News
Bloomberg | Business Activity in U.S. Shrank in October for Second Month
Business activity in the U.S. unexpectedly contracted in October for a second month, adding to signs manufacturing has retreated from its central role in the economic recovery.
CNN Money | Largest refinery okay, but gas shortage still a risk
In the aftermath of Superstorm Sandy, it's still unclear whether consumers will see a nationwide gas spike.
Market Watch | U.S. employment costs climb 0.4% in third quarter
The employment cost index, which measures the price of U.S. labor, rose 0.4% in the third quarter, the Labor Department said Wednesday.
Bloomberg | Storm Keeping Millions From Work May Slow Economic Growth
Atlantic superstorm Sandy may cut U.S. economic growth as it keeps millions of employees away from work and shuts businesses from restaurants to refineries in one of the nation’s most populated and productive regions.
CNN Money | Sandy's economic impact
Millions are without power, likely for an extended period of time. Businesses -- from the nation's stock exchanges and all the way on down to thousands of corner stores -- have been shut down.
Econ Comments & Analysis
NBER | The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing
The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago.
Washington Times | Crunch time for Obama’s weak economic numbers
The bleak truth about the comatose Obama economy is not just that it’s barely breathing. It’s still not far from another recession.
Daily Caller | Come home, Paul Krugman
I hate to say it, but economist, New York Times columnist and partisan talking beard Paul Krugman is a smart guy. After all, they don’t hand out Nobel Prizes based on looks. For proof, see 1902’s winner for literature.
Washington Times | The coming regulatory tsunami
Knowledgeable officials are expecting a regulatory tsunami after the election. By law, the Office of Management and Budget (OMB) is required to publish a report each April and October about new regulations that government agencies are considering. OMB failed to publish the April report. The question is why — what is it hiding?
Forbes | On Its 83rd Anniversary, Lessons From The Great Depression
Monday marks the 83rd anniversary of the onset of the worst economic collapse in the history of the modern world: the Great Depression. To observe the occasion, U.S. policymakers should reflect on lessons learned from the crisis. This is more than just an exercise in platitudes. Understanding the effects of policies implemented to aid the recoveries of the early 20th century could go a long way toward accelerating the one we’re currently surviving.
The American | Who Needs Home Ownership?
Home ownership subsidies have imposed costs that are large and clear. The benefits of such subsidies are, at best, small and vague.
Washington Times | Obama’s designs on American industry
Recently, I saw a big poster that proclaimed “Keep America Strong — Vote Obama-Biden.” I nearly choked. What am I not getting here?
CNN Money | A new type of 401(k): No fund picking allowed
The 401(k) is the best tool you have to save for retirement, but it can be an awfully clumsy one.
Blogs
Café Hayek | The curious task
Still, I worry that the pursuit of national numerical targets is a bad way to allocate scarce resources. In 1995, President Bill Clinton announced a goal of 8 million new homeowners by 2000. In 2002, President George W. Bush promised 5.5 million new minority homeowners by 2010.
Political Calculations | A First Look at GDP for 2012-Q4
As we expected, economic growth in the United States picked up in the third quarter of 2012, increasing from the annualized growth rate of 1.3% recorded in 2012-Q2 to 2.0% in the BEA's initial GDP estimate for 2012-Q3.
AEI | Misplaced Nordic envy
The United States is now just the 12th most prosperous nation on Earth, apparently. This marks the first time it has ever fallen from the top ten of the Legatum Institute’s Prosperity Index.
Café Hayek | Destroying Property Does Not Promote Economic Prosperity
I sit at home now (GMU is closed today) awaiting whatever will be the effects of hurricane Sandy. I’m not sure what those effects will be, although I doubt that they will be as dire as some of the breathless commentaries are predicting. (I could be proven wrong, of course; I hope that I’m not.)
Wednesday, October 31, 2012
Health Care
Econ Comments & Analysis
WSJ | ObamaCare's Costs to the Working Class
It is time to move past the debate over whether ObamaCare was a good or a bad idea. I count myself as an ObamaCare supporter, but this doesn't blind me to the law's flaws. Regardless of who wins the presidential election, bipartisan compromise will be necessary to reform health care in a constructive way.
Blogs
CATO | California Officials: ObamaCare ‘Exchange’ Will Hike Premiums up to 25%
Under a new rating map approved by state lawmakers, the Department of lnsurance estimated that premiums for similar coverage could increase as much as 25% in West Los Angeles, 22% in the Sacramento area and nearly 13% in Orange County.
Library of Economics | Socialized Medicine Can Kill
A 29-year-old woman will die without a new drug that the NHS is refusing to provide despite the manufacturer offering it to her for free, it emerged today.
WSJ | ObamaCare's Costs to the Working Class
It is time to move past the debate over whether ObamaCare was a good or a bad idea. I count myself as an ObamaCare supporter, but this doesn't blind me to the law's flaws. Regardless of who wins the presidential election, bipartisan compromise will be necessary to reform health care in a constructive way.
Blogs
CATO | California Officials: ObamaCare ‘Exchange’ Will Hike Premiums up to 25%
Under a new rating map approved by state lawmakers, the Department of lnsurance estimated that premiums for similar coverage could increase as much as 25% in West Los Angeles, 22% in the Sacramento area and nearly 13% in Orange County.
Library of Economics | Socialized Medicine Can Kill
A 29-year-old woman will die without a new drug that the NHS is refusing to provide despite the manufacturer offering it to her for free, it emerged today.
Monetary
News
Market Watch | Fed's Kocherlakota says rate policy not too easy
The Federal Reserve hasn't overdone easing moves to help the economy, Narayana Kocherlakota, the president of the Minneapolis Federal Reserve Bank, said on Tuesday.
Blogs
Café Hayek | Hanke on money
This week’s EconTalk is Steve Hanke talking about hyperinflation and the US fiscal situation. This was extremely informative.
Market Watch | Fed's Kocherlakota says rate policy not too easy
The Federal Reserve hasn't overdone easing moves to help the economy, Narayana Kocherlakota, the president of the Minneapolis Federal Reserve Bank, said on Tuesday.
Blogs
Café Hayek | Hanke on money
This week’s EconTalk is Steve Hanke talking about hyperinflation and the US fiscal situation. This was extremely informative.
Taxes
Econ Comments & Analysis
WSJ | Big Storm Opportunism
Our former editor Robert Bartley once quipped (fondly) about the writer Jude Wanniski that he thought a capital-gains tax cut could intercept a Soviet SS-20 missile in mid-flight. We were reminded of that monomania Tuesday as the political left more or less declared in unison that the ravages of Hurricane Sandy prove that America needs bigger government.
Blogs
Heritage Foundation | Is a Tax Cut Always a Good Thing?
As a matter of principle, there are at least two reasons to dislike taxes and to applaud tax cuts. First, taxes take money away from those who made the money in the first place. For reasons of basic morality, democratic governments should respect individual property rights as much as possible while meeting their constitutional obligations.
WSJ | Big Storm Opportunism
Our former editor Robert Bartley once quipped (fondly) about the writer Jude Wanniski that he thought a capital-gains tax cut could intercept a Soviet SS-20 missile in mid-flight. We were reminded of that monomania Tuesday as the political left more or less declared in unison that the ravages of Hurricane Sandy prove that America needs bigger government.
Blogs
Heritage Foundation | Is a Tax Cut Always a Good Thing?
As a matter of principle, there are at least two reasons to dislike taxes and to applaud tax cuts. First, taxes take money away from those who made the money in the first place. For reasons of basic morality, democratic governments should respect individual property rights as much as possible while meeting their constitutional obligations.
Employment
News
CNN Money | Eurozone unemployment hits record high
Unemployment in the eurozone rose in September to a record high of 11.6%, the European Commission's Eurostat statistics agency reported Wednesday..
Politico | Labor releases Tuesday reports on time
Hurricane Sandy failed to push the Labor Department off its schedule for releasing a local jobs report Tuesday, tamping down concerns that the storm would delay the closely watched national unemployment report past its Friday deadline and until after the election.
Econ Comments & Analysis
Real Clear Markets | The Evidence Is In: Green Jobs Are a Total Waste
In case anyone has any doubt, the evidence is in. Green jobs training programs are a waste of taxpayer money. So says the Office of the Inspector General of the U.S. Department of Labor in a report on the $500 million program, published on Thursday.
