Economics Roundtable

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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September 30, 2014, 5:33 pm, 1344020
In 2010, vice-president Joe Biden publicly vowed the US would be “totally out” of Afghanistan “come hell or high water, by 2014.”

In a few short months, 2014 will be gone. Are US troops out of Afghanistan? Nope. Iraq? Nope. Instead, we have troops in Syria.

Political Promises


September 30, 2014, 5:33 pm, 1344019

The Energy Information Administration (EIA) released new state crude oil production data yesterday for the month of July, and one of the highlights of that monthly report is that oil output in America’s No. 1 oil-producing state – Texas ...


September 30, 2014, 5:33 pm, 1344018

1. From Margaret Wente’s article “The New Campus Sex Puritans” in the Globe and Mail:

Sixty years ago, sexual behavior among the young caused deep alarm among the puritanical religious right. Today, it causes deep alarm among the puritanical progressive left. Like their forebears, they are doing their best ...


September 30, 2014, 5:03 pm, 1343961

We've been asked which states adjust their gasoline tax for inflation. Most states (and the federal government) define their gas tax in so many cents per gallon, which can make a difference as time passes and inflation erodes the purchasing power of that tax rate. For example, the federal ...


September 30, 2014, 5:03 pm, 1343960

China’s devalued exchange rate has made it a pariah of U.S.-based manufacturing and a beloved target of countless U.S. political diatribes and bills seeking to censure Beijing for its currency policy.

But it is key U.S. ally Germany that’s sapping growth from the global economy, according to the latest ...


September 30, 2014, 5:03 pm, 1343958

The time might be approaching for the U.S. Treasury to rethink its strategy of issuing more long-term debt relative to short-term debt, a former senior U.S. Treasury official said Tuesday.

The Treasury has been lengthening the average maturity of the debt it issues for several years. At 68.4 months as of ...


September 30, 2014, 5:03 pm, 1343959

Infrastructure investment is the antidote to serial disappointments in global growth.

That’s what the International Monetary Fund is touting ahead of a gathering of top finance officials from around the world.

Especially for advanced economies, infrastructure investment “is one of the few remaining policy levers available to support growth, given ...


September 30, 2014, 5:03 pm, 1343957

Earlier this year, the hapless Cleveland Cavaliers signed a two-year deal ...


September 30, 2014, 5:03 pm, 1343956

Martin Wolf, in "Why inequality is such a drag on economies":

...in 2012, says the Organisation for Economic Co-operation and Development, the US ranked highest among the high-income countries in the share of relatively low-paying jobs. ...


September 30, 2014, 5:03 pm, 1343955
Fannie Mae reported today that the Single-Family Serious Delinquency rate declined slightly in August to 1.99% from 2.00% in July. The serious delinquency rate is down from 2.61% in August 2013, and this is the lowest level since October 2008.

The Fannie Mae serious delinquency rate peaked ...


September 30, 2014, 4:44 pm, 1343954
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September 30, 2014, 4:35 pm, 1343953

A poll released today by the conservative Hudson Institute and the liberal group Public Citizen finds that nearly 9 in 10 voters surveyed favor clear rules that define political activities by non-profit tax-exempt organizations. The public’s desire for clarity is not surprising, given the amount of undisclosed campaign money ...


September 30, 2014, 4:34 pm, 1343952

More than a year after first putting the proposal before its commissioners for consideration, the Federal Communications Commission has eliminated a long standing rule that barred local stations from broadcasting games on local ...


September 30, 2014, 4:34 pm, 1343951
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September 30, 2014, 4:05 pm, 1343948

Pierre Mouganie has a new paper:

In 1997, the French government put into effect a law that permanently exempted young French male citizens born after Jan 1, 1979 from mandatory military service while still requiring those born before that cutoff date to serve. This paper uses a ...


September 30, 2014, 4:04 pm, 1343947
Okay, well, as all you AB regular readers know, yesterday I posted a post deconstructing—and, yes, that’s what I did—a blog post on the Forbes website by William F. Cannon.  He blogs there on “health, freedom, and other uncertainties,” but his day job is Director of Health Policy Studies at the Cato ...


September 30, 2014, 3:33 pm, 1343943
Reader Mike wonders how interest can ever be repaid in a credit-based economy.

Hi Mish,

I wonder if you would be able to comment on this from Bill Gross in For Wonks Only:

"A credit-based financial economy (as opposed to pure cash) depends on ...


September 30, 2014, 3:33 pm, 1343942

A recent New York Times piece frets that communities lucky enough to get Google Fiber superfast internet don’t yet know what to do with all that blazing bandwidth. (Well, other than exploring the ability to download 600 cute cat photos a second.) But give them time. As ...


September 30, 2014, 3:33 pm, 1343941

Over at Pacific Standard, Noah Berlatsky writes about the strange copyright case of Alice Randall’s 2001 The Wind Done Gone, a parody of Gone with the Wind. Berlatsky notes that “a district court at first forbade publication of The Wind Done Gone, arguing the work was a ...


