Thursday, July 5, 2012

General Economics

News                                                                                                                             
CNN Money | IMF warns on U.S. economy
Boost the U.S. economy now and worry about cutting deficits later, the International Monetary Fund recommended Tuesday.
Market Watch | 30-year mortgage rate falls to record low of 3.62%
Mortgage rates are at record lows, with the 30-year fixed-rate mortgage average falling to 3.62% in the week ending July 5 from 3.66% in the prior week, Freddie Mac said Thursday in its weekly report.
CNN Money | Living wills for megabanks released
Regulators took another step toward ending the era of "too big to fail" Tuesday, releasing so-called living wills, guidelines for unwinding nine of the largest banks doing business in the United States.
USA Today | Nobel economist Joseph Stiglitz: American Dream now a myth
Once seen as the land of opportunity, the U.S. today is grappling with rising inequality and a political system that benefits the rich at the expense of others, resulting in lower growth and risking the death of the American dream, according to Nobel prize-winning economist Joseph Stiglitz.
CNN Money | Rents keep rising, while home prices inch higher
As if record low mortgage rates and beaten down home prices weren't enough to get prospective home buyers off the fence, there's another factor that has made the case for buying even stronger: rising rents.
Market Watch | ISM services reading weakest since January 2010
In another signal of a deteriorating U.S. economy, the services sector grew at its slowest pace since January 2010, according to an index released Thursday.
CNN Money | Manufacturing sector contracts for first time since 2009
U.S. manufacturing slowed sharply in June to a level that indicates the sector is now contracting, marking the end of almost three years of growth in domestic manufacturing.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Private Pensions Evade Honest Accounting
The new infrastructure and student loan bill, to be signed by President Obama on Friday at the White House, will reduce the 10-year deficit by $16 billion, at least according to the nonpartisan Congressional Budget Office. Of this, $11 billion in deficit reduction is attributable to raising the contributions corporations make to their pension plans.
WSJ | What Life Was Like in 1776
Those Americans, it turns out, had the highest per capita income in the civilized world of their time. They also paid the lowest taxes—and they were determined to keep it that way.
Real Clear Markets | Middle Class Wealth: It's Not As Bad As It Looks
Viewed in context, however, the wealth levels of middle-class Americans are in better shape than these dramatic figures would suggest, though they have not improved markedly over several decades.
Real Clear Markets | Earmark Ban Backfires, and Trade Policy Pays the Price
In an attempt to salvage their deteriorating reputation, lawmakers have cast a wide net over the last few years to catch and quash anything resembling earmarks. While ostensibly ridding the political system of special-interest favoritism, both parties have helped to create a net that is too wide and is currently hobbling sound economic decision-making.
Trib Live | The ‘good-citizen’ economist
What role should economists play on the public-policy front?

Blogs                                                                                                                             
WSJ | World-Wide Factory Activity, by Country
A global manufacturing slowdown deepened in June, as the U.S. slipped into contractionary territory for the first time since July 2009.
Daily Capitalist | Global Economic Decline Is Here, Now
Today’s U.S. manufacturing report is at the top of a mountain of bad economic news coming out. Whether these data will lead to a “new” recession (as defined by the NBER) remains to be seen, but at the very least the U.S. economy is stagnating, and it is likely to remain that way for some time.
Daily Caller | This Independence Day, we’re more dependent on government than ever before
What do we celebrate on this Independence Day? It’s not just independence from Britain — it’s America’s independent spirit and commitment to free markets. Some call it the American Dream.
National Review | Time to Do the Right Thing: End Sugar Quotas
In recent years we have seen Republicans, with the usual exceptions, vote along party lines against big signature Democratic laws such as the president’s health-care or the stimulus bills. But it’s not enough.
WSJ | Secondary Sources: Inefficient Markets, Fed Can Do More, Education Leveling Off
A roundup of economic news from around the Web.
Daily Capitalist | Two Different Stories About The Economy
To get back to prosperity, we need to let the housing and financial markets heal. We need to stop trying to manipulate the housing market and the financial sector. We have to let banks fail now and then, especially those who lend to fund reckless investments.
WSJ | Recession Now More Likely
There’s no way to sugarcoat it: The already-sluggish U.S. economy is stalling out, stung by doubts about our economic and fiscal future.
Daily Capitalist | Krugman’s Great Illusion
Once upon a time, Krugman would have been classified as a “crank,” someone who believes that wealth is cranked up on printing presses. Today, he is seen as a prophet, a “lonely voice” crying in the wilderness with the message that economic salvation is easy. Repent and be baptized in a flood of inflation, and all will be well.
Northwood | Vincent Ostrom (1919-2012): Political Philosopher of Freedom and Federalism by Richard M. Ebeling
On Friday, June 29, 2012, political scientist, Vincent Ostrom, passed away at the age of 92. Dr. Ostrom was one of the leading experts on the structure and content of American constitutional federalism.
Political Calculations | Forecasting GDP for 2012Q2
Now that the U.S. Bureau of Economic Analysis has released its third estimate of GDP in the first quarter of 2012, we can now officially project where U.S. GDP for the second quarter of 2012 will be when it is nearly finalized three months from now!
Library of Economics | Adam Smith on U.S. Independence
Here is what Adam Smith wrote in 1776 (in The Wealth of Nations) about the odds that the British government would voluntarily give up control over the 13 colonies.

