Economics Roundtable

Technical Problems 3/9/15

The website was down several hours today, but is back up now.


May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


Jobs

The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .


Click on the image to get a bigger version.


Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.


Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?


Click on the chart for a larger version.


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- Recent Entries


May 22, 2015, 1:03 pm, 1479128

The Commerce Department on Friday said it is planning a series of steps to smooth out statistical quirks that may be affecting quarterly gross domestic product data.

The move could make first (and fourth) quarters of the year a little less bad and the rest of the year a little ...


May 22, 2015, 1:03 pm, 1479127

The Obama administration is risking its credibility over the trade deal:

Trade and Trust, by Pau Krugman, Commentary, NY Times: One of the Obama administration’s underrated virtues is its intellectual honesty. Yes, Republicans see deception and sinister ulterior motives everywhere, but they’re just projecting. The truth is that, in ...


May 22, 2015, 1:03 pm, 1479126

One of the enduring puzzles of international finance is the fact that the joint hypothesis of uncovered interest parity and rational expectations is consistently rejected, as evidenced by the coefficient estimates in the Fama regression.

The typical approach is to estimate a regression of the ex post change (in logs) ...


May 22, 2015, 1:03 pm, 1479125
The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.2% annualized rate) in April. The 16% trimmed-mean Consumer Price Index also rose 0.2% (2.2% annualized rate) during the month. The ...


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May 22, 2015, 12:35 pm, 1479115

By James Kwak

One of the central dramas of the early seasons of The Wire is the cat-and-mouse game between Avon Barksdale’s drug operation and the detectives of the Major Crimes Unit. The drug dealers started off using pagers and pay phones. When the police tapped ...


May 22, 2015, 12:04 pm, 1479114

Vorige maand heb ik hier uitgelegd waarom ik er niet van overtuigd ben dat Thomas Piketty’s Kapitaal in de 21ste eeuw de status van openbaring over mens en maatschappij verdient die zovelen het willen toekennen. Piketty’s theorie van het kapitalisme en zijn feitelijke bevindingen over de rol van het kapitaal ...


May 22, 2015, 12:04 pm, 1479113

Daar was-ie weer, afgelopen dinsdag: de jaarlijkse State of the Union-toespraak. De Amerikaanse grondwet gebiedt de president om “van tijd to tijd” het Congres informatie te geven over de toestand van de Unie, en om maatregelen aan te bevelen die hem nuttig en noodzakelijk lijken. De eerste twee presidenten, George ...


May 22, 2015, 12:04 pm, 1479112

Veel van Thomas Piketty’s boek Kapitaal in de 21e Eeuw bestaat uit voorspellingen en doemdenken, en daar ga ik het vandaag over hebben. In eerdere afleveringen van deze serie heb ik enkele van de problemen besproken die ik zie met de theorie, data, en beleidsvoorstellen van de beste man, maar ...


May 22, 2015, 12:04 pm, 1479111

Jaarlijks verschijnen honderden boeken die een serieuze bespreking verdienen. Sommigen weten daarbij ook de tijdsgeest te vatten. Een enkele heeft een grensoverschrijdende impact. Waarom werd uitgerekend Piketty’s Kapitaal in de 21ste eeuw zo’n boek?

In de voorafgaande vier afleveringen van deze serie over Thomas Piketty’s Kapitaal in de 21e Eeuwheb ik ...


May 22, 2015, 12:04 pm, 1479110

Not only that, it’s growing faster as these two charts (above and below) from FiveThirtyEight’s Andrew Flowers show:

OK, so what’s the explanation? Flowers takes threes shots at it:

With a slew of mergers and acquisitions — like the Verizon-AOL deal — big ...


May 22, 2015, 11:23 am, 1479109

The pseudo-debate about whether Keynesians and other fellow travellers ought to be embarrassed when governments that engage in fiscal austerity nevertheless experience positive economic growth rates has become a distraction.

For countries like the US and the UK, it is possible under current circumstances for governments to implement budget cuts and still see their economies grow. But the truth of that statement ...


May 22, 2015, 11:03 am, 1479048

Tax treatment of beer varies widely across the U.S., ranging from a low of $0.02 per gallon in Wyoming to a high of $1.29 per gallon in Tennessee. Check out today’s map below to see where your state lies on the beer tax spectrum.


May 22, 2015, 11:03 am, 1479047

Pascal Saint-Amans is Director of the OECD’s Centre for Tax Policy and Administration (CPTA).

Under a mandate from the G20 leaders, Mr. Saint-Amans is directing one of the most significant transnational efforts in the history of international taxation, the OECD’s Base Erosion and Profit shifting (BEPS) project. Regardless of ...