September 30, 2014, 3:33 pm, 1343940

September 30, 2014, 3:23 pm, 1343939
You may have seen my post giving you an example of introducing the concept ofdiseconomies of scale on Sunday where you ask a large team of students to draw an image of Steve Jobs. This next one is nothing like that!Instead, here's another example of a future-proofed activity that uses ...


September 30, 2014, 3:03 pm, 1343875

Last week, Chile’s President Michelle Bachelet signed legislation that would reform much of Chile’s tax system in order to raise tax revenue for the country.

This law would raise the top corporate income tax rate from 20 percent to 27 percent by 2017.

The law also creates a separate corporate ...


September 30, 2014, 3:03 pm, 1343874

In June 2014, the Internal Revenue Service released a “Taxpayer Bill of Rights” at the recommendation of the Taxpayer Advocate Service. The publication attempts to clearly outline the fundamental rights a taxpayer has when filing their returns and dealing with the IRS in general.

In an attempt to further ...


September 30, 2014, 3:03 pm, 1343873

A top Bank of England policy maker said Tuesday he doesn’t think that providing more explicit guidance on the future path of interest rates in the U.K. would be a very good idea.

David Miles, one of nine rate-setters on the BOE’s Monetary Policy Committee, said in a speech at the ...


September 30, 2014, 3:03 pm, 1343872
A few key points:
1) There is a clear seasonal pattern for house prices.
2) The surge in distressed sales during the housing bust distorted the seasonal pattern.
3) Even though distressed sales are down significantly, the seasonal factor is based on several years of data - and the factor ...


September 30, 2014, 3:03 pm, 1343871
I started 2014 expecting a slowdown in year-over-year (YoY) prices as "For Sale" inventory increases, and the price slowdown is very obvious! The Case-Shiller Composite 20 index was up 6.7% YoY in July; the smallest YoY increase since November 2012 (the National index was up 5.6%, also the slowest YoY ...


September 30, 2014, 2:44 pm, 1343870
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September 30, 2014, 2:44 pm, 1343869
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September 30, 2014, 2:44 pm, 1343867
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September 30, 2014, 2:44 pm, 1343868
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September 30, 2014, 2:05 pm, 1343865

Mises Daily Tuesday by Mark Tovey:

When dealing with people in a potentially hostile environment (such as a zombie apocalypse) how do we decide if we should trade with strangers or kill them? It turns out time preference and ...


September 30, 2014, 2:05 pm, 1343864

Mises Daily Tuesday by Ron Paul:

Devolving government into smaller units promotes economic growth. The smaller the size of government, the less power it has to hobble free enterprise with taxes and regulations.

Just because people do not wish to live under ...


September 30, 2014, 2:04 pm, 1343863
(Don Boudreaux)

Heres’ a letter to Paul Krugman:

Mr. Krugman:

On your blog recently you wrote that conspicuous spending by the rich “imposes negative externalities on the rest of the population” (“Having It and Flaunting It,” Sept. 24).  You are here, I assume, endorsing the argument made by Cornell economist


September 30, 2014, 1:03 pm, 1343796

Chile has for many years had one of the lowest corporate tax rates in the developed world, and also one of the fastest rates of economic growth. Between 2000 and 2010, Chile’s corporate tax rate was 15 to 17 percent, lower than that found in any developed country except ...


September 30, 2014, 1:03 pm, 1343795

The S&P Case-Shiller national home price index is up just 5.6% in the year ended in July, continuing a slowing trend since late 2013.

Las Vegas was one of just ...


September 30, 2014, 1:03 pm, 1343794

Household incomes in the Plains states are booming.

Nebraska and North Dakota posted the strongest income growth in the second quarter among all 50 states. Overall incomes—reflecting what Americans earn in salary, rental income and government assistance—grew a seasonally adjusted 2.7% in those states in the spring, Commerce Department data show.

Incomes ...


September 30, 2014, 1:03 pm, 1343793

The two neighboring states of Wisconsin and Minnesota share a similar economic structure and size; and yet their fortunes have diverged over the past three years. One correlate of Wisconsin’s growth deficit is state and local government spending.

First, let’s document Wisconsin’s lagging performance along three dimensions — gross state ...


September 30, 2014, 12:44 pm, 1343791
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September 30, 2014, 12:44 pm, 1343792
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September 30, 2014, 12:44 pm, 1343790
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September 30, 2014, 12:44 pm, 1343789
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September 30, 2014, 12:44 pm, 1343788

TODAY Russia submitted its budget to the Duma, the lower house of the parliament. After three rounds of discussions, Vladimir Putin, the president, will sign it into law. The budget shows how much trouble the Russian economy is in—and how unwilling the government is to face up to reality.

It’s an ...


