fueling doubts on the sustainability of the Swiss central bank's currency floor against the euro.
USA Today | Oil below $90 a barrel, headed for biggest drop since '08
Benchmark U.S. crude has dropped nearly 16% so far in May. There are growing expectations that the world won't use as much oil this year as previously expected.
WSJ | India's Economy Grows at Slowest Pace in a Decade
India's gross domestic product grew at its slowest pace in almost a decade in the January-March period, adding weight to growing evidence the nation's economy is heading into troubled waters.
Bloomberg | U.S. 10-Year Yield Reaches Record Low for Second Day
Treasury 10-year yields fell to a record low for a second day on concern the European debt crisis is widening and as data showed the U.S. economic expansion slowed during the first quarter.
Econ Comments & Analysis
Washington Times | Flexible fuel to end foreign oil dependence
The next time you go to buy a car, a fridge, shoes, a TV, boxer shorts or lipstick, what if there were only one choice - a single product in the marketplace for each category - take it or leave it?
Bloomberg | Restored Competition Will Lessen U.S. Inequality
The U.S. middle class is squeezed by the rising costs of college education and health care, and an economy that increasingly rewards only superstars. Fixing these problems requires introducing greater competition into each area.
WSJ | Slow Growth Amid Sluggish Job Gains
The U.S. economy slowed more than initially thought in the first quarter amid smaller gains in consumption and inventories, while corporate profits picked up. Separately, two measures of the labor market indicated continued sluggish job growth.
Washington Times | June can’t come soon enough
June is shaping up to be a pivotal month for American liberty. On one front, the Supreme Court is expected in June to hand down its decision on the constitutionality of Obamacare,
Politico | Politicians' gas price promises just hot air
The recent decline in gasoline prices has at least temporarily made this a less pressing issue in the presidential campaign. There is a real risk, however, that the summer driving season will again push the price to near $4 a gallon and that it will again assume center stage in the national political debate.
Blogs
CATO | Disadvantaged Minority: Non-Beneficiaries of Government
I would argue that the federal government should not favor people of one particular ethnic backgrounds over others. However, I think the bigger issue here is that a Commerce determination in the affirmative would be yet another step in the direction of greater government dependency.
The American | Goldman Sachs: U.S. headed for a decade of anemic, European-level growth
From 1981-2000, the U.S. economy grew at a snappy pace of about 3.4%. Then it downshifted to 1.6%—including the Great Recession—from 2001-2010. And from 2011-2020, GS expects it to grow only a bit faster—no better, really, than Europe!
National Review | Does the SEC Die if It Stops Adding New Rules?
Always looking for new ways to spread its influence, the Securities and Exchange Commission is contemplating taking another step towards stricter regulation of America’s $2.5 trillion in money-market funds.
The American | EuroCrisis 2012: How we get from here to a global depression
The big problem from our view is Spain, partially because it is too big to fail and too big to bail out. But what makes Spain different is the massive real estate bubble and overbuilding.
Daily Capitalist | The Latest Housing Data: Still Going Down
[M]ore than 30% of borrowers, or close to 16 million homeowners, were underwater on their mortgage during the first quarter, according to Zillow.
The American | Nancy Pelosi tells us how to grow the U.S. economy
Actually, our “entrepreneurial spirit,” as Pelosi puts it, depends on innovators a) being rewarded and respected for their efforts and b) being allowed to innovate without entrenched interests blocking their path through regulation and other means.
Thursday, May 31, 2012
Health Care
News
CNN Money | Goodbye benefits: Employers still cutting back
Slashed health care coverage and frozen wages were the hallmark of the recession -- at least for those who held onto their jobs. Yet even though the economy has improved, many of the employee benefits that were once guarantees are starting to look like a thing of the past.
Washington Times | Obama’s health care aid to small firms disappoints
It seemed like a good idea at the time, but a health insurance tax credit for small businesses, part of President Obama’s health care law that gets strong support in public opinion polls, has turned out to be a disappointment.
National Journal | NYC Plans Super-Size Soda Ban
In an effort to combat obesity, New York City plans a widespread ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, The New York Times reports.
Econ Comments & Analysis
WSJ | ObamaCare in Reverse
One tragedy of the Affordable Care Act is that we already know what its regulations will do to insurance markets, because the states have been conducting policy experiments since the 1990s. But we also know from the states that the damage is reversible, as shown by Maine's emerging insurance turnaround.
Blogs
CATO | How to Tell When ObamaCare Takes a Beating in the Kaiser Poll: the Headline Is about Something Else
Even when pollsters tell the public that ObamaCare is “reform,” the public still doesn’t like it.
CNN Money | Goodbye benefits: Employers still cutting back
Slashed health care coverage and frozen wages were the hallmark of the recession -- at least for those who held onto their jobs. Yet even though the economy has improved, many of the employee benefits that were once guarantees are starting to look like a thing of the past.
Washington Times | Obama’s health care aid to small firms disappoints
It seemed like a good idea at the time, but a health insurance tax credit for small businesses, part of President Obama’s health care law that gets strong support in public opinion polls, has turned out to be a disappointment.
National Journal | NYC Plans Super-Size Soda Ban
In an effort to combat obesity, New York City plans a widespread ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, The New York Times reports.
Econ Comments & Analysis
WSJ | ObamaCare in Reverse
One tragedy of the Affordable Care Act is that we already know what its regulations will do to insurance markets, because the states have been conducting policy experiments since the 1990s. But we also know from the states that the damage is reversible, as shown by Maine's emerging insurance turnaround.
Blogs
CATO | How to Tell When ObamaCare Takes a Beating in the Kaiser Poll: the Headline Is about Something Else
Even when pollsters tell the public that ObamaCare is “reform,” the public still doesn’t like it.
Monetary
News
WSJ | Euro-Zone Inflation Slows, German Data Upbeat
A steeper-than-expected fall in euro-zone inflation Thursday gave hope that the European Central Bank could soon step in to support growth in the crisis-hit region, despite a fresh spate of data from Germany showing the bloc's largest economy continues to flourish.
Bloomberg | Euro-Region Inflation Rate Declines More Than Forecast
European inflation slowed more than economists forecast this month, cooling to the least in more than a year as the economic slump showed signs of deepening.
FOX Business | EU Officials: Euro's Survival at Risk
The European Central Bank stepped up pressure on Thursday for a joint fund to guarantee bank deposits in the euro zone, saying Europe needed new tools to fight bank runs as the bloc's debt crisis drives investors to flee risk.
Econ Comments & Analysis
WSJ | Fed Board Reflects Obama's Influence
With the swearing in of a seventh Federal Reserve board member, the panel is operating at full strength for the first time since 2006, amplifying the activist stamp of President Barack Obama.
WSJ | Euro-Zone Inflation Slows, German Data Upbeat
A steeper-than-expected fall in euro-zone inflation Thursday gave hope that the European Central Bank could soon step in to support growth in the crisis-hit region, despite a fresh spate of data from Germany showing the bloc's largest economy continues to flourish.
Bloomberg | Euro-Region Inflation Rate Declines More Than Forecast
European inflation slowed more than economists forecast this month, cooling to the least in more than a year as the economic slump showed signs of deepening.
FOX Business | EU Officials: Euro's Survival at Risk
The European Central Bank stepped up pressure on Thursday for a joint fund to guarantee bank deposits in the euro zone, saying Europe needed new tools to fight bank runs as the bloc's debt crisis drives investors to flee risk.
Econ Comments & Analysis
WSJ | Fed Board Reflects Obama's Influence
With the swearing in of a seventh Federal Reserve board member, the panel is operating at full strength for the first time since 2006, amplifying the activist stamp of President Barack Obama.
Taxes
News
WSJ | At Core of Greek Chaos, a Reviled Tax
When the Greek government surprised homeowners in September by imposing a new national property tax, the mayor of this down-at-the-heels suburb on the western fringe of Athens sprung into action—mobilizing against it.
WSJ | At Core of Greek Chaos, a Reviled Tax
When the Greek government surprised homeowners in September by imposing a new national property tax, the mayor of this down-at-the-heels suburb on the western fringe of Athens sprung into action—mobilizing against it.
Employment
News
CNN Money | No more unemployment checks for seasonal workers
From school bus drivers to ballet dancers to lifeguards, many workers whose jobs only last for a portion of the year have traditionally been eligible for jobless benefits. But now states across the country are starting to crack down, trying to save money and rescue insolvent jobless funds.
USA Today | Unemployment rates fall in most metro areas
Unemployment rates fell in nearly all large U.S. cities in April from March, aided by summer hiring on farms and in tourist destinations.
