Monday, January 9, 2012

General Economics

News                                                                                                                             
Bloomberg | U.S. Corporate Profit Growth Slows as Europe Drags
U.S. corporations ended 2011 with the slowest profit growth in two years as the mending economy that lifted Macy’s Inc. (M) was met by a European slump that vexed companies more tied to global sales, such as Cisco Systems Inc.
CNN: Money | Washington, D.C. leads U.S. in attracting new residents
Often, people go where the jobs are. As unemployment soared throughout most of the nation over the past four years, jobs were being created in or near D.C., thanks to one big employer: The government.

Econ Comments                                                                                                             
Washington Times | MICHAELS: A sustainable depression
Governments find inefficient renewable energy is unaffordable.
National Journal | QUICK TAKE: Obama to Propose Raise in Federal Worker Pay
A senior administration official familiar with Obama’s 2013 budget says the proposal will include a raise in pay for federal workers. The increase is marginal—only 0.5 percent—but, if passed by Congress, would mark the first pay raise the federal government has seen since 2010 when Obama ordered a two-year freeze.
WSJ | Time for a China-U.S. Free Trade Agreement
China does not have to invest here, but it is to America's advantage.
RCM | What Politicians Can Do to Help the Economy
In reality, there is an awful lot that our political leaders can do to help the economy. The problem is that what they can do is the opposite of what they want to do. What they can do, to borrow a line from Ayn Rand's Atlas Shrugged, is to get the hell out of our way.

Blogs                                                                                                                             
Heritage Foundation | Wage and Price Stickiness and Economic Recovery
In a weak economy, the government should not erect barriers to hiring. But two government policies have hindered the already slow recovery: increases in the minimum wage and government unionization.
Mercatus Center | Why Would Light Bulb Manufacturers Want to Be Regulated?
Last weekend, Congress passed a trillion-dollar budget bill. Among its provisions, plenty of things not related to spending. One of these so-called riders is aimed at saving the hundred-watt incandescent light bulb.
Econlog | Wilkinson, Rogoff, and the Presumption in Favor of Economic Growth
If something seems extremely good, you need a let more than "coulds" to counter it. Indeed, you need strong evidence that side effects of the seemingly-extremely good-thing are on balance extremely bad.
Coordination Problem | What Remains of the Consensus in Macroeconomics?
Economics is constantly evolving as any science must, but the hard-core of the discipline is not. It is this hard-core that I often describe as mainline economics -- in juxtaposition to mainstream.
WSJ: Real Time Economics | Household Income Creeping Up
Here’s another glimmer of good news about the state of the U.S. economy: Household income is creeping up, notching a third consecutive month of gains in November.
Calculated Risk | Schedule for Week of Jan 8th
Retail sales and the trade balance report are the key economic releases this week. Consumer sentiment might recover some more in early January. Also several regional Fed presidents are scheduled to speak this week.
Ecolong | Bryan Caplan on Income Inequality
In the 1970s, when oil companies with large inventories of crude oil were being lambasted because of their record profits, politicians excoriated oil-company officials, hauling them before Congress to explain themselves.
Calculated Risk | Unofficial Problem Bank list declines to 970 institutions
At year-end 2011, the Unofficial Problem Bank List included 970 institutions with assets of $391.2.
AEI: American | Are we headed for a ‘Recovery Winter?’
More jobs would not only be good for American workers, of course, but also for President Obama’s reelection chances. A strong jobs number tomorrow from the Labor Department, along with a 3 percent-plus GDP number for the fourth quarter, would certainly tempt Team Obama to adopt a more optimistic tone on the economy.
WSJ: Real Time Economics | Fewer Kids in the U.S.
The U.S. minor population fell in the 1970s as well, as baby boomers moved into adulthood and women entered the labor force en masse, delaying families in the process. A large drop in fertility was also behind a decline in minors between 1920 and 1930.
Daily Capitalist | How To Cure A (Our) Depression
If government wishes to alleviate, rather than aggravate, a depression, its only valid course is laissez-faire-to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch.
WSJ: Real Time Economics | Number of the Week: Americans’ Cheaper Restaurant Bills
Americans spend less per visit to restaurants than most other major industrialized countries, according to data compiled by market research firm NPD Group.

