Wednesday, July 11, 2012

General Economics

News                                                                                                                             
Market Watch | OPEC sees slower world oil demand growth in 2013
The Organization of the Petroleum Exporting Countries, or OPEC, on Wednesday left its forecast for 2012 growth in world oil demand unchanged at 0.9 million barrels a day and said it expects growth to slow to 0.8 million barrels a day in 2013 due to a continuing global economic slowdown.
WSJ | Fed Official Doubts Euro Fix
Financial markets are pulling the euro zone apart and the chances of finding a solution to the currency union's debt crisis appear distant, a U.S. central banker said Tuesday.
Bloomberg | Wen Says Investment Now Key to Stabilizing China Growth: Economy
Premier Wen Jiabao said promoting investment growth is the key now to stabilizing China’s economic expansion, signaling officials may boost spending to counter a slowdown that probably extended into a sixth quarter.
WSJ | Bucking Trend, U.S.-China Trade Gap Grows
The U.S. trade deficit with China continues to grow even as the rest of the world runs a trade surplus with Beijing, potentially exacerbating a political problem for President Barack Obama as this year's campaign debate unfolds.
Market Watch | U.S. trade deficit lower in May; exports rise
The U.S. trade deficit fell 3.8% in May as exports rose slightly and the cost of imported oil fell, the government reported Wednesday.

Econ Comments & Analysis                                                                                            
Washington Times | American consumers pay dearly to go ‘green’
President Obama has spent 3 1/2 years waging war on fossil fuels - and American consumers and families are caught in the crossfire.
WSJ | China's Coming Economic Transformation
China is grappling with an economic downturn, but there is more than the usual amount of disagreement about how fast it's slowing down.
Investors | Obama's Class-Warfare Rhetoric Demonizes Success
Anyone who wants to study the tricks of propaganda rhetoric has a rich source of examples in the statements of President Barack Obama.
WSJ | Air Jordan and the 1%
What does Michael Jordan tell us about income inequality in the United States? The U.S. has greater income inequality than nearly all other developed nations, and the former basketball star earned far more in most years than the typical American earns in a lifetime. So is our system unfair and stacked against the middle class? First, some historical perspective.
Politico | A small business plan all can agree on, right?
As the nation debates solutions to our stagnant economy and continuing unemployment crisis, more elected leaders now agree that small-business growth plays a crucial role in job creation. An estimated 27 million small businesses employ more than half the country’s private-sector workforce, creating 60 percent to 70 percent of all new jobs.

Blogs                                                                                                                             
AEI | Economic mobility is determined by personal choice
The Pew Economic Mobility Project has come out with a new study that suggests all is not wonderful in the world of economic mobility. I haven’t read the study yet, but I look forward to taking a gander and hearing what my colleagues around here have to say about it.
Neighborhood Effects | How Cronyism is Hurting the Economy
The problem of cronyism is compounded by the phenomenon of the “revolving door,” or the tendency for ex-government officials to find jobs in the industries they once oversaw and for industry insiders to find regulatory jobs overseeing their former colleagues.
AEI | The missing $1.4 trillion: One chart that says U.S. business investment isn’t ‘doing fine’
You think an additional $1.4 trillion in non-residential business investment over 2008-2011 might have helped the economy during that period?

Health Care

News                                                                                                                             
National Journal | Feds Will Exempt Poorest From Insurance Requirement
The Obama administration will make an exception for poor people living in states that choose not to expand Medicaid, according to a letter from Health and Human Services Secretary Kathleen Sebelius.
Politico | Medicaid expansion could pay off for investors
For all the Republican governors saying they’ll block President Barack Obama’s plan to expand Medicaid in their states — now at least five — the market seems to think they’re bluffing.
National Journal | McConnell Files 'Obamacare' Repeal Amendment
The volatile subject of repealing the 2010 health care law won't be contained to just the House, after Senate Minority Leader Mitch McConnell, R-Ky., filed an amendment on Tuesday night repealing "Obamacare."
CNN Money | High price of lower tax rates
Many tax reform plans, most notably Mitt Romney's, aim to lower income tax rates and make up for the loss in revenue by reducing tax breaks.
National Journal | Ways and Means Trade Analogies as Members Debate Whether Health Care Mandate Is Tax
Members of the Ways and Means Committee spent much of their hearing on the tax implications of the Supreme Court’s ruling on the Affordable Care Act comparing the law’s individual mandate, now considered a tax, to fishing licenses, car ownership, and the promotion of energy efficiency.

Blogs                                                                                                                             
AEI | Does it matter if Obamacare imposes a tax or a penalty? Actually, yes
You’ve heard in the media that it doesn’t matter whether Obamacare’s individual mandate imposes a tax or a penalty. Actually, it could matter a great deal.

Monetary

News                                                                                                                             
WSJ | German Inflation Falls
Consumer price inflation in Germany, Europe's largest economy, fell in June to its lowest annual rate in a year and a half, the Federal Statistics Office said Wednesday, confirming its preliminary data published June 27.
CNN Money | Calls for QE3 grow as economy wanes
Is more stimulus on the way from the Federal Reserve? Wall Street sure thinks so.