Health Care

News                                                                                                                             
CNN Money | Even health reform critics say: Quit repeal talk
The Supreme Court's decision on health reform brought a sigh of relief from small businesses. Whether they love or hate the new rules, they like certainty.
NY Times | Republican Governor of Florida Says State Won’t Expand Medicaid
In another sign of resistance to President Obama’s health care overhaul, Gov. Rick Scott of Florida, a Republican, said Monday that his state would not expand its Medicaid program.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Supreme Court: Let Them Eat Broccoli
When the Supreme Court decided last week that the federal government can ‘tax' you if you don't purchase health insurance, the court narrowed choices for Americans in ways that go well beyond the individual mandate.
WSJ | Henninger: ObamaCare's Lost Tribe: Doctors
Back at the at the dawn of ObamaCare in June 2009, speaking to the American Medical Association's annual meeting, President Obama said: "No matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period."

Blogs                                                                                                                             
AEI | Yes, there is a free-market alternative to Obamacare
Government — through the tax code, regulatory code, and social insurance programs — has sabotaged market forces that, if allowed to work, would create a healthcare system with more choice, coverage, quality, value, and efficiency.
The Volokh Conspiracy | What Did the Court “Hold” About the Commerce Clause and Medicaid?
So what happens when votes supporting a proposition of law are supplied by dissents?
CATO | HHS Offers to Pay Six Years of Operating Costs for Some States’ ObamaCare Exchanges
ObamaCare gives HHS the authority to make unlimited grants to help states create Exchanges. But that authority expires on December 31, 2014. HHS just issued an announcement that they will issue grants right up to midnight on December 31—and that some of those grants will be so big that they will last for five years
Mercatus | Blahous On the Fiscal Impact of the Health Care Ruling
“The Supreme Court’s action of striking down only the requirement that the states expand Medicaid may mean that the health law will do even more fiscal damage than before."
AEI | It’s already too late. Why Obamacare isn’t going to happen the way Obama thinks it is
Repealing and replacing the Affordable Care Act will be a tough task in 2013, even if Republicans take control of the White House and Congress. But implementing the ACA is hardly a walk in the park, as AEI’s Joe Antos notes
National Review | The Government We Deserve: Health-Care Edition
I am not a legal scholar so I cannot comment on the legal impact of yesterday’s health care ruling. However, I am having a hard time seeing this as a victory for federalism like many others around me.

Monetary

News                                                                                                                             
Bloomberg | China Cuts Benchmark Rates for Second Time in Month
China cut benchmark interest rates for the second time in a month and allowed banks to offer bigger discounts on their borrowing costs, stepping up efforts to reverse a slowdown in the world’s second-biggest economy.
CNN Money | ECB cuts rates to all-time low
The European Central Bank lowered interest rates Thursday to all-time lows but did not introduce any unconventional moves to stimulate economic activity.

Econ Comments & Analysis                                                                                            
Forbes | Emperor Ben Has No Clothes
The failure of promiscuous money printing and interest rate manipulation to reboot our economy is lost on the Fed.
WSJ | Monetary Policy and the Next Crisis
At its annual meeting of the world's central bankers in Switzerland last week, the Bank for International Settlements—the central bank of central banks—warned about the harmful "side effects" of current monetary policies "in the major advanced economies" where "policy rates remain very low and central bank balance sheets continue to expand."
Forbes | The Decline and Fall of China's Renminbi
The People’s Bank of China, the central bank, decreased its daily reference rate for the renminbi by 0.48% in Q2.  That contributed to the Chinese currency suffering its biggest quarterly decline since 2005, when it was unpegged from the U.S. dollar. 

Blogs                                                                                                                             
WSJ | Who Will Pick Up Ron Paul’s Role of Chief Fed Critic?
Nearly one year after Rep. Ron Paul of Texas said he would leave Congress at the end of his 12th term, his successor as the Federal Reserve‘s chief critic has yet to emerge on Capitol Hill.

Taxes

News                                                                                                                             
Washington Times | Economy Briefs: French taxes increased to meet budget targets
France's Socialist government hit big business and the rich with tax hikes Wednesday to ensure the country meets its 2017 balanced budget target as eurozone growth lags and Italy struggles.