Blogs
Calculated Risk | Update: Employment Report expected on Friday
The U.S. Labor Department on Monday said it is “working hard to ensure the timely release” of the October jobs report, saying it intends to released the report on schedule Friday despite Hurricane Sandy.
WSJ | Older Americans’ Complicated Role in the Work Force
The Outlook column in today’s Journal highlighted how an aging labor force is driving down the share of the population that’s working or looking for work, a measure known as the participation rate. But take a look at the charts accompanying the article, and another story jumps out: The participation rate among older Americans is actually rising.
CNN Money | Eurozone unemployment hits record high
Unemployment in the eurozone rose in September to a record high of 11.6%, the European Commission's Eurostat statistics agency reported Wednesday..
Politico | Labor releases Tuesday reports on time
Hurricane Sandy failed to push the Labor Department off its schedule for releasing a local jobs report Tuesday, tamping down concerns that the storm would delay the closely watched national unemployment report past its Friday deadline and until after the election.
Econ Comments & Analysis
Real Clear Markets | The Evidence Is In: Green Jobs Are a Total Waste
In case anyone has any doubt, the evidence is in. Green jobs training programs are a waste of taxpayer money. So says the Office of the Inspector General of the U.S. Department of Labor in a report on the $500 million program, published on Thursday.
Blogs
Calculated Risk | Update: Employment Report expected on Friday
The U.S. Labor Department on Monday said it is “working hard to ensure the timely release” of the October jobs report, saying it intends to released the report on schedule Friday despite Hurricane Sandy.
WSJ | Older Americans’ Complicated Role in the Work Force
The Outlook column in today’s Journal highlighted how an aging labor force is driving down the share of the population that’s working or looking for work, a measure known as the participation rate. But take a look at the charts accompanying the article, and another story jumps out: The participation rate among older Americans is actually rising.
Budget
News
Market Watch | Treasury sees debt limit reached near end of year
The Treasury Department said Wednesday that it expects to reach the debt limit near the end of the year.
Bloomberg | Euro Chiefs Set to Grant Greece Extension Amid Squabbles
Euro-area finance chiefs may grant Greece more time to meet its bailout targets even as they split on whether the country needs another debt writedown and Greek politicians squabble over further austerity measures.
Market Watch | Treasury sees debt limit reached near end of year
The Treasury Department said Wednesday that it expects to reach the debt limit near the end of the year.
Bloomberg | Euro Chiefs Set to Grant Greece Extension Amid Squabbles
Euro-area finance chiefs may grant Greece more time to meet its bailout targets even as they split on whether the country needs another debt writedown and Greek politicians squabble over further austerity measures.
Monday, October 29, 2012
General Economics
News
Market Watch | Judging recovery time from the Great Recession
Getting a handle on how long it’ll take to recover from the Great Recession is more art than science, but a few economists think there are lessons from the past that might prove useful for those seeking a light at the end of the tunnel.
Bloomberg | UBS Cutting Investment Bank Seen Freeing Investors Cash
UBS AG (UBSN)’s decision to cut as many as 10,000 jobs and retreat from capital-intensive trading businesses will help position Switzerland’s largest bank to return more funds to shareholders.
Market Watch | U.S. consumer spending climbs 0.8% in September
Consumer spending in the U.S. rose a seasonally adjusted 0.8% in September, the Commerce Department said Monday. Spending for August was unchanged at a 0.5% increase.
WSJ | Economy Grows at 2% Pace
Consumers, Government Spending Powered Third-Quarter Gains but Growth Likely to Slow Down.
Fox News | Gauge of consumer sentiment hits 82.6 in October, highest reading since September 2007
The University of Michigan's final index of October consumer sentiment rose to 82.6 from 78.3 in September. That's the highest since September 2007 — three months before the Great Recession began.
USA Today | Business spending tightens as fiscal cliff nears
The median forecast of 48 economists surveyed by USA TODAY before Friday's report predicted the economy will grow 1.9% this quarter and next, strengthening in the middle of the year and reaching a 2.8% growth rate late next year.
Econ Comments & Analysis
Washington Times | EDITORIAL: The ongoing slump
Uncle Sam’s current path guarantees economic stagnation.
WSJ | Chronic Fatigue Economy
We borrowed $5 trillion and all we got was this lousy 1.7% growth.
Bloomberg | Why More Immigration, Not Less, Is Key to U.S. Economic Growth
Beyond the huge importance of immigrants to the U.S. economy today, three forces are making immigration reform more urgent:
RCM | Calling All Economists: How Many Steaks Can a Rich Man Eat?
If income inequality is the class warrior's casus belli, the Gini coefficient, a measure of statistical wealth or income dispersion, is his battle cry. "Unfair!" barks the champion of equal outcomes, advocating equality neglectful of its impact on prosperity.
MSN Money | The economy is weaker than it looks
The third-quarter GDP number continues a streak of misleading economic data.
Washington Times | EDITORIAL: Worst economic recovery, ever
The Obama administration is hailing the latest economic growth figures as evidence things are getting better. They’re not. As with recent unemployment data, these numbers don’t pass the smell test. In your guts you know they’re nuts.
Blogs
AEI: The American | The Financial Stability Oversight Council’s Fatal Flaw
Can the FSOC point out that its own members are creating potential instability and systemic risk? If it cannot, it is constitutionally incapable of carrying out its statutory assignment.
"Calculated Risk | Unofficial Problem Bank list declines to 864 Institutions"
There were five removals and four additions leaving the Unofficial Problem Bank List with 864 institutions with assets of $330.4 billion. A year ago, the list had 985 institutions with assets of $406.6 billion.
Heritage Foundation | Major Benefits of Free Trade
Nations that embrace international trade enjoy significantly stronger economies, achieve lower rates of hunger, and maintain a better stewardship of the environment, according to new data published by Heritage for the forthcoming Index of Economic Freedom.
AEI | Weak GDP report shows no end in sight for the Long Recession
The anemic growth rate means the current recovery remains extraordinarily fragile. Research from the Fed which finds that since 1947 when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time.
Calculated Risk | Schedule for Week of Oct 28th
The key report this week is the October employment report to be released on Friday. Other key reports include the August Case-Shiller house price index on Tuesday, October auto sales on Thursday, and the October ISM manufacturing index, also on Thursday.
AEI | Think food is more expensive today than in the past? It’s not, it’s now cheaper than ever before
When you adjust food prices for inflation, you might be surprised to learn that your dollars go further today compared to 30 years ago — for most products at least. Don’t believe it? See for yourself with an interactive grocery shopping simulator that reveals how much your grocery bill varies over the past three decades.”
Market Watch | Judging recovery time from the Great Recession
Getting a handle on how long it’ll take to recover from the Great Recession is more art than science, but a few economists think there are lessons from the past that might prove useful for those seeking a light at the end of the tunnel.
Bloomberg | UBS Cutting Investment Bank Seen Freeing Investors Cash
UBS AG (UBSN)’s decision to cut as many as 10,000 jobs and retreat from capital-intensive trading businesses will help position Switzerland’s largest bank to return more funds to shareholders.
Market Watch | U.S. consumer spending climbs 0.8% in September
Consumer spending in the U.S. rose a seasonally adjusted 0.8% in September, the Commerce Department said Monday. Spending for August was unchanged at a 0.5% increase.
WSJ | Economy Grows at 2% Pace
Consumers, Government Spending Powered Third-Quarter Gains but Growth Likely to Slow Down.
Fox News | Gauge of consumer sentiment hits 82.6 in October, highest reading since September 2007
The University of Michigan's final index of October consumer sentiment rose to 82.6 from 78.3 in September. That's the highest since September 2007 — three months before the Great Recession began.
USA Today | Business spending tightens as fiscal cliff nears
The median forecast of 48 economists surveyed by USA TODAY before Friday's report predicted the economy will grow 1.9% this quarter and next, strengthening in the middle of the year and reaching a 2.8% growth rate late next year.
Econ Comments & Analysis
Washington Times | EDITORIAL: The ongoing slump
Uncle Sam’s current path guarantees economic stagnation.
