Friday, July 6, 2012

General Economics

News                                                                                                                             
WSJ | Cities Consider Seizing Mortgages
A handful of local officials in California who say the housing bust is a public blight on their cities may invoke their eminent-domain powers to restructure mortgages as a way to help some borrowers who owe more than their homes are worth.
Washington Times | College grads find big degree of debt, difficulty
The Great Recession sent millions of Americans scurrying back to school to improve their chances of securing jobs. But the difficulty that recent college graduates have had finding work — after taking on unprecedented loads of debt — has sparked a lively debate about whether a college degree opens doors the way it once did in the job market.
FOX News | After weak June, retailers to sweat out summer
Shoppers, worried about jobs and the economy, pulled back on spending in June, slowing sales for most retailers to the weakest pace since 2009. And that could leave merchants on edge, wondering if Americans will spend more when the back-to-school season starts in late July.
WSJ | Home-Equity Loans Pose Looming Threat to Banks
U.S. banks may be hit with a new round of mortgage losses over the next five years as borrowers who took out home-equity loans a decade earlier face increased monthly payments, a regulator warned Thursday.
National Journal | Pace of Recovery More Frustrating Than Jobs Report Will Suggest
The unemployment rate, according to a Friday Labor Department report, was 8.2 percent in June, the same as the previous month but nearly 2 percentage points lower than the recession-era peak reached in October 2009.
WSJ | Firms Sustain Investment in U.S.
Companies around the world are on track to increase their investments in the U.S. during 2012, according to a report Thursday by the United Nations.

Econ Comments & Analysis                                                                                            
WSJ | The Sources of the Next American Boom
Three years after the recession was declared officially over, unemployment remains high and there's worry that a new recession is down the road. And yet waiting in the wings for when we get our economic policies in order are a mounting number of stunning discoveries, inventions and technological breakthroughs that could set off a burst of growth and wealth creation as big as any in living memory.
Real Clear Markets | Things Will Get Much Worse Before They Get Better
Way back in May 2012 before a press conference announcing the ECB's decision to hold rates steady, Mario Draghi, European Central Bank (ECB) President, speculated that the Eurozone economy showed "tentative stabilization". This was two months after he commented to a German newspaper that "the worst was over".
Fortune | Is there an upside to a dip in corporate profits?
For the first time since the Great Recession, corporate profits fell during the first three months of this year. While the dip may be small, the $6.4 billion (or 0.3%) decline is significant as it just might inspire a shift in tone within corporate America, which saw profits soar even as joblessness has persisted.
Washington Times | June’s weak numbers could make for a bleak July
By now, you probably have heard that the stock market fell 3.3 percent over the April-to-June period as measured by the S&P 500 because of fears of slowing global growth and uncertainty in Europe.

Blogs                                                                                                                             
Economist | The doldrums
How long ago seem the promising months of early 2012, when the American economy added jobs at a healthy 225,000 monthly clip. And how disappointing when the labour market slumped back into its now traditional spring-and-summer slump.
Calculated Risk | Consumer Bankruptcy filings Decrease 13 Percent in First Half of 2012
From the American Bankruptcy Institute: Bankruptcy Filings Fall 14 Percent for the First Half of 2012, Commercial Filings Drop 22 Percent

Health Care

Blogs                                                                                                                             
Heritage Foundation | Side Effects: Obama Administration Admits You Can’t Keep Your Health Plan
On several occasions during the health care reform debate, President Obama promised the American people, “If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”
The Volokh Conspiracy | Court Did Not Authorize Economic Mandates Under the Tax Power
Throughout the Obamacare litigation, I freely conceded that Congress could use its tax powers to create incentives to buy health insurance, and even enact a “single payer” Medicare for everyone scheme.  But I never accepted the claim made by Obamacare proponents  that all Congress needed to do was call the mandate a “tax” (from which they then claimed that it was just a matter of labels).

Monetary

News                                                                                                                             
Bloomberg | Draghi Move to Zero Rates Fuels Talk of QE in ECB Armory
The European Central Bank’s step into the world of zero interest rates is fueling speculation it may eventually be forced to follow the Federal Reserve and the Bank of England with large-scale asset purchases.
WSJ | Central Banks Take Action
Central banks in China, the euro zone, the U.K. and other countries took new steps to bolster growth amid mounting worries about the global economy, but the moves didn't appear to reassure investors.
Bloomberg | Credit Swaps in U.S. Climb as Payrolls Rise Less Than Forecast
A gauge of U.S. corporate debt risk rose for a second day after U.S. employment increased less than forecast, fueling concerns that labor-market growth is cooling.