CNN Money | May jobs report: More weak hiring expected
The economy was expected to have added 150,000 jobs last month, according to economists surveyed by CNNMoney. They project that the job report for May will show the private sector expanded payrolls by 162,000 jobs, but government shed 12,000 positions.
Econ Comments & Analysis
Real Clear Markets | Long-Term Unemployment, and the Skills Erosion Myth
Whatever the direction of Friday's jobless number, it can't be stressed enough that unemployment of the kind we're suffering at the moment is a wholly unnatural phenomenon wrought by government distortion of wages and benefits, and sagging investment that results from policies in favor of a weak dollar.
Blogs
The American | CBO: Obama stimulus may have cost as much as $4.1 million a job
CBO now estimates that the total impact of the American Recovery and Reinvestment Act over the 2009–2019 period will amount to about $831 billion.
Political Calculations | New Jobless Claims Continue Rising
It has been several weeks since we last looked at the trend in the number of new jobless claims being filed in the U.S. each week. Our chart below shows how things stand through the initial report for 19 May 2012
CNN Money | No more unemployment checks for seasonal workers
From school bus drivers to ballet dancers to lifeguards, many workers whose jobs only last for a portion of the year have traditionally been eligible for jobless benefits. But now states across the country are starting to crack down, trying to save money and rescue insolvent jobless funds.
USA Today | Unemployment rates fall in most metro areas
Unemployment rates fell in nearly all large U.S. cities in April from March, aided by summer hiring on farms and in tourist destinations.
CNN Money | May jobs report: More weak hiring expected
The economy was expected to have added 150,000 jobs last month, according to economists surveyed by CNNMoney. They project that the job report for May will show the private sector expanded payrolls by 162,000 jobs, but government shed 12,000 positions.
Econ Comments & Analysis
Real Clear Markets | Long-Term Unemployment, and the Skills Erosion Myth
Whatever the direction of Friday's jobless number, it can't be stressed enough that unemployment of the kind we're suffering at the moment is a wholly unnatural phenomenon wrought by government distortion of wages and benefits, and sagging investment that results from policies in favor of a weak dollar.
Blogs
The American | CBO: Obama stimulus may have cost as much as $4.1 million a job
CBO now estimates that the total impact of the American Recovery and Reinvestment Act over the 2009–2019 period will amount to about $831 billion.
Political Calculations | New Jobless Claims Continue Rising
It has been several weeks since we last looked at the trend in the number of new jobless claims being filed in the U.S. each week. Our chart below shows how things stand through the initial report for 19 May 2012
Budget
News
CNN Money | Irish to vote on fiscal treaty
As Europe scrambles to keep up with a resurgent debt crisis, Ireland will put a key agreement on fiscal discipline to a popular vote.
WSJ | Europe Woes Ignite Selloff
Fears Spain can't save its troubled banks sparked a selloff in Spanish government bonds Wednesday and prompted a broad decline in stock markets and the euro, leaving Europe's common currency in its most precarious state in months.
Econ Comments & Analysis
WSJ | The Obama Spending Record
Every journalist not in the re-election tank has been shredding President Obama's recent claim that spending growth has been modest on his watch. But kudos in particular to the Associated Press for hitting several White House accounting gimmicks in a dispatch last week.
Heritage Foundation | The Real Cost of Public Pensions
This paper discusses how to properly calculate the cost of public defined-benefit pension benefits, compares the cost of these benefits to private-sector retirement plans, and refutes two of the most common arguments that public pension benefits are somehow modest.
Blogs
National Review | Canada Cut Spending and So Should We
Chris Edwards has a good Cato Policy Report this month explaining how Canada went from a free-market economy to socialism and back.
Café Hayek | Living within your means is so inconvenient
In short, it’s a good idea to spend less than you take in. Debt leads to misery. But wiser men than Dickens and Smith argued that what is best for the individual need not be best for the nation.
CNN Money | Irish to vote on fiscal treaty
As Europe scrambles to keep up with a resurgent debt crisis, Ireland will put a key agreement on fiscal discipline to a popular vote.
WSJ | Europe Woes Ignite Selloff
Fears Spain can't save its troubled banks sparked a selloff in Spanish government bonds Wednesday and prompted a broad decline in stock markets and the euro, leaving Europe's common currency in its most precarious state in months.
Econ Comments & Analysis
WSJ | The Obama Spending Record
Every journalist not in the re-election tank has been shredding President Obama's recent claim that spending growth has been modest on his watch. But kudos in particular to the Associated Press for hitting several White House accounting gimmicks in a dispatch last week.
Heritage Foundation | The Real Cost of Public Pensions
This paper discusses how to properly calculate the cost of public defined-benefit pension benefits, compares the cost of these benefits to private-sector retirement plans, and refutes two of the most common arguments that public pension benefits are somehow modest.
Blogs
National Review | Canada Cut Spending and So Should We
Chris Edwards has a good Cato Policy Report this month explaining how Canada went from a free-market economy to socialism and back.
Café Hayek | Living within your means is so inconvenient
In short, it’s a good idea to spend less than you take in. Debt leads to misery. But wiser men than Dickens and Smith argued that what is best for the individual need not be best for the nation.
Wednesday, May 30, 2012
General Economics
News
Market Watch | Foreclosures level off in early 2012: CoreLogic
The inventory of homes in foreclosure has leveled off in the first four months of the year, according to a report from data firm CoreLogic Inc. released on Wednesday. The number of homes in the foreclosure inventory stood at 1.4 million at the end of April, compared to 1.5 million in April 2011 and 1.4 million in March.
WSJ | Housing Market Crawls Back
Housing prices across the U.S. fell in March, but not as much as in earlier months, according to a report Tuesday that offered fresh evidence of a real-estate market on the mend.
CNN Money | Home prices lowest since 2002
Average home prices were down 2.6% from 12 months earlier, according to the S&P/Case-Shiller home price index of 20 major markets. Home prices have not been this low since mid-2002.
WSJ | Spain's Economy Shows Fresh Strain
Spain's economy showed fresh strains as retail sales fell at a record pace in April, suggesting the country's recession is deepening as the government's austerity program curbs consumption.
Bloomberg | Euro-Area Economic Confidence Falls to 2 1/2 Year Low
Economic confidence in the euro area declined more than economists forecast in May to the lowest in 2 1/2 years after inconclusive Greek elections raised the specter of a euro breakup and Spain struggled to shore up its banks.
FOX News | Obama to sign renewal of Export-Import Bank
President Barack Obama is set to sign the reauthorization of the Export-Import Bank, the government's vehicle for promoting U.S. export sales.
Econ Comments & Analysis
Project Syndicate | France’s Broken Dream
The crisis in the eurozone is the result of France’s persistent pursuit of the “European project,” the goal of political unification that began after World War II when two leading French politicians, Jean Monnet and Robert Schuman, proposed the creation of a United States of Europe.
Bloomberg | Low, Stable Housing Prices: What’s Not to Like?
The Case-Shiller Housing Price figures for March were released Tuesday, and they reveal a second month of modest price increases.
Politico | The anti-free-enterprise president
President Barack Obama declared Tuesday, “This is what this campaign is going to be about.” He was not talking about jobs. He was not talking about the economy—not even about the budget deficit. He was referring to divisive, disingenuous character attacks against presumed GOP nominee Mitt Romney and a rhetorical assault on job creators.
WSJ | The Bain Ads Are About Spending
Who says Wall Streeters aren't filled with a desire to please? Two big-name Democratic financiers, Roger Altman and Steven Rattner, may not be ready to defend the president's deceitful Bain ads. But they promptly took to the airwaves to defend the president's defense of the ads, after President Obama himself issued a few syllables they could cling to, saying the ads merely questioned whether profit maximization is an appropriate governing principle.
Market Watch | Foreclosures level off in early 2012: CoreLogic
The inventory of homes in foreclosure has leveled off in the first four months of the year, according to a report from data firm CoreLogic Inc. released on Wednesday. The number of homes in the foreclosure inventory stood at 1.4 million at the end of April, compared to 1.5 million in April 2011 and 1.4 million in March.
WSJ | Housing Market Crawls Back
Housing prices across the U.S. fell in March, but not as much as in earlier months, according to a report Tuesday that offered fresh evidence of a real-estate market on the mend.
CNN Money | Home prices lowest since 2002
Average home prices were down 2.6% from 12 months earlier, according to the S&P/Case-Shiller home price index of 20 major markets. Home prices have not been this low since mid-2002.