May 22, 2015, 11:03 am, 1479045
At high-school graduations across the country a familiar question will be asked: What’s next? The collective answer will offer some clues about the labor market for young people, and even their future earnings.


May 22, 2015, 11:03 am, 1479044
Pedestrians walk down Oxford Street in central London. BOE Gov. Mark Carney said much of the recent weakness in U.K. inflation has been due to food and energy prices.


May 22, 2015, 11:03 am, 1479046

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, May 22, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Blackstone’s Take: ECB Turns Up Heat on Governments Fed Proposes Relaxing Rules Impacting Municipal Bonds


May 22, 2015, 11:03 am, 1479043
Shoppers—who probably do not even know the shape of the U.S. income distribution or the Gini coefficient—look at jewelry at the Cartier store on Rodeo ...


May 22, 2015, 11:03 am, 1479042
Students study math at the Ridings Federation Winterbourne International Academy in South Gloucestershire, England, in February. MATT CARDY/GETTY IMAGES

It’s an age-old tradeoff in economics: Should a ...


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May 22, 2015, 10:35 am, 1479037

One effect of growing old is that you get to see history being rewritten. So, I fear, it is with the description of Liz Kendall as being a Blairite because she rejects the idea that England has moved leftwards and supports Toryish policies such ...


May 22, 2015, 10:34 am, 1479036
Teaser:

Occupational ...


May 22, 2015, 10:05 am, 1479033

How realistic is it to directly send data in and out of the brain? That is the core scientific innovation underlying my novels. From a longer piece in which I discuss neurotechnology. (The Ultimate Interface: Your Brain):

Neural implants could accomplish things no external interface could: Virtual and augmented reality ...


May 22, 2015, 10:04 am, 1479032
(May 22, 2015 11:41 AM, by David Henderson) Bob Murphy has done a huge service by laying out clearly the economic reasoning behind my conclusions (here and here) that: (1) you can't make interpersonal utility comparisons and (2) utility is ordinal, not cardinal. His piece is not long... (0 COMMENTS)


May 22, 2015, 10:04 am, 1479031
(Don Boudreaux)

… is from page 223 of the 5th edition (2015) of Thomas Sowell’s Basic Economics:

Just as businesses seek to have ...


May 22, 2015, 10:04 am, 1479030


May 22, 2015, 10:04 am, 1479028

The Islamic State (ISIS, ISIL, Daesh) has reportedly seized Palmyra, an ancient city known for some of the best preserved Roman ruins outside of Rome. Syrians and outsiders fear that the Islamic State will destroy the site. After all, they have already bulldozed Nimrud, smashed artifacts in the Mosul museum, ...


May 22, 2015, 10:04 am, 1479029

Wise words from Warren Buffett. The Oracle of Omaha predicts how the rush to sharply raise the minimum wage will end. (Spoiler: badly for the people the policy purports to help.) And Buffett also offers a smart alternative to help low-income workers:

In my mind, the country’s economic policies ...


May 22, 2015, 10:04 am, 1479027

Earlier this week, Jenn Hatfield, Elizabeth English, and I released a paper on charter school authorizing.  In it, we made two pretty straightforward arguments. First, there are things that are appropriate for charter school authorizers (and the legislators that write charter school policy) to ask schools to demonstrate before they ...


May 22, 2015, 10:04 am, 1479026

Twee weken geleden heb ik op deze plek kort besproken wat er zoal niet klopt aan de theoretische onderbouwing van de centrale theses in Thomas Piketty’s Kapitaal in de 21ste eeuw, en dat is een hoop. Maar wat veel linkse recensenten en economen vooral als een dolle verkondigden zodra ze ...


May 22, 2015, 9:03 am, 1478960
Fed officials debated whether there is a lower, ‘new normal’ level of neutral interest rates at their April meeting, minutes showed.  J. SCOTT APPLEWHITE/ASSOCIATED PRESS

Did the ...


May 22, 2015, 9:03 am, 1478959
The ECB will no longer distribute to journalists advance copies of speeches under embargo following a snafu earlier this week with a speech by Executive Board member Benoit Coeuré.


May 22, 2015, 9:03 am, 1478957
Toledo, Ohio, continued to shrink in 2013-14, according to analysis of Census Bureau data by demographer William Frey. JOSHUA A. BICKEL FOR THE WALL STREET JOURNAL

As ...


May 22, 2015, 9:03 am, 1478958
The 2010 Dodd-Frank law created the new vice chairman post at the Fed’s seven-member board of governors. J. SCOTT APPLEWHITE/ASSOCIATED PRESS

Federal Reserve Chairman Janet Yellen ...