WSJ | Chronic Fatigue Economy
We borrowed $5 trillion and all we got was this lousy 1.7% growth.
Bloomberg | Why More Immigration, Not Less, Is Key to U.S. Economic Growth
Beyond the huge importance of immigrants to the U.S. economy today, three forces are making immigration reform more urgent:
RCM | Calling All Economists: How Many Steaks Can a Rich Man Eat?
If income inequality is the class warrior's casus belli, the Gini coefficient, a measure of statistical wealth or income dispersion, is his battle cry. "Unfair!" barks the champion of equal outcomes, advocating equality neglectful of its impact on prosperity.
MSN Money | The economy is weaker than it looks
The third-quarter GDP number continues a streak of misleading economic data.
Washington Times | EDITORIAL: Worst economic recovery, ever
The Obama administration is hailing the latest economic growth figures as evidence things are getting better. They’re not. As with recent unemployment data, these numbers don’t pass the smell test. In your guts you know they’re nuts.
Blogs
AEI: The American | The Financial Stability Oversight Council’s Fatal Flaw
Can the FSOC point out that its own members are creating potential instability and systemic risk? If it cannot, it is constitutionally incapable of carrying out its statutory assignment.
"Calculated Risk | Unofficial Problem Bank list declines to 864 Institutions"
There were five removals and four additions leaving the Unofficial Problem Bank List with 864 institutions with assets of $330.4 billion. A year ago, the list had 985 institutions with assets of $406.6 billion.
Heritage Foundation | Major Benefits of Free Trade
Nations that embrace international trade enjoy significantly stronger economies, achieve lower rates of hunger, and maintain a better stewardship of the environment, according to new data published by Heritage for the forthcoming Index of Economic Freedom.
AEI | Weak GDP report shows no end in sight for the Long Recession
The anemic growth rate means the current recovery remains extraordinarily fragile. Research from the Fed which finds that since 1947 when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time.
Calculated Risk | Schedule for Week of Oct 28th
The key report this week is the October employment report to be released on Friday. Other key reports include the August Case-Shiller house price index on Tuesday, October auto sales on Thursday, and the October ISM manufacturing index, also on Thursday.
AEI | Think food is more expensive today than in the past? It’s not, it’s now cheaper than ever before
When you adjust food prices for inflation, you might be surprised to learn that your dollars go further today compared to 30 years ago — for most products at least. Don’t believe it? See for yourself with an interactive grocery shopping simulator that reveals how much your grocery bill varies over the past three decades.”
Health Care
Blogs
Heritage Foundation | Why Medicare Must Be Reformed
Medicare spending has reached unsustainable levels and is contributing to our budget deficits more quickly than any other program. Further, over the long term, Medicare has made $37 trillion worth of benefit promises to future seniors that are simply not funded. The hospital insurance trust fund is projected to be insolvent by 2024.
Cato@Liberty | ‘Mediscare’ and the Pennsylvania Senate Race
As Republicans tell it, they want to “protect” and “strengthen” Medicare, whereas President Obama wants to “cut” and “weaken” it.
Heritage Foundation | Why Medicare Must Be Reformed
Medicare spending has reached unsustainable levels and is contributing to our budget deficits more quickly than any other program. Further, over the long term, Medicare has made $37 trillion worth of benefit promises to future seniors that are simply not funded. The hospital insurance trust fund is projected to be insolvent by 2024.
Cato@Liberty | ‘Mediscare’ and the Pennsylvania Senate Race
As Republicans tell it, they want to “protect” and “strengthen” Medicare, whereas President Obama wants to “cut” and “weaken” it.
Monetary
Blogs
Economics One | A Monetary Historian's Delight
A fascinating and useful new e-book, The Bretton Woods Transcripts, has just been published by the Center for Financial Stability (CFS). It is the first publication of the transcripts of the famous international meeting that took place nearly 70 years ago in Bretton Woods, New Hampshire and founded the International Monetary Fund and the World Bank.
Economics One | A Monetary Historian's Delight
A fascinating and useful new e-book, The Bretton Woods Transcripts, has just been published by the Center for Financial Stability (CFS). It is the first publication of the transcripts of the famous international meeting that took place nearly 70 years ago in Bretton Woods, New Hampshire and founded the International Monetary Fund and the World Bank.
Taxes
News
National Journal | White House: Report of New Tax Cut Proposal 'Not Correct'
The White House described as inaccurate a Washington Post report that it is considering a proposal for a new tax cut that could replace the expiring payroll tax cut.
USA TODAY | States with the highest and lowest taxes
Which 10 states tax their residents most, and which least? 24/7 Wall St. looks at the figures and the reasons behind the differences.
Blogs
Greg Mankiw's Blog | Tax Expenditure Fact of the Day
If instead we lowered the size of the mortgage eligible for this deduction from the current $1 million to, say, $250,000, the base broadening would have an even smaller effect on middle-income housholds.
National Journal | White House: Report of New Tax Cut Proposal 'Not Correct'
The White House described as inaccurate a Washington Post report that it is considering a proposal for a new tax cut that could replace the expiring payroll tax cut.
USA TODAY | States with the highest and lowest taxes
Which 10 states tax their residents most, and which least? 24/7 Wall St. looks at the figures and the reasons behind the differences.
Blogs
Greg Mankiw's Blog | Tax Expenditure Fact of the Day
If instead we lowered the size of the mortgage eligible for this deduction from the current $1 million to, say, $250,000, the base broadening would have an even smaller effect on middle-income housholds.
Employment
News
WSJ | More People Opt Not to Work Anymore
On Friday, the government will release its monthly estimate of how many Americans are working and how many are looking for work. But another number in the report may have greater long-term significance: the declining share of the population that is doing either one.
Blogs
Economics One | Disappointing Labor Markets in the Nation and in Key States
Were it not for the unusual labor force decline (that is, the decline beyond what is due to the aging of the baby boomers and the downturn in the business cycle), the unemployment rate would be “about 1¼ percentage points higher than the actual rate” according to the CBO. This means that the current 7.8 percent is actually 9.1 percent.
WSJ | Real Time Economics | Number of the Week: States’ Broader Unemployment Rates
15.3%: The rate of underemployment in Idaho, under the Labor Department’s broader definition.
AEIdeas | Explaining the weak U.S. labor market: More unemployment benefits means more unemployment
There have been numerous studies linking increases in unemployment benefits to increases in unemployment. One, from the San Francisco Fed, estimates that absent the extended UI benefits in 2009, the unemployment rate would have peaked at 9.6% rather than 10%.
WSJ | More People Opt Not to Work Anymore
On Friday, the government will release its monthly estimate of how many Americans are working and how many are looking for work. But another number in the report may have greater long-term significance: the declining share of the population that is doing either one.
Blogs
Economics One | Disappointing Labor Markets in the Nation and in Key States
Were it not for the unusual labor force decline (that is, the decline beyond what is due to the aging of the baby boomers and the downturn in the business cycle), the unemployment rate would be “about 1¼ percentage points higher than the actual rate” according to the CBO. This means that the current 7.8 percent is actually 9.1 percent.
WSJ | Real Time Economics | Number of the Week: States’ Broader Unemployment Rates
15.3%: The rate of underemployment in Idaho, under the Labor Department’s broader definition.
AEIdeas | Explaining the weak U.S. labor market: More unemployment benefits means more unemployment
There have been numerous studies linking increases in unemployment benefits to increases in unemployment. One, from the San Francisco Fed, estimates that absent the extended UI benefits in 2009, the unemployment rate would have peaked at 9.6% rather than 10%.
Budget
News
WSJ | Cost of Bailing Out Fannie and Freddie Expected to Fall Sharply
The Federal Housing Finance Agency, the companies' federal regulator, released a report on Friday that estimated they will pay between $32 billion and $78 billion to the U.S. Treasury through 2015. The baseline forecast assumes that the companies would end up costing taxpayers $76 billion by the end of 2015, down from the current tab of $142 billion.
WSJ | Greek, European Officials Dispute Budget Reprieve
Greece said Wednesday that a loan agreement it is negotiating with its creditors would give the country an additional two years to meet its budget targets in exchange for deep budget cuts and other measures.
