Monday, May 7, 2012

General Economics

CNN Money | Manufacturers to banks: We need money now
American manufacturers say business is booming again, but many are complaining that banks aren't lending them money to ramp up production.
CNN Money | Obama administration tightens fracking rules
The Obama administration tightened rules on hydraulic fracturing Friday, requiring the disclosure of chemicals used in the process when done on federal and American Indian lands.
Bloomberg | No Repeating Slowdown Seen by U.S. With Banks to Housing
The smallest gain in U.S. payrolls in six months need not presage the kind of slowdown that bedeviled the world’s largest economy for the past two years.
CNN Money | Why Obama can't match the Reagan recovery
April's jobs report was, in a word, disappointing. The economy added only 115,000 jobs. Hiring slowed. More than 340,000 workers dropped out of the labor force.

Econ Comments & Analysis                                                                                            
CBO | How Would Proposed Fuel Economy Standards Affect the Highway Trust Fund?
A Proposed Rule to Tighten Fuel Economy Standards Would Gradually Decrease Fuel Consumption, Eventually Reducing Revenues from the Gasoline Tax by 21 Percent in 2040
CRS | Interest Rates on Subsidized Stafford Loans to Undergraduate Students
In the 112th Congress, proposals have been made to reduce the interest rate applicable to Subsidized Stafford Loans that will be made to undergraduate students during AY2012-2013 from 6.8% to 3.4%.
Washington Times | Scaring away investors
A lot of money is about to leave the United States. Because of a few rogue bureau crats at the Internal Revenue Service (IRS) acting without congressional authority, American financial institutions can expect to see a massive outflow of foreign capital next year.
WSJ | 'Paycheck Fairness' Will Mean a Pay Cut for Men
Team Obama calculates that its road to victory is paved with the votes of women, so the American people are now subject to a coordinated effort to cast GOP opposition to expanding government power as an assault on the weaker sex. But few women view public policy as a battle between the sexes.
Forbes | Gross Domestic Product Worship Strangles Real Economic Growth
The recent report on 1st quarter U.S. GDP achieved something rare in the commentariat today: broad consensus that the economy is struggling. Of course it’s when consensus reveals itself that wise readers should be skeptical.
NY Times | Never Mind Europe. Worry About India.
The economic slowdown in India is one of the world’s biggest economic stories, but it is commanding only a modicum of attention in the United States.
WSJ | Don't Worry (About GDP), Be Happy
In recent years, numerous experts have declaimed that the gross domestic product is a flawed measure of whether citizens are truly thriving. President Obama's designee for World Bank president, Jim Yong Kim, for example, warned that "the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men."

Politico | Biden: Economy on 'steady path' to recovery
Vice President Joe Biden is defending the Obama administration's record on jobs, saying the country is on a "steady path" to recovery, despite unemployment numbers Friday that show the economy last month only added 115,000 jobs.
Calculated Risk | Unofficial Problem Bank list declines to 925 Institutions
The removals lower the institution list count to 925 with assets of $361.1 billion. A year-ago, the list held 983 institutions with assets of $422.2 billion.
The Atlantic | Why Economies Boom
One of the major schools of thought in macroeconomics rarely makes it into mainstream discussions: Real Business Cycle Theory. 
Calculated Risk | Schedule for Week of May 6th
This will be a light week for economic releases. The key economic release is the March trade balance report to be released on Thursday.
The Atlantic | The Recession's Invisible Victim Is Trust
Part of growing up is having the scales fall from your eyes.  My parents raised me to be honest, and I think they did a pretty good job of it.  Somehow I got the idea that almost everyone else was the same way.  A few bad apples, sure. But a whole bunch? 
WSJ | Twelve Facts That May Surprise You About the Housing Bust
That’s the implication of a new paper from economists at the Federal Reserve Banks of Atlanta and Boston that’s bound to spark debate because, if their premises are correct, it sharply undercuts the justification for much of the new regulation that’s been erected over the past two years.

Health Care

USA Today | Health care costs worry workers nearing retirement
Health care costs are a top retirement fear, and that's even though many older workers vastly underestimate how much they'll have to pay.
National Journal | Massachusetts Lawmakers Unveil Ambitious Plan To Cut Health Care Costs
When Massachusetts passed sweeping health insurance reform in 2006, a crucial piece was missing from the landmark legislation: how to control rising medical costs. 

Econ Comments & Analysis                                                                                            
CATO | Cost Shifting Does Not Justify Obamacare
A major justification by President Obama for the individual mandate in the Affordable Care Act, which requires everyone to buy health insurance, is that every time an uninsured patient receives care in an emergency room, doctors and hospitals shift the cost to those of us who have insurance. But the impact of such cost shifting is vastly overblown and government, through the legislation, makes the problem worse, not better.


Bloomberg | Hysteresis Undermining Labor Pattern Becomes Bernanke Fed Focus
After looking for work since May 2009, Raquel Barron, 40, hears the same thing when she interviews: We don’t want to hire someone who’s been jobless for so long.
Market Watch | Ron Paul taking end-Fed bill before panel
A House panel led by longtime Federal Reserve critic Rep. Ron Paul will take direct aim at the central bank next week when it considers a bill to abolish the powerful institution.