May 22, 2015, 9:03 am, 1478953
SPENCER PLATT/GETTY IMAGES

What if banks could tap into their vast network of consumer and business accounts to ferret out signals about where the economy is headed?

J.P. Morgan Chase ...


May 22, 2015, 9:03 am, 1478954
The Bank of England. Investors expect the BOE to begin raising short-term interest rates in mid-2016. Zuma Press

LONDON—The recent slump in the oil price may have ...


May 22, 2015, 9:03 am, 1478955

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, May 21, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Is the Fed’s 2% Inflation Target Too Low? Fed Minutes Show June Rate ...


May 22, 2015, 9:03 am, 1478956
Reuters

The Bank of Russia has intervened again on currency markets to replenish its hard-currency reserves and has indicated it may increase the volume of daily interventions in the ...


May 22, 2015, 9:03 am, 1478952
Pew Research Center found that 61% of Germans and 56% of Americans say they are saving for retirement. In Italy, the figure drops to only 23%. But Italians are also ...


May 22, 2015, 9:03 am, 1478949

The unemployment rate for foreign-born workers in the U.S. fell to 5.6% in 2014 from 6.9% in 2013, the Bureau of Labor Statistics reported Thursday, reflecting the overall firming up of the ...


May 22, 2015, 9:03 am, 1478951
Brixton Pound notes. brixtonpound.org

One of the main contenders in this weekend’s local elections in Barcelona, Spain’s second-largest city, recently made an eye-catching pledge: To create a ...


May 22, 2015, 9:03 am, 1478948

PALO ALTO, Calif.–Federal Reserve Bank of San Francisco President John Williams said Thursday inflation targets are important in creating effective monetary policy.
Speaking at a conference held by Stanford University’s Hoover Institution, Mr. Williams observed briefly that price targets like the Fed’s 2% inflation goal make the Fed “formally and ...


May 22, 2015, 9:03 am, 1478947
Wall Street’s biggest banks said before the Fed’s April meeting they expected the first interest rate increase in September. Bloomberg News

Wall Street’s biggest banks told the ...


May 22, 2015, 9:03 am, 1478950

Europe’s Economic and Monetary Union will “very likely” survive its current crisis, but greater fiscal integration is needed for the eurozone’s future, the U.S. central bank’s No. 2 official said Thursday.

“The decision to use the single currency to drive the European project forward was a risky one, and at some ...


May 22, 2015, 9:03 am, 1478945

Federal Reserve Bank of San Francisco President John Williams said Thursday monetary policy rules could have benefits for central bank policy making.

But in order for these rules to be truly effective, they have to be able to say something about what the Fed would do when short-term rates need to ...


May 22, 2015, 9:03 am, 1478946

PALO ALTO, Calif.–A former U.S. central bank governor opened the kimono on Federal Reserve decision making, saying little real debate happens at the bank’s monetary policy gatherings.

Speaking Thursday, Kevin Warsh told a conference held by Stanford University’s Hoover Institution that, by and large, gatherings of the rate-setting Federal Open ...


May 22, 2015, 9:03 am, 1478944
Bank of England Deputy Governor Minouche Shafik said she expects wage growth and productivity growth to resume in the U.K. and for the recent weakness of inflation to pass.


May 22, 2015, 9:03 am, 1478942

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, May 22, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Blackstone’s Take: ECB Turns Up Heat on Governments Fed Proposes Relaxing Rules Impacting Municipal Bonds


May 22, 2015, 9:03 am, 1478943
Andrew Harrer/Bloomberg News

Bank of Japan Gov. Haruhiko Kuroda hit a more upbeat note about the nation’s economy Friday, saying the central bank has effectively raised its view of ...


May 22, 2015, 9:03 am, 1478941
At high-school graduations across the country a familiar question will be asked: What’s next? The collective answer will offer some clues about the labor market for young people, and even their future earnings.


May 22, 2015, 9:03 am, 1478940
From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index declined 0.2 percent before seasonal adjustment.


May 22, 2015, 8:44 am, 1478939
The economy could yet rebound from its blues, but a sharper downward shift would rattle the 2016 race and reveal many of the candidates as unprepared for the deeper discussion.


May 22, 2015, 8:44 am, 1478938
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May 22, 2015, 8:44 am, 1478937
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May 22, 2015, 8:35 am, 1478936
How’s that second-quarter rebound holding up? Well, it’s shaky. The economic reports in the weeks ahead could tell us otherwise, but the numbers published so far for May offer a mixed bag of results for the US economy. Let’s start with the good news. The outlook is certainly positive from ...


May 22, 2015, 8:35 am, 1478935

Congress will be in recess next week. The Daily Deduction will post on Tuesday, May 26, 2015, after Memorial Day, and will return to its regular schedule on Monday, June 1.