WSJ | Spain's Economy Shows Fresh Strain
Spain's economy showed fresh strains as retail sales fell at a record pace in April, suggesting the country's recession is deepening as the government's austerity program curbs consumption.
Bloomberg | Euro-Area Economic Confidence Falls to 2 1/2 Year Low
Economic confidence in the euro area declined more than economists forecast in May to the lowest in 2 1/2 years after inconclusive Greek elections raised the specter of a euro breakup and Spain struggled to shore up its banks.
FOX News | Obama to sign renewal of Export-Import Bank
President Barack Obama is set to sign the reauthorization of the Export-Import Bank, the government's vehicle for promoting U.S. export sales.
Econ Comments & Analysis
Project Syndicate | France’s Broken Dream
The crisis in the eurozone is the result of France’s persistent pursuit of the “European project,” the goal of political unification that began after World War II when two leading French politicians, Jean Monnet and Robert Schuman, proposed the creation of a United States of Europe.
Bloomberg | Low, Stable Housing Prices: What’s Not to Like?
The Case-Shiller Housing Price figures for March were released Tuesday, and they reveal a second month of modest price increases.
Politico | The anti-free-enterprise president
President Barack Obama declared Tuesday, “This is what this campaign is going to be about.” He was not talking about jobs. He was not talking about the economy—not even about the budget deficit. He was referring to divisive, disingenuous character attacks against presumed GOP nominee Mitt Romney and a rhetorical assault on job creators.
WSJ | The Bain Ads Are About Spending
Who says Wall Streeters aren't filled with a desire to please? Two big-name Democratic financiers, Roger Altman and Steven Rattner, may not be ready to defend the president's deceitful Bain ads. But they promptly took to the airwaves to defend the president's defense of the ads, after President Obama himself issued a few syllables they could cling to, saying the ads merely questioned whether profit maximization is an appropriate governing principle.
Health Care
News
Politico | Medical device tax is questioned
A controversial health care reform tax due to go into effect next year has become a prominent issue in a number of House and Senate races throughout the country.
Econ Comments & Analysis
WSJ | There's a Medical App for That—Or Not
Even the most ideologically opposed politicians agree: Health care is choking on paperwork, and medicine is prone to errors of handwriting, lost information and guesswork.
NBER | Medicare Reimbursements and Shortages of Sterile Injectable Pharmaceuticals
This paper investigates the rise in shortages of sterile injectable pharmaceutical drugs in the United States. I focus on a policy change that occurred in 2005 that reduced Medicare Part B payments for sterile injectable drugs.
Politico | Medical device tax is questioned
A controversial health care reform tax due to go into effect next year has become a prominent issue in a number of House and Senate races throughout the country.
Econ Comments & Analysis
WSJ | There's a Medical App for That—Or Not
Even the most ideologically opposed politicians agree: Health care is choking on paperwork, and medicine is prone to errors of handwriting, lost information and guesswork.
NBER | Medicare Reimbursements and Shortages of Sterile Injectable Pharmaceuticals
This paper investigates the rise in shortages of sterile injectable pharmaceutical drugs in the United States. I focus on a policy change that occurred in 2005 that reduced Medicare Part B payments for sterile injectable drugs.
Monetary
Econ Comments & Analysis
Fortune | It's time for Europe to choose inflation over austerity
If the EU's leading nations aren't willing to forgive the debt of their troubled bretheren, then maybe they need to start printing more euros.
Heritage Foundation | China Drowning in Money: What It Means for the U.S.
Global financial markets are keenly interested in China’s short-term economic direction and policy choices. American policy should look farther. If China chooses to try to stimulate its economy in the second half of the year, even if successful, it will only exacerbate a more pressing long-term challenge.
Fortune | It's time for Europe to choose inflation over austerity
If the EU's leading nations aren't willing to forgive the debt of their troubled bretheren, then maybe they need to start printing more euros.
Heritage Foundation | China Drowning in Money: What It Means for the U.S.
Global financial markets are keenly interested in China’s short-term economic direction and policy choices. American policy should look farther. If China chooses to try to stimulate its economy in the second half of the year, even if successful, it will only exacerbate a more pressing long-term challenge.
Taxes
News
Politico | GOP softens anti-tax rhetoric
Cracks are emerging in the GOP’s hard-line stance against raising tax revenues to slash the deficit, with a number of Republicans willing to go further than their party’s standard-bearer in the face of a looming showdown over the budget.
Econ Comments & Analysis
Daily Caller | Shallow-loss programs could leave taxpayers in deep trouble
Imagine what would have happened if, at the peak of the housing bubble in 2006, Congress had passed a law guaranteeing that all homeowners could sell their property at close to its record price for the next five years, regardless of market conditions.
Blogs
FOX Business | Why Taxing 'The Rich' Doesn't Work
If you want to understand politics, all you have to do is think back to third grade. Even at 8 years old, it was probably clear to you that the only reason the class bully picked on weak kids was because they were unable to defend themselves. That’s exactly the strategy driving proposals to raise tax rates on corporations and “The Rich.”
Politico | GOP softens anti-tax rhetoric
Cracks are emerging in the GOP’s hard-line stance against raising tax revenues to slash the deficit, with a number of Republicans willing to go further than their party’s standard-bearer in the face of a looming showdown over the budget.
Econ Comments & Analysis
Daily Caller | Shallow-loss programs could leave taxpayers in deep trouble
Imagine what would have happened if, at the peak of the housing bubble in 2006, Congress had passed a law guaranteeing that all homeowners could sell their property at close to its record price for the next five years, regardless of market conditions.
Blogs
FOX Business | Why Taxing 'The Rich' Doesn't Work
If you want to understand politics, all you have to do is think back to third grade. Even at 8 years old, it was probably clear to you that the only reason the class bully picked on weak kids was because they were unable to defend themselves. That’s exactly the strategy driving proposals to raise tax rates on corporations and “The Rich.”
Employment
News
WSJ | Flat U.S. Wages Help Fuel Rebound in Manufacturing
The celebrated revival of U.S. manufacturing employment has been accompanied by a less-lauded fact: Wages for many manufacturing workers aren't keeping up with inflation.
Econ Comments & Analysis
Real Clear Markets | Unemployment Is a Labor Market Mismatch
After an unexpected upswing at the beginning of this year, the labor market appears to be back in the doldrums again. The subsequent drop in the employment numbers to slightly more than 100,000 has left us scrambling for an explanation.
Blogs
WSJ | Numbers Show China’s Still Working
In the midst of gloom about China’s economic outlook, new labor market data provides an optimistic counterpoint — and a possible explanation for why a long-anticipated stimulus has been slow to arrive.
WSJ | Flat U.S. Wages Help Fuel Rebound in Manufacturing
The celebrated revival of U.S. manufacturing employment has been accompanied by a less-lauded fact: Wages for many manufacturing workers aren't keeping up with inflation.
Econ Comments & Analysis
Real Clear Markets | Unemployment Is a Labor Market Mismatch
After an unexpected upswing at the beginning of this year, the labor market appears to be back in the doldrums again. The subsequent drop in the employment numbers to slightly more than 100,000 has left us scrambling for an explanation.
Blogs
WSJ | Numbers Show China’s Still Working
In the midst of gloom about China’s economic outlook, new labor market data provides an optimistic counterpoint — and a possible explanation for why a long-anticipated stimulus has been slow to arrive.
Budget
News
Bloomberg | U.S. May Avert Plunging Over Fiscal Cliff in 2013
The U.S. will avoid plunging off a fiscal cliff in 2013, according to economists surveyed by Bloomberg News, as lawmakers find enough common ground in budget negotiations to avert a recession.
WSJ | U.S. Seeks Action on Europe Crisis
The Obama administration dispatched one of its top economic officials to Europe on Tuesday to press officials in Greece, Spain, France and Germany to calm a widening crisis that threatens to spark new trouble for the U.S. economy.
Politico | Politics of 2013 ‘fiscal cliff’ worries economists
Democrats and Republicans are trying to stir up votes for November by locking horns over the coming fiscal cliff, but they’re stirring up just as much anxiety among economists who fear that the rhetoric upsets consumer confidence and squashes the stock market.
Bloomberg | EU Weighs Direct Aid to Banks, Euro Bonds as Crisis Antidote
The European Commission called for direct euro-area aid for troubled banks, and touted a Europe- wide deposit-guarantee system and common bond issuance as antidotes to the debt crisis now threatening to overwhelm Spain.