September 30, 2014, 12:36 pm, 1343787
The ISM Manufacturing Index is expected to decline slightly to 58.1 in tomorrow’s update for September vs. the previous month, based on The Capital Spectator’s median econometric point forecast. The estimate is still well above the neutral 50.0 mark and … Continue reading →


September 30, 2014, 12:36 pm, 1343786

By James Kwak

I wrote a column that went up this morning at The Atlantic about the ProPublica/This American Life story about the New York Fed. The gist of the argument is that we all knew the New York Fed was captured; for people like Tim Geithner, that’s a feature, ...


September 30, 2014, 12:34 pm, 1343785

The smaller the size of government, the less power it has to hobble free enterprise with taxes and regulations.


September 30, 2014, 12:05 pm, 1343781

Whenever you see someone use the word “neoliberalism” you are probably dealing with someone who spends most of his or her time in a left-wing echochamber where people believe they are being oppressed by “free markets” and that things will be set ...


September 30, 2014, 12:05 pm, 1343780

September 30, 2014, 12:04 pm, 1343779
(September 30, 2014 11:13 AM, by Scott Sumner) There is a sort of zero sum aspect to exchange rates. Any change in exchange rates means one currency is weaker and one is stronger, relative to the other. But exchange rates tell us nothing about whether currencies are weaker... (0 COMMENTS)


September 30, 2014, 11:33 am, 1343777

In a  recent TechRepublic piece, reporter Erin Carson points out various myths about driverless cars. One of them involves passenger passivity. Although the eventual goal is that your car can motor to the office while you kick back and work on the Penske file or watch ...


September 30, 2014, 11:33 am, 1343776

A year ago saw the final post on The Oil Drum, a popular blog — started in 2005 — devoted to discussing the idea that global oil production had peaked. Next up was an age of energy scarcity and economic collapse. Actually what peaked was interest in “peak ...


September 30, 2014, 11:33 am, 1343775

In today’s Wall Street Journal, Syl Schieber and I return to the question of whether Americans face a “retirement crisis,” as many articles and organizations have claimed.

The first chart is from the OECD and compares the income of retirees in a given country to the average income in ...


September 30, 2014, 11:33 am, 1343774

The Energy Information Administration (EIA) released new data this week on international energy production for the month of June, and here are some highlights of that update:

1. For the 20th month in a row starting in November 2012, “Saudi ...


September 30, 2014, 11:33 am, 1343773

The Energy Information Administration (EIA) released new data this week on international energy production for the month of June, and here are some highlights of that update:

1. For the 20th month in a row starting in November 2012, “Saudi ...


September 30, 2014, 11:03 am, 1343710
Former Treasury Secretary Lawrence Summers delivers remarks during the 2014 annual conference of the Export-Import Bank in April in Washington. Getty Images

The U.S. government over time ...


September 30, 2014, 11:03 am, 1343709

The European Central Bank must be wondering when it will catch a break.

On Monday, surveys published by the European Commission showed it was at risk of losing its battle to persuade consumer and households that the inflation rate will soon start to pick up, and edge towards its target over ...


September 30, 2014, 11:03 am, 1343708

The Federal Reserve should continue to act fully independently from the U.S. Treasury even in times of crisis, Fed Gov. Jerome Powell said Tuesday in response to calls for closer cooperation between the two bodies in a Brookings Institution paper.

The research, of which former Treasury Secretary Lawrence Summers is a ...


September 30, 2014, 11:03 am, 1343707

At MoneyWatch:

The silver lining in falling college enrollment, by Mark Thoma: College enrollment "declined by close to half a million (463,000) between 2012 and 2013, marking the second year in a row that a drop of this magnitude has occurred," according to a report from the ...


September 30, 2014, 11:03 am, 1343706

I have a new column:

Why Have Policymakers Abandoned the Working Class?, by Mark Thoma: The risks associated with a negative economic shock can vary widely depending on the wealth of a household. Wealthy households can, of course, absorb a shock much easier than poorer households. Thus, it’s important to ...


September 30, 2014, 11:03 am, 1343705
S&P/Case-Shiller released the monthly Home Price Indices for July ("July" is a 3 month average of May, June and July prices).

This release includes prices for 20 individual cities,and two composite indices (for 10 cities and 20 cities) and the new monthly National index.

Note: Case-Shiller reports ...


September 30, 2014, 10:44 am, 1343704
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September 30, 2014, 10:44 am, 1343703
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September 30, 2014, 10:44 am, 1343702

THERE has been a widespread media narrative recently which says that the British labour market recovery has relied on low-paying jobs. We highlighted this trend, and its implications for tax revenues, in the print edition two weeks ago. However, the Independent's John Rentoul claims we have all got ...


September 30, 2014, 10:44 am, 1343701

The CFPB entered into a Consent Order with Flagstar Bank regarding its default mortgage servicing practices. This order is really important. It's the first enforcement action of the CFPB's new servicing rules, and its "benching" remedy that prevents Flagstar from most default servicing until it demonstrates ...