Econ Comments & Analysis
WSJ | The Lame Duck Congress's Fiscal Duty
The fiscal cliff that is looming on Jan. 2—a $500 billion combination of rising tax rates and expiring preferential tax policies—is a historic and completely obvious threat to our economy. In 2008, no one knew that the financial system was about to face cardiac arrest. But every American knows that unless Congress acts quickly, we will be hit with economy-crushing tax increases at the start of the New Year.
Bloomberg | How Congress Prevented the ‘Fiscal Cliff’ of the 1840s
The U.S. is quickly approaching a “fiscal cliff,” a combination of scheduled tax increases and automatic spending cuts that could seriously disrupt the economy. It’s a grim situation, but not an unprecedented one.
WSJ | How to Cut Spending at the Grass Roots
Pooling services among municipalities, cross-training public employees, using cooperative purchasing networks: The list is long and the savings substantial.
SIEPR | A Note On the Effects of the Higher National Debt On Economic Growth
The financial crisis, deep recession and anemic recovery have been accompanied by massive policy interventions. Their overall short-run impact on the economy remains controversial: Some claim these policies prevented a much worse recession, others that they delayed recovery.
Blogs
Economics One | Exploding Debt Still Threatens America
Back in May 2009 I wrote “Exploding Debt Threatens America” in the Financial Times. Unfortunately the federal debt is still exploding, but fortunately we are learning more about the threat thanks to research reported and carefully explained in a new piece by my colleague Michael Boskin.
WSJ | Cost of Bailing Out Fannie and Freddie Expected to Fall Sharply
The Federal Housing Finance Agency, the companies' federal regulator, released a report on Friday that estimated they will pay between $32 billion and $78 billion to the U.S. Treasury through 2015. The baseline forecast assumes that the companies would end up costing taxpayers $76 billion by the end of 2015, down from the current tab of $142 billion.
WSJ | Greek, European Officials Dispute Budget Reprieve
Greece said Wednesday that a loan agreement it is negotiating with its creditors would give the country an additional two years to meet its budget targets in exchange for deep budget cuts and other measures.
Econ Comments & Analysis
WSJ | The Lame Duck Congress's Fiscal Duty
The fiscal cliff that is looming on Jan. 2—a $500 billion combination of rising tax rates and expiring preferential tax policies—is a historic and completely obvious threat to our economy. In 2008, no one knew that the financial system was about to face cardiac arrest. But every American knows that unless Congress acts quickly, we will be hit with economy-crushing tax increases at the start of the New Year.
Bloomberg | How Congress Prevented the ‘Fiscal Cliff’ of the 1840s
The U.S. is quickly approaching a “fiscal cliff,” a combination of scheduled tax increases and automatic spending cuts that could seriously disrupt the economy. It’s a grim situation, but not an unprecedented one.
WSJ | How to Cut Spending at the Grass Roots
Pooling services among municipalities, cross-training public employees, using cooperative purchasing networks: The list is long and the savings substantial.
SIEPR | A Note On the Effects of the Higher National Debt On Economic Growth
The financial crisis, deep recession and anemic recovery have been accompanied by massive policy interventions. Their overall short-run impact on the economy remains controversial: Some claim these policies prevented a much worse recession, others that they delayed recovery.
Blogs
Economics One | Exploding Debt Still Threatens America
Back in May 2009 I wrote “Exploding Debt Threatens America” in the Financial Times. Unfortunately the federal debt is still exploding, but fortunately we are learning more about the threat thanks to research reported and carefully explained in a new piece by my colleague Michael Boskin.
Friday, October 26, 2012
General Economics
News
Market Watch | U.S. economy speeds up in third quarter
The U.S. economy sped up in the third quarter as consumers and the federal government boosted spending and home construction accelerated.
WSJ | South Korea GDP Growth Slows
The South Korean economy grew at the slowest pace in nearly three years in the third quarter from the prior three months as the persistent euro-zone debt crisis hurt corporate investment, the Bank of Korea said Friday, adding to pressure on the central bank to keep its policy rate low to promote growth.
FOX News | Average US rate on 30-year fixed mortgage edges up to 3.41 pct.; 15-year loan at 2.72 pct.
Average U.S. mortgage rates rose only slightly this week and continued to hover near record lows, a trend that has helped boost home sales and refinancing.
Market Watch | Business investment has ground to a halt
Despite an incredible 9.9% gain in orders for durable goods in September, business investment — one of the major engines of economic and profit growth over the past three years — has stalled out, at least temporarily.
Bloomberg | Michigan Consumer Sentiment Index Rose to 82.6 in October
Confidence among U.S. consumers rose in October from the prior month to the highest level since before the last recession began five years ago.
Econ Comments & Analysis
WSJ | The Anatomy of Government Failure
More than any presidential election since 1980, the current campaign is about the proper size and scope of government. With so fundamental an issue at stake, the chronic claims on behalf of government "solutions" for perceived problems need to be subjected to a reality check.
Washington Times | U.S. economy on schedule to crash March 2014
Those wild and crazy Mayans put down their marker that the end of the world would occur on Dec. 21, 2012 — about two months from now. There is, of course, some small chance that they might be right. On the other hand, there is a very large probability that the real end of the world will occur around March 4, 2014.
AEI | Returning to an economic growth agenda
The engine of growth that has fueled the U.S. economy for over 225 years appears idle. In the five-year period from the second half of 2007 through the first half of 2012, the U.S. GDP growth rate has averaged just 0.6 percent annually. In fact, as the accompanying chart indicates, the average annual growth rate of the U.S. economy has been below 1 percent during the last five years, far slower than its recent historical average.
Real Clear Markets | Got a Problem? Easy, Blame Free Trade
It is not an understatement to say that Europe is an economic mess. It might be surprising, however, to mention that one of the most dysfunctional national pieces inside the patchwork currency noose of the euro is France.
Heritage Foundation | 2013 Index of Economic Freedom: No Boost in Trade Freedom
The latest rankings of trade freedom around the world, developed by The Heritage Foundation and The Wall Street Journal in the forthcoming 2013 Index of Economic Freedom, once again demonstrate how citizens of countries that embrace free trade are better off than citizens of countries that do not.
Blogs
Economist | Better faster than slower
It isn't difficult to be the least dirty shirt in the hamper these days. America's economy seems to relish the role, continuing to post growth performances that would be utterly disappointing were they not so much better than those managed by other rich countries. Real output rose at a 2% annual pace in the third quarter, reported the Bureau of Economic Analysis this morning. That's miles better than Europe, which remains stuck in recession.
John Taylor | An Unusually Weak Recovery as Usually Defined
The view that the current U.S. recovery is unusually weak compared to past U.S. recoveries from recessions with financial crises is gaining more and more support.
Market Watch | U.S. economy speeds up in third quarter
The U.S. economy sped up in the third quarter as consumers and the federal government boosted spending and home construction accelerated.
WSJ | South Korea GDP Growth Slows
The South Korean economy grew at the slowest pace in nearly three years in the third quarter from the prior three months as the persistent euro-zone debt crisis hurt corporate investment, the Bank of Korea said Friday, adding to pressure on the central bank to keep its policy rate low to promote growth.
FOX News | Average US rate on 30-year fixed mortgage edges up to 3.41 pct.; 15-year loan at 2.72 pct.
Average U.S. mortgage rates rose only slightly this week and continued to hover near record lows, a trend that has helped boost home sales and refinancing.
Market Watch | Business investment has ground to a halt
Despite an incredible 9.9% gain in orders for durable goods in September, business investment — one of the major engines of economic and profit growth over the past three years — has stalled out, at least temporarily.
Bloomberg | Michigan Consumer Sentiment Index Rose to 82.6 in October
Confidence among U.S. consumers rose in October from the prior month to the highest level since before the last recession began five years ago.
Econ Comments & Analysis
WSJ | The Anatomy of Government Failure
More than any presidential election since 1980, the current campaign is about the proper size and scope of government. With so fundamental an issue at stake, the chronic claims on behalf of government "solutions" for perceived problems need to be subjected to a reality check.
Washington Times | U.S. economy on schedule to crash March 2014
Those wild and crazy Mayans put down their marker that the end of the world would occur on Dec. 21, 2012 — about two months from now. There is, of course, some small chance that they might be right. On the other hand, there is a very large probability that the real end of the world will occur around March 4, 2014.
