Monday, September 17, 2012

General Economics

Bloomberg | Manufacturing in New York Region Shrinks More Than Forecast
Manufacturing in the New York region contracted more than forecast in September as orders shrank, a sign the world’s largest economy will get less support from the industry.
CNN Money | Obama's college tuition plans face tough fight
In his re-election campaign, President Obama says he wants to cut the growth of college tuition in half over the next decade.
WSJ | Euro-Zone Trade Surplus Widens, Wages Rise
The euro zone's trade surplus widened in July as imports fell, while wages picked up in the second quarter, suggesting the currency area's economy is unlikely to contract deeply this quarter.
Bloomberg | U.S. Challenges China Trade Subsidies on Cars, Auto Parts
The U.S. filed its second car- related complaint against China at the World Trade Organization since President Barack Obama began his re-election campaign, accusing the Asian nation of illegally subsidizing exports of automobiles and auto parts.
WSJ | U.S. to File WTO Charges on China
The Obama administration plans to announce Monday it will file new World Trade Organization complaints against China, charging Beijing with violations on automobiles and automobile parts, people familiar with the cases said.
Bloomberg | Euro-Region Exports Decline, Adding to Slowdown Signs: Economy
Euro-area exports declined in July, adding to signs of a recession after the economy was pushed into a contraction in the second quarter.

Econ Comments & Analysis                                                                                            
WSJ | A Watershed for Democrats and Unions
The Chicago teachers strike moved toward settlement over the weekend, but fell short. A question hanging over the negotiations: What has the strike really been about?
CATO | No Way to Run an Economy
One defining characteristic of cronyism is that politically connected businesses and industries get special favors from the government.
Real Clear Markets | We May Be In For Another Malaise Worthy of "Great"
To finance World War II, the government ran massive deficits that were underwritten not so much by patriotic expressions of "war bonds", but by a central bank peg to the interest cost on government debt. In other words, the Federal Reserve agency oriented monetary policy so that bank reserves would be tied to the ability of private banking concerns to purchase government bonds at fixed rates of interest.
WSJ | The Magnitude of the Mess We're In
Sometimes a few facts tell important stories. The American economy now is full of facts that tell stories that you really don't want, but need, to hear.
Bloomberg | About Those Policies That Got Us Into This Mess
“They want us to go back to the same old policies that got us into this mess in the first place.”
The American | U.S. Manufacturing’s Brave New World
After losing 6 million manufacturing jobs between 2001 and 2009, the American manufacturing sector has reemerged as a beacon in an otherwise lackluster economic recovery.
NBER | The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications
We study the cyclical properties of sales, regular price changes and average prices paid by consumers (“effective” prices) in a dataset containing prices and quantities sold for numerous retailers across a variety of U.S. metropolitan areas.

CATO | Can I Get Some Free Trade in My Free Trade Agreements?
Last week, I voiced several complaints about the Trans Pacific Partnership, the main trade agreement being negotiated by the U.S.  Let me add another concern: There’s too much protectionism in this “free trade” agreement. 
Calculated Risk | Schedule for Week of Sept 16th
There are three key housing reports to be released this week: September homebuilder confidence on Tuesday, and August housing starts and August Existing Home sales, both on Wednesday.
Library of Economics | Questions for Austrians
What are some important, substantive economic claims that can be known a priori?
Calculated Risk | Unofficial Problem Bank list declines to 886 Institutions
There were two removals and one addition to the Unofficial Problem Bank List, which leaves it standing at 886 institutions with assets of $330.5 billion. A year ago, the list held 984 institutions with assets of $402.4 billion.
Political Calculations | What's Your Income Percentile?
Now that the U.S. Census has released its total money income data it collected as part of its 2012 Annual Social and Economic Supplement survey, we can tell you almost exactly where you rank among American individuals, men (if you're a man), women (if you're a woman).
Calculated Risk | August Update: Early Look at 2013 Cost-Of-Living Adjustments indicates 1.4% increase
The BLS reported this morning: "The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.7 percent over the last 12 months to an index level of 227.056 (1982-84=100).
WSJ | Number of the Week: Top 20% of Earners Take Home 51% of All Income
51.1%: The share of all income going to the top 20% of earners.
Daily Capitalist | ECRI: The 2012 Recession
The Economic Cycle Research Institute (ECRI) came out yesterday with a defense of its much criticized recession call. As readers know I am cautious about their calls mainly because they use a “blackbox” proprietary methodology which is kept secret by them (in order to justify their high fees). But they have an extraordinary record.

Health Care

National Journal | OMB Sequester Report Protects Two ACA Programs
Two programs established in President Obama's signature 2010 health reform law would be protected from being part of the sequester's automatic $1.2 trillion cut if the standoff between Congress and the White House over the "fiscal cliff" is not resolved.

Econ Comments & Analysis                                                                                            
AEI | The encroaching fiscal cliff: Health care edition
Newspapers and airways are chock full of warnings about the fiscal cliff the country is getting ready to topple over when scheduled tax increases and spending cuts kick in on January 1, 2013.

Heritage Foundation | Medicare Roundup: Setting the Record Straight
In recent weeks, liberal politicians, editorialists, and policy analysts have vigorously attacked reforming Medicare based on defined-contribution financing.


WSJ | Fed Move Echoes World-Wide
As the Federal Reserve begins a fresh effort to juice the economic recovery by pouring tens of billions of dollars into U.S. credit markets, ripples already are lapping on the shores of emerging markets.