September 30, 2014, 10:36 am, 1343700
Private nonfarm payrolls in the US are projected to rise 204,000 (seasonally adjusted) in tomorrow’s September update of the ADP Employment Report, based on The Capital Spectator’s median econometric point forecast. The expected monthly gain matches August’s increase. Compared with … Continue reading →


September 30, 2014, 10:36 am, 1343699

For a long time, I've argued that government borrowing is due is large part to the corporate sector's financial surplus - its excess of retained profits over capital spending. However, today's GDP figures show that something else is also happening.

These show that ...


September 30, 2014, 10:34 am, 1343698
Teaser:

The ...


September 30, 2014, 10:05 am, 1343691

Bras, girdles and leggings infused with caffeine and sold as weight loss aids were more decaf than espresso, and the companies that sold them have agreed to refund money to customers and pull their ads, U.S. regulators said on Monday.

The Federal Trade Commission said Wacoal America and Norm Thompson Outfitters, ...


September 30, 2014, 10:04 am, 1343690


September 30, 2014, 9:33 am, 1343688

Scientists announced Monday that human-caused climate change contributed to and/or amplified nine of 2013's most extreme weather events, making one of the most definitive statements yet on the direct link between individual weather extremes and human-induced climate change.

In a new report released in the Bulletin of the American Meteorological Society ...


September 30, 2014, 9:03 am, 1343626

The Wall Street Journal’s Daily Report on Global Central Banks for Tuesday, September 30, 2014:

Sign up for the newsletter.

Highlights

Hilsenrath’s Take: Report Points to Downsides of Fed’s Consensus Culture Fed Rate Policies Aid Foreign ...


September 30, 2014, 9:03 am, 1343625

Bank of Japan officials are losing their hopes for a quick rebound of the economy, their confidence further shaken by a slew of poor indicators released on Tuesday, according to people familiar with the central bank’s thinking.

While the BOJ’s policy board isn’t expected to decide on any additional measures ...


September 30, 2014, 9:03 am, 1343624

U.S. workers who have been out of a job for six months or longer can and will reenter the labor market as the unemployment rate falls further, according to a new paper countering arguments that the long-term jobless are increasingly unemployable due to an erosion of skills.

That doesn’t mean that


September 30, 2014, 8:45 am, 1343623
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September 30, 2014, 8:36 am, 1343622
The Treasury market’s inflation forecast via 10-year Notes continues to fall and the US stock market has turned wobbly too. That’s a troubling combination… if it continues. The antidote to this mini re-run of heightened disinflation risk is economic growth. … Continue reading →


September 30, 2014, 8:04 am, 1343621
(Don Boudreaux)

… is from page 146 of Ludwig von Mises‘s 1951 essay “Profit and Loss,” as reprinted in the 2008 Liberty Fund edition of Mises’s 1952 collection, Planning for Freedom:

What has been called the democracy of the market manifests itself in the fact that profit-seeking business is unconditionally ...


September 30, 2014, 7:33 am, 1343615

New York Times columnist stumbles onto truth. But instead of lamenting how big business has gotten, why not greatly decrease what they can lobby for by limiting government?


September 30, 2014, 7:33 am, 1343614

And as the government pays for more and more of our health care, you ain't seen nothing yet.


September 30, 2014, 7:33 am, 1343613

"So corporate insiders are using company cash and borrowed money to buy back company shares while selling the same shares from their personal accounts. Venture capital firms are IPOing their portfolios as fast as they can get them out the door. Private equity firms are selling. And AAII members are ...


September 30, 2014, 7:33 am, 1343611

Victor Davis Hanson: "About the best choice is to support without qualification the only two pro-American and constitutional groups in the Middle East, the Israelis and Kurds."

Works for me.


September 30, 2014, 7:33 am, 1343612

I don't agree with everything--on #5, I think kids need a lot more "workforce-prep mentality" from the schools and on #8, lots of things make little kids cry, including the current curriculum--but for both supporters and opponents of Common Core there's food for thought here.

And see also former ...


September 30, 2014, 7:33 am, 1343610
Fatih Karahan, Samuel Kapon, and Kaivan K. Sattar

Job openings are arguably one of the most important indicators of recovery in the labor market, as they reflect employers’ willingness to hire. The number of job openings has recovered steadily since the recession, yet through the end of ...


September 30, 2014, 7:24 am, 1343609

Photo Credit: Ron

There’s a significant problem when you are a supremely big and connected financial institution: your failure will have an impact on the financial system as a whole.  Further, there is no one big enough to rescue ...


September 30, 2014, 7:03 am, 1343558

Brazilians face many options in the Oct. 5 vote, but for economists and investors the options are clear: It is reform or die.

Some economists say that even if incumbent ...


