News
WSJ | For Spain's Jobless, Time Equals Money
As Europe's leaders struggle with a five-year-old economic crunch that has saddled Spain with the industrialized world's highest jobless rate, young Spaniards are increasingly embracing such bottom-up self-help initiatives to cope.
Econ Comments & Analysis
Heritage Foundation | Ending Work for Welfare: Bogus Measures of Success
Last month, President Obama’s Department of Health and Human Services (HHS) illegally overturned the work requirements that were the core of the welfare reform law of 1996, which required that a portion of the able-bodied recipients in the Temporary Assistance for Needy Families (TANF) program—the successor to the Aid to Families with Dependent Children (AFDC) program—be required to work or prepare for work as a condition of receiving aid.
Blogs
WSJ: Real Time Economics | New Jobs Come With Lower Wages
During the recession, people who lost long-held jobs struggled to find new employment and often took substantial pay cuts if they did find new work. Little appears to have changed after the recession ended, a new Labor Department report shows.
Political Calculations | The Minimum Wage, The Economy and Labor Force Participation
After showing how only the reduction in the U.S. labor force participation rate has resulted in a lower unemployment rate last week, a number of commenters requested that we follow up and show how the minimum wage might factor into the situation.
Monday, August 27, 2012
Budget
News
Washington Times | German economy minister rejects more time for Greece
Germany’s economy minister has rejected calls for Greece to get more time to implement economic reforms, saying in an interview Sunday that Athens needs to respect the bailout deal reached with its international creditors.
Market Watch | ECB weighs flexible yield targets for bonds: WSJ
European Central Bank officials are weighing a plan that would use flexible yield targets to hold down borrowing costs for struggling governments, without committing to explicit caps on yields that could pose a threat to the bank's balance sheet and independence, The Wall Street Journal reported Monday, citing an unnamed person familiar with the matter.
Blogs
EconLog | U.S. Federal Budget Cuts in the 1990s
I agree that it's harder to do in the United States. But the evidence that it can be done is right under our noses: it's called the 1990s.
Washington Times | German economy minister rejects more time for Greece
Germany’s economy minister has rejected calls for Greece to get more time to implement economic reforms, saying in an interview Sunday that Athens needs to respect the bailout deal reached with its international creditors.
Market Watch | ECB weighs flexible yield targets for bonds: WSJ
European Central Bank officials are weighing a plan that would use flexible yield targets to hold down borrowing costs for struggling governments, without committing to explicit caps on yields that could pose a threat to the bank's balance sheet and independence, The Wall Street Journal reported Monday, citing an unnamed person familiar with the matter.
Blogs
EconLog | U.S. Federal Budget Cuts in the 1990s
I agree that it's harder to do in the United States. But the evidence that it can be done is right under our noses: it's called the 1990s.
Friday, August 24, 2012
General Economics
News
Market Watch | Airlines, autos boost durable-goods orders
Orders for big-ticket items such as autos and airlines surged in July, but other areas of the U.S. manufacturing sector softened for the second month in a row, according to a government report.
WSJ | U.K. Economy Shrinks Less Than Thought
In its second estimate of the second quarter, the Office for National Statistics said gross domestic product shrank 0.5% between April and June, compared with its preliminary estimate on July 25 of a contraction of 0.7%.
Bloomberg | Online Buoys Global Growth by Paring Distance: Cutting Research
Trading more online could help boost global economic growth, according to a paper published this week by the Centre for Economic Policy Research.
WSJ | France, Germany Unify Approach to Greek Talks
The official spoke after German Chancellor Angela Merkel and French President François Hollande met for a working dinner in the chancellery for a wide-ranging discussion about the euro zone and international politics.
WSJ | Sales of New Homes Climb Sharply
Sales of newly built homes rose briskly in July, and inventory fell to the lowest level on record, suggesting the housing market is showing continued signs of recovery and that builders may need to ramp up construction in the coming months.
Econ Comments & Analysis
Washington Times | LAMBRO: Obama economy even worse than anticipated
If you think the feeble economy under this administration is bad, wait until next year when the Congressional Budget Office says it could fall into another deep recession if there’s no year-end deal to forestall nearly half-a-trillion dollars in income tax hikes and spending cuts.
CBO | CBO Releases Latest Quarterly Report on ARRA’s Effect on Output and Employment
CBO’s current estimates of the economic effects of ARRA for 2009 through 2013 are nearly identical to those the agency published in May 2012. Some estimates of quarterly economic effects for 2012 and 2013 have changed slightly, reflecting minor shifts in the quarterly pattern of ARRA outlays.