Econ Comments & Analysis
WSJ | A Fiscal Union Won't Fix the Euro Crisis
Increasingly, euro-zone hardliners have called for putting in a disciplined, unified fiscal arrangement similar to the one we have in the U.S. Unfortunately, their vision of fiscal union has badly missed the essence of the U.S. experience and would not fix the euro crisis.
CATO | We Can Cut Government: Canada Did
Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journal said that growing debt was making Canada an “honorary member of the third world” with the “northern peso” as its currency. But Canada reversed course and cut spending, balanced its budget, and enacted various pro-market reforms.
Blogs
National Review | Public Pensions and Rosy Projections
Last week, my collegue Eileen Norcross produced a chart that underlies a very scary unreported threat for many municipal budgets around the country. In this particular case, the chart showcases the Warwick, R.I.’s municipal budget
Political Calculations | Economic Growth and the Chains of Debt
What we see is that high levels of national debt with respect to the size of a nation's economy, would appear to have a medium-strength effect upon its real rate of economic growth. For every 10% increase in a country's national debt with respect to its GDP, it would appear that its real economic growth rate is reduced on average by roughly 3/8th of a percent.
Bloomberg | U.S. May Avert Plunging Over Fiscal Cliff in 2013
The U.S. will avoid plunging off a fiscal cliff in 2013, according to economists surveyed by Bloomberg News, as lawmakers find enough common ground in budget negotiations to avert a recession.
WSJ | U.S. Seeks Action on Europe Crisis
The Obama administration dispatched one of its top economic officials to Europe on Tuesday to press officials in Greece, Spain, France and Germany to calm a widening crisis that threatens to spark new trouble for the U.S. economy.
Politico | Politics of 2013 ‘fiscal cliff’ worries economists
Democrats and Republicans are trying to stir up votes for November by locking horns over the coming fiscal cliff, but they’re stirring up just as much anxiety among economists who fear that the rhetoric upsets consumer confidence and squashes the stock market.
Bloomberg | EU Weighs Direct Aid to Banks, Euro Bonds as Crisis Antidote
The European Commission called for direct euro-area aid for troubled banks, and touted a Europe- wide deposit-guarantee system and common bond issuance as antidotes to the debt crisis now threatening to overwhelm Spain.
Econ Comments & Analysis
WSJ | A Fiscal Union Won't Fix the Euro Crisis
Increasingly, euro-zone hardliners have called for putting in a disciplined, unified fiscal arrangement similar to the one we have in the U.S. Unfortunately, their vision of fiscal union has badly missed the essence of the U.S. experience and would not fix the euro crisis.
CATO | We Can Cut Government: Canada Did
Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journal said that growing debt was making Canada an “honorary member of the third world” with the “northern peso” as its currency. But Canada reversed course and cut spending, balanced its budget, and enacted various pro-market reforms.
Blogs
National Review | Public Pensions and Rosy Projections
Last week, my collegue Eileen Norcross produced a chart that underlies a very scary unreported threat for many municipal budgets around the country. In this particular case, the chart showcases the Warwick, R.I.’s municipal budget
Political Calculations | Economic Growth and the Chains of Debt
What we see is that high levels of national debt with respect to the size of a nation's economy, would appear to have a medium-strength effect upon its real rate of economic growth. For every 10% increase in a country's national debt with respect to its GDP, it would appear that its real economic growth rate is reduced on average by roughly 3/8th of a percent.
Tuesday, May 29, 2012
General Economics
News
FOX Business | OPEC Output Hits Highest Level Since 2008, Survey Finds
OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained high production rates despite a drop in prices and Iranian shipments did not fall substantially further ahead of an EU embargo, a Reuters survey found on Tuesday.
CNN Money | Postal Service offers $15,000 buyouts to 45,000 mail handlers
The U.S. Postal Service is offering buyouts to 45,000 mail handlers, part of the struggling agency's efforts to shed staff and cut costs.
Market Watch | Canadian bank’s stress-test pro talks Europe
What happens if the euro zone unravels, with Greece, Ireland, Portugal and Spain all leaving at the same time as political gridlock drives the U.S. off a fiscal cliff? What if China were no longer willing to fund the U.S. deficit and there was a dramatic 40% decline in the U.S. dollar?
CNN Money | Summer gas prices - as good as they'll get
As the summer driving season gets underway, most Americans are enjoying lower gas prices than they might have expected when the spring began.
Bloomberg | Greek Euro Exit Aftershocks Risk Reaching China
Greece, responsible for 0.4 percent of the world economy, now poses a threat to international prosperity as investors raise bets its days using the euro are numbered.
CNN Money | China paying billions for oil deals in the Americas
Eager to feed its growing energy appetite, China's worldwide buying binge for oil and other energy assets is spreading to North and South America.
FOX News | Home prices rise in most major US cities
Home prices rose in March from February in most major U.S. cities for the first time in seven months. The increase is the latest evidence of a slow recovery taking shape in the housing market.
Econ Comments & Analysis
WSJ | The Reagan Memo
Nearby today readers will notice excerpts from a memo written to Ronald Reagan by his economic advisers between his November 1980 election and inauguration. We share the memo because it shines a historical perspective on our own economic dilemmas as the Presidential race hits its Memorial Day turn.
NBER | The Evolution of Income, Consumption, and Leisure Inequality in The US, 1980-2010
Recent research has documented that income inequality in the United States has increased dramatically over the prior three decades. There has been less of a consensus, however, on whether the increase in income inequality was matched by an equally large increase in consumption inequality.
CBO | Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from January 2012 Through March 2012
As required by law, CBO prepares regular reports on its estimate of the number of jobs created by the American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in response to significant weakness in the economy. In its latest report issued this afternoon, CBO provides estimates of ARRA’s impact on employment and economic output in the first quarter of calendar year 2012, as well as over the entire period since February 2009.
Blogs
CATO | New Study from UK Think Tank Shows How Big Government Undermines Prosperity
It seems I was put on the planet to educate people about the negative economic impact of excessive government. I must be doing a bad job, because the burden of the public sector keeps rising.
Calculated Risk | Unofficial Problem Bank list increases to 931 Institutions
As expected, this week the FDIC released the Official Problem Bank List through March 2012 and it enforcement actions through April 2012. For the week, there were nine removals and 12 additions
WSJ | More Economists React: What if Greece Exits Euro Zone?
Greece may or may not leave, and there’s a huge range of potential policy responses. So, making allowances for some guesswork, from U.S. political upheaval to a knock-on effect for Mexican bonds, here’s a rundown of the latest on some economists’ and analysts’ views on what could happen next.
Calculated Risk | Schedule for Week of May 27th
The key report this week is the May employment report to be released on Friday.
FOX Business | OPEC Output Hits Highest Level Since 2008, Survey Finds
OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained high production rates despite a drop in prices and Iranian shipments did not fall substantially further ahead of an EU embargo, a Reuters survey found on Tuesday.
CNN Money | Postal Service offers $15,000 buyouts to 45,000 mail handlers
The U.S. Postal Service is offering buyouts to 45,000 mail handlers, part of the struggling agency's efforts to shed staff and cut costs.
Market Watch | Canadian bank’s stress-test pro talks Europe
What happens if the euro zone unravels, with Greece, Ireland, Portugal and Spain all leaving at the same time as political gridlock drives the U.S. off a fiscal cliff? What if China were no longer willing to fund the U.S. deficit and there was a dramatic 40% decline in the U.S. dollar?
CNN Money | Summer gas prices - as good as they'll get
As the summer driving season gets underway, most Americans are enjoying lower gas prices than they might have expected when the spring began.
Bloomberg | Greek Euro Exit Aftershocks Risk Reaching China
Greece, responsible for 0.4 percent of the world economy, now poses a threat to international prosperity as investors raise bets its days using the euro are numbered.
CNN Money | China paying billions for oil deals in the Americas
Eager to feed its growing energy appetite, China's worldwide buying binge for oil and other energy assets is spreading to North and South America.
FOX News | Home prices rise in most major US cities
Home prices rose in March from February in most major U.S. cities for the first time in seven months. The increase is the latest evidence of a slow recovery taking shape in the housing market.
Econ Comments & Analysis
WSJ | The Reagan Memo
Nearby today readers will notice excerpts from a memo written to Ronald Reagan by his economic advisers between his November 1980 election and inauguration. We share the memo because it shines a historical perspective on our own economic dilemmas as the Presidential race hits its Memorial Day turn.
NBER | The Evolution of Income, Consumption, and Leisure Inequality in The US, 1980-2010
Recent research has documented that income inequality in the United States has increased dramatically over the prior three decades. There has been less of a consensus, however, on whether the increase in income inequality was matched by an equally large increase in consumption inequality.