September 30, 2014, 6:04 am, 1343557
(September 30, 2014 05:45 AM, by Art Carden) Saturday Morning Breakfast Cereal has joined The Oatmeal, XKCD, and Botched Spot as one of my favorite comics. This particular installment was especially brilliant. It proposes a browser plug-in that makes the opportunity cost of military hardware explicit. The night... (0 COMMENTS)


September 30, 2014, 5:03 am, 1343469
Japan’s industrial output unexpectedly fell 1.5% in August. Bloomberg News

A raft of economic data released Tuesday continues to paint a picture of sluggish growth for ...


September 30, 2014, 5:03 am, 1343468

September 30, 2014, 4:44 am, 1343467

THE argument that American officials lacked the capability or authority to save Lehman Brothers—and, potentially, to spare the world the most wrenching financial crisis since the 1930s—never really withstood close scrutiny. In 2012, I wrote:

There was no reason that Lehman had to fail. It had tons of assets on ...


September 30, 2014, 4:05 am, 1343466

Europe got some good news in early June as the EU changed its statistical guidelines on how to compute GDP. Among other changes, expenditures on prostitution and illicit drugs (hookers and blow, colloquially) will now be included.

Of course, some countries have been including these items for years. Back in 2006, ...


September 30, 2014, 4:04 am, 1343465
by: Mark Jamison; A retired Postmaster having served the town and community of Webster, N.C. Mark can also be read on Save The Post Office, a blog discussing the state of the USPS. “In the following weeks, Mr. Green would go on to scream at me, ALL YOU ARE IS ...


September 30, 2014, 3:03 am, 1343402
A row of newly constructed homes selling in the new Sydney suburb of Greenhills Beach Reuters

SYDNEY–Australia’s central bank and banking regulator are on course to announce ...


September 30, 2014, 3:03 am, 1343401
Pedestrians walk past advertisements for property at an estate agents office in Beijing. Bloomberg News

Just how much will a downturn in China’s property market hurt the ...


September 30, 2014, 2:44 am, 1343400
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September 30, 2014, 2:34 am, 1343399
Teaser:

Northern ...


September 30, 2014, 2:05 am, 1343398

Deconstruction of the EU’s actual greenness must start by separating old renewables from new renewables — an essential task because in most countries the old renewables still provide the largest combined contribution in the green category. Readers of European news might be forgiven if they thought that wind turbines and ...


September 30, 2014, 2:05 am, 1343397

A poll last week by the Chinese University of Hong Kong showed that 46.3% of the city’s residents opposed Occupy Central while 31.3% supported it. But the group has more support among the young. According to the poll, 47% of people under 24 back Occupy Central compared with 20.9% of ...


September 30, 2014, 2:04 am, 1343396
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September 30, 2014, 2:04 am, 1343395
(September 30, 2014 12:50 AM, by Bryan Caplan) I often argue that popular ideas are deeply mistaken. I attacked everything from nationalism and militarism to Tiger Parenting and labor market regulation. There's one utterly corrupt outlook, though, that I almost never bother to criticize. As soon as I... (0 COMMENTS)


September 30, 2014, 2:04 am, 1343394
(September 30, 2014 02:41 AM, by David Henderson) This discussion is related to the time inconsistency of optimal policy, which occurs when the government cannot implement an optimal tax policy because the stated policy is inconsistent with the government's incentives over time. Consider a proposal made by the... (1 COMMENTS)


September 30, 2014, 1:03 am, 1343382

A year and a half since the Bank of Japan kicked off its aggressive easing measures, promising to spur 2% inflation in “about two years,” there still isn’t a consensus on exactly what this timetable means among market participants and policy makers.

The rate of inflation appears on the verge of ...


September 30, 2014, 1:03 am, 1343381
Japanese Prime Minister Shinzo Abe at the U.N. Climate Summit in New York, Sept 23. Reuters

Faced with a drop in demand after an April sales tax ...


September 29, 2014, 11:33 pm, 1343378
As many as 63 seriously misguided teenaged girls from France, 40 from Germany, and 50 in the UK have left their countries to join ISIS in Syria.

The Guardian has a fascinating report on Schoolgirl jihadis: the female Islamists leaving home to join Isis fighters.


September 29, 2014, 11:03 pm, 1343356

NEW YORK—In a television interview Monday, Federal Reserve Bank of Chicago leader Charles Evans again said the U.S. central bank should hold off on raising interest rates until officials are truly confident of the recovery’s durability.

Speaking to CNBC, Mr. Evans said, “I think there will be quite some time before ...


September 29, 2014, 11:03 pm, 1343357

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, September 29, 2014:

Sign up for the newsletter.

Highlights

Blackstone’s Take: Base Effects to Give ECB Some Breathing Room Secret Review Found New York ...


September 29, 2014, 11:03 pm, 1343358

MONDAY

Chicago Fed’s Evans is interviewed on CNBC at 8 a.m. EDT Chicago Fed’s Evans speaks on the economy and monetary policy at the National Association for Business Economics annual meeting in Chicago at 9 a.m. EDT

TUESDAY

Reserve Bank of India releases a policy statement at 11 a.m. local time ECB’s Lautenschlaeger speaks ...