NBER | When Does It Pay to Delay Social Security? The Impact of Mortality, Interest Rates, and Program Rules
We found that for current real interest rates, delaying is actuarially advantageous for a large subset of people, particularly for primary earners in married couples. In this paper, we quantify the degree of actuarial advantage or disadvantage for individuals whose mortality differs from the average.
WSJ | Regulators Captured
SEC rules have long allowed money-fund operators to employ an accounting fiction that makes their funds appear safer than they are. Instead of share prices that fluctuate, like other kinds of securities, money funds are allowed to report to customers a fixed net asset value (NAV) of $1 per share—even if that's not exactly true.
Washington Times | ANGEL: Walk, don’t run, toward money-market fund reform
Proposed “reforms” include abolishing the industry by getting rid of the stable $1 net asset value that is the essence of the product and requiring costly “capital buffers” that would tax investors far beyond any realistic estimates of risk.
Fox Business | Another Flawed Study on the 'Rich'
Pew defines median middle class income as $70,000. The income range for the middle class is fairly wide here, $39,418 to $118,255 in 2011.
Blogs
Calculated Risk | New Home Sales and Distressing Gap
This is still a very low level of sales, but clearly new home sales have bottomed and are starting to recover.
Heritage Foundation | Conflict Minerals: Another of Dodd–Frank’s Hidden Costs
On Wednesday, the Securities and Exchange Commission (SEC) adopted a little-known section (and there are many) of the Dodd–Frank financial regulation bill that will end up doing the most harm to the people in the Congo that it purports to help.
Marginal Revolution | The other Malthusian problem
After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.
AEI | My counter: Why U.S. economic growth doesn’t have to come to an end
This paper raises basic questions about the process of economic growth. It questions the assumption, nearly universal since Solow’s seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever.
Mercatus Center | One Man’s Privilege is Another’s Punishment
To make matters worse, economic theory and evidence long ago established the point that the costs borne by consumers outweigh the benefits bestowed on producers.
EconLog | Lee Ohanian on the Great Recession
So, employment today relative to the working age population is lower now than it was at the NBER-defined 2009 June trough, and it's lower today than it was at the height of the financial crisis when the stock market was falling 20%, everybody thought the world was coming to an end...
Market Watch | Airlines, autos boost durable-goods orders
Orders for big-ticket items such as autos and airlines surged in July, but other areas of the U.S. manufacturing sector softened for the second month in a row, according to a government report.
WSJ | U.K. Economy Shrinks Less Than Thought
In its second estimate of the second quarter, the Office for National Statistics said gross domestic product shrank 0.5% between April and June, compared with its preliminary estimate on July 25 of a contraction of 0.7%.
Bloomberg | Online Buoys Global Growth by Paring Distance: Cutting Research
Trading more online could help boost global economic growth, according to a paper published this week by the Centre for Economic Policy Research.
WSJ | France, Germany Unify Approach to Greek Talks
The official spoke after German Chancellor Angela Merkel and French President François Hollande met for a working dinner in the chancellery for a wide-ranging discussion about the euro zone and international politics.
WSJ | Sales of New Homes Climb Sharply
Sales of newly built homes rose briskly in July, and inventory fell to the lowest level on record, suggesting the housing market is showing continued signs of recovery and that builders may need to ramp up construction in the coming months.
Econ Comments & Analysis
Washington Times | LAMBRO: Obama economy even worse than anticipated
If you think the feeble economy under this administration is bad, wait until next year when the Congressional Budget Office says it could fall into another deep recession if there’s no year-end deal to forestall nearly half-a-trillion dollars in income tax hikes and spending cuts.
CBO | CBO Releases Latest Quarterly Report on ARRA’s Effect on Output and Employment
CBO’s current estimates of the economic effects of ARRA for 2009 through 2013 are nearly identical to those the agency published in May 2012. Some estimates of quarterly economic effects for 2012 and 2013 have changed slightly, reflecting minor shifts in the quarterly pattern of ARRA outlays.
NBER | When Does It Pay to Delay Social Security? The Impact of Mortality, Interest Rates, and Program Rules
We found that for current real interest rates, delaying is actuarially advantageous for a large subset of people, particularly for primary earners in married couples. In this paper, we quantify the degree of actuarial advantage or disadvantage for individuals whose mortality differs from the average.
WSJ | Regulators Captured
SEC rules have long allowed money-fund operators to employ an accounting fiction that makes their funds appear safer than they are. Instead of share prices that fluctuate, like other kinds of securities, money funds are allowed to report to customers a fixed net asset value (NAV) of $1 per share—even if that's not exactly true.
