Thursday, July 26, 2012

General Economics

USA Today | Drought could cost $12 billion, most since 1988
The Department of Agriculture said Wednesday that food prices next year could go up by 3%-4% as a result, with beef expected to take the highest jump at 4%-5%.
USA Today | New home sales fall to 5-month low in June
The Commerce Department said Wednesday that sales of new homes fell 8.4% last month from May to a seasonally adjusted annual rate of 350,000. That's the biggest drop since February 2011.

Econ Comments & Analysis                                                                                            
WSJ | Dodd-Frank's Unhappy Anniversary
Two years ago, I was one of 43 members of Congress appointed to the conference committee for the Dodd-Frank financial-reform bill. Along with others, I fought against the legislation and lost.
Investors | Businesses Aren't The Problem, They're The Solution
Lately, it seems that the only form of acceptable hate speech left in America is hostile invective heaped upon entrepreneurs and innovators by a vocal minority of pundits, and increasingly, political leaders who should know better.
Market Watch | Global economy’s cure is worse than the disease
The patient’s history includes a seizure in 2007/ 2008 — financial losses, banking problems, a major recession. Liberal injections of taxpayer cash avoided catastrophic multiple organ failure, assisting a modest recovery.
WSJ | America's Two Economies
For a long time, the United States had one economy. Now we have two economies that compete for America's wealth: A private economy and a public economy. The 2012 election will decide which will be subordinate to the other. One economy will lead. The other will follow.

Library of Economics | Does Import Dependence Make Us More Vulnerable?
An increasing reliance on imports, combined with the fraying of the nation's power grid, highways and rail lines, leaves the United States more vulnerable to the damage of natural disasters and terrorist attacks, according to a report to be released Wednesday by former homeland security secretary Tom Ridge.
WSJ | Mid-Sized Companies Holding Back Investment
Mid-sized companies are holding onto cash and pulling back on investments in response to mounting fears of a global economic slowdown.
National Review | Hold on to Your Wallet: The Cost of Corporate Welfare and Rent-Seeking
Cronyism takes many forms: It is Solyndra, the farm bill, subsidies to oil-and-gas corporations, banks and automobile companies, but also the protections granted to the sugar industry and other industries, tax credits to private companies, and much more.
Coordination Problem | What Great Stagnation?
In last week's Washington Post, Robert Samuelson reported on the results of the Pew Mobility Project, looking at the income and wealth mobility of Americans over the last several decades.  Although not all the news is good, most of it is. 

Health Care

NY Times | Medicaid Expansion May Lower Death Rates, Study Says
Into the maelstrom of debate over whether Medicaid should cover more people comes a new study by Harvard researchers who found that when states expanded their Medicaid programs and gave more poor people health insurance, fewer people died.

National Review | CBO Score of the Health Care Law and the Media
Whether it is in the New York Times or this morning on NPR, there seems to be a message emerging: After the SCOTUS ruling, the cost of the president’s signature health-care law is lower that previously projected.


Econ Comments & Analysis                                                                                            
Real Clear Markets | We Can't Rely On the Fed to Rescue Us
Pity Fed Chairman Ben Bernanke. With U.S. and global growth slowing, all eyes are on next week's meeting of the Federal Reserve's policy committee. On Wednesday, the New York Times devoted its lead, page one story to nudging the Fed towards pumping more money into the banking system.
Forbes | The Fed, The Financial Crisis And Monetary History: An Interview With Dr. Allan Meltzer
I wrote my thesis on French inflation so that was the beginning, but I didn’t have any career plan to pursue either that or financial inflation.
Real Clear Markets | Let's Scrap the Fed's Open Market Committee
The board had had a shaky record, especially in recent years. It had been blamed for fueling a financial mania that precipitated a financial crisis and the worst global recession in almost a century.
CNN Money | The risks of more Federal Reserve action
Last week, Federal Reserve Chairman Ben Bernanke told lawmakers that the Fed stands ready to give the economy a boost, should the recovery continue to struggle.
Real Clear Markets | QE3's Looming Failure Means Ben's Days Are Numbered
The above-the-fold headline of yesterday's Wall Street Journal, "Fed Moves Closer to Action", signals an impossibly deluded Federal Reserve utterly blind to the damage its machinations are bringing to the U.S. and global economy. 

WSJ | IMF Paper Warns Against Letting Inflation Target Rise
One big debate facing the Federal Reserve is whether the central bank should allow inflation to rise to help bring down unemployment and spur economic growth.
Library of Economics | The Magic Solution of Devaluation
If the Spanish and Greek governments shrank enough to balance their budgets, they'd still have 24% unemployment, if not more. Their economies are hopelessly uncompetitive at the current exchange rate.
WSJ | House Passes Ron Paul’s ‘Audit the Fed’ Bill
The House voted Wednesday to open up the Federal Reserve‘s core monetary policy decisions to the scrutiny of the federal government.


Library of Economics | Alan Blinder: Banks Don't Pay Taxes
Suppose the Fed cuts the IOER [interest on excess reserves] from 25 basis points to minus 25 basis points, and banks don't lend one penny more. In that case, the Fed stops paying banks almost $4 billion a year in interest and, instead, starts collecting roughly equal fees from banks.


Econ Comments & Analysis                                                                                            
The American | Mobility Matters: Understanding the New Geography of Jobs
Enrico Moretti explains why policymakers should concentrate on mobility inequality, why there is no Great Stagnation, and why economist Paul Romer has a tough road ahead.
Forbes | The Rise of The 1099 Economy: More Americans Are Becoming Their Own Bosses
While the economy has been miserable for small business, and many larger ones as well, the ranks of the self-employed have been growing.

WSJ | Why Kids Today Have It Worse Than Their Parents
Today’s 20-somethings are, broadly speaking, the children of the last of the Baby Boomers, those born in the late 1950s and early 1960s. That generation, like this one, came of age in the midst of a brutal recession: The unemployment rate for 18-24 year-olds topped 17% at the end of 1982. (In 2010, it briefly crossed 18%.)


WSJ | Funds Cut Euro-Zone Bank Debt
U.S. prime money-market funds cut lending to euro-zone banks to a record low in June as concerns about Europe's debt crisis ramped up, according to a Fitch Ratings report.
WSJ | Muni Blues Worry Investors
Some cash-strapped U.S. cities are walking away from their financial obligations, exposing potential risks in the municipal-bond market.

Econ Comments & Analysis                                                                                            
Real Clear Markets | California Is Ground Zero for Muni Bankruptcies
Debates about the role of government are shifting from libraries and lecture halls to kitchen tables and coffee shops as municipal bankruptcies flare up across the country. And California is ground zero.
Project Syndicate | California Bad Dreaming
While central governments’ fiscal problems plague many economies, a parallel crisis is enveloping many subnational governments around the world. From Spain to China to the United States to Italy, these governments – regions, states, provinces, cities, and towns – face immense fiscal challenges.

WSJ | 12 Municipalities With Money Trouble
The financial crisis prompted some distressed homeowners to mail their keys back to the bank rather than pay their mortgage. Now distressed municipalities may be taking similar steps with the keys to the city.
Daily Capitalist | Caught In A Debt Trap
As with much of the euro area, the US is in a debt trap. All the politicking in DC does not change this economic fact. The federal debt is going to be devalued.