Tuesday, October 9, 2012

General Economics

WSJ | IMF Sees Euro-Zone Countries Missing Deficit Targets
France, Spain and several other euro-zone governments won't hit budget deficit targets agreed to with European authorities, the International Monetary Fund said Tuesday, setting the stage for a contentious debate over whether the governments should pursue more cuts or allow the targets to slip.
CNN Money | Iraq oil output to double by 2020: IEA
Iraqi oil production could double by the end of this decade, putting the country on track to become the second-biggest supplier to world markets after Saudi Arabia by the 2030s, the International Energy Agency said Tuesday.
WSJ | OECD Points to Further Slowdown
Most major economies are to slow further in coming months, with only Brazil and the U.K. to experience a moderate pickup, according to the Organization for Economic Cooperation and Development's composite leading indicators.
Market Watch | IMF cuts 2012, 2013 global growth forecasts
The International Monetary Fund on Tuesday revised down its projections for global growth for this year and next, citing lower growth prospects and higher risks.
Market Watch | Social Security rise may be 1.7%: study
Social Security recipients may get a cost-of-living increase between 1.5% to 1.7%, according to the American Institute for Economic Research.
FOX News | Survey: Small business owners grow more pessimistic as employment and sales remain weak
A survey released Tuesday by the National Federation of Independent Business shows that owners became more pessimistic during September as employment and sales remained weak. The NFIB's index of owner optimism fell 0.1 point to 92.8.

Econ Comments & Analysis                                                                                            
CATO | Countervailing Calamity: How to Stop the Global Subsidies Race
The world is awash in trade-distorting subsidies. Since the financial crisis of 2008, governments have adopted massive "stimulus" packages that have included taxpayer subsidies for industries, such as agriculture, alternative energy, and automobiles, which have distorted global markets, bred cronyism, and undermined free trade.
NBER | Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines
Measures of entrepreneurship, such as average establishment size and the prevalence of start-ups, correlate strongly with employment growth across and within metropolitan areas, but the endogeneity of these measures bedevils interpretation.
Washington Times | A class-action blow to U.S. manufacturing
The U.S. Supreme Court has until Friday to determine whether it will hear an appeal involving a class-action lawsuit against Whirlpool, the nation’s largest washing machine manufacturer. Until then, the future of all manufacturing in the United States hangs in the balance.
WSJ | Biting the Bank That Saved You
The U.S. Department of Justice and New York Attorney General Eric Schneiderman teamed up last week to sue J.P. Morgan in a headline-grabbing case alleging the fraudulent sale of mortgage-backed securities.
Real Clear Markets | Obama Asks Big Business to Break the Law
The White House has initiated an effort, possibly extra-legal, to head off required layoff notices to employees of defense contractors on the cusp of Election Day. Worse, without congressional approval, it has offered to pay firms' penalties and court costs, potentially $500 million or more, out of the Pentagon budget.
WSJ | California's Green Gas Shortages
Californians are grumbling about a gas price spike, which state officials blame on disruptions in the supply chain. Actually, they're paying through the nozzle for their greener-than-thou government.
Real Clear Markets | Small Businesses Innovate Around Government Barriers
U.S. "small businesses", unlike like their "big business" brethren, are the fodder of election year speeches, with political candidates enshrining American entrepreneurs with the true spirit of capitalism. This year is no different, but this year the definition of what political candidates are referring to as a "small business" has changed - at least according to the U.S. Department of Commerce's Small Business Administration (SBA).
WSJ | How to Restore Confidence in the Financial Markets
Virtually every developed nation today suffers from the reluctance of investors and CEOs to invest in new businesses, jobs or ideas. Investors have adopted a wait-and-see attitude because markets are missing the two components essential for confidence: trust and certainty.

Calculated Risk | Schedule for Week of Oct 7th
Early in the week, the focus will be on Europe with a report due on Greece, the ESM becoming active, and a finance minister meeting.
Political Calculations | Which Obama Policy Killed the Recovery?
Not long ago, we used stock market-style technical analysis to reveal that the policies implemented during President George W. Bush's tenure in office were most likely responsible for launching the economic recovery that followed the December 2007 recession and that the policies implemented during President Barack H. Obama's tenure in office were most likely responsible for derailing that recovery.
Calculated Risk | Unofficial Problem Bank list declines to 873 Institutions
Very quiet week for the Unofficial Problem Bank List with only removal.

Health Care

Bloomberg | Mississippi Fights Over Health Law as States Resist Key Element
In Mississippi, where one in five people lack health insurance, two Republican elected officials are fighting over the best way to resist President Barack Obama’s health-care overhaul.

Heritage Foundation | Chart of the Week: Poor, Middle Class Hit by Obamacare Mandate Tax
With campaign season in full tilt, Americans are being inundated with rhetoric regarding the various tax proposals touted by President Obama and Governor Romney.
Marginal Revolution | How much would it matter if we deregulated health insurance across state lines?
Allowing insurance sales across state lines comes up perennially as a way to drive down the cost of health care.