Wisconsin’s GOP: Tax bikes to pay for bike paths, use tax dollars to expand private schools. Presidential hopeful Governor Scott ...


May 22, 2015, 8:04 am, 1478932
(Don Boudreaux)

In this earlier post I argued that if real-world hikes in the minimum wage were in fact ...


May 22, 2015, 7:33 am, 1478926

Based on my very small--so far--sample, these interviews seem to be a bit above the usual celebrity chats.


May 22, 2015, 7:33 am, 1478925

The study was published in Science, so this is a big deal: "A researcher apparently made up the results of the much-publicized study, as revealed Tuesday by scientists trying to replicate it."

Related: "As A Major Retraction Shows, We’re All Vulnerable To Faked Data". (As the old joke goes, ...


May 22, 2015, 7:33 am, 1478924

Featuring a brief discussion of Dylan's affection for punk and a ringing, rocking performance of "Jokerman". (What the lyrics might mean.)

More good Letterman: "David Letterman retires: His most notable interviews". This is a fine selection including two at the peak of his form, with ...


May 22, 2015, 7:23 am, 1478923
I sometimes wonder if we expect more than we should from democracy


May 22, 2015, 7:03 am, 1478890
Bank of England Deputy Governor Minouche Shafik said she expects wage growth and productivity growth to resume in the U.K. and for the recent weakness of inflation to pass.


May 22, 2015, 7:03 am, 1478889
Andrew Harrer/Bloomberg News

Bank of Japan Gov. Haruhiko Kuroda hit a more upbeat note about the nation’s economy Friday, saying the central bank has effectively raised its view of ...


May 22, 2015, 7:03 am, 1478888
According to Black Knight's First Look report for April, the percent of loans delinquent increased 1% in April compared to March, and declined 15% year-over-year.

The percent of loans in the foreclosure process declined 2% in March and were down 25% over the last year.

Black ...


May 22, 2015, 6:44 am, 1478887
The economy could yet rebound from its blues, but a sharper downward shift would rattle the 2016 race and reveal many of the candidates as unprepared for the deeper discussion.


May 22, 2015, 6:35 am, 1478886
● US Manufacturing PMI eases to 16-month low in May | Markit ● US Existing Home Sales Fall Short of Expectations In April | Mortgage News Daily ● US Jobless Claims Rise, But Still Point to Growing Labor Market | WSJ ● US Leading Economic Index Climbs 0.7% In April, ...


May 22, 2015, 5:03 am, 1478844

Did you ever wonder what gift you could possibly get for the guy who has everything?

The


May 22, 2015, 5:03 am, 1478843

May 22, 2015, 4:05 am, 1478842

That is the new Anders Aslund book, and it is instructive throughout.  Here are a few things I learned:

1. 80 percent of Ukrainian youth receive higher education of some kind.

2. Ukraine has the world’s highest rate of pension expenditures as a share of gdp, at about 18 percent, ...


May 22, 2015, 2:44 am, 1478818
Salim Furth: The Los Angeles City Council's move to raise the minimum wage will help some workers at the expense of others and lead to higher prices for consumers.


May 22, 2015, 2:04 am, 1478817

This very good Justin Wolfers piece outlines some possible explanations, for instance:

For those not keeping track, it boils down to two camps: economists who blame first-quarter weakness on idiosyncratic factors versus those blaming mismeasurement.

The weather would be one — but not the only — possible idiosyncratic factor.

I wonder, ...


May 22, 2015, 2:04 am, 1478816
(May 22, 2015 12:21 AM, by Bryan Caplan) Two strangely divergent reactions:1. When economists discuss worst-case macroeconomic scenarios, they often say stuff like, "Head for your bunker," "Dig a hole and jump in," and "Hopefully you've been hoarding canned goods."2. When foreign policy experts discuss worst-case war foreign... (0 COMMENTS)


May 21, 2015, 11:33 pm, 1478795
Congratulations are in order for team Bush and team Obama for another stunning US foreign policy success: Isis Controls Half of Syria after Palmyra Seizure.

Fighters from the Islamic State of Iraq and the Levant (Isis) have seized the Syrian city of Palmyra, home to a Unesco ...


May 21, 2015, 10:44 pm, 1478777

The greening of the economy brings with it changes in the demand for certain skills in the labour market. Understanding these changes has important implications for policy aiming to support sustainable industry. This column uses US data to identify key green jobs and the skills of import for them. Environmental ...


May 21, 2015, 10:44 pm, 1478776

World trade in services is increasing rapidly but micro evidence remains scarce. This column employs firm data from Japan to argue that service-exporting firms are more productive than non-exporting firms and goods-exporting firms. Information asymmetry, transportation costs, differences in institutions, cultures, and languages increase the fixed costs of service trade. ...


