Thursday, August 23, 2012

General Econimcs

News                                                                                                                             
Bloomberg | Euro-Area Services, Manufacturing Contracted in August: Economy
Euro-area services and manufacturing output contracted for a seventh straight month in August, adding to signs of a deepening economic slump as European leaders struggle to contain the fiscal crisis.
Market Watch | Home-equity loans could sink retirement hopes
Some call it a ticking time bomb, while others call it nothing more than a potential problem. But whatever it is, pre-retirees and retirees who have a balance on their home equity line of credit, or HELOC, will need to plan for the day when that debt reaches its 10-year anniversary.
Bloomberg | China’s Manufacturing May Contract at Faster Pace in August
China’s manufacturing may contract at a faster pace in August, a private survey showed, signaling more monetary and fiscal stimulus may be needed to secure a second-half rebound in economic growth.
CNN Money | The middle class falls further behind
America's middle class has endured its worst decade in modern history," the Pew Research Center said in its report. "It has shrunk in size, fallen backward in income and wealth, and shed some -- but by no means all -- of its characteristic faith in the future.
National Journal | Pew: Pessimism Grows Among Middle Class; Many Blame Congress for Their Plight
Pew surveyed 2,508 adults from July 16-26 and about half identified themselves as middle class. Of those, 85 percent said that maintaining their standard of living is harder now than it was 10 years ago. And the largest share of the blame goes to Congress. When middle-class respondents were asked what role Congress played in their difficulties, 62 percent said it deserved “a lot” of the blame, while 29 percent said it bears only “a little.”

Econ Comments & Analysis                                                                                            
Washington Times | PATTERSON: Government of unions, by unions, for unions
Unfair auto pension deals possibly illegal.
RCM | Obama's Unfortunate Regulatory Legacy
For market-inducing business regulation to be successful the technology employed must match the market demand. Furthermore, everything necessary to connect these two critical components must be fully implemented.
WSJ | The SEC Does Dodd-Frank
Two new rules that raise business costs, no rule for easier job creation.
Reuters | COLUMN: Against all odds, American manufacturers are winning
Despite cheaper labor abroad, currency manipulation, intellectual property theft, and subsidies to foreign competitors, these American manufacturers are winning. Many of them are small or medium-sized businesses that are family owned.
Washington Times | PERKINS: Sequestration is bad for Virginia
Conservative estimates suggest that Northern Virginia will lose tens of thousands of jobs in both the private and public sectors and billions in revenue. In addition, the trickle-down effect will be felt in the real estate market, food industry and throughout the various service-oriented small businesses that make up the local economy.
AEI | Greece can unbind itself from torment
In Greece's present day context, one has to wonder whether it might not have been more apt for Prof Pagoulatos to have considered the alternative Greek myth about the punishment Zeus meted out to Prometheus by binding him to a rock and having an eagle eat out his liver on a daily basis.
CNN Money | Everything you need to know about where things stand in Europe
Summer fun in Europe is about to come to a screeching halt, as fund managers and government officials will return in September to what appears to be a hopeless situation.

Blogs                                                                                                                             
WSJ: Real Time Economics | Even if ‘Fiscal Cliff’ Gets Resolved, Outlook Is Anemic
The most distressing aspect of the Congressional Budget Office’s outlook for 2013 isn’t the fact that the U.S. economy will fall into recession if the ‘fiscal cliff’ of looming tax increases and spending cuts becomes reality.
AEI | Wait, both the Reagan and Bush recoveries were better than Obama’s
Cutter counts the job gains from the low point of Obama’s term forward. The low point was February 2010 when U.S. nonfarm payrolls measured 129,244,00. In July, they measured 133,245,000 for a gain of 4.0 million jobs in 27 months. If you measure the Reagan recovery the same way, he created 8.0 million new jobs in 27 months.
WSJ: Real Time Economics | Housing Better, Still Not Normal
Housing continues its slow creep toward stability. Normalcy is a long way off. The National Association of Realtors announced July sales of existing homes rose to an annual rate of 4.47 million, close to expectations.
WSJ: Real Time Economics | Foreigners Invest in U.S. Manufacturing
If the U.S. manufacturing revival is real, shouldn’t it be showing up at least partly as more foreign investment in American plants?