CBO | Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from January 2012 Through March 2012
As required by law, CBO prepares regular reports on its estimate of the number of jobs created by the American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in response to significant weakness in the economy. In its latest report issued this afternoon, CBO provides estimates of ARRA’s impact on employment and economic output in the first quarter of calendar year 2012, as well as over the entire period since February 2009.
Blogs
CATO | New Study from UK Think Tank Shows How Big Government Undermines Prosperity
It seems I was put on the planet to educate people about the negative economic impact of excessive government. I must be doing a bad job, because the burden of the public sector keeps rising.
Calculated Risk | Unofficial Problem Bank list increases to 931 Institutions
As expected, this week the FDIC released the Official Problem Bank List through March 2012 and it enforcement actions through April 2012. For the week, there were nine removals and 12 additions
WSJ | More Economists React: What if Greece Exits Euro Zone?
Greece may or may not leave, and there’s a huge range of potential policy responses. So, making allowances for some guesswork, from U.S. political upheaval to a knock-on effect for Mexican bonds, here’s a rundown of the latest on some economists’ and analysts’ views on what could happen next.
Calculated Risk | Schedule for Week of May 27th
The key report this week is the May employment report to be released on Friday.
Health Care
Econ Comments & Analysis
WSJ | Improvised Explosive Device Tax
'Taxmageddon' isn't only about the half-trillion-dollar blow to the economy that arrives in 2013 on the end of the Bush-Obama tax rates. Several of the Affordable Care Act's worst tax increases kick in too, such as the new excise tax on medical devices.
Blogs
Heritage Foundation | Pictures of America’s Medicare Mess
In “Medicare at Risk: Visualizing the Need for Reform,” Heritage’s Kathryn Nix and John Fleming illustrate the facts about Medicare and why Washington must come to the rescue with innovative solutions to preserve the program today and into the future.
WSJ | Improvised Explosive Device Tax
'Taxmageddon' isn't only about the half-trillion-dollar blow to the economy that arrives in 2013 on the end of the Bush-Obama tax rates. Several of the Affordable Care Act's worst tax increases kick in too, such as the new excise tax on medical devices.
Blogs
Heritage Foundation | Pictures of America’s Medicare Mess
In “Medicare at Risk: Visualizing the Need for Reform,” Heritage’s Kathryn Nix and John Fleming illustrate the facts about Medicare and why Washington must come to the rescue with innovative solutions to preserve the program today and into the future.
Monetary
News
WSJ | Powell Sworn In As Member of Fed Board
Jerome Powell was sworn in Friday as a member of the Federal Reserve's Board of Governors, the central bank said in a statement.
Bloomberg | Dollar Scarce as Top-Quality Assets Shrink 42%
The dollar is proving scarce, even after the Federal Reserve flooded the financial system with an extra $2.3 trillion, as the amount of the highest-quality assets available worldwide shrinks.
Econ Comments & Analysis
WSJ | Seeing Is Not Believing at Today's Fed
Federal Reserve Chairman Ben Bernanke's new policy of openness has much to recommend it, in that it gives the markets information about current and future monetary policy that removes some of the guesswork of years past. But now that traders and investors have better insights into the thinking of Fed policy makers, they don't seem to be acting on that knowledge. Seeing is not believing, apparently.
WSJ | Powell Sworn In As Member of Fed Board
Jerome Powell was sworn in Friday as a member of the Federal Reserve's Board of Governors, the central bank said in a statement.
Bloomberg | Dollar Scarce as Top-Quality Assets Shrink 42%
The dollar is proving scarce, even after the Federal Reserve flooded the financial system with an extra $2.3 trillion, as the amount of the highest-quality assets available worldwide shrinks.
Econ Comments & Analysis
WSJ | Seeing Is Not Believing at Today's Fed
Federal Reserve Chairman Ben Bernanke's new policy of openness has much to recommend it, in that it gives the markets information about current and future monetary policy that removes some of the guesswork of years past. But now that traders and investors have better insights into the thinking of Fed policy makers, they don't seem to be acting on that knowledge. Seeing is not believing, apparently.
Taxes
News
National Journal | Cantor Presses for Bush Tax-Cut Deal Soon
With the George W. Bush-era tax cuts set to expire at the end of the year, House Republicans are planning on taking the matter into their own hands. Instead of waiting until the lame-duck session, House Majority Leader Eric Cantor says they need to take the matter head on.
CNN Money | Payroll tax cut in its last lap?
The payroll tax cut you've enjoyed since last year may be going away in January.
National Journal | Gas Taxes Remain Steady in the Face of Falling Prices
With gas prices leveling out in some parts of the country and falling in many others, drivers out on the road this Memorial Day weekend will no doubt rejoice. But while what the drivers will be spending overall might be less compared with recent days and weeks, what they will be paying in state and federal excise gas taxes will remain the same.
Econ Comments & Analysis
WSJ | What's Right With Kansas
France's new President wants to impose a 75% tax rate, and Washington is headed for a huge tax cliff in January, but some enlightenment reigns in the American heartland.
National Journal | Cantor Presses for Bush Tax-Cut Deal Soon
With the George W. Bush-era tax cuts set to expire at the end of the year, House Republicans are planning on taking the matter into their own hands. Instead of waiting until the lame-duck session, House Majority Leader Eric Cantor says they need to take the matter head on.
CNN Money | Payroll tax cut in its last lap?
The payroll tax cut you've enjoyed since last year may be going away in January.
National Journal | Gas Taxes Remain Steady in the Face of Falling Prices
With gas prices leveling out in some parts of the country and falling in many others, drivers out on the road this Memorial Day weekend will no doubt rejoice. But while what the drivers will be spending overall might be less compared with recent days and weeks, what they will be paying in state and federal excise gas taxes will remain the same.
Econ Comments & Analysis
WSJ | What's Right With Kansas
France's new President wants to impose a 75% tax rate, and Washington is headed for a huge tax cliff in January, but some enlightenment reigns in the American heartland.
Employment
News
NY Times | U.S. Winds Down Longer Benefits for the Unemployed
Hundreds of thousands of out-of-work Americans are receiving their final unemployment checks sooner than they expected, even though Congress renewed extended benefits until the end of the year.
USA Today | Many unemployed facing early end to benefits
More than 100,000 Americans out of work longer than a year in six states and Washington, D.C., are expected to lose their unemployment checks this summer, pushing the total cut off this year to more than 500,000.
NY Times | U.S. Winds Down Longer Benefits for the Unemployed
Hundreds of thousands of out-of-work Americans are receiving their final unemployment checks sooner than they expected, even though Congress renewed extended benefits until the end of the year.
USA Today | Many unemployed facing early end to benefits
More than 100,000 Americans out of work longer than a year in six states and Washington, D.C., are expected to lose their unemployment checks this summer, pushing the total cut off this year to more than 500,000.
Budget
News
WSJ | $1.6 Billion Budget Cut Passed for Illinois Gap
Illinois is taking steps toward plugging one of the nation's worst fiscal gaps, with state lawmakers passing deep cuts to Medicaid and considering a tax increase for cigarettes to cover a $2.7 billion shortfall in the state and federal health program for the needy, disabled and elderly.
Econ Comments & Analysis
WSJ | The History Boys
Riffing on the re-election trail, President Obama often tells crowds that "We've got to move forward to the future we imagined in 2008." An imaginary future from the past—got it. Then there's the imaginary history of the past that Mr. Obama has been recounting lately, when his first-term spending and debt boom never happened.
Washington Times | Spending lies run into facts
Many in the political class, including President Obama and many members of Congress, have an interest in confusing, rather than enlightening, the public.
AEI | Cut to grow
Austerity measures in Europe have been the topic of a heated and mostly confused debate in the economic world. During the May summit of the leading industrial nations at Camp David, German chancellor Angela Merkel and other European leaders pushed for continued European austerity. Keynesian critics argue that these policies destroy economic growth.
Blogs
National Review | Fact-Checking Obama on Spending
Something really strange is happening in Washington these days: The same people who are always arguing that the only way to boost economic growth is to spend and spend and spend are also the ones bragging about President Obama’s record, wait for it, as the smallest spender of all presidents.
WSJ | $1.6 Billion Budget Cut Passed for Illinois Gap
Illinois is taking steps toward plugging one of the nation's worst fiscal gaps, with state lawmakers passing deep cuts to Medicaid and considering a tax increase for cigarettes to cover a $2.7 billion shortfall in the state and federal health program for the needy, disabled and elderly.