Econ Comments & Analysis                                                                                            
AEI | Happy birthday, America! Time to totally overhaul your tax code
Economic growth is impeded by the income tax's penalty on saving and investment. Under today's income tax system, people who save to spend later in life may be taxed many times on their saving - first on the income they save and then on the returns to their savings over time. In contrast, those who spend today are taxed only once. The use of consumption taxation would avoid this disparity

Employment

News                                                                                                                             
Washington Times | Recruiting jobless veterans for retraining
Unemployed veterans may be heading back to school en masse under a federal program to get out-of-work veterans trained and back into the job market.
CNN Money | Job market perks up
The job market may have perked up last month, according to three reports released Thursday.
Washington Times | AP survey: Next president faces high unemployment
A majority of economists in the latest Associated Press Economy Survey expect the national unemployment rate to stay above 6 percent — the upper bounds of what’s considered healthy — for at least four more years.
Bloomberg | ADP Says U.S. Companies Added 176,000 Workers in June
Companies in the U.S. added more workers than forecast in June, which may ease concern the labor market is deteriorating, a private payrolls report showed.
Washington Times | Eurozone unemployment hits new record in May
Unemployment in the 17-country euro currency bloc hit another record in May as the crippling financial crisis pushed the continent toward the brink of recession, official figures showed Monday.

Econ Comments & Analysis                                                                                            
Investors | As Obama takes court victory lap, U.S. unemployed still left in line
President Obama wasted little time giving his perspective on the Supreme Court's decision to uphold his sweeping health care law.
WSJ | Why Hairdressers Are Secure: Their Jobs Can't Be Exported
Before, during and after the recession, demand for one sort of worker has been persistently stronger: jobs that involve assisting or caring for other people—from fast-food workers to home-health aides to nail polishers.

Blogs                                                                                                                             
FOX Business | Big Labor, Big Money
While labor bosses are quick to pull out the tape measure on companies, they’re not so quick to reveal how they spend more than their “fair share,” tens of millions of dollars, in tax-free union funds on junkets to luxury resorts to even outright buying luxury resorts, country clubs, golf courses and Learjets, at a time when thousands of union members across the country have lost their jobs, when the labor movement is struggling, and when union pension funds are in crisis.
AEI | Michelle Obama calls on states to reduce regulatory burdens for occupational licensing
Well, that headline is actually a little bit exaggerated, the First Lady is really only asking states to reduce the regulatory burden of occupational licensing for military spouses in this Baltimore Sun editorial.  Mrs. Obama raises some excellent points about how the process of transferring or renewing professional licenses in many states is burdensome and time-consuming.

Budget

News                                                                                                                             
USA Today | Defense cuts starting to pinch economy
Tighter defense budgets are starting to pinch the nation's economy, slowing a sluggish recovery even before sharper spending cuts could kick in next year.
CNN Money | Federal government misses small business contract goal - again
For the sixth year in a row, the government has missed its goal to award 23% of all federal contract dollars to small businesses.
Market Watch | Draghi: Euro-area bank lending remains subdued
European Central Bank President Mario Draghi, at a press conference following the rate cut announced by the central bank Thursday, said loan growth in the euro area remains subdued.
NY Times | Cost to Protect U.S. Secrets Doubles to Over $11 Billion
The federal government spent more than $11 billion to protect its secrets last year, double the cost of classification a decade ago — and that is only the part it will reveal.

Econ Comments & Analysis                                                                                            
LA Times | The real national security threat: America's debt
Our growing national debt is a threat not only to domestic programs but to a U.S. tradition of an activist foreign policy that helped America prosper.
Reuters | Analysis: Stockton, California new paradigm for struggling cities
Stockton, California, the largest city in the United States to ever file for bankruptcy, could create a new template for struggling cities and potentially lift the stigma that scars municipalities if they seek court protection from creditors.
WSJ | Slouching Toward Debt Union
On Friday euro-zone leaders agreed—or rather, Angela Merkel conceded—that their joint bailout funds may now be used both to buy up sovereign bonds directly and to start bailing out banks with European funds.

Blogs                                                                                                                             
Neighborhod Effects | Actuarial camouflage II: Normal Cost Methods
As part of the new GASB rules for public sector pensions not only will the rules guiding discount rate selection change, amortization periods will shrink from 30 to 15 years. This reflects the average number of service years remaining for current employees.
Daily Finance | Lower College Loan Interest Rates Won't Fix the Student Debt Crisis
Outstanding student loans having topped the $1 trillion mark, but it's down at the individual level where that debt burden has built up that former students are finding it difficult to bear. With jobs still hard to come by, young adults are looking for any break they can get.
Economics One | Debt Fireworks Continue On This Independence Day
Well, after two more years of Long Term Budget Outlooks (2011 and 2012) the CBO projections unfortunately look virtually the same. The problem has not been fixed as my grand daughter requested in my Economics 1 class at Stanford nearly three years ago.