AEI | Returning to an economic growth agenda
The engine of growth that has fueled the U.S. economy for over 225 years appears idle. In the five-year period from the second half of 2007 through the first half of 2012, the U.S. GDP growth rate has averaged just 0.6 percent annually. In fact, as the accompanying chart indicates, the average annual growth rate of the U.S. economy has been below 1 percent during the last five years, far slower than its recent historical average.
Real Clear Markets | Got a Problem? Easy, Blame Free Trade
It is not an understatement to say that Europe is an economic mess. It might be surprising, however, to mention that one of the most dysfunctional national pieces inside the patchwork currency noose of the euro is France.
Heritage Foundation | 2013 Index of Economic Freedom: No Boost in Trade Freedom
The latest rankings of trade freedom around the world, developed by The Heritage Foundation and The Wall Street Journal in the forthcoming 2013 Index of Economic Freedom, once again demonstrate how citizens of countries that embrace free trade are better off than citizens of countries that do not.
Blogs
Economist | Better faster than slower
It isn't difficult to be the least dirty shirt in the hamper these days. America's economy seems to relish the role, continuing to post growth performances that would be utterly disappointing were they not so much better than those managed by other rich countries. Real output rose at a 2% annual pace in the third quarter, reported the Bureau of Economic Analysis this morning. That's miles better than Europe, which remains stuck in recession.
John Taylor | An Unusually Weak Recovery as Usually Defined
The view that the current U.S. recovery is unusually weak compared to past U.S. recoveries from recessions with financial crises is gaining more and more support.
Health Care
News
NY Times | Spending on Medicaid Has Slowed, Survey Finds
The annual growth in spending on Medicaid slowed sharply last year as the economy began to improve, a survey by the Kaiser Family Foundation found. Enrollment in the program grew only modestly as well, but that may change as millions of people are due to become eligible in 2014 under the new national health care law.
Econ Comments & Analysis
Washington Times | Obama’s Medicaid expansion will bankrupt states
As a practicing doctor serving in Congress, I am glad Mitt Romney and President Obama are debating Medicaid. For 20 years, I have taught and treated patients in a safety-net hospital. For 20 years, I have seen well-meaning politicians harm patient care. I see this now with Mr. Obama’s expansion of Medicaid.
Blogs
Heritage Foundation | The Contraception Misconception
The contraception debate in a nutshell: There is no contraception debate. No one—neither Republicans nor the more than 100 individuals and organizations suing over the HHS mandate—is calling for a ban on contraception.
NY Times | Spending on Medicaid Has Slowed, Survey Finds
The annual growth in spending on Medicaid slowed sharply last year as the economy began to improve, a survey by the Kaiser Family Foundation found. Enrollment in the program grew only modestly as well, but that may change as millions of people are due to become eligible in 2014 under the new national health care law.
Econ Comments & Analysis
Washington Times | Obama’s Medicaid expansion will bankrupt states
As a practicing doctor serving in Congress, I am glad Mitt Romney and President Obama are debating Medicaid. For 20 years, I have taught and treated patients in a safety-net hospital. For 20 years, I have seen well-meaning politicians harm patient care. I see this now with Mr. Obama’s expansion of Medicaid.
Blogs
Heritage Foundation | The Contraception Misconception
The contraception debate in a nutshell: There is no contraception debate. No one—neither Republicans nor the more than 100 individuals and organizations suing over the HHS mandate—is calling for a ban on contraception.
Monetary
News
CNBC | Fed's Lacker: Latest Stimulus Will Boost Inflation
The Federal Reserve's latest stimulus will not boost economic growth without creating unwanted inflation, said Jeffrey Lacker, president of the Richmond Fed and lone dissenter on the central bank's policy committee.
Econ Comments & Analysis
Forbes | Inequality Is The Child Of Fiat Money
For a while there, it looked like the 2012 election was going to be a referendum on economic inequality. This would have been weird, in that economic growth and its twin, employment, are the clear issues of choice in these years of torpid economic recovery.
CNBC | Fed's Lacker: Latest Stimulus Will Boost Inflation
The Federal Reserve's latest stimulus will not boost economic growth without creating unwanted inflation, said Jeffrey Lacker, president of the Richmond Fed and lone dissenter on the central bank's policy committee.
Econ Comments & Analysis
Forbes | Inequality Is The Child Of Fiat Money
For a while there, it looked like the 2012 election was going to be a referendum on economic inequality. This would have been weird, in that economic growth and its twin, employment, are the clear issues of choice in these years of torpid economic recovery.
Taxes
News
CNN Money | CEOs: Taxes have to be part of debt plan
As Congress dithers on resolving the fiscal cliff and long-term debt, 87 CEOs of major companies publicly urged lawmakers to compromise -- and fast.
Econ Comments & Analysis
CRS | Constitutionality of Retroactive Tax Legislation
It is clear there is no absolute constitutional bar to retroactive tax legislation. Nonetheless, it is possible, albeit rare, for retroactive tax legislation that increases a taxpayer's tax liability to violate the Constitution.
Blogs
Tax Foundation | Chart of the Day
The Aging of America's Taxpayers
CNN Money | CEOs: Taxes have to be part of debt plan
As Congress dithers on resolving the fiscal cliff and long-term debt, 87 CEOs of major companies publicly urged lawmakers to compromise -- and fast.
Econ Comments & Analysis
CRS | Constitutionality of Retroactive Tax Legislation
It is clear there is no absolute constitutional bar to retroactive tax legislation. Nonetheless, it is possible, albeit rare, for retroactive tax legislation that increases a taxpayer's tax liability to violate the Constitution.
Blogs
Tax Foundation | Chart of the Day
The Aging of America's Taxpayers
Employment
News
CNN Money | Spanish unemployment hits new peak
Spain's unemployment rate hit a record high of 25% in the third quarter, as the jobless total grew to nearly 5.8 million people.
CNN Money | American Airlines to hire 2,500 pilots
The iconic, but troubled, American Airlines says it intends to hire 2,500 pilots over the next five years.
Econ Comments & Analysis
NBER | The United States Labor Market: Status Quo or A New Normal?
The recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of unemployment that prevailed in the recent past. Is this true?
Blogs
Economist | Labour lost
I've been mulling over an interesting new (or newly updated) paper by Guillermo Calvo, Fabrizio Coricelli, and Pablo Ottonello on the labour-market consequences of differing inflation rates in the wake of financial crises.
CNN Money | Spanish unemployment hits new peak
Spain's unemployment rate hit a record high of 25% in the third quarter, as the jobless total grew to nearly 5.8 million people.
CNN Money | American Airlines to hire 2,500 pilots
The iconic, but troubled, American Airlines says it intends to hire 2,500 pilots over the next five years.
Econ Comments & Analysis
NBER | The United States Labor Market: Status Quo or A New Normal?
The recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of unemployment that prevailed in the recent past. Is this true?
Blogs
Economist | Labour lost
I've been mulling over an interesting new (or newly updated) paper by Guillermo Calvo, Fabrizio Coricelli, and Pablo Ottonello on the labour-market consequences of differing inflation rates in the wake of financial crises.
Budget
News
WSJ | Illinois Growth Threatened by Finances, Report Says
A culture of short-sightedness among the leaders of Illinois threatens the state's economic growth and its ability to provide the basic services its residents need, according to a new report on state fiscal problems by a high-profile task force.
Econ Comments & Analysis
WSJ | State of Dysfunction
The precarious financial situation in liberal states is the big story no one wants to talk about, but maybe Illinois voters will start to pay attention with the new report from former New York Lieutenant Governor Richard Ravitch and former Federal Reserve Chairman Paul Volcker. "Illinois has been doing backflips on a high wire, without a net," they write as part of their State Budget Crisis Task Force.
Politico | Progressives should support a ‘grand bargain’
This week, some of the most vocal progressive organizations planted a flag in the ground in opposition to a grand bargain budget agreement in the lame duck Congress. Led by AFL-CIO President Richard Trumka, who Tuesday wrote an op-ed in POLITICO, “Americans don’t want ‘grand bargain,’” these groups made a particular point in opposing any fixes to Social Security and Medicare.