Health Care

Econ Comments & Analysis                                                                                            
Cato Institute | Rewriting Its Own Bad Obamacare Law
President Barack Obama won big when Congress passed his health care bill. But the administration made a serious mistake and now is trying to rewrite the law. Without going to Congress, as required by the Constitution.

Blogs                                                                                                                             
AEI | Markets in everything: A $5 doctor
From the Chicago Tribune, a story about an 87-year old small-town physician in Illinois who charges only $5 for an office visit, and hasn’t changed his price since the 1970s.

Monetary

News                                                                                                                             
Market Watch | Fed minutes show active discussion of QE3
Members of the Federal Reserve got closer to pushing the button on a new round of bond purchases even as a less-aggressive step of altering language on a low-rate pledge seems to be in the works, according to minutes from the most recent meeting released Wednesday.
Market Watch | Chicago Fed president urges more policy action
Federal Reserve Bank of Chicago President Charles Evans urged further monetary-policy easing Thursday, saying the U.S. central bank should take additional actions to bolster the economy, according to reported comments made in Thursday in Beijing. "Accommodation is our best defense against any shocks," Evans said, according to Dow Jones Newswires, echoing some of his previous comments on the matter. He said he saw little evidence of inflation, calling price gains in the U.S. "modest to say the least."

Taxes

News                                                                                                                             
WSJ | The Cliff the Keynesians Built
Temporary tax cuts created the fiscal threat to growth.

Econ Comments & Analysis                                                                                            
Fox Business | How the Superrich Don't Pay Taxes
...money is in pocket, but there is no tax liability because one is entitled to subtract basis from proceeds in order to determine taxable income.

Employment

News                                                                                                                             
Market Watch | U.S. weekly jobless claims rise to 372,000
Applications for U.S. jobless benefits rose slightly last week, the government reported Thursday, but the latest figures suggest little change in the nation’s underperforming labor market.
CNN Money | Obama extends pay freeze on federal workers
President Obama plans to extend the pay freeze for federal workers through next March, and then they would get a meager 0.5% increase.

Econ Comments & Analysis                                                                                            
Market Watch | Why go to college if I can't get a job?
Late summer is when parents bring their children to college. As they drive to campus they’re worried about tuition increases, the burden of student debt and whether their children will find jobs when they graduate.

Blogs                                                                                                                             
WSJ: Real Time Economics | CBO: Even if Fiscal Cliff Avoided Unemployment to Remain High
If the tax increases and spending cuts aren’t averted, the unemployment rate will rise to 9.1% at end of 2013. If they are avoided, the unemployment rate will fall just slightly, to 8.0% at the end of 2013, according to CBO’s forecasts.

Budget

News                                                                                                                             
Market Watch | Fiscal cliff would lead to 2013 recession: CBO
The U.S. government will run a budget deficit of $1.1 trillion in fiscal 2012, or 7.3% of gross domestic product, the Congressional Budget Office estimated in a new report on Wednesday.
WSJ | Greece Faces New Pressure on Cuts
European Official Says Decision on Extending Deadlines for Overhauls Will Come After Creditors Visit.

Econ Comments & Analysis                                                                                            
Heritage Foundation | CBO Budget Update: Historic Deficits Continue, Recession Threatens in 2013
Three key messages emerge from the updated budget outlook released today by the Congressional Budget Office...
Daily Finance | Which Country Goes Bankrupt Next? (Hint: It's Not Who You Think)
According to The Wall Street Journal, Belize is telling its creditors that unless they write off 45% of its debt, or give it a 15-year holiday from debt payments, the country will default on the whole shebang.
CBO | Baseline Economic Forecast—August 2012
This file supplements information in CBO's August 2012 report An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022.

Blogs                                                                                                                             
Marginal Revolution | The fiscal cliffet
"Even if the Bush tax cuts are extended and the sequester delayed, a huge amount of fiscal drag remains in place..."