May 21, 2015, 10:44 pm, 1478775
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May 21, 2015, 10:04 pm, 1478771
(Don Boudreaux)

The only economic case for raising the minimum wage that is even potentially theoretically sound is the case built ...


May 21, 2015, 9:03 pm, 1478742

Federal Reserve Bank of San Francisco President John Williams said Thursday monetary policy rules could have benefits for central bank policy making.

But in order for these rules to be truly effective, they have to be able to say something about what the Fed would do when short-term rates need to ...


May 21, 2015, 9:03 pm, 1478741
Earlier from the Philly Fed:May Manufacturing Survey

Manufacturing activity in the region increased modestly in May, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity, new orders, and shipments were positive but remain at low readings. Employment increased at the reporting firms, ...


May 21, 2015, 8:44 pm, 1478740
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May 21, 2015, 7:03 pm, 1478697
Wall Street’s biggest banks said before the Fed’s April meeting they expected the first interest rate increase in September. Bloomberg News

Wall Street’s biggest banks told the ...


May 21, 2015, 7:03 pm, 1478696

PALO ALTO, Calif.–A former U.S. central bank governor opened the kimono on Federal Reserve decision making, saying little real debate happens at the bank’s monetary policy gatherings.

Speaking Thursday, Kevin Warsh told a conference held by Stanford University’s Hoover Institution that, by and large, gatherings of the rate-setting Federal Open ...


May 21, 2015, 6:44 pm, 1478695
Salim Furth: The Los Angeles City Council's move to raise the minimum wage will help some workers at the expense of others and lead to higher prices for consumers.


May 21, 2015, 6:44 pm, 1478694
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May 21, 2015, 6:35 pm, 1478693

By Simon Johnson

At today’s daily briefing, White House spokesman Josh Earnest communicated the president’s threat to veto any trade promotion authority (TPA) that “could undermine the independence or ability of the Federal Reserve to make monetary policy decisions”.  (The question was posed at minute 42:50, Mr. Earnest’s answer starts ...


May 21, 2015, 6:34 pm, 1478692
I had heard Paul Romer is disgruntled, and now that he's written down his thoughts, we can perhaps sort this out. We'll start with his recent blog post on "Protecting the Norms of Science in ...


May 21, 2015, 6:04 pm, 1478684


May 21, 2015, 6:04 pm, 1478683

De Nederlandse vertaling van Thomas Piketty’s boek over de kwalen van het kapitalisme, Kapitaal in de 21ste eeuw, is een paar weken geleden dan uiteindelijk verschenen. Een mooi moment voor een toernee door ons land, met zelfs een optreden voor de commissie Financiën van de Tweede Kamer. De receptie van ...


May 21, 2015, 6:04 pm, 1478682

Hillary Clinton is making campaign finance reform a major plank of her presidential run.

Laugh if you like at this risible pledge from a candidate who will shatter all previous fundraising records. But don’t call it hypocrisy. It’s something worse than hypocrisy.

Clinton, in advocating the same restrictions on political speech Democrats ...


May 21, 2015, 6:04 pm, 1478681

Bill Clinton won the presidency in 1992 by running as a different kind of Democrat from previous nominees. Hillary Clinton, Anne Gearen of the Washington Post reports, is hoping to win the presidency in 2016 by running as the same kind of Democrat as the current incumbent.

There’s a certain logic ...


May 21, 2015, 5:33 pm, 1478677

1. Chart of the Day. I haven’t reported on this lately, but the Traffic Volume Trend report was released today and moving 12-month average for total vehicle miles traveled in the US reached a new all-time in March of 3.06 trillion miles. In ...


May 21, 2015, 5:03 pm, 1478616

PALO ALTO, Calif.–Federal Reserve Bank of San Francisco President John Williams said Thursday inflation targets are important in creating effective monetary policy.
Speaking at a conference held by Stanford University’s Hoover Institution, Mr. Williams observed briefly that price targets like the Fed’s 2% inflation goal make the Fed “formally and ...


May 21, 2015, 5:03 pm, 1478615
Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for several selected cities in April.

On distressed: Total "distressed" share is down in most of these markets mostly due to a decline in short sales (Mid-Atlantic is up year-over-year because of an ...


May 21, 2015, 4:44 pm, 1478613
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May 21, 2015, 4:44 pm, 1478614
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May 21, 2015, 4:44 pm, 1478612
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May 21, 2015, 4:35 pm, 1478611

By James Kwak

“In my many years of experience working in compliance, do you know how many fixed and variable annuities I’ve seen being invested in IRAs??? Countless.

“Investing a tax deferred investment within a tax deferred account simply does not make sense, except for ...