Econ Comments & Analysis
WSJ | The History Boys
Riffing on the re-election trail, President Obama often tells crowds that "We've got to move forward to the future we imagined in 2008." An imaginary future from the past—got it. Then there's the imaginary history of the past that Mr. Obama has been recounting lately, when his first-term spending and debt boom never happened.
Washington Times | Spending lies run into facts
Many in the political class, including President Obama and many members of Congress, have an interest in confusing, rather than enlightening, the public.
AEI | Cut to grow
Austerity measures in Europe have been the topic of a heated and mostly confused debate in the economic world. During the May summit of the leading industrial nations at Camp David, German chancellor Angela Merkel and other European leaders pushed for continued European austerity. Keynesian critics argue that these policies destroy economic growth.
Blogs
National Review | Fact-Checking Obama on Spending
Something really strange is happening in Washington these days: The same people who are always arguing that the only way to boost economic growth is to spend and spend and spend are also the ones bragging about President Obama’s record, wait for it, as the smallest spender of all presidents.
Friday, May 25, 2012
General Economics
News
WSJ | New Signs of Global Slowdown
On Thursday, the U.S. reported that businesses were slowing their orders of computers, aircraft, machinery and other long-lasting goods. Measures of business sentiment in Europe slipped, and reports from purchasing managers at manufacturers around the globe turned down.
National Journal | Summer Drivers Get Some Relief, But Not From Gas-Price Politics
Memorial Day weekend usually heralds an annual surge in gasoline prices, as American drivers hit the road and oil refiners switch to a cleaner but pricier summer fuel blend. And in an election year, rising prices usually means heightened political rhetoric about energy, drilling, and the role of big oil.
CNN Money | 30-year mortgage rate hits another record low
Buying a home got even cheaper this week as interest rates on the 30-year fixed-rate mortgage set a record low for the fourth week in a row.
Econ Comments & Analysis
Market Watch | FDIC: Bank profits at highest level since 2007
Bank profits in the first quarter of 2012 reached their highest quarterly income levels in nearly five years, a federal banking regulator said Thursday.
CRS | Department of Housing and Urban Development (HUD): Funding Trends Since FY2002
The Department of Housing and Urban Development (HUD) administers a number of programs and activities that are primarily designed to address housing problems faced by households with very low incomes or other special housing needs. Most of the funding for HUD's programs and activities comes from discretionary appropriations provided each year in the annual appropriations acts enacted by Congress.
Politico | Student loan bills stall in Senate
Senators rejected dueling Republican and Democratic plans to stop rates from doubling in July, because of partisan fighting – again – over how the $6-billion bill would be paid for.
Blogs
Fortune | Why Shell is betting billions to drill for oil in Alaska
This summer, the energy giant will begin exploring off the icy coast of Alaska -- after years of resistance by environmentalists. The payoff could be the largest U.S. offshore oil discovery in a generation.
WSJ | Uncertain Businesses Go Into Wait-And-See Mode
New orders taken by durable goods makers edged up 0.2% in April, but the closely watched bookings for nondefense capital goods excluding aircraft–seen as a proxy for future business investment–dropped 1.9% on top of a 2.2% decline in March.
Economist | Remembering when the future kept getting bigger
How big can the American economy grow? This week’s Free exchange column tackles the critical question of America’s potential: the maximum output it can sustain given its endowments of capital, labour and technology.
Heritage Foundation | Four Big Problems with Obama’s Energy Subsidy Push
These subsidies have and continue to enjoy bipartisan support precisely because they benefit both Republicans and Democrats come election time, when they can say they helped create jobs for their district and state.
WSJ | New Gauge Shows U.S. Factory Growth Slowing
The flash purchasing managers’ index compiled by data provider Markit dropped to 53.9 in May from 56.0 in April, according to an economist who has seen the numbers. The Markit report said the index is the lowest since February.
WSJ | New Signs of Global Slowdown
On Thursday, the U.S. reported that businesses were slowing their orders of computers, aircraft, machinery and other long-lasting goods. Measures of business sentiment in Europe slipped, and reports from purchasing managers at manufacturers around the globe turned down.
National Journal | Summer Drivers Get Some Relief, But Not From Gas-Price Politics
Memorial Day weekend usually heralds an annual surge in gasoline prices, as American drivers hit the road and oil refiners switch to a cleaner but pricier summer fuel blend. And in an election year, rising prices usually means heightened political rhetoric about energy, drilling, and the role of big oil.
CNN Money | 30-year mortgage rate hits another record low
Buying a home got even cheaper this week as interest rates on the 30-year fixed-rate mortgage set a record low for the fourth week in a row.
Econ Comments & Analysis
Market Watch | FDIC: Bank profits at highest level since 2007
Bank profits in the first quarter of 2012 reached their highest quarterly income levels in nearly five years, a federal banking regulator said Thursday.
CRS | Department of Housing and Urban Development (HUD): Funding Trends Since FY2002
The Department of Housing and Urban Development (HUD) administers a number of programs and activities that are primarily designed to address housing problems faced by households with very low incomes or other special housing needs. Most of the funding for HUD's programs and activities comes from discretionary appropriations provided each year in the annual appropriations acts enacted by Congress.
Politico | Student loan bills stall in Senate
Senators rejected dueling Republican and Democratic plans to stop rates from doubling in July, because of partisan fighting – again – over how the $6-billion bill would be paid for.
Blogs
Fortune | Why Shell is betting billions to drill for oil in Alaska
This summer, the energy giant will begin exploring off the icy coast of Alaska -- after years of resistance by environmentalists. The payoff could be the largest U.S. offshore oil discovery in a generation.
WSJ | Uncertain Businesses Go Into Wait-And-See Mode
New orders taken by durable goods makers edged up 0.2% in April, but the closely watched bookings for nondefense capital goods excluding aircraft–seen as a proxy for future business investment–dropped 1.9% on top of a 2.2% decline in March.
Economist | Remembering when the future kept getting bigger
How big can the American economy grow? This week’s Free exchange column tackles the critical question of America’s potential: the maximum output it can sustain given its endowments of capital, labour and technology.
Heritage Foundation | Four Big Problems with Obama’s Energy Subsidy Push
These subsidies have and continue to enjoy bipartisan support precisely because they benefit both Republicans and Democrats come election time, when they can say they helped create jobs for their district and state.
WSJ | New Gauge Shows U.S. Factory Growth Slowing
The flash purchasing managers’ index compiled by data provider Markit dropped to 53.9 in May from 56.0 in April, according to an economist who has seen the numbers. The Markit report said the index is the lowest since February.
Health Care
Econ Comments & Analysis
WSJ | The Liberal Legal Meltdown Over ObamaCare
In apparent panic at the tenor of the Supreme Court argument over the constitutionality of the Affordable Care Act (aka ObamaCare), liberal law professors have exploded with anticipatory denunciations of the court's conservative justices—claiming that it would be "hypocritical" and "partisan" of them to invalidate legislation passed by Congress when they generally oppose "judicial activism."
Blogs
Library of Economics | Quotations from Alice Rivlin
In arguing with Sidney Winter, who wants a large well-funded military because if it's small, "we" can't intervene in other countries, Alice Rivlin said, "Aren't we a little bit tempted to use it [the military] if we have it?"
WSJ | The Liberal Legal Meltdown Over ObamaCare
In apparent panic at the tenor of the Supreme Court argument over the constitutionality of the Affordable Care Act (aka ObamaCare), liberal law professors have exploded with anticipatory denunciations of the court's conservative justices—claiming that it would be "hypocritical" and "partisan" of them to invalidate legislation passed by Congress when they generally oppose "judicial activism."
Blogs
Library of Economics | Quotations from Alice Rivlin
In arguing with Sidney Winter, who wants a large well-funded military because if it's small, "we" can't intervene in other countries, Alice Rivlin said, "Aren't we a little bit tempted to use it [the military] if we have it?"
Monetary
News
Bloomberg | Frozen Europe Means ECB Must Resort to ELA for Banks
The European Central Bank is trying to limit the flow of information about so-called Emergency Liquidity Assistance, which is increasingly being tapped by distressed euro-region financial institutions as the debt crisis worsens.
Econ Comments & Analysis
Businessweek | What a Return to the Drachma Really Looks Like
From a distance, returning to the drachma seems like a great solution for Greece. Economists such as New York University’s Nouriel Roubini say that by quitting the euro, Greece would seize control of its fate.
