Monday, July 9, 2012

General Economics

Washington Times | China’s premier unsure of economy
China’s economy faces “huge pressure” to slow further despite stimulus measures, Premier Wen Jiabao said Sunday, damping hopes for a quick recovery from the deepest slump since the 2008 global financial crisis.
WSJ | OECD Leading Indicators Point to Slowdown in Major Economies
Growth in most major economies is set to slow down in coming months, with only Brazil expected to experience a pickup, according to the Organization for Economic Cooperation and Development's composite leading indicators.
Washington Times | Economy is in the eye of the policy beholder
Reading the economy these days is like taking a Rorschach test: Optimists see signs of progress in each economic report, while pessimists see the end of the expansion and many others host middling views.

Econ Comments & Analysis                                                                                            
WSJ | How About a Free-Trade Deal With Europe?
Europe's ongoing economic crisis and the evident discord among its key leaders have profound implications for the United States. Despite a new agreement during the most recent European Union summit last month, the crisis will likely endure for some time, with unpredictable political and economic consequences.
The American | Groundhog Day in Europe
European policymakers have to be concerned that the half-life of their band-aids is getting shorter and shorter while resistance to these measures gets stronger and stronger.
CNBC | Signs We Are Approaching a Zombie Economy
Uncertainty about U.S. fiscal policy, Europe’s sovereign crisis and slower global growth have turned the U.S. economy into what feels like a slow-moving zombie, leaving businesses and consumers hesitant and reluctant to act.
WSJ | America Already Is Europe
I'm often asked if I think America is trending toward becoming a European-style social democracy. My answer is: "No, because we already are a European-style social democracy." From the progressivity of our tax code, to the percentage of GDP devoted to government, to the extent of the regulatory burden on business, most of Europe's got nothing on us.
The American | The Economics of Pepco
As an economist and a Pepco customer, I am concerned by two factors that insulate Pepco from facing market discipline concerning reliability. The first is that Pepco is a regulated monopoly. The second is that there is no price indicating the benefits of reliability.

Calculated Risk | Unofficial Problem Bank list declines to 913 Institutions
Changes to the Unofficial Problem Bank List this week were limited to four removals. Afterward, the list holds 913 institutions with assets of $353.4 billion. A year ago, the list hit its high at 1,004 institutions with assets of $418.8 billion.
WSJ | Number of the Week: Has Housing Bottomed?
10: The number of consecutive months that the construction sector has shown year-over-year job growth.
Calculated Risk | Schedule for Week of July 8th
The FOMC minutes, to be released on Wednesday, will receive extra attention for clues about QE3. Also several regional Fed presidents will speak this week.
Café Hayek | Motives vs. results
Are you greedy, selfish, and uncaring? A little. We all are. Even people who oppose liberty. But I don’t think self-interest explains your view of the proper role of government intervention.

Health Care

NY Times | Brawling Over Health Care Moves to Rules on Exchanges
Critics of the new health care law, having lost one battle in the Supreme Court, are mounting a challenge to President Obama’s interpretation of another important provision, under which the federal government will subsidize health insurance for millions of low- and middle-income people.

Econ Comments & Analysis                                                                                            
Motley Fool | 3 Health-Care Misconceptions That Never Die
Rule of thumb: Wherever there is major legislation, trillions of dollars, and your well-being at stake, there will be claims driven by emotion instead of fact. Case in point: Health care.
Forbes | Obamacare RIP: John Roberts Cannot Save You
Progressives are desperate to prevent the country from learning that free market conservatives have long been proposing policies to assure essential health care for all, and achieve all the other goals of Obamacare, at just a small fraction of the costs. 

CRFB | The Budgetary Impact of States Opting Out of the Medicaid Expansion
As the initial discussion over the ruling for the individual mandate has subsided, experts are now weighing in on the potential federal budgetary impacts of the Court’s decision which enables states to opt out of expanding Medicaid coverage to low-income adults.


WSJ | Weak Report Lifts Chance of Fed Action
Friday's disappointing jobs report increases the likelihood that the Federal Reserve will launch a new bond-buying program to boost economic growth, though it doesn't ensure such a move.

Econ Comments & Analysis                                                                                            
Market Watch | Monetary policy isn’t helping ‘The Simpsons’
“We’re not helping, as I put it, the Homers and the Marges,” Fisher continued in a session moderated by CNBC’s Maria Bartiromo. “We’re helping the Mr. Burnses.”

Coordination Problem | George Selgin Asks a Very Good Question of the Market Monetarists
Over at the Free Banking blog, George explains why even though he is sympathetic to much of the Market Monetarist theoretical argument, he is actively objecting to their call for more expansionary policy from the Fed.  He offers three reasons, with the third being the most interesting
Economics One | Gross Capital Flows Grow in Importance
My Wall Street Journal article yesterday Monetary Policy and the Next Crisis touches on a growing research area in international finance that focusses on gross capital flows as distinct from the current account.


NY Times | Obama Poised for New Fight With G.O.P. Over Tax Cuts
With a torpid job market and a fragile economy threatening his re-election chances, President Obama is changing the subject to tax fairness, calling for a one-year extension of the Bush-era tax cuts for people making less than $250,000.
Washington Times | Economy Briefs: AIG wants $30.2 million in tax interest
American International Group, the insurance giant saved by a massive federal bailout, wants some tax money back from 1991.

Econ Comments & Analysis                                                                                            
WSJ | A Short History of Congress's Power to Tax
In 1935, Secretary of Labor Frances Perkins was fretting about finding a constitutional basis for the Social Security Act. Supreme Court Justice Harlan Fiske Stone advised her, "The taxing power, my dear, the taxing power. You can do anything under the taxing power."