September 29, 2014, 11:03 pm, 1343360
Demonstrators disperse as tear gas is fired by police during a protest on Sept. 29 in Hong Kong. Getty Images

Pro-democracy protests paralyzing the center ...


September 29, 2014, 11:03 pm, 1343355
Federal Reserve Bank of Chicago President Charles Evans in 2012. Associated Press

NEW YORK–Federal Reserve Bank of Chicago President Charles Evans said Monday the U.S. central bank ...


September 29, 2014, 11:03 pm, 1343361

Federal Reserve Bank of Dallas President Richard Fisher said in a television interview Sunday he is worried the U.S. central bank will raise interest rates too late and risk letting price pressures get out of control.

The U.S. is “definitely pulling ahead of the rest of the world” in terms ...


September 29, 2014, 11:03 pm, 1343359
An elderly man shops for groceries a supermarket in Tokyo. European Pressphoto Agency

The Bank of Japan is sticking to its bullish forecast ...


September 29, 2014, 11:03 pm, 1343352
Federal Reserve Bank of Chicago President Charles Evans Associated Press

 

Federal Reserve Bank of Chicago President Charles Evans said Monday he wouldn’t be comfortable with a move ...


September 29, 2014, 11:03 pm, 1343348

The European Central Bank has suffered an early setback in its battle to persuade households and businesses that inflation will pick up over coming months and years.

The ECB sets great store by “anchoring” inflation expectations to ...


September 29, 2014, 11:03 pm, 1343354

Business economists are skeptical that the Federal Reserve’s benchmark interest rate will top 1% by the end of next year as central bank officials project.

The poll of 46 professional forecasters by the National Association for Business Economics pegged the federal-funds rate target at 0.845% at the end of 2015. That reading ...


September 29, 2014, 11:03 pm, 1343349

NEW YORK–Federal Reserve Bank of Dallas President Richard Fisher said Monday he might want to start raising interest rates next spring, rather than wait until later in the year as many of his colleagues prefer.

In an interview with The Wall Street Journal Monday, Mr. Fisher said the timing of ...


September 29, 2014, 11:03 pm, 1343350

Economists and market participants in the U.S. like to fixate on every wiggle in consumption and inflation data. A tenth of a percentage point increase in the Consumer Price Index can spark fears that the Federal Reserve will raise interest rates, not to mention lead to repricing of the $1 ...


September 29, 2014, 11:03 pm, 1343353

Consumer prices held flat in August from a month earlier, resulting in a closely watched annual inflation gauge slipping further below the Federal Reserve’s target.

The price index for personal consumption expenditures—the Fed’s preferred ...


September 29, 2014, 11:03 pm, 1343351
Food prices continued to climb in September, according to Premise Data Corp., led by processed meats, including bologna and hot dogs. Getty Images

While overall inflation remains ...


September 29, 2014, 11:03 pm, 1343347

Time heals all wounds, and that idea may finally be moving into the forefront when it comes to consumer finances. But households still carry a few scars from the Great Recession.

A ...


September 29, 2014, 11:03 pm, 1343345

A year and a half since the Bank of Japan kicked off its aggressive easing measures, promising to spur 2% inflation in “about two years,” there still isn’t a consensus on exactly what this timetable means among market participants and policy makers.

The rate of inflation appears on the verge of ...


September 29, 2014, 11:03 pm, 1343346

The Federal Reserve has flooded the financial system with trillions of dollars as part of its effort to boost the economy. All that money out there presents the central bank with a challenge as it contemplates when and how to raise interest rates. And it has had unintended consequences, including ...


September 29, 2014, 10:34 pm, 1343344

When dealing with people in a potentially hostile environment (such as a zombie apocalypse) how do we decide if we should trade with strangers or kill them? It turns out time preference and the division of labor has a lot to do with ...


September 29, 2014, 10:04 pm, 1343340
(Don Boudreaux)

In a new and, I’m certain, well-researched research paper, Alice Chen, Emily Oster, and Heidi Williams explore reasons why infant mortality is higher in the U.S. than it is in many other developed countries.  (HT Tyler Cowen)  Here’s the abstract:

The US has a substantial – and poorly ...


September 29, 2014, 9:33 pm, 1343339

Here are some questionable statistics about CEO pay that we learn about from the AFL-CIO’s Executive Paywatch webpage:

1. In 2013 the CEO-to-worker pay ratio was 331:1 and the CEO-to-minimum-wage-worker pay ratio was 774:1. America is supposed to be the ...


September 29, 2014, 9:03 pm, 1343308

NEW YORK—In a television interview Monday, Federal Reserve Bank of Chicago leader Charles Evans again said the U.S. central bank should hold off on raising interest rates until officials are truly confident of the recovery’s durability.