WSJ | Illinois Growth Threatened by Finances, Report Says
A culture of short-sightedness among the leaders of Illinois threatens the state's economic growth and its ability to provide the basic services its residents need, according to a new report on state fiscal problems by a high-profile task force.
Econ Comments & Analysis
WSJ | State of Dysfunction
The precarious financial situation in liberal states is the big story no one wants to talk about, but maybe Illinois voters will start to pay attention with the new report from former New York Lieutenant Governor Richard Ravitch and former Federal Reserve Chairman Paul Volcker. "Illinois has been doing backflips on a high wire, without a net," they write as part of their State Budget Crisis Task Force.
Politico | Progressives should support a ‘grand bargain’
This week, some of the most vocal progressive organizations planted a flag in the ground in opposition to a grand bargain budget agreement in the lame duck Congress. Led by AFL-CIO President Richard Trumka, who Tuesday wrote an op-ed in POLITICO, “Americans don’t want ‘grand bargain,’” these groups made a particular point in opposing any fixes to Social Security and Medicare.
Thursday, October 25, 2012
General Economics
News
WSJ | Euro-Zone Activity Declines Further
The euro-zone economy declined further at the start of the fourth quarter, business surveys suggest, with sentiment in Germany—the euro zone's biggest economy and key source of financial support—worsening markedly.
USA Today | Economists see less pain, slow gains in 2013
Almost two-thirds of the 48 economists surveyed predict the so-called fiscal cliff issue will be resolved without significant damage to the economy.
CNN Money | Microsoft is risking an $18 billion empire on Windows 8
Windows has been Microsoft's most reliable cash cow for nearly three decades. The software giant is gambling all of that success on what it deems to be the company's future: a radically redesigned Windows 8.
Bloomberg | Orders for U.S. Capital Goods Stagnate Spending Slumps
Orders for U.S. business equipment stalled in September, capping a quarterly slump that signals investment will cool in the second half of the year.
CNN Money | Foreclosures fall in 62% of U.S. cities
Foreclosures fell in nearly two-thirds of the nation's largest metro areas during the third quarter, according to RealtyTrac Thursday.
Market Watch | Pending home sales inch higher in September
Pending home sales edged up 0.3% in September after a sharp drop in the prior month, a trade group reported Thursday.
Econ Comments & Analysis
The American | Energy Is Everywhere
Nearly half of what people pay for energy comes ‘embodied’ in the various goods and services that they use, and about half of that comes down to two things: food and health care.
Politico | Paul Ryan: Stop 'dependency' culture
As Mitt Romney continues to defend himself over comments that 47 percent of Americans are dependent on government services, his running-mate Paul Ryan will say in Ohio on Wednesday that “upward mobility” is stalled for many Americans.
WSJ | Consumption and the Myths of Inequality
In multiple campaign speeches over the past week, President Obama has emphasized a theme central to Democratic campaigns across the country this year: inequality.
Blogs
Economist | Rebalancing, and the big squeeze
The euro zone would like to make its way out of recession at some point; the longer it stays there the more painful and less successful is fiscal consolidation.
Calculated Risk | New Home Sales and Distressing Gap
New home sales have averaged 364,000 on an annual rate basis through September. That means sales are on pace to increase 19% from last year (and based on the last few months, sales will probably increase more than 20% this year).
AEI | Blame Bush? The two charts that show how the Great Recession really happened
Washington has produced lots of policy in response to the Great Recession. TARP, the $800 billion stimulus, Dodd Frank, HAMP and HARP, the QEs.
Heritage Foundation | CHART: Paul Ryan Lays Out a Vision for Reforming Welfare, Fighting Poverty
In his speech today at Cleveland State University, Representative Paul Ryan (R–WI) laid out a vision for reforming the nation’s approach to poverty.
WSJ | Euro-Zone Activity Declines Further
The euro-zone economy declined further at the start of the fourth quarter, business surveys suggest, with sentiment in Germany—the euro zone's biggest economy and key source of financial support—worsening markedly.
USA Today | Economists see less pain, slow gains in 2013
Almost two-thirds of the 48 economists surveyed predict the so-called fiscal cliff issue will be resolved without significant damage to the economy.
CNN Money | Microsoft is risking an $18 billion empire on Windows 8
Windows has been Microsoft's most reliable cash cow for nearly three decades. The software giant is gambling all of that success on what it deems to be the company's future: a radically redesigned Windows 8.
Bloomberg | Orders for U.S. Capital Goods Stagnate Spending Slumps
Orders for U.S. business equipment stalled in September, capping a quarterly slump that signals investment will cool in the second half of the year.
CNN Money | Foreclosures fall in 62% of U.S. cities
Foreclosures fell in nearly two-thirds of the nation's largest metro areas during the third quarter, according to RealtyTrac Thursday.
Market Watch | Pending home sales inch higher in September
Pending home sales edged up 0.3% in September after a sharp drop in the prior month, a trade group reported Thursday.
Econ Comments & Analysis
The American | Energy Is Everywhere
Nearly half of what people pay for energy comes ‘embodied’ in the various goods and services that they use, and about half of that comes down to two things: food and health care.
Politico | Paul Ryan: Stop 'dependency' culture
As Mitt Romney continues to defend himself over comments that 47 percent of Americans are dependent on government services, his running-mate Paul Ryan will say in Ohio on Wednesday that “upward mobility” is stalled for many Americans.
WSJ | Consumption and the Myths of Inequality
In multiple campaign speeches over the past week, President Obama has emphasized a theme central to Democratic campaigns across the country this year: inequality.
Blogs
Economist | Rebalancing, and the big squeeze
The euro zone would like to make its way out of recession at some point; the longer it stays there the more painful and less successful is fiscal consolidation.
Calculated Risk | New Home Sales and Distressing Gap
New home sales have averaged 364,000 on an annual rate basis through September. That means sales are on pace to increase 19% from last year (and based on the last few months, sales will probably increase more than 20% this year).
AEI | Blame Bush? The two charts that show how the Great Recession really happened
Washington has produced lots of policy in response to the Great Recession. TARP, the $800 billion stimulus, Dodd Frank, HAMP and HARP, the QEs.
Heritage Foundation | CHART: Paul Ryan Lays Out a Vision for Reforming Welfare, Fighting Poverty
In his speech today at Cleveland State University, Representative Paul Ryan (R–WI) laid out a vision for reforming the nation’s approach to poverty.
Health Care
News
Health Care IT | HHS questions GOP calls to suspend meaningful use
Health and Human Services officials, who spoke this week at the CHIME12 Annual Fall Forum, are pushing back against Republican questions of the appropriateness of the $27 billion meaningful use EHR Incentive Program.
News Medical | Obama administration to relax Medicare benefit rules
As part of a proposed settlement in a national class-action lawsuit, the federal government would expand benefits for skilled nursing and home health care to the chronically ill.
Health Care IT | HHS questions GOP calls to suspend meaningful use
Health and Human Services officials, who spoke this week at the CHIME12 Annual Fall Forum, are pushing back against Republican questions of the appropriateness of the $27 billion meaningful use EHR Incentive Program.
News Medical | Obama administration to relax Medicare benefit rules
As part of a proposed settlement in a national class-action lawsuit, the federal government would expand benefits for skilled nursing and home health care to the chronically ill.
Monetary
News
WSJ | Fed Keeps Rates Low, Says Growth Is Moderate
The Federal Reserve stuck to its assessment Wednesday that the economy is growing moderately and voted to keep its support in place to help the job market recover.
Market Watch | Fed sticks to QE3 plan, given mixed growth signals
The Federal Reserve on Wednesday continued to express concern about the U.S. economy as it maintained its ultra-easy policy stance.
CNN Money | Higher yields on savings? It will be awhile
The Federal Reserve said in September it would buy $40 billion of mortgage-backed securities a month until the labor market rebounds. The goal: to free up banks to lend more.
Econ Comments & Analysis
Mercatus | The Case for Nominal GDP Targeting
The history of central banking is a story of one failure after another. This does not mean our actual monetary regimes have been the worst of all possible regimes—far from it. But it does mean we can improve policy by learning from experience. Every proposed reform is a response to a previous failure, an implicit display of lessons learned.
Blogs
Library of Economics | Is Fiat Money a Bubble?