Marginal Revolution | Why monetary policy matters less every day
Circa 2012, monetary policy matters less every day.  You might feel outraged by that reality, and by the policy omissions from the past, but still monetary policy matters less every day.  That point follows from basic insights from Milton Friedman and Irving Fisher, or for that matter modern most mainstream neo-Keynesian models. 


Heritage Foundation | Congress Needs to Act Now on Taxmageddon
At that time, Taxmageddon was merely a blip on Washington’s radar, because the conventional wisdom was that Congress and the President would deal with it in the lame duck period after the November election. We argued then that this was a bad idea.
Economist | The capital exception
Governments have no problem taxing capital and capital income. For a sufficiently generous definition of capital taxes (including property tax, for instance), America collects about 8% of GDP in such levies, or about a third of all government revenue raised. Economists (most of them anyway) have long been adamant that the right tax on capital is no tax at all.
FOX Business | You Pay More in Taxes Than on Housing, Food and Clothing -- Combined
The nonpartisan Tax Foundation says that this year, U.S. citizens will pay more than $4 trillion in total federal, state and local taxes.


WSJ | For Most Graduates, Grueling Job Hunt Awaits
Graduating college students face a mixed job market at best this year, and most will leave school without an offer in hand, despite an uptick in hiring by on-campus recruiters.

Econ Comments & Analysis                                                                                            
Investors | Labor Force Shrinks As Jobless Swell Disability Ranks
The civilian labor force shrank in April by 342,000 workers and remains below where it stood when the economic recovery started 34 months ago, according to data released Friday by the Bureau of Labor Statistics.
WSJ | The Vanishing Workers
The economy turned in another lackluster month for job creation in April, with 115,000 net new jobs, 130,000 in private business (less 15,000 fewer in government). The unemployment rate fell a tick to 8.1%, albeit mainly because the labor force shrank by 342,000.
Washington Times | More phony job numbers
The White House crowed on Friday about the unemployment rate dropping a 10th of a percent. At the same time, the number of people out of the labor force reached a record high. The Obama administration can report all the funny numbers it wants, but the American people know in their guts that things are getting much worse.
Investors | The Unemployment Rate Is Meaningless
Normally, a drop in the unemployment rate would be a welcome sign of an economy on the mend. But in the upside-down world of Obamanomics, the jobless figure is increasingly useless, hiding more than it reveals.
Heritage Foundation | Heritage Employment Report: Jobs Do Not Bloom in April
The Bureau of Labor Statistics reported that the economy added 115,000 jobs in April and the unemployment rate declined to 8.1 percent from 8.2 percent. However, further declines in the percentage of Americans in the labor force explain this slightly lower unemployment rate. Indeed, the labor force participation rate dipped to a 30-year low as many unemployed workers simply left the labor force.

Economist | Bringing back those missing millions
Friday's jobs report touched off a round of hand-wringing over the possibility of permanent damage to America's labour force as a result of years of labour-market weakness.
WSJ | Depth of Recession Makes Recovery Look Worse
Since the job market bottomed out in February, 2010, the U.S. has added 3.7 million jobs, an average of about 134,000 per month. Despite Friday’s disappointing jobs figures, the pace of growth has generally been accelerating: U.S. employers have added an average of 197,000 jobs per month over the past six months, up from 106,000 in the prior six months.


Market Watch | Treasury to raise $5 billion from AIG stock sale
The U.S. Treasury said late Sunday it had agreed to sell nearly 164 million of its shares in American International Group Inc. AIG -4.77% at $30.50 apiece in an underwritten public offering.

Econ Comments & Analysis                                                                                            
WSJ | The 2013 Fiscal Cliff Could Crush Stocks
On Dec. 31, trillions of dollars in tax cuts will expire, trillions more in new tax hikes under ObamaCare will kick in, and a trillion in automatic spending cuts will begin. Yet stock prices are the highest in four years.

Café Hayek | European Government Spending as % of GDP, 2009
Russ asks for some data regarding spending by European governments.  Quite by coincidence, I opened this morning an e-mail from my friend Gary Hoover – an e-mail not prompted by Russ’s post – that contained data on 2009 spending.
CATO | A Contradiction in Keynesian Fiscal Policy
There’s an internal contradiction in the way that Keynesian-oriented economists and policymakers address the federal budget situation. I’ve noticed it over and over.
Library of Economics | Chris Edwards on Time-Inconsistent Fiscal Policy
To Keynesians, the short run is always more important than the long run, so it's impossible for them to have a "credible" long-run commitment to deficit reduction. Even today, prominent Keynesian economists are demanding more "stimulus," but the economy is not in recession and the budget deficit (which is "stimulus" to Keynesians) is already over $1 trillion.
Marginal Revolution | Social Security, Savings and Stagnation
Here is Evans, Kotlikoff, and Phillips making the case that transfers to the elderly, such as Social Security and Medicare, have dramatically lowered the US savings rate, the investment rate and real wage growth
Atlantic | We're Spent: Why the U.S. Is in Danger of Losing Its Responsible Rep
"Stimulus now, austerity later."  Sounds like good economic policy, whatever your political leanings. If you're on the right, you want tax cuts now, if you're on the left, you want government spending to get the economy moving. 
Café Hayek | The austerity experiment
I have seen many articles on austerity. I can’t remember seeing any that suggest that government spending in any European country has actually fallen. Yes, there is talk of spending cuts or cuts in growth rates. But I’d like to see the data that shows the cuts have actually been implemented.