Reuters | New U.S. stress test needed: higher interest rates
“Don’t fight the Fed,” the saying goes. The U.S. Federal Reserve is promising ultra-low interest rates into 2015. Yet the buildup of low-yielding debt on financial firms’ balance sheets means they may suffer badly if rates jump. The central bank aside, prudent bosses – and their watchdogs – need to ensure they are avoiding fights with history, too.


Econ Comments & Analysis                                                                                            
WSJ | Welfare for Hollywood
The Hollywood fashion "hobo chic" probably seems bizarre to most people. But perhaps celebrities are merely emulating the well-heeled production companies that have just hit up California taxpayers for another $200 million. Is this what Hollywood liberals call social justice?
Washington Times | A world without income taxes
Why should the federal government bother to impose taxes when it can use the Federal Reserve to “print” all the money it needs to pay its bills?


Market Watch | The downside of an older workforce
Encore: Workers 55 and up now make up a bigger part of the employed population -- a trend some pros say could hurt economic growth.

Econ Comments & Analysis                                                                                            
WSJ | Why Jobs Surveys Don't Always Tell the Same Story
Employers added a relatively modest 114,000 jobs in September, but the unemployment rate registered its biggest drop in nearly two years. What explains the disparity?
Real Clear Markets | Fake Jobs Numbers Would Look Better Than This
When the Bureau of Labor Statistics (BLS) reported on Friday that the unemployment rate had fallen to 7.8% in September, some observers wondered if the numbers had been "cooked" for political purposes. They can relax. Fake jobs numbers wouldn't look as bad as these.
WSJ | Happy Days Are Not Here Again
The jobless rate fell in September to 7.8% from 8.1%, though the economy created only 114,000 new jobs, and some of our conservative friends smell a bureaucratic rat so close to Election Day. We doubt the Labor gnomes are manipulating the numbers, and in any case chasing conspiracies detracts from the real news, which is that the job market still stinks.
Fortune | Why the unemployment rate won't keep dropping
It was either an average month for job growth, or one of the best months in nearly three decades. In the September jobs numbers, there was evidence for both.

WSJ | Flowing Through the Labor Market
The following charts examine how the patterns of flows have changed over the past 22 years. The unemployed are remaining so longer, while they are now more likely to drop out of the labor force than to find a job.
Library of Economics | BLS Data
The Bureau of Labor Statistics had not finished releasing the surprisingly good September data that a number of commentators started raising doubts about the truthfulness of the data. There is no doubt that the data were a boost to President Obama, a boost coming at a difficult moment, when the President's lead is faltering. Yet, is this motive sufficient to convict?
WSJ | Impossible to Manipulate Labor Survey Data — Former BLS Head
Even if the U.S. government wanted to manipulate monthly jobs figures, it would be impossible to accomplish, said a former head of the U.S. government’s labor statistics agency.
Political Calculations | Teens Stuck in the Basement
The big news with the September 2012 employment situation report is that it added 873,000 people to the count of the number of employed individuals in the U.S. thanks to an unexpected adjustment in the BLS' monthly count.
Library of Economics | The Latest Unemployment Figures
Our new co-blogger, Luigi Zingales, in his first post, has done an excellent job of dispelling the conspiracy theory that political operatives in the Obama administration "got to" the professionals in the Bureau of Labor Statistics who gather and report unemployment data. By the way, welcome, Luigi.
WSJ | Part-Time Work Can’t Support Full-Time Spending
As usual, Friday’s employment report came with some unexpected twists.
Political Calculations | Is Unemployment Set to Explode?
Now that the average price of gasoline in the United States is clocking in at all-time record levels for this time of year, especially in California, what effect will that factor have upon the official U.S. unemployment rate, which just clocked in at its lowest level since early 2009?
WSJ | More People Over 65 Are Still Working
U.S. labor market participation rates have been running at 30-year lows, but for one group — 65 years old and over — participation in the labor force continues to ramp up.
AEI | Why Gallup’s chief economist says the big drop in the unemployment rate ‘should be discounted’
You can count pollster Gallup as another observer questioning Friday’s job report, in particular the big drop in the unemployment rate. In a blog post, Dennis Jacobe, Gallup’s chief economist, writes that he seriously doubts whether the economy created nearly 900,000 jobs in September, as measured by the Labor Department’s seasonally adjusted household survey.


Bloomberg | U.S. Downgrade Seen as Upgrade as U.S. Debt Dissolved
U.S. debt has shrunk to a six-year low relative to the size of the economy as homeowners, cities and companies cut borrowing, undermining rating companies’ downgrading of the nation’s credit rating.

Econ Comments & Analysis                                                                                            
WSJ | Another Year, Another $1 Trillion-Plus
One October irony is that even as President Obama hits Mitt Romney for lacking details and the press demands answers about the tax treatment of municipal bond interest, nobody seems interested in the substance of Mr. Obama's supposed $4 trillion deficit reduction plan. Maybe someone will ask after Friday's report showing another $1 trillion-plus deficit for 2012.

Economist | Let go of the brakes
Fiscal policy could be a lot better, in a lot of countries. This is the unavoidable conclusion from reading the IMF’s updated Fiscal Monitor presented this morning in Toyko.