Blogs
WSJ | Fed’s Dudley Doesn’t See Need for More Easing
Expectations for U.S. economic growth, while “pretty disappointing” at around 2.4%, is sufficient to keep the central bank from easing monetary policy, Federal Reserve Bank of New York President William Dudley said.
Bloomberg | Frozen Europe Means ECB Must Resort to ELA for Banks
The European Central Bank is trying to limit the flow of information about so-called Emergency Liquidity Assistance, which is increasingly being tapped by distressed euro-region financial institutions as the debt crisis worsens.
Econ Comments & Analysis
Businessweek | What a Return to the Drachma Really Looks Like
From a distance, returning to the drachma seems like a great solution for Greece. Economists such as New York University’s Nouriel Roubini say that by quitting the euro, Greece would seize control of its fate.
Blogs
WSJ | Fed’s Dudley Doesn’t See Need for More Easing
Expectations for U.S. economic growth, while “pretty disappointing” at around 2.4%, is sufficient to keep the central bank from easing monetary policy, Federal Reserve Bank of New York President William Dudley said.
Taxes
News
NY Times | An Often Procrastinating Congress Is Raring at the Gate on Tax Cuts
It is a maxim in Congress these days: If high-profile legislation affecting millions of Americans is about to expire, deal with it at the last possible second, preferably with rancor.
Econ Comments & Analysis
Washington Times | The Not-So-Free State
Maryland Gov. Martin O'Malley signed a quarter-billion dollars’ worth of tax increases into law on Tuesday. The move is meant to keep the state’s ever-expanding budget on a path toward growth. “Growth” is the last thing the private-sector economy is going to see in the Free State.
Blogs
Neighborhood Effects | New Research on Dedicated Taxes
Earlier this week, George Crowley and Adam Hoffer published new Mercatus research on dedicated tax revenues in the states. The practice of dedicating tax revenues to a specific purpose is popular among both politicians and voters.
Tax Foundation | Maryland Gov. O'Malley Signs Tax Increases into Law
On May 22 Maryland Gov. Martin O'Malley signed into law a bill raising income taxes and tobacco taxes and ending certain business tax breaks. The bill increases tax rates for single filers making over $100,000 ($150,000 for a couple) with a new top rate of 5.75% on income over $250,000 ($300,000 for a couple).
NY Times | An Often Procrastinating Congress Is Raring at the Gate on Tax Cuts
It is a maxim in Congress these days: If high-profile legislation affecting millions of Americans is about to expire, deal with it at the last possible second, preferably with rancor.
Econ Comments & Analysis
Washington Times | The Not-So-Free State
Maryland Gov. Martin O'Malley signed a quarter-billion dollars’ worth of tax increases into law on Tuesday. The move is meant to keep the state’s ever-expanding budget on a path toward growth. “Growth” is the last thing the private-sector economy is going to see in the Free State.
Blogs
Neighborhood Effects | New Research on Dedicated Taxes
Earlier this week, George Crowley and Adam Hoffer published new Mercatus research on dedicated tax revenues in the states. The practice of dedicating tax revenues to a specific purpose is popular among both politicians and voters.
Tax Foundation | Maryland Gov. O'Malley Signs Tax Increases into Law
On May 22 Maryland Gov. Martin O'Malley signed into law a bill raising income taxes and tobacco taxes and ending certain business tax breaks. The bill increases tax rates for single filers making over $100,000 ($150,000 for a couple) with a new top rate of 5.75% on income over $250,000 ($300,000 for a couple).
Employment
News
FOX News | How US states fared on jobless aid applications
Weekly US unemployment benefit applications were largely unchanged last week, a sign hiring will likely continue at a modest pace. The number of people seeking benefits dipped 2,000 to a seasonally adjusted 370,000.
CNN Money | Jobless claims fall slightly
Claims for unemployment benefits have been chopping around the same level for about a month, signaling companies probably increased their hiring only slightly in May.
FOX News | How US states fared on jobless aid applications
Weekly US unemployment benefit applications were largely unchanged last week, a sign hiring will likely continue at a modest pace. The number of people seeking benefits dipped 2,000 to a seasonally adjusted 370,000.
CNN Money | Jobless claims fall slightly
Claims for unemployment benefits have been chopping around the same level for about a month, signaling companies probably increased their hiring only slightly in May.
Budget
News
Washington Times | EU summit over, eurozone ills are not
European Union leaders concluded their latest summit early Thursday with few ways to cure the continent’s festering financial crisis, even as the potential for a messy Greek exit from the euro appears to be rising. Some leaders stressed the importance of planning for just such an event but offered no measures that might help Greece avoid it.
Bloomberg | China Banks May Miss Loan Target for 2012, Officials Say
China’s biggest banks may fall short of loan targets for the first time in at least seven years as an economic slowdown crimps demand for credit, three bank officials with knowledge of the matter said.
Econ Comments & Analysis
WSJ | Deus ex Eurobonds
European stock markets have been tumbling all week over fears of the damage a Greek exit from the euro zone could do to the single currency and even the European Union. Yet through it all, Germany's borrowing costs keep going down—so much so that on Wednesday Berlin sold two-year bonds that pay no interest.
Washington Times | Obama’s big deficit lie
President Obama claims federal budget deficits have not soared out of control during his administration. He has officially jumped the shark.
Four Percent Growth | The False Promise of Deficit Spending
“Austerity is out, growth is in.” This line — from a May 8 editorial in The San Francisco Chronicle — captures the change in economic vocabulary following the May elections in France and Greece. The new turn to the left in Europe is premised on a simple declaration: We are tired of austerity and we want to grow. That’s it.
CBO | Status of Discretionary Appropriations: FY 2013 Senate
Estimates of discretionary budget authority and outlays for fiscal year 2013.
Blogs
Heritage Foundationh | Setting Obama’s “Great Fiscal Restraint Record” Straight
The Obama Administration is piggybacking on claims made by MarketWatch’s Rex Nutting that Obama has not gone on the spending spree everyone thinks he has since taking office. As White House press secretary Jay Carney puts it, President Obama has exercised “significant fiscal restraint” and “acted with great fiscal responsibility.”
CATO | Mirror, Mirror, on the Wall, Which President Is the Biggest Spender of All?
A financial columnist named Rex Nutting recently triggered a firestorm of controversy by claiming that Barack Obama is not a big spender.
National Review | Public-Sector Austerity vs. Private-Sector Austerity
For a few weeks I have been saying that pro-growth austerity imposes austerity on the public sector. That means reduction in government spending, reform of entitlements, reduction in the the rolls and salaries of government employees, and reduction of the government footprint in the private sector. Unfortunately, in most cases, governments would rather address their debt problems through an anti-growth version of austerity, meaning more taxes and more government intervention in our lives.
Washington Times | EU summit over, eurozone ills are not
European Union leaders concluded their latest summit early Thursday with few ways to cure the continent’s festering financial crisis, even as the potential for a messy Greek exit from the euro appears to be rising. Some leaders stressed the importance of planning for just such an event but offered no measures that might help Greece avoid it.
Bloomberg | China Banks May Miss Loan Target for 2012, Officials Say
China’s biggest banks may fall short of loan targets for the first time in at least seven years as an economic slowdown crimps demand for credit, three bank officials with knowledge of the matter said.
Econ Comments & Analysis
WSJ | Deus ex Eurobonds
European stock markets have been tumbling all week over fears of the damage a Greek exit from the euro zone could do to the single currency and even the European Union. Yet through it all, Germany's borrowing costs keep going down—so much so that on Wednesday Berlin sold two-year bonds that pay no interest.
Washington Times | Obama’s big deficit lie
President Obama claims federal budget deficits have not soared out of control during his administration. He has officially jumped the shark.
Four Percent Growth | The False Promise of Deficit Spending
“Austerity is out, growth is in.” This line — from a May 8 editorial in The San Francisco Chronicle — captures the change in economic vocabulary following the May elections in France and Greece. The new turn to the left in Europe is premised on a simple declaration: We are tired of austerity and we want to grow. That’s it.
CBO | Status of Discretionary Appropriations: FY 2013 Senate
Estimates of discretionary budget authority and outlays for fiscal year 2013.
Blogs
Heritage Foundationh | Setting Obama’s “Great Fiscal Restraint Record” Straight
The Obama Administration is piggybacking on claims made by MarketWatch’s Rex Nutting that Obama has not gone on the spending spree everyone thinks he has since taking office. As White House press secretary Jay Carney puts it, President Obama has exercised “significant fiscal restraint” and “acted with great fiscal responsibility.”