I thought the mainstream view was that fiat money was--in most mainstream theories and possibly in practice--a bubble.
Daily Capitalist | Very Good News About The Fed
It’s not what you were thinking (today’s FOMC report). The good news was that Bernanke and Geithner see the handwriting on the wall. They will both head for the unemployment lines if Romney wins. Geithner says he wants out if Obama wins. His replacement will be another lackluster Keynesian. While Bernanke’s appointment will not run out until January 2014, my call is that he will be asked to resign by Romney, after a suitable period of time after the election to calm the markets.
WSJ | Fed Keeps Rates Low, Says Growth Is Moderate
The Federal Reserve stuck to its assessment Wednesday that the economy is growing moderately and voted to keep its support in place to help the job market recover.
Market Watch | Fed sticks to QE3 plan, given mixed growth signals
The Federal Reserve on Wednesday continued to express concern about the U.S. economy as it maintained its ultra-easy policy stance.
CNN Money | Higher yields on savings? It will be awhile
The Federal Reserve said in September it would buy $40 billion of mortgage-backed securities a month until the labor market rebounds. The goal: to free up banks to lend more.
Econ Comments & Analysis
Mercatus | The Case for Nominal GDP Targeting
The history of central banking is a story of one failure after another. This does not mean our actual monetary regimes have been the worst of all possible regimes—far from it. But it does mean we can improve policy by learning from experience. Every proposed reform is a response to a previous failure, an implicit display of lessons learned.
Blogs
Library of Economics | Is Fiat Money a Bubble?
I thought the mainstream view was that fiat money was--in most mainstream theories and possibly in practice--a bubble.
Daily Capitalist | Very Good News About The Fed
It’s not what you were thinking (today’s FOMC report). The good news was that Bernanke and Geithner see the handwriting on the wall. They will both head for the unemployment lines if Romney wins. Geithner says he wants out if Obama wins. His replacement will be another lackluster Keynesian. While Bernanke’s appointment will not run out until January 2014, my call is that he will be asked to resign by Romney, after a suitable period of time after the election to calm the markets.
Taxes
News
WSJ | Tax-Evasion Allegations Dog Greece
A former Greek finance minister on Wednesday accused financial-crime investigators of failing to pursue leads against Greeks who salted away more than €1 billion in Swiss bank accounts, fueling a new round of finger-pointing over Athens' alleged failure to move against wealthy tax dodgers.
Blogs
Economist | Fun with tax
Depending on your viewpoint, tax may be the price of civilisation or it may be a form of legalised theft. What is undoubtedly true is that it is less onerous now than was the case until recently, in the rich world at least.
AEI | Taxing the rich: Not just an American controversy
The Czech Republic is waiting for the resolution of a dispute about a “tax on millionaires” which threatens the approval of the 2013 budget and could bring down the Czech government. Sound familiar? It turns out that neither the desire to tax the rich nor the fierce opposition that such proposals provoke is unique to the United States.
WSJ | Tax-Evasion Allegations Dog Greece
A former Greek finance minister on Wednesday accused financial-crime investigators of failing to pursue leads against Greeks who salted away more than €1 billion in Swiss bank accounts, fueling a new round of finger-pointing over Athens' alleged failure to move against wealthy tax dodgers.
Blogs
Economist | Fun with tax
Depending on your viewpoint, tax may be the price of civilisation or it may be a form of legalised theft. What is undoubtedly true is that it is less onerous now than was the case until recently, in the rich world at least.
AEI | Taxing the rich: Not just an American controversy
The Czech Republic is waiting for the resolution of a dispute about a “tax on millionaires” which threatens the approval of the 2013 budget and could bring down the Czech government. Sound familiar? It turns out that neither the desire to tax the rich nor the fierce opposition that such proposals provoke is unique to the United States.
Employment
News
Bloomberg | Firings Highest Since 2010 as Ford to Dow Face Slump
Ford Motor Co. (F) and Dow Chemical Co. (DOW) joined a growing number of companies firing thousands of workers as sluggish U.S. growth and Europe’s deepening recession lead to a persisting slump in sales.
Market Watch | U.S. initial jobless claims drop to 369,000
First-time applications for unemployment benefits declined last week, government data showed Thursday, but the number of new claims filed stands little changed over the past few months in a reflection of slow U.S. hiring trends.
Bloomberg | Outsourcing Turns Inside-Out as Indians Open U.S. Centers
Janie James says she was cool at first when Indian outsourcing giant Infosys Ltd. (INFO) approached her about a job near Atlanta, even though she was unemployed. She didn’t know much about the company, and it seemed a step down from her old vice-president post at Primerica Inc. (PRI)
Blogs
Calculated Risk | Updates to the ADP Employment Report
The newly expanded ADP National Employment Report will be issued each month by the ADP Research InstituteSM, a specialized group within ADP that provides insights around employment trends and workforce strategy.
WSJ | More People Eschew Jobless Benefits Than Scam System
Some people scam the system to get jobless benefits they don’t deserve. But far more don’t claim the benefits for which they are eligible, according to research by economists working with the Federal Reserve Bank of St. Louis.
Bloomberg | Firings Highest Since 2010 as Ford to Dow Face Slump
Ford Motor Co. (F) and Dow Chemical Co. (DOW) joined a growing number of companies firing thousands of workers as sluggish U.S. growth and Europe’s deepening recession lead to a persisting slump in sales.
Market Watch | U.S. initial jobless claims drop to 369,000
First-time applications for unemployment benefits declined last week, government data showed Thursday, but the number of new claims filed stands little changed over the past few months in a reflection of slow U.S. hiring trends.
Bloomberg | Outsourcing Turns Inside-Out as Indians Open U.S. Centers
Janie James says she was cool at first when Indian outsourcing giant Infosys Ltd. (INFO) approached her about a job near Atlanta, even though she was unemployed. She didn’t know much about the company, and it seemed a step down from her old vice-president post at Primerica Inc. (PRI)
Blogs
Calculated Risk | Updates to the ADP Employment Report
The newly expanded ADP National Employment Report will be issued each month by the ADP Research InstituteSM, a specialized group within ADP that provides insights around employment trends and workforce strategy.
WSJ | More People Eschew Jobless Benefits Than Scam System
Some people scam the system to get jobless benefits they don’t deserve. But far more don’t claim the benefits for which they are eligible, according to research by economists working with the Federal Reserve Bank of St. Louis.
Budget
News
National Journal | Congress Could Punt On the Fiscal Cliff
Lawmakers are downplaying hopes that they will avert the so-called fiscal cliff of expiring tax cuts and automatic budget cuts set to hit in January with a major deficit-reduction and tax deal, but they suggest a partial fix is likely.
WSJ | Greek, European Officials Dispute Budget Reprieve
Greece said Wednesday that a loan agreement it is negotiating with its creditors would give the country an additional two years to meet its budget targets in exchange for deep budget cuts and other measures.
National Journal | White House Holds Back on Sequester Details
There’s a funny thing happening at federal agencies. When it comes to the details of the looming $1.2 trillion cut to their budgets, agency officials find themselves unable to explain just how those cuts would affect myriad programs on the ground. Instead, they have a unified message: talk to the Office of Management and Budget.
Blogs
Neighborhood Effects | States Look to Rainy Day Funds to Avoid Future Crises
For the past nine quarters, state revenue collections have been increasing and are now approaching 2008 levels after adjusting for inflation. Many state policymakers are no longer facing the near-ubiquitous budget gaps of fiscal year 2012, but at the moment those memories seem to remain fresh in their minds.
National Review | Austerity U.K. Edition, Part 2
The New York Times’ Paul Krugman has a series of charts today that are supposed to show that austerity has failed in Britain. The charts show that economic growth in the country has diverged from what one would expect it to be (because we know how accurate economic forecasts and projections often are).
National Journal | Congress Could Punt On the Fiscal Cliff
Lawmakers are downplaying hopes that they will avert the so-called fiscal cliff of expiring tax cuts and automatic budget cuts set to hit in January with a major deficit-reduction and tax deal, but they suggest a partial fix is likely.
WSJ | Greek, European Officials Dispute Budget Reprieve
Greece said Wednesday that a loan agreement it is negotiating with its creditors would give the country an additional two years to meet its budget targets in exchange for deep budget cuts and other measures.