Econ Comments & Analysis                                                                                            
Forbes | The Fed's Futile Effort To Bail Out Obamanomics
The fundamental problem is the Fed’s policy stance is internally incoherent.  Stabilizing the value of the dollar would require the Fed to provide as much, or as little, money as the world demands at a stable price level.  In other words, price stability requires the quantity of money to be the variable.
Real Clear Markets | Obamanomics Has Failed Dismally (And Ben Bernanke Can't Bail It Out)
About thirty years ago, Paul Volcker launched a monumental monetary effort to bring down inflation. As Fed chairman, he sold bonds, removed cash from the economy, and cared not one wit about rising interest rates. And it worked.
CNBC | Does Quantitative Easing Mainly Help the Rich?
Last month, the Bank of England issued a report that must have made Fed chairman Ben Bernanke squirm.
AEI | Bernanke goes to war armed with QE3
The Fed's move into QE3 marked a sharp change in tone from Chairman Ben Bernanke and the FOMC. While markets were pleased by the move, Bernanke's strategy may be something we soon come to regret.
Washington Times | Bernanke’s more-placebo policy
The problem with Washington is there’s no interest in any cure to our economic ills that has the side effect of angering powerful special interests. On the left, there’s no desire to trim government spending that public-sector unions depend upon.
Washington Post | Bernanke on the brink
We are reaching — or may already have passed — the practical limits of “economic stimulus.”

Minyanville | The Absurdity of the Fed's Monetary Policy (and Some Tradeable Setups)
If you and I did what the Fed has been doing (and will do more of), we’d go to jail for forgery and passing counterfeit currency.  Since the Fed does it, it’s called “monetary policy”.  It won’t create any more jobs than the first two bouts of forg…err…monetary policy, but it will inflate everything. 
Calculated Risk | Key Measures show slowing inflation in August
According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.8% annualized rate) in August.
Economist | A victory, and a test
Yesterday, Tyler Cowen has declared, was Scott Sumner day. That strikes me as a fair honour to bestow. For it does appear that the Federal Reserve's statement yesterday represented a subtle but perceptible shift in monetary policy strategy—one that probably would not have occurred without Mr Sumner's efforts.
WSJ | Calling the Dollar the Loser From Fed Action May Be Premature
The Federal Reserve has announced quantitative easing as we have never seen it before. And the U.S. currency’s reaction to it could be just as unpredictable.
Free Banking | 2003 Redux, or, Why Market Monetarists Had Better Start Talking About the Dangers of QE3
In the title of a recent post Scott Sumner jokingly wonders whether, having been credited by the press for badgering Ben Bernanke's Fed until it at last cried "uncle!" by announcing QE3, he now needs to worry about going down in history as the guy who gave the U.S. its first episode of hyperinflation.


Washington Post | Mere threat of tax cliff already weighing heavily on small businesses
Small business owners, like so many Americans, are anxiously waiting to see whether Congress can avoid potentially catastrophic spending cuts and tax code revisions scheduled to take place at the end of the year. But already, just the threat of toppling over the tax cliff is weighing on their decisions and bottom lines.

Tax Foundation | NYC Ban on Large Sodas Plagued by Same Problems as Soda Excise Taxes
On Thursday the New York City Board of Health approved the ban of sodas and large sugary beverages over 16 ounces originally proposed by Mayor Michael Bloomberg. The ban is part of a nationwide trend of government on all levels considering new taxes and bans on soda, sugary beverages, and candy in order to fight what many have called an “obesity epidemic.”
CATO | Tax Rates Impact Economic Performance, but other Policies also Matter
I’m a big fan of fundamental tax reform, in part because I believe in fairness and want to reduce corruption. But I also think the flat tax will boost the economy’s performance, largely because lower tax rates are the key to good tax policy.


FOX News | American prison labor means longer unemployment lines
Two southeast companies that make U.S. military uniforms are shedding hundreds of jobs, as the government looks to federal inmates for the fatigues.

FOX Business | Generation Underemployed: How Grads Can Land Their Desired Job
Despite having a diploma in hand, many college grads are finding themselves in the same type jobs they were working at before and during their college years.
Political Calculations | Update: Major Trends in New Jobless Claims
Today, we're updating our ongoing statistical analysis of the major trends in the weekly number of new jobless benefit claims in the U.S. since the end of 2005.


WSJ | Spain Is Reluctant to Make More Cuts
Spain's government is facing an autumn of angry street protests by a recession-weary public, even after telling its European partners that its next steps to overhaul the economy would avoid further cuts in public spending.
USA Today | Shrinking household debt is good sign for 2013 economy
Consumers' out-of-control debt loads helped spark the recession, but households are rapidly getting their balance sheets back into shape.
WSJ | Federal Budget Cuts Detailed
Automatic spending reductions set to begin in January would cut $109 billion from the federal budget through Sept. 30, 2013, including broad cuts to the military, food safety and U.S. embassy security, a new report from the White House said Friday.

Econ Comments & Analysis                                                                                            
Forbes | Get Ready For The Most Fiscally Destructive Lame Duck Presidency Ever
America rapidly approaches a precipice where previously negotiated budget gimmicks will cut $109 billion from federal spending come January. While statistically unaesthetic for calculating GDP, curtailing Washington’s footprint is financially necessary.
Market Watch | Spending cuts would be devastating: White House
Automatic spending cuts set to begin in January would have a “devastating” effect on both defense and domestic programs, the White House’s Office of Management and Budget said in a report on Friday.