May 21, 2015, 4:05 pm, 1478609

Luo Yufeng, who has worked in the salons for four years, reports:

Q. What are your thoughts on the New York manicure industry in general?

A. I think it’s fine. Many of my friends have been doing the work for more than 10 years, and they generally think it’s better than working ...


May 21, 2015, 4:04 pm, 1478608

May 21, 2015, 4:04 pm, 1478607
This post of mine yesterday deals mostly with Clinton’s annoying “When women are [fill in the blank], families are [same word; slightly different meaning] slogans.  But toward the end, it also discusses Clinton’s annoying references to people’s “God-given potential.”  References to people’s potential, without injecting religion (at least without some ...


May 21, 2015, 4:04 pm, 1478606

Judicial Watch has released a heavily retracted version of a 2012 Defense Intelligence Agency (DIA) assessment of Iraq and Syria which provides fairly damning evidence that the US intelligence community saw in advance the threat that growing radicalization in Syria, if unchecked, would pose to Iraq. In short, the DIA ...


May 21, 2015, 4:04 pm, 1478605

Rahul Gandhi is back. Or so says the conventional wisdom among commentators who see signs of life in a politician they had recently declared all but dead.

Renewed hopes for the 44-year-old Congress Party vice president may be premature, but they are nonetheless understandable. After vanishing for nearly two months for ...


May 21, 2015, 4:04 pm, 1478603

1. Chart of the Day. I haven’t reported on this lately, but the Traffic Volume Trend report was released today and moving 12-month average for total vehicle miles traveled in the US reached a new all-time in March of 3.06 trillion miles. In ...


May 21, 2015, 4:04 pm, 1478604

When Harvard social scientist and celebrated author Robert Putnam lists the challenges facing poor Americans, family structure is always at the top – above jobs, schools, rising inequality or the weakening of civil society. And his new book, “Our Kids,” has received great attention and praise for documenting the growing ...


May 21, 2015, 3:33 pm, 1478599

. . . and how they might well be responsible for almost everything about your health.

"Everything you think you know about diets is WRONG: Counting calories is a total waste of time, it’s bacteria in your gut that make you fat and finally, cheese, alcohol and chocolate can ...


May 21, 2015, 3:33 pm, 1478598
More weak economic reports came out today. Let's take a look at two regional manufacturing reports.

Philly Fed Region "Weak but Stable"

The Bloomberg Economic Consensus for the Philadelphia Fed Business Outlook Survey was 8.0. Economists got the leading sign correct, but the consensus estimate was ...


May 21, 2015, 3:33 pm, 1478597
Existing Home Sales Disappoint

Economists overestimated existing home sales today, rounding out another impressive day of overoptimism.

New home sales came in at a seasonally adjusted 5.04 million annualized rate.

The Bloomberg Consensus Estimate was 5.22 million. 5.04 million was below the lower end of ...


May 21, 2015, 3:24 pm, 1478596
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May 21, 2015, 3:03 pm, 1478535

Europe’s Economic and Monetary Union will “very likely” survive its current crisis, but greater fiscal integration is needed for the eurozone’s future, the U.S. central bank’s No. 2 official said Thursday.

“The decision to use the single currency to drive the European project forward was a risky one, and at some ...


May 21, 2015, 3:03 pm, 1478534

The unemployment rate for foreign-born workers in the U.S. fell to 5.6% in 2014 from 6.9% in 2013, the Bureau of Labor Statistics reported Thursday, reflecting the overall firming up of the ...


May 21, 2015, 3:03 pm, 1478533
From housing economist Tom Lawler:

The National Association of Realtors reported that US existing home sales ran at an estimated seasonally adjusted annual rate of 5.04 million in April, down 3.3% from March’s upwardly-revised pace and up 6.1% from last March’s seasonally adjusted pace. The NAR’s estimate was ...


May 21, 2015, 2:44 pm, 1478532
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(May 21, 2015 02:28 PM, by David Henderson) David Friedman writes in a comment on my post on interpersonal utility comparisons: Von Neuman [sic] showed how to cardinalize utility most of a century ago, so your statement that utility is ordinal not cardinal is long out of date.... (0 COMMENTS)


May 21, 2015, 2:04 pm, 1478522
(Don Boudreaux)

Here’s a letter to the Washington Post:

Ruth Marcus is right and Elizabeth Warren is wrong: the secrecy of ...


May 21, 2015, 2:04 pm, 1478521

A “must watch” for foreign and national security types is this CNN footage of a P8-A Poseidon surveillance flight over Fiery Cross Reef and Mischief Reef, both part of the Spratly islands in the South China Sea (SCS). The remarkable video enables viewers to get a much better sense of ...