National Journal | White House Holds Back on Sequester Details
There’s a funny thing happening at federal agencies. When it comes to the details of the looming $1.2 trillion cut to their budgets, agency officials find themselves unable to explain just how those cuts would affect myriad programs on the ground. Instead, they have a unified message: talk to the Office of Management and Budget.
Blogs
Neighborhood Effects | States Look to Rainy Day Funds to Avoid Future Crises
For the past nine quarters, state revenue collections have been increasing and are now approaching 2008 levels after adjusting for inflation. Many state policymakers are no longer facing the near-ubiquitous budget gaps of fiscal year 2012, but at the moment those memories seem to remain fresh in their minds.
National Review | Austerity U.K. Edition, Part 2
The New York Times’ Paul Krugman has a series of charts today that are supposed to show that austerity has failed in Britain. The charts show that economic growth in the country has diverged from what one would expect it to be (because we know how accurate economic forecasts and projections often are).
Wednesday, October 24, 2012
General Economics
News
FOX News | College tuition costs up again this fall but signs unsustainable trends may be slowing
The sticker price of in-state tuition at four-year public universities climbed about $400 this fall, an increase of nearly 5 percent that brought the average to $8,655. That's a modest increase compared to recent years but still painful for families with stagnant incomes after a prolonged economic slump.
Bloomberg | Mortgage Lenders See Tighter Credit Under New U.S. Rules
Mortgage bankers and Realtors are warning that it could become even harder for borrowers to qualify for a home loan early next year as the industry faces a barrage of new rules.
Washington Times | Big firms report dismal earnings for third quarter
Stock markets around the world suffered through one of the worst days of trading in months Tuesday, as a number of U.S. companies reported weak earnings because of a slowdown in the global economy and as concerns mounted over Spain’s role in the European financial crisis.
Bloomberg | Euro-Area Recession Deepens as Manufacturing Shrinks: Economy
Euro-area services and manufacturing output contracted more than economists forecast in October and German business confidence dropped to the lowest in more than 2 1/2 years as Europe’s recession deepened.
WSJ | China Edges Out U.S. as Top Foreign-Investment Draw Amid World Decline
Businesses curtailed new overseas investments in the first half of the year, another symptom of the global economic slowdown.
Washington Times | U.S. may soon become world’s top oil producer
U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world’s biggest producer.
Market Watch | Sales pace of new homes highest since April 2010
Sales of new single-family homes in the U.S. rose in September to the highest rate in more than two years, according to government data released Wednesday that confirms the improving picture in the housing market.
CNN Money | America's near poor: 30 million and struggling
More than 30 million Americans are living just above the poverty line. These near poor, often defined as having incomes of up to 1.5 times the poverty threshold, were supporting a family of four on no more than $34,500 last year.
Econ Comments & Analysis
WSJ | Obama Overloads a Tale of Equal Pay
President Obama makes much of his concern for women's rights, particularly regarding equal pay, but he seems not to be aware that for nearly half a century we have enjoyed the protection of two laws requiring equal pay. The 1963 Equal Pay Act and Title VII of the 1964 Civil Rights Act combined to settle the matter in law.
Real Clear Markets | Regulators Must Think Before They Regulate
Last week, the Commodity Futures Trading Commission received a letter from a group of overseas regulators. The letter urged the CFTC to "ensure that rulemaking works not just domestically but also globally" before rules take effect. In other words, the CFTC should think before it regulates-not an outlandish request.
The Freeman | Moving Beyond Free-Market Minimalism
The “economic point of view” means, to a lot of people, assuming people are nothing but cost-cutting opportunists—economizers who wouldn’t hesitate to gain at someone else’s expense if they could get away with it.
Washington Times | Federal pay fable
Government employees around the world have a reality check coming. With budgetary red ink exceeding the capacity of economies to pay the bills, bureaucrats are doing everything they can to avoid the day of reckoning. In Athens, thousands took to the streets last week hoping violence would be enough to convince politicians to leave lavish civil-service benefits untouched.
AEI | 6 government failures of Fannie Mae
The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall
CATO | Plain Packaging and Protectionism: What is Free Trade?
Come December, all cigarettes sold in Australia will be in "plain packages" — stripped of all brand logos, and in drab colors. Other countries, including Britain and Canada, are considering following suit.
Blogs
Heritage Foundation | America’s Regulatory Competiveness Continues to Lag
According to the World Bank’s just-released Doing Business 2013—which looks into various reform measures to rank 185 economies on the ease of doing business—the United States continues to trail Singapore, Hong Kong, and New Zealand. The only surprise is that the U.S. didn’t drop further in the rankings.
FOX News | College tuition costs up again this fall but signs unsustainable trends may be slowing
The sticker price of in-state tuition at four-year public universities climbed about $400 this fall, an increase of nearly 5 percent that brought the average to $8,655. That's a modest increase compared to recent years but still painful for families with stagnant incomes after a prolonged economic slump.
Bloomberg | Mortgage Lenders See Tighter Credit Under New U.S. Rules
Mortgage bankers and Realtors are warning that it could become even harder for borrowers to qualify for a home loan early next year as the industry faces a barrage of new rules.
Washington Times | Big firms report dismal earnings for third quarter
Stock markets around the world suffered through one of the worst days of trading in months Tuesday, as a number of U.S. companies reported weak earnings because of a slowdown in the global economy and as concerns mounted over Spain’s role in the European financial crisis.
Bloomberg | Euro-Area Recession Deepens as Manufacturing Shrinks: Economy
Euro-area services and manufacturing output contracted more than economists forecast in October and German business confidence dropped to the lowest in more than 2 1/2 years as Europe’s recession deepened.
WSJ | China Edges Out U.S. as Top Foreign-Investment Draw Amid World Decline
Businesses curtailed new overseas investments in the first half of the year, another symptom of the global economic slowdown.
Washington Times | U.S. may soon become world’s top oil producer
U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world’s biggest producer.
Market Watch | Sales pace of new homes highest since April 2010
Sales of new single-family homes in the U.S. rose in September to the highest rate in more than two years, according to government data released Wednesday that confirms the improving picture in the housing market.
CNN Money | America's near poor: 30 million and struggling
More than 30 million Americans are living just above the poverty line. These near poor, often defined as having incomes of up to 1.5 times the poverty threshold, were supporting a family of four on no more than $34,500 last year.
Econ Comments & Analysis
WSJ | Obama Overloads a Tale of Equal Pay
President Obama makes much of his concern for women's rights, particularly regarding equal pay, but he seems not to be aware that for nearly half a century we have enjoyed the protection of two laws requiring equal pay. The 1963 Equal Pay Act and Title VII of the 1964 Civil Rights Act combined to settle the matter in law.
Real Clear Markets | Regulators Must Think Before They Regulate
Last week, the Commodity Futures Trading Commission received a letter from a group of overseas regulators. The letter urged the CFTC to "ensure that rulemaking works not just domestically but also globally" before rules take effect. In other words, the CFTC should think before it regulates-not an outlandish request.
The Freeman | Moving Beyond Free-Market Minimalism
The “economic point of view” means, to a lot of people, assuming people are nothing but cost-cutting opportunists—economizers who wouldn’t hesitate to gain at someone else’s expense if they could get away with it.
Washington Times | Federal pay fable
Government employees around the world have a reality check coming. With budgetary red ink exceeding the capacity of economies to pay the bills, bureaucrats are doing everything they can to avoid the day of reckoning. In Athens, thousands took to the streets last week hoping violence would be enough to convince politicians to leave lavish civil-service benefits untouched.
AEI | 6 government failures of Fannie Mae
The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall
CATO | Plain Packaging and Protectionism: What is Free Trade?
Come December, all cigarettes sold in Australia will be in "plain packages" — stripped of all brand logos, and in drab colors. Other countries, including Britain and Canada, are considering following suit.
Blogs
Heritage Foundation | America’s Regulatory Competiveness Continues to Lag
According to the World Bank’s just-released Doing Business 2013—which looks into various reform measures to rank 185 economies on the ease of doing business—the United States continues to trail Singapore, Hong Kong, and New Zealand. The only surprise is that the U.S. didn’t drop further in the rankings.
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