Econ Comments & Analysis                                                                                            
AEI | The Federal Reserve: The Biggest Systemic Risk of All
Oh, the trials and tribulations of being a modern central bank! There are the unrealistic expectations of how much you know about the economic present and future (encouraged by your own PR, of course). There are the equally unrealistic expectations of how much you can control the economic future (encouraged by textbooks). And then there is the infinitely frustrating nature of the financial markets which you would like to manipulate.

Taxes

News                                                                                                                             
Washington Times | Reid proposes cutting taxes for small businesses
Senate Majority Leader Harry Reid is borrowing from the Republican playbook by proposing a series of tax cuts, including a measure being considered this week to extend tax breaks to small businesses.
Politico | Obama takes middle class tax-cut to campaign trail
President Obama took his tax cut push to the campaign trail on Tuesday, as he continued his efforts to appeal to middle class voters.

Econ Comments & Analysis                                                                                            
Washington Times | Escape from Maryland
When times are tight, people look for potential savings wherever they can. Increasingly, Marylanders living under the oppressive tax regime of Gov. Martin F. O'Malley have realized they can get a better deal by packing their bags and heading for the Old Dominion.
Politico | CBO: Fed tax rates hit historic low
The average tax rates for American households reached a historical low in 2009, according to a report issued by the non-partisan Congressional Budget Office.
CBO | The Distribution of Household Income and Federal Taxes, 2008 and 2009
The recent recession has had a substantial impact on income, the amount of taxes owed, and average tax rates. Changes in households’ before-tax income and average tax rates in 2008 and 2009 were substantial and differed markedly across the income distribution.
CATO | Obama: Tax 'the Rich'
By some counts, this represents the 25th time the president has rolled out this proposal — something to keep in mind the next time he warns against “refighting the battles of the past” over something like repealing Obamacare. Regardless, repetition hasn’t done anything to improve either the policy or the president’s truthfulness in describing it.

Blogs                                                                                                                             
Heritage Foundation | Reid’s Unconstitutional Gambit on Small Business Taxes
Senate Majority Leader Harry Reid (D–NV) is trying to use the Senate to message on tax issues. The problem is that this political ploy is unconstitutional.

Employment

News                                                                                                                             
WSJ | OECD Warns of Long-Term Damage to Unemployed
The rate of unemployment in developed economies will remain high for longer than previously expected, increasing the risk that a growing number of workers will find themselves permanently marginalized in the jobs market, the Organization for Economic Cooperation and Development said Tuesday.
Bloomberg | Low-Paid Grads On Tight Budgets Switching to Discounters
Michael Baum took every substitute teaching job he found and has sent out hundreds of resumes since graduating from college two years ago. He never got a full-time offer and works as a waiter at a pizza parlor in Chicago, earning $650 during a busy week.

Econ Comments & Analysis                                                                                            
Market Watch | May job openings rise to 3.64 million
Job openings at U.S. workplaces increased to 3.64 million in May from 3.45 million in April, the U.S. Labor Department reported Tuesday.

Blogs                                                                                                                             
Marginal Revolution | Why is American labor mobility falling?
The first [reason] is that the mix of jobs offered in different parts of America has become more uniform. The authors compute an index of occupational segregation, which compares the composition of employment in individual places with the national profile. Over time, their figures show, employment in individual markets has come to resemble more closely that in the nation as a whole.
WSJ | Good News: More People Are Quitting
The good news for the job market: More people are quitting their jobs. The bad news: More are getting laid off, too.
Calculated Risk | BLS: Job Openings increased in May
There were 3.6 million job openings on the last business day of May, little changed from 3.4 million in April, the U.S. Bureau of Labor Statistics reported today.
WSJ | Is 8% the New Normal for Unemployment?
The U.S. unemployment rate has been above 8% for more than three long years, far above the 5.4% average of the seven full decades since the Great Depression.

Budget

News                                                                                                                             
Washington Times | EU extends Spain’s deficit timeline by a year
The European Union worked towards stabilizing Spain‘s finances Tuesday as it backed up the blueprint for the country’s 100-billion-euro ($122.52 billion) bank bailout plan with plans to grant the country an extra year to cut its budget deficit.
WSJ | China Lifts Spending As Growth Weakens
China is ramping up state spending to counter its sharpest decline in growth since the financial crisis, further entrenching state-owned companies and dimming the hopes of some that China would use the slowdown to restructure its economy with market-oriented changes.
NY Times | States Face Tough Choices Even as Downturn Ends
As state governments begin to emerge from the long downturn, many are grappling with a difficult choice: should they restore some of the services and jobs they were forced to eliminate in the recession or cut taxes in the hopes of bolstering their local economies?

Econ Comments & Analysis                                                                                            
Market Watch | Four fiscal cliffs ahead, and a jobs war
Election wars are masking the fiscal cliff that America is destined to drop off in early 2013, warns the Congressional Budget Office. History tells us our politicians will slowly drive America off the fiscal cliff and into a mid-1930s-style sinkhole.

Blogs                                                                                                                             
FOX Business | Budget Insanity
In my syndicated column this week, I point out that even politicians who campaign on reducing government won't cut bad programs.
AEI | New farm bill likely to be a budget and trade disaster
Parents know how often children confuse their wants with their needs. A child may hunger for a glitzy new bike, but if she already has one in perfect working order there is no need for a new bike to get her to school: She just wants one. In the same vein, the chair and ranking member of the House Agriculture Committee have confused farmers’ wants with their needs.