May 21, 2015, 2:04 pm, 1478520

After years of being a focus of interest for specialists, the South China Sea is now getting major attention from the media. The latest is a CNN report that a US Navy P-8 surveillance plane was warned away from some of China’s manmade islands in the Spratly Island chain by ...


May 21, 2015, 1:03 pm, 1478452
Brixton Pound notes. brixtonpound.org

One of the main contenders in this weekend’s local elections in Barcelona, Spain’s second-largest city, recently made an eye-catching pledge: To create a ...


May 21, 2015, 1:03 pm, 1478451
Inventory is still very low (and down 0.9% year-over-year in April). More inventory would probably mean smaller price increases and slightly higher sales, and less inventory means lower sales and somewhat larger price increases. This will be important to watch over the next few months during the Spring buying season.


May 21, 2015, 12:44 pm, 1478449
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May 21, 2015, 12:35 pm, 1478441
The Chicago Fed National Activity Index’s three-month average (CFNAI-MA3) ticked higher in April, but growth remained below the historical trend for the third month in a row. The latest string of three consecutive negative values represents the longest stretch of below-trend data in nearly two years. Still, CFNAI-MA3 inched up ...


May 21, 2015, 12:34 pm, 1478440
Teaser:

Young ...


May 21, 2015, 12:04 pm, 1478434

Key Points

Tuberculosis and malaria kill more than two million people each year, primarily in low- and middle-income countries. Many of these deaths could be prevented if companies have incentives to produce medications for diseases of poverty more quickly and make them available more cheaply.Once effective new medicines for diseases of ...


May 21, 2015, 12:04 pm, 1478436

On Monday, the Supreme Court ruled 5-4 that Maryland’s individual income tax system unconstitutionally discriminates against interstate commerce. The Court’s decision in Maryland Comptroller v. Wynne is a decisive victory for free interstate trade. The Court’s majority opinion relied heavily on economic principles detailed in an amicus brief ...


May 21, 2015, 12:04 pm, 1478437
Resident Scholar, Michael Rubin, discusses the United States' fight against ISIS on Fox News' "The O'Reilly Factor."


May 21, 2015, 12:04 pm, 1478435

Last week, the Wall Street Journal reported that the Pentagon was considering beefed up options for responding to China’s island building in the South China Sea. Last night, a CNN crew was brought along on a US Navy P8-A patrol over the Spratly Islands, with Jim Sciutto reporting that the ...


May 21, 2015, 11:34 am, 1478433

The rising expense of local government services is increasingly capturing the attention of pundits and policy makers alike. The rising cost of policing and fire services in particular and their effects on local budgets and ratepayers, has drawn the attention of Canadian municipal leaders. ...


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May 21, 2015, 11:03 am, 1478371

This week, Senator and Democratic Party presidential hopeful Bernie Sanders (I-VT) introduced a plan to provide zero-price public college education for all paid for by a financial transaction tax.

We have discussed many of the problems with a financial transaction tax in the past: it is a poor tax ...


May 21, 2015, 11:03 am, 1478370

Scott Dyreng is Associate Professor of Accounting at Duke University’s Fuqua School of Business.

Professor Dyreng’s scholarship focuses on corporate tax avoidance, international taxation, accounting for income taxes, and profit shifting. His novel research related to various aspects of corporate tax avoidance has been widely cited and published in leading ...


May 21, 2015, 11:03 am, 1478369
The Bank of England. Investors expect the BOE to begin raising short-term interest rates in mid-2016. Zuma Press

LONDON—The recent slump in the oil price may have ...


May 21, 2015, 11:03 am, 1478367
Pew Research Center found that 61% of Germans and 56% of Americans say they are saving for retirement. In Italy, the figure drops to only 23%. But Italians are also ...


May 21, 2015, 11:03 am, 1478368
SPENCER PLATT/GETTY IMAGES

What if banks could tap into their vast network of consumer and business accounts to ferret out signals about where the economy is headed?

J.P. Morgan Chase ...


May 21, 2015, 11:03 am, 1478366
The NAR reports: Existing-Home Sales Lose Momentum in April

Total existing–home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, declined 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. Despite the monthly ...


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May 21, 2015, 10:35 am, 1478361

David Clark writes:

To abandon the search for a more equitable, productive and democratic economy out of a desire to appear “pro-business” would be a serious error.

This hints at an under-appreciated possibility - that some pro-growth policies are not pro-business. What might these ...


May 21, 2015, 10:34 am, 1478360
Teaser:

If ...


May 21, 2015, 10:05 am, 1478358

Over the last 5 years, the price of new wind power in the US has dropped 58% and the price of new solar power has dropped 78%. That’s the conclusion of investment firm Lazard Capital. The key graph is here (here’s a version with US grid prices marked). ...