Blogs                                                                                                                             
Economist | A monetary policy for the 1%
The proper role of a central bank has been under much discussion lately. In its recent annual report, the Bank for International Settlements lamented central banks being forced into loose monetary policy as politicians fail to take steps to restructure their economies for growth.

Taxes

News                                                                                                                             
CNBC | French Budget Adds $8.7 Billion in Taxes on Rich, Big Firms
France will impose 7.2 billion euros ($8.7 billion) in new taxes this year, including large one-off levies on wealthy households and big corporations, to plug a revenue shortfall left by slowing economic growth, according to a revised 2012 budget.

Blogs                                                                                                                             
Heritage Foundation | Pennsylvania Approves Private School Tax Credit Program
Public school students in poor performing Pennsylvania schools will now be eligible to receive scholarships to attend a private school of their choice.

Employment

News                                                                                                                             
Businessweek | Worker Shortage? Teach Teens Manufacturing Skills
During her sophomore year at Kettle Moraine High School in Wales, Wis., about 30 miles outside Milwaukee, Tara Britten ditched class and was in danger of expulsion. “They thought I was stupid,” Britten says. “Nobody would challenge me at the level I needed to be challenged at, so it made me angry and bored.”
Washington Times | Congressional Republicans resolved to repeal Obamacare
There’s no doubt that the president’s health care law is hurting our economy. Even before the U.S. Supreme Court’s recent ruling on Obamacare, the president’s law was driving up health costs and making it harder for small businesses to hire.
CNN Money | June jobs report: Hiring weak, unemployment unchanged
Hiring was lukewarm last month, with employers adding jobs but not enough to bring the unemployment rate down.

Blogs                                                                                                                             
Calculated Risk | June Employment Report: 80,000 Jobs, 8.2% Unemployment Rate
Nonfarm payroll employment continued to edge up in June (+80,000), and the unemployment rate was unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported today.
Economist | America settles down
Americans are much more willing to move around within their great continental expanse than residents of other countries are to migrate.
WSJ | What to Watch for in Jobs Report
When the government releases its monthly jobs report at 8:30 tomorrow morning, most of the attention will be on two numbers: The net increase or decrease in non-farm payrolls (economists yesterday boosted their estimate to predict a gain of 125,000 jobs) and the unemployment rate (economists expect it to hold steady at 8.2%).
CATO | Another Month of Data Re-Confirms Obama’s Horrible Record on Jobs
Today’s weak job market is affected by factors such as the threat of higher taxes in 2013 (when the 2001 and 2003 tax cuts are scheduled to expire), the costly impact of Obamacare, and the harsh regulatory environment.
Calculated Risk | Employment Situation Preview
Another weak report, combined with sluggish Q2 GDP numbers to be released later this month, would increase the likelihood of QE3 being announced on August 1st.

Budget

News                                                                                                                             
Bloomberg | Monti Cabinet Backs Spending-Cut Package to Replace Tax Increase
Italian Prime Minister Mario Monti replaced a looming sales-tax increase with a package of spending cuts, seeking to counter rising anger over the government’s demand for revenue.
Bloomberg | Credit Swaps in U.S. Climb as Payrolls Rise Less Than Forecast
A gauge of U.S. corporate debt risk rose for a second day after U.S. employment increased less than forecast, fueling concerns that labor-market growth is cooling.

Econ Comments & Analysis                                                                                            
USA Today | Debt buries American dream
America has long prided itself on being a land of opportunity. The American dream, stories of those rising from rags to riches, is etched into our sense of identity. But increasingly, this seems just a myth.

Blogs                                                                                                                             
National Review | Greek Government: Not As Austere As It Claimed
Greece conceded on Thursday it had slipped “in some respects” in implementing the cuts and reforms demanded by lenders in exchange for saving Athens from bankruptcy, and tried to persuade them to cut the country some slack.
Library of Economics | The Debt-Fueled Binge Story, Keynes, and PSST
In the Keynesian model, borrowing money to maintain high public-worker salaries will create trickle-down prosperity for the private sector. In the PSST model, it won't.