Neighborhod Effects | To Regulate or to Tax
It has now been a week since the Supreme Court handed down its long-awaited ruling on the ACA. From an individual liberty perspective, it was either a dark cloud with a silver lining or a dark cloud with a dark lining.
National Review | More on the President’s Uninsured Tax
There has been, understandably, a lot of attention paid to the tax that uninsured Americans will have to pay if they decide not to buy insurance.
AEI | Top 400 taxpayers paid almost as much in federal income taxes in 2009 as the entire bottom 50%
We hear all the time that the “rich don’t pay their fair share of taxes” (you’ll find more than 100,000 Google search results for that phrase).  Here’s an analysis using recent IRS data that suggests otherwise.
WSJ | Greeks Hide Tens of Billions From Tax Man
If Greece’s government was as adept as its banks at figuring out what its citizens earn, the world might be a very different place.


CNN Money | African-American jobless rate surges
As the overall U.S. unemployment rate stayed at 8.2% in June, the rate among black Americans rose nearly a full percentage point.
WSJ | Weak Labor Report Fans Fears
The U.S. economy posted its third consecutive month of weak job growth, complicating President Barack Obama's reelection prospects and turning up the pressure on the Federal Reserve to do more to help the economy.
CNN Money | Fiscal cliff cloud hangs over jobs
House Republicans blame the disappointing June jobs report on President Obama's "failed policies." Senate Democrats blame Republicans for engaging in "empty, partisan exercises that will not create one job."
Washington Times | Obama: June jobs report is ‘a step in the right direction’
President Obama portrayed a disappointing jobs report — just 80,000 added to the payrolls in June — as “a step in the right direction,” during a campaign stop in Ohio Friday.
WSJ | Canada Created More Jobs Than Expected in June
The Canadian economy created more net new jobs than expected in June for the fourth straight month, and the unemployment rate dropped unexpectedly as fewer people looked for work.
CNN Money | Overpaid unemployment benefits top $14 billion
Don't spend that unemployment check too fast. The government might ask you to pay it back.

Econ Comments & Analysis                                                                                            
CNN Money | Why are we surprised by bad jobs numbers?
For those of you who remember what vinyl records are, they tend to play the same spot of a song over and over and over again when they are broken. With that in mind, have I ever mentioned to you before that this is a barbecue recovery?
Fortune | Why American workers are worse off today
At 8.2%, June's unemployment rate is slightly lower than January's 8.3%, but workers aren't better off.
Investors | 10 reasons why jobs market even worse than weak June employment report
Nonfarm payrolls rose by just 80,000 in June, slightly worse than expected and the third straight month of sub-100,000 job growth. The jobless rate held at 8.2%. The employment report was disappointing. Here are 10 reasons why the jobs market is even worse than the headline figures.

WSJ | Worst Quarter for Jobs Growth Since 2010
America’s job market hasn’t been this feeble since the economy started adding jobs regularly two years ago.
Calculated Risk | Employment Report Graphs: Participation Rate, Duration of Unemployment and Diffusion Indexes
Below are three more graphs based on the June employment report.
Political Calculations | The Brightest Spot in the June 2012 Jobs Report
If the major headlines posted on Google News on Friday, 6 July 2012 are any indication, the June 2012 Employment Situation Report for the United States was "tepid" at best, and "dismal" at worst.
WSJ | Jobs Slowdown Looks Less Severe Without Seasonal Adjustments
The slowdown in U.S. jobs growth is real, but may not be as quite severe as recent dismal headline figures suggest.
Daily Capitalist | No Jobs: The Result of Wizard of Oz Economics
Recent economic data, and especially today’s unemployment numbers reveal the powerlessness of the Fed in the face of underlying economic problems that they fail to understand.
Calculated Risk | Percent Job Losses: Great Recession and Great Depression
The causes of the Great Recession were similar to the Great Depression - as opposed to most post war recessions that were caused by Fed tightening to slow inflation - and I'm frequently asked if we could compare the percent job losses during the two periods. Unfortunately there is very little data for the Great Depression.
WSJ | Broader Jobless Rate Ticks Up to 14.9%
The U.S. unemployment rate was unchanged at 8.2% in June but a broader measure rose to 14.9% as the ranks of the underemployed grew.
AEI | The chart that shows the private sector is not ‘doing fine’
You can say what you want about cuts in government hiring, but the private sector is not “doing fine” as President Obama has suggested. Private-sector job growth continues to be sluggish at best, having downshifted significantly from earlier this year.
WSJ | Federal Job Cuts Outpacing State, Local Reductions
The slump in state and local government jobs, which has dragged on job growth throughout the recovery, has started to wane. The new drag: A more austere federal government.


WSJ | Italy Approves €4.5 Billion in Spending Cuts for 2012
Italy's government late Thursday approved €4.5 billion ($5.58 billion) in spending cuts for 2012 aimed at slashing the size of Italy's bloated public sector and delaying a new tax increase until after the first half of 2013.
WSJ | Doubts Emerge in Bloc's Rescue Deal
Euro-zone countries would still have to guarantee the loans their banks receive from the region's permanent bailout fund, the European Stability Mechanism, even if it directly recapitalizes them, a senior European Union official with direct knowledge of the situation said.

Econ Comments & Analysis                                                                                            
WSJ | America Has Too Many Teachers
President Obama said last month that America can educate its way to prosperity if Congress sends money to states to prevent public school layoffs and "rehire even more teachers." Mitt Romney was having none of it, invoking "the message of Wisconsin" and arguing that the solution to our economic woes is to cut the size of government and shift resources to the private sector.