Speaking to CNBC, Mr. Evans said, “I think there will be quite some time before ...


September 29, 2014, 9:03 pm, 1343307
Federal Reserve Bank of Chicago President Charles Evans in 2012. Associated Press

NEW YORK–Federal Reserve Bank of Chicago President Charles Evans said Monday the U.S. central bank ...


September 29, 2014, 9:03 pm, 1343309

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, September 29, 2014:

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Highlights

Blackstone’s Take: Base Effects to Give ECB Some Breathing Room Secret Review Found New York ...


September 29, 2014, 9:03 pm, 1343312
Demonstrators disperse as tear gas is fired by police during a protest on Sept. 29 in Hong Kong. Getty Images

Pro-democracy protests paralyzing the center ...


September 29, 2014, 9:03 pm, 1343311
An elderly man shops for groceries a supermarket in Tokyo. European Pressphoto Agency

The Bank of Japan is sticking to its bullish forecast ...


September 29, 2014, 9:03 pm, 1343306

Business economists are skeptical that the Federal Reserve’s benchmark interest rate will top 1% by the end of next year as central bank officials project.

The poll of 46 professional forecasters by the National Association for Business Economics pegged the federal-funds rate target at 0.845% at the end of 2015. That reading ...


September 29, 2014, 9:03 pm, 1343310

MONDAY

Chicago Fed’s Evans is interviewed on CNBC at 8 a.m. EDT Chicago Fed’s Evans speaks on the economy and monetary policy at the National Association for Business Economics annual meeting in Chicago at 9 a.m. EDT

TUESDAY

Reserve Bank of India releases a policy statement at 11 a.m. local time ECB’s Lautenschlaeger speaks ...


September 29, 2014, 9:03 pm, 1343300

The European Central Bank has suffered an early setback in its battle to persuade households and businesses that inflation will pick up over coming months and years.

The ECB sets great store by “anchoring” inflation expectations to ...


September 29, 2014, 9:03 pm, 1343305

Consumer prices held flat in August from a month earlier, resulting in a closely watched annual inflation gauge slipping further below the Federal Reserve’s target.

The price index for personal consumption expenditures—the Fed’s preferred ...


September 29, 2014, 9:03 pm, 1343298

The Federal Reserve has flooded the financial system with trillions of dollars as part of its effort to boost the economy. All that money out there presents the central bank with a challenge as it contemplates when and how to raise interest rates. And it has had unintended consequences, including ...


September 29, 2014, 9:03 pm, 1343301

NEW YORK–Federal Reserve Bank of Dallas President Richard Fisher said Monday he might want to start raising interest rates next spring, rather than wait until later in the year as many of his colleagues prefer.

In an interview with The Wall Street Journal Monday, Mr. Fisher said the timing of ...


September 29, 2014, 9:03 pm, 1343299

Time heals all wounds, and that idea may finally be moving into the forefront when it comes to consumer finances. But households still carry a few scars from the Great Recession.

A ...


September 29, 2014, 9:03 pm, 1343304
Federal Reserve Bank of Chicago President Charles Evans Associated Press

 

Federal Reserve Bank of Chicago President Charles Evans said Monday he wouldn’t be comfortable with a move ...


September 29, 2014, 9:03 pm, 1343303
Food prices continued to climb in September, according to Premise Data Corp., led by processed meats, including bologna and hot dogs. Getty Images

While overall inflation remains ...


September 29, 2014, 9:03 pm, 1343302

Economists and market participants in the U.S. like to fixate on every wiggle in consumption and inflation data. A tenth of a percentage point increase in the Consumer Price Index can spark fears that the Federal Reserve will raise interest rates, not to mention lead to repricing of the $1 ...


September 29, 2014, 9:03 pm, 1343297
Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for July. Although this is the June report, it is really a 3 month average of May, June and July. The consensus is for a 7.5% year-over-year increase in the Composite 20 index (NSA) for July. The Zillow ...


September 29, 2014, 8:44 pm, 1343295

The assumption of sticky prices is central in understanding the effect of monetary policies on the economy. Yet, how to best model price stickiness is an unresolved issue. This column assesses a selection of models that are able to reproduce cross-sectional heterogeneity in the setting of prices. The authors derive ...


September 29, 2014, 8:44 pm, 1343296

Offshoring of production can have a deep impact on the wages and welfare of workers with different abilities through its effect on technological progress. This column argues that, when labour is sufficiently cheap abroad, firms have incentives to offshore low-skill tasks and invest in skill-biased technologies at home. Over time, ...


September 29, 2014, 7:33 pm, 1343293

The New Republic’s Noam Scheiber is worried that Hillary Clinton hasn’t gotten the memo. It’s not enough for Scheiber that the likely Democratic presidential nominee will almost certainly make inequality a core theme of her 2016 campaign. One can expect calls for universal preschool, a higher minimum wage, ...