Washington Times | ANGEL: Walk, don’t run, toward money-market fund reform
Proposed “reforms” include abolishing the industry by getting rid of the stable $1 net asset value that is the essence of the product and requiring costly “capital buffers” that would tax investors far beyond any realistic estimates of risk.
Fox Business | Another Flawed Study on the 'Rich'
Pew defines median middle class income as $70,000. The income range for the middle class is fairly wide here, $39,418 to $118,255 in 2011.
Blogs
Calculated Risk | New Home Sales and Distressing Gap
This is still a very low level of sales, but clearly new home sales have bottomed and are starting to recover.
Heritage Foundation | Conflict Minerals: Another of Dodd–Frank’s Hidden Costs
On Wednesday, the Securities and Exchange Commission (SEC) adopted a little-known section (and there are many) of the Dodd–Frank financial regulation bill that will end up doing the most harm to the people in the Congo that it purports to help.
Marginal Revolution | The other Malthusian problem
After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.
AEI | My counter: Why U.S. economic growth doesn’t have to come to an end
This paper raises basic questions about the process of economic growth. It questions the assumption, nearly universal since Solow’s seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever.
Mercatus Center | One Man’s Privilege is Another’s Punishment
To make matters worse, economic theory and evidence long ago established the point that the costs borne by consumers outweigh the benefits bestowed on producers.
EconLog | Lee Ohanian on the Great Recession
So, employment today relative to the working age population is lower now than it was at the NBER-defined 2009 June trough, and it's lower today than it was at the height of the financial crisis when the stock market was falling 20%, everybody thought the world was coming to an end...
Monetary
Econ Comments & Analysis
AEI | The uses of LIBOR and the victims of its manipulation: A primer
Banks can collude to move the trimmed average, and traders at several financial institutions are being investigated for doing so from 2005 to 2011.
RCM | A Brief History of Modern Money's Inadequacy
The markets of capitalism cannot function over the long run without successful intermediation, but intermediation as it currently exists of interbank money and ledger money cannot be successful as it is now construed. Something has to give.
Blogs
CNN Money | Oil near $100. Thanks a lot, Fed!
The price of crude oil is getting dangerously close to $100 a barrel again. It hasn't been above that level since May. The euro has strengthened against the dollar as of late, partly due to hopes that the European Central Bank will step in and buy more Spanish bonds and also because of rising expectations for QE3.
AEI | The uses of LIBOR and the victims of its manipulation: A primer
Banks can collude to move the trimmed average, and traders at several financial institutions are being investigated for doing so from 2005 to 2011.
RCM | A Brief History of Modern Money's Inadequacy
The markets of capitalism cannot function over the long run without successful intermediation, but intermediation as it currently exists of interbank money and ledger money cannot be successful as it is now construed. Something has to give.
Blogs
CNN Money | Oil near $100. Thanks a lot, Fed!
The price of crude oil is getting dangerously close to $100 a barrel again. It hasn't been above that level since May. The euro has strengthened against the dollar as of late, partly due to hopes that the European Central Bank will step in and buy more Spanish bonds and also because of rising expectations for QE3.
Health Care
Econ Comments & Analysis
Cato Institute | Romney and Obama: Both Wrong on Medicare
Obama's implication that current seniors would lose their Medicare benefits under Romney's plan is particularly dishonest.
Blogs
Heritage Foundation | Debunking Medicare Reform Myths
Premium support is the only reform option that will ensure that Medicare is still around for future generations. It also has the added advantage of a long history of bipartisan support.
Cato Institute | Romney and Obama: Both Wrong on Medicare
Obama's implication that current seniors would lose their Medicare benefits under Romney's plan is particularly dishonest.
Blogs
Heritage Foundation | Debunking Medicare Reform Myths
Premium support is the only reform option that will ensure that Medicare is still around for future generations. It also has the added advantage of a long history of bipartisan support.
Taxes
Econ Comments & Analysis
Fox Business | One Tool Left to Jumpstart Economy: Lower Taxes
Today the story is troubling -- more so than in any other time I can remember. The tool of lowering interest rates is no longer available to us. Rates are basically at zero and we obviously cannot lower them any further.
Fox Business | One Tool Left to Jumpstart Economy: Lower Taxes
Today the story is troubling -- more so than in any other time I can remember. The tool of lowering interest rates is no longer available to us. Rates are basically at zero and we obviously cannot lower them any further.
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