Reports                                                                                                                         
CRS | U.S. Manufacturing in International Perspective
The health of the U.S. manufacturing sector has long been of great concern to Congress. The decline in manufacturing employment since the start of the 21st century has stimulated particular congressional interest. Members have introduced hundreds of bills intended to support domestic manufacturing activity in various ways.

Health Care

News                                                                                                                             
National Journal | Old Arguments, but a New Story on Health Care Reform
The Obama administration didn’t change its legal argument, but it did change the story it chose to tell about its signature health care reform law when it filed its brief on Friday defending the individual mandate with the Supreme Court.
NY Times | Report Finds Most Errors at Hospitals Go Unreported
Hospital employees recognize and report only one out of seven errors, accidents and other events that harm Medicare patients while they are hospitalized, federal investigators say in a new report.

Monetary

Econ Comments                                                                                                             
WSJ | An Exit Strategy From the Euro
The euro can be phased out the same way Europe's individual currencies were. The bonds of troubled member states would benefit as a result.
Market Watch | QE not likely now, given data: Fed’s Bullard
More bond purchases, otherwise known as quantitative easing, are not likely at least in the short term because the economy seems on more solid ground, St. Louis Federal Reserve Bank President James Bullard said Saturday.
WSJ | Investing in a 'Fat Tail' World
By pushing interest rates to very low levels, central banks are pushing investors out the risk spectrum.
Market Watch | Key Fed official keeps up housing push
The Federal Reserve on Friday kept up its push for increased steps to lift the struggling housing market, as a key Fed president called for more mortgage refinancing as well as principal reductions for hard-hit borrowers.
WSJ | A Quiet Fed Voice Emerges as Force Inside the Temple
The world's most powerful central bank will begin publishing internal forecasts of its plans for interest rates over several years, an effort to make its intentions and strategies clearer to the public.

Blogs                                                                                                                             
Econlog | Devaluation and the Real Exchange Rate
It seems to me that if the rational-expectations theory held, then Greece would not be in its current pickle. Wages and prices there would have fallen in order to make its tradable sectors more competitive.
Reason Foundation | Fed to Adopt Inflation Targeting, a Few Thoughts
The Federal Reserve is very close to adopting an inflation targeting model to carry-out monetary policy. This will be a significant divergence from the past four years of gut-reaction, ad-hoc policy making, and more or less should be welcoming.
Free Banking | A free banking gold standard versus other gold standards
A free banking gold standard differs in important respects from other varieties of the gold standard. Here are key questions about the details of a gold standard, and the answers as they apply to its free banking form.

Taxes

News                                                                                                                             
CNN Money | Key tax deductions left hanging
It may be a new year, but when Congress returns from its winter break it will be all old business that lawmakers failed to finish before Christmas.
CNN Money | IRS audited 1 in 8 millionaires
The IRS audited one out of every 8 millionaires last year, the third year in a row the agency has ramped up its enforcement of the nation's top earners.
CNN Money | Tax gap: IRS comes up $385 billion short
Close to 15% of federal taxes -- or $385 billion -- went unpaid in 2006, according to new estimates by the IRS.

Econ Comments                                                                                                             
Market Watch | The truth about Kim Kardashian’s taxes
The so-called “Courage Campaign,” which wants to raise California’s top tax rate from 10.3%, has come out with a video arguing that Kardashian is paying way too little tax. See it here.
Reuters | Time to junk income taxes?
This is America’s 100th year for individual income tax, a system as out of touch with our era as digital music is with the hand-cranked Victrola music players of 1912.