May 21, 2015, 10:04 am, 1478357
(May 21, 2015 09:09 AM, by Scott Sumner) Aggregate demand is fundamentally a monetary concept, linked to each country's monetary unit. Only in a few cases, such as the eurozone, does it make sense to talk about aggregate demand as a regional concept. Indeed in the eurozone, aggregate... (0 COMMENTS)


May 21, 2015, 10:04 am, 1478356

I expect (hope) 2016 will be the last GOP presidential primary where many — if not most — candidates feel compelled to publicly dismiss the potential dangers of climate change and need for action. The science rolls on. If I only had as much evidence for my prediction. ...


May 21, 2015, 9:33 am, 1478351
Today, I'm at Drexel University speaking at this sustainability eventand Tuesday I return to the LSE to talk about my China research. Yesterday, I learned a good lesson about Uber. You never know who you are going to meet. A Hollywood Movie Star drove me to ...


May 21, 2015, 9:03 am, 1478296

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, May 21, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Is the Fed’s 2% Inflation Target Too Low? Fed Minutes Show June Rate ...


May 21, 2015, 9:03 am, 1478295
The DOL reported:

In the week ending May 16, the advance figure for seasonally adjusted initial claims was 274,000, an increase of 10,000 from the previous week's unrevised level of 264,000. The 4-week moving average was 266,250, a decrease of 5,500 from the previous week's unrevised average of 271,750. ...


May 21, 2015, 8:44 am, 1478294
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May 21, 2015, 8:35 am, 1478293
Tobin’s Q, a market-valuation metric, is back in the news, in part thanks to a widely read Bloomberg article. The story, published earlier this week, offered the provocative title: “Nobel Winner’s Math Is Showing S&P 500 Unhinged From Reality.” Oh, my, that sounds serious. Or maybe not. As several observers ...


May 21, 2015, 8:35 am, 1478292

Redesign the EITC to help more low-income workers. TPC’s Elaine Maag thinks that’s the way to go. She explains in her new paper: “A worker credit based on individual earnings, and not contingent on having children at home, could provide substantial benefits to all low-income workers, ease administration for the IRS, and ...


May 21, 2015, 8:04 am, 1478290
(Don Boudreaux)

… is from page 312 of NYU’s great economic-development economist William Easterly’s superb 2006 book, The White Man’s Burden – ...


May 21, 2015, 7:33 am, 1478285

Fortunately, she seems to have modified her behavior in time.


May 21, 2015, 7:33 am, 1478283

Including "Aspartame causes cancer, or, at the very least, is definitely bad for us" and six others.


May 21, 2015, 7:33 am, 1478284

Forward osmosis is a cool-sounding technology.


May 21, 2015, 7:04 am, 1478230
Reuters

The Bank of Russia has intervened again on currency markets to replenish its hard-currency reserves and has indicated it may increase the volume of daily interventions in the ...


May 21, 2015, 6:44 am, 1478229

Economic scholarship has changed dramatically in the past half-century, becoming far more empirical and much less abstract and theoretical. The winds of change have blown most strongly in applied microeconomics, but econometrics has been left far behind. This column argues that econometrics teaching needs an overhaul and that this change ...


May 21, 2015, 6:44 am, 1478228
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May 21, 2015, 6:35 am, 1478227
● Fed officials see June rate hike as unlikely: minutes | Reuters ● US mortgage applications drop for 4th straight week | RTT ● Eurozone Job creation at 4-year high as eco. growth slows in May: PMI | Markit ● Further slowing of German private sector output growth in May: ...


May 21, 2015, 6:35 am, 1478226

By Simon Johnson and Andrei Levchenko

The Obama administration is lobbying hard for Congress to pass a trade promotion authority (TPA) and to quickly approve the Trans-Pacific Partnership (TPP), a free trade agreement that is on the verge of being finalized.

The administration and its supporters on this issue, including leading Republicans, ...


May 21, 2015, 5:34 am, 1478223

Take a macro model of an economy with two different goods being produced; call them Carrots and Grapes (there can be many different varieties of carrots, and many different varieties of grapes, if you like). Suppose the demand for grapes falls, because of a change in preferences. Will there be ...


May 21, 2015, 5:33 am, 1478222

I'm a fan of grilled cheese and I wouldn't have guessed.


May 21, 2015, 5:33 am, 1478221
The slowdown in China continues as the HBSC Flash PMI shows Output contracts at strongest rate in just over a year.

Key Points

Flash China Manufacturing PMI™ at 49.1 in May (48.9 in April). Two-month high.Flash China Manufacturing Output Index at 48.4 in May (50.0 ...