CATO | Mirror, Mirror, on the Wall, Which President Is the Biggest Spender of All?
A financial columnist named Rex Nutting recently triggered a firestorm of controversy by claiming that Barack Obama is not a big spender.
National Review | Public-Sector Austerity vs. Private-Sector Austerity
For a few weeks I have been saying that pro-growth austerity imposes austerity on the public sector. That means reduction in government spending, reform of entitlements, reduction in the the rolls and salaries of government employees, and reduction of the government footprint in the private sector. Unfortunately, in most cases, governments would rather address their debt problems through an anti-growth version of austerity, meaning more taxes and more government intervention in our lives.
Thursday, May 24, 2012
General Economics
News
WSJ | Euro-Zone Economic Contraction Deepens
Concerns over the future of the euro deepened Thursday on more evidence of policy inertia and a fresh spate of dire economic data that showed some of the remaining supports for business activity in the 17-country euro zone splintering away.
Market Watch | 30-year mortgage rate hits record low of 3.78%
Mortgage rates hit record lows in the week ending May 24, with the 30-year fixed-rate mortgage average ticking down to 3.78% from 3.79% in the prior week, Freddie Mac said Thursday in its weekly report.
WSJ | U.K. Recession Deeper Than Expected
The U.K. economy slid even deeper into recession than previously thought in the first quarter, official statistics showed Thursday, piling additional pressure on the government to do more to spur growth.
Bloomberg | Europe Manufacturing Shrinks, German Confidence Drops
European manufacturing and services output dropped in May, German business confidence declined and Britain’s first-quarter contraction was deeper than previously estimated as the region’s economic slump worsened.
WSJ | Europe Girds for Greek Exit
European officials are stepping up contingency planning for a possible Greek exit from the euro zone, even as Europe's leaders struggled to overcome differences on how to resolve the currency bloc's crisis at a summit meeting here.
Market Watch | FDIC: Bank profits at highest level since 2007
Bank profits rose in the first quarter of 2012, reaching their highest quarterly levels since the second quarter of 2007, according to the Federal Deposit Insurance Corp.'s quarterly banking report, released Thursday.
Econ Comments & Analysis
Washington Times | J.P. Morgan’s risky business
Investment-services firm J.P. Morgan blew $2 billion on bad trades, and the total damage could rise to $5 billion. Though the Obama administration wants you to think otherwise, this is proof the market works.
WSJ | Why Oil Prices Will Keep Falling
The recent retreat in crude prices has surprised many experts, who were predicting steeply higher levels. The sanctions choking off Iranian exports and the ever-present elephant in the room—a possible shutdown of the Strait of Hormuz, where 20% of global crude traffic occurs—were pushing prices up.
NBER | Ricardo's Theory of Comparative Advantage: Old Idea, New Evidence
When asked to name one proposition in the social sciences that is both true and non-trivial, Paul Samuelson famously replied: 'Ricardo's theory of comparative advantage'. Truth, however, in Samuelson's reply refers to the fact that Ricardo's theory of comparative advantage is mathematically correct, not that it is empirically valid.
AEI | Dodd-Frank's too-big-to-fail dystopia
With the recent publication of its final rule, the federal government's Financial Stability Oversight Council is now in position to designate certain nonbank firms as "systemically important financial institutions" (SIFIs).
Blogs
Economist | Stamp duty
As many newspaper owners have found out, it is extremely hard to make money by selling something that someone else is giving away. Postal services around the world have struggled to adapt since the the arrival of e-mail, often because they are tangled up in politics.
CATO | Diversity & Choice or Regulation & Monopoly?
Parents and taxpayers should have a diverse array of choices, and a large and diverse collection of scholarship organizations is essential for achieving that.
Heritage Foundation | The California Conundrum: New, Costly High-Speed Rail vs. Massive Budget Deficit
What do $16 billion and $68.4 billion have in common, other than the fact that each of these figures dwarfs JPMorgan Chase’s recent loss? The former is how deep in the red the California state budget sits currently. The latter is the latest in a series of roller-coasting cost estimates for the state’s controversial high-speed rail (HSR) project, which is funded in part by the federal government.
Reason Foundation | States and Cities Going Private With Infrastructure Investment
As public debts grow, cities and states simultaneously face pressing needs to repair and modernize critical infrastructure assets that can't wait if citizens hope to keep goods and services moving in the economy.
Economist | Fiscal cliffs, multipliers, and the myth of central bank independence
The cryptic phrase "fiscal cliff" is creeping into news reports and economic analyses (including our own). Alongside "grexit" and "hard landing" it lurks as a mysterious and malevolent force waiting to wreak havoc on the global economy. The fiscal cliff is an American afflication.
WSJ | Euro-Zone Economic Contraction Deepens
Concerns over the future of the euro deepened Thursday on more evidence of policy inertia and a fresh spate of dire economic data that showed some of the remaining supports for business activity in the 17-country euro zone splintering away.
Market Watch | 30-year mortgage rate hits record low of 3.78%
Mortgage rates hit record lows in the week ending May 24, with the 30-year fixed-rate mortgage average ticking down to 3.78% from 3.79% in the prior week, Freddie Mac said Thursday in its weekly report.
WSJ | U.K. Recession Deeper Than Expected
The U.K. economy slid even deeper into recession than previously thought in the first quarter, official statistics showed Thursday, piling additional pressure on the government to do more to spur growth.
Bloomberg | Europe Manufacturing Shrinks, German Confidence Drops
European manufacturing and services output dropped in May, German business confidence declined and Britain’s first-quarter contraction was deeper than previously estimated as the region’s economic slump worsened.
WSJ | Europe Girds for Greek Exit
European officials are stepping up contingency planning for a possible Greek exit from the euro zone, even as Europe's leaders struggled to overcome differences on how to resolve the currency bloc's crisis at a summit meeting here.
Market Watch | FDIC: Bank profits at highest level since 2007
Bank profits rose in the first quarter of 2012, reaching their highest quarterly levels since the second quarter of 2007, according to the Federal Deposit Insurance Corp.'s quarterly banking report, released Thursday.
Econ Comments & Analysis
Washington Times | J.P. Morgan’s risky business
Investment-services firm J.P. Morgan blew $2 billion on bad trades, and the total damage could rise to $5 billion. Though the Obama administration wants you to think otherwise, this is proof the market works.
WSJ | Why Oil Prices Will Keep Falling
The recent retreat in crude prices has surprised many experts, who were predicting steeply higher levels. The sanctions choking off Iranian exports and the ever-present elephant in the room—a possible shutdown of the Strait of Hormuz, where 20% of global crude traffic occurs—were pushing prices up.
NBER | Ricardo's Theory of Comparative Advantage: Old Idea, New Evidence
When asked to name one proposition in the social sciences that is both true and non-trivial, Paul Samuelson famously replied: 'Ricardo's theory of comparative advantage'. Truth, however, in Samuelson's reply refers to the fact that Ricardo's theory of comparative advantage is mathematically correct, not that it is empirically valid.
AEI | Dodd-Frank's too-big-to-fail dystopia
With the recent publication of its final rule, the federal government's Financial Stability Oversight Council is now in position to designate certain nonbank firms as "systemically important financial institutions" (SIFIs).
Blogs
Economist | Stamp duty
As many newspaper owners have found out, it is extremely hard to make money by selling something that someone else is giving away. Postal services around the world have struggled to adapt since the the arrival of e-mail, often because they are tangled up in politics.
CATO | Diversity & Choice or Regulation & Monopoly?
Parents and taxpayers should have a diverse array of choices, and a large and diverse collection of scholarship organizations is essential for achieving that.
Heritage Foundation | The California Conundrum: New, Costly High-Speed Rail vs. Massive Budget Deficit
What do $16 billion and $68.4 billion have in common, other than the fact that each of these figures dwarfs JPMorgan Chase’s recent loss? The former is how deep in the red the California state budget sits currently. The latter is the latest in a series of roller-coasting cost estimates for the state’s controversial high-speed rail (HSR) project, which is funded in part by the federal government.
Reason Foundation | States and Cities Going Private With Infrastructure Investment
As public debts grow, cities and states simultaneously face pressing needs to repair and modernize critical infrastructure assets that can't wait if citizens hope to keep goods and services moving in the economy.
Economist | Fiscal cliffs, multipliers, and the myth of central bank independence
The cryptic phrase "fiscal cliff" is creeping into news reports and economic analyses (including our own). Alongside "grexit" and "hard landing" it lurks as a mysterious and malevolent force waiting to wreak havoc on the global economy. The fiscal cliff is an American afflication.
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