Blogs                                                                                                                             
Political Calculations | Your Paycheck in 2012
How much money will you really take home from your paycheck in 2012?

Reports                                                                                                                         
CBO | Budgetary Effects of H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2011
Budgetary Effects of H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2011, adjusted for the enactment of H.R. 3765, the Temporary Payroll Tax Cut Continuation Act of 2011.

Employment

News                                                                                                                             
CNN Money | Brutal losses in state and local jobs
Nearly 250,000 state and local government employees lost their jobs in 2011, with the ax falling particularly hard on public school teachers.
Washington Times | Business groups fear revitalized NLRB
The National Labor Relations Board will have a “cloud” hanging over any rulings it makes after President Obama this week pushed through three recess appointments to the agency that don’t pass “constitutional muster,” a former member of the labor board said Thursday.
NY Times | Manufacturing Is Surprising Bright Spot in U.S. Economy
For the first time in many years, manufacturing stands out as an area of strength in the American economy.
CNN Money | Unemployment falls ... but not for blacks
But at the end of the year the black unemployment rate was 15.8%, exactly where it started out 2011, according to the government's December jobs report released Friday.
CNN Money | Holiday deliveries boost job numbers
Well, not exactly. More than 40,000 of those jobs were couriers and messengers, which were in demand during the holidays because of the increased focus on online shopping rather than retail.

Econ Comments                                                                                                             
RCM | Obama Grasps At Employment Straws
The BLS "Household Survey" is more statistically valid, and it provides a more accurate picture of labor market conditions. This report showed that total employment rose by 176,000 in December. This is only a little more than half the increase reported for November, and it is 25% less than the average monthly increase for the second half of 2011 as a whole.
WSJ | Unemployment Scars Likely to Last for Years
...economists gathered here for the American Economic Association's annual convention took a longer and generally dimmer view.

Blogs                                                                                                                             
Calculated Risk | Question #5 for 2012: Employment
How many payroll jobs will be added in 2012?
WSJ: Real Time Economics | Government Still Trimming Jobs, but Cutbacks Slow
State and local governments continue to be a big drag on the job market, though they are cutting jobs at a slower pace than they were over the past two years when the economy was weaker and their budgets tighter.
Calculated Risk | Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
This was a decent report compared to expectations, but it was still weak compared to the number of people unemployed and the high level of unemployment.
Daily Capitalist | December Unemployment Data: There Is Less Than Meets The Eye
Unemployment has been the devil in the economy: its persistence at a high level belies the argument that the US economy is in recovery.
WSJ: Real Time Economics | Jobs Strength Is There, Now Sustainability Needed
A sustained pace of December-caliber job growth is needed to trigger the virtuous cycle of more income generating more demand which causes businesses to add more workers. The key word there is “sustained.”

Budget

Blogs                                                                                                                             
Cato@Liberty | Austan Goolsbee’s Budget Math Is Wrong – More than 100 Percent of Long-Term Fiscal Challenge Is Government Spending
Austan Goolsbee, the former Chairman of President Obama’s Council of Economic Advisers, had a column in the Wall Street Journal that argues government spending isn’t too high.
Café Hayek | A Note on the Burden-of-Public-Debt Question
Suppose the government of A gives each adult citizen of A between the ages of 18 and 65 the right to force another randomly chosen adult citizen of A to work six months out of every year for the first adult’s benefit.
Volokh Conspiracy | The Wall Street Journal on Public Ignorance About Federal Spending
The article suggests that this ignorance may not matter much because the majority of survey respondents don’t change their minds about policy priorities even when presented with correct information.
Café Hayek | The Burden of the Debt Burden
Here’s the second of the promised two long posts on the burden of public debt.  I see now that I will likely burden future readers with a third long-ish post on this topic.
Café Hayek | Let’s Not Talk Past Each Other on the Burden-of-Public-Debt Issue
his post is the first of two long ones on the question of the burden of public debt.