September 29, 2014, 7:03 pm, 1343242

The Federal Reserve has flooded the financial system with trillions of dollars as part of its effort to boost the economy. All that money out there presents the central bank with a challenge as it contemplates when and how to raise interest rates. And it has had unintended consequences, including ...


September 29, 2014, 6:05 pm, 1343241

On Mises’s Birthday:

We live in a time in which many people claim to be libertarians or at least hint that they are. This includes many obviously unlibertarian people such as Bill Maher, Paul Ryan, and Michelle Bachmann. It’s arguably a good thing when people who have no real interest ...


September 29, 2014, 6:04 pm, 1343240
(September 29, 2014 04:02 PM, by Art Carden) Pete Boettke has a great post on the intellectual legacy of Ludwig von Mises at Coordination Problem (HT: Pete Boettke via Twitter). With speculation about the possibility of a shared Baumol-Kirzner Nobel Prize, this is an interesting time to be... (0 COMMENTS)


September 29, 2014, 6:04 pm, 1343239
(Don Boudreaux)

Here’s the text of the truly splendid talk that John Cochrane gave this past Friday at a Hoover Institution conference, in honor of Gary Becker, on inequality.  Two slices:

But there are lots of different kinds of inequality, and an enormous variety of different mechanisms at work. Lumping ...


September 29, 2014, 6:04 pm, 1343238
Last week, the House Committee on Oversight and Government Reform subpoenaed documents from the Treasury Department and IRS that could have a huge impact on Pruitt v. Burwell, Halbig v. Burwell, King v. Burwell, and Indiana v. IRS – four lawsuits that could have a huge impact on ObamaCare. Those cases challenge the federal government’s ability to implement ...


September 29, 2014, 5:33 pm, 1343233
US Bombed Wrong Refineries in Syria

Oil is in the news in many countries in many ways. Let's take a look starting with a couple of paragraphs buried in the Financial Times report Barack Obama Admits US Underestimated Isis.

Allied aircraft on Sunday struck three ...


September 29, 2014, 5:33 pm, 1343232


September 29, 2014, 5:23 pm, 1343231

Consider this scenario. You travel out of town to meet up with an old friend. Your hotel is walking distance to the appointed meeting place, across a large grassy field with which you are unfamiliar.

With good conditions, the walk is about 30 minutes but, to you, the quality of ...


September 29, 2014, 5:03 pm, 1343170

Morgan Stanley, six years after getting bailed out by taxpayers, is now doing research on inequality. The former investment bank released a report last week that attributes growing inequality to many factors, including taxes:

Though tax policies are still largely supportive of lower income groups, they have become less ...


September 29, 2014, 5:03 pm, 1343169

According to this year’s International Tax Competitiveness Index, Estonia has the most competitive tax system in the developed world.

Key drivers for Estonia’s high rank are its relatively low corporate tax rate at 21 percent with no double taxation of dividend income, a nearly flat 21 percent income tax ...


September 29, 2014, 5:03 pm, 1343167

The European Central Bank has suffered an early setback in its battle to persuade households and businesses that inflation will pick up over coming months and years.

The ECB sets great store by “anchoring” inflation expectations to ...


September 29, 2014, 5:03 pm, 1343168

NEW YORK–Federal Reserve Bank of Dallas President Richard Fisher said Monday he might want to start raising interest rates next spring, rather than wait until later in the year as many of his colleagues prefer.

In an interview with The Wall Street Journal Monday, Mr. Fisher said the timing of ...


September 29, 2014, 5:03 pm, 1343166

Time heals all wounds, and that idea may finally be moving into the forefront when it comes to consumer finances. But households still carry a few scars from the Great Recession.

A ...


September 29, 2014, 4:45 pm, 1343165
A


September 29, 2014, 4:44 pm, 1343164

THIS week: Bill Gross leaves PIMCO, trade deals in trouble and the rising US dollar


September 29, 2014, 4:05 pm, 1343159

The shooting death of John Crawford in an Ohio Walmart store well illustrates the difference between private security and monopoly government security which is the final judge of its own actions, and which enjoys essentially limitless access to cash via ...


September 29, 2014, 4:05 pm, 1343158

Electronic currencies are typically viewed as “disruptive” innovations that will upset the existing structure of the banking industry (and even the economy and society at large), rather than “sustaining” innovations that generate incremental changes within the existing structure (here I’m borrowing Clayton Christensen’s famous terms). But people sometimes forget that ...


September 29, 2014, 4:05 pm, 1343157

Some Austrians and libertarians think that managerial hierarchies, even within fully private companies, are inherently inefficient (or, worse, the indirect result of government intervention). I think this view is mistaken, for a variety of reasons (see these links for some ...


September 29, 2014, 4:05 pm, 1343156

Hopscotching the globe as Thailand’s prime minister, Yingluck Shinawatra repeatedly encountered a distressing problem: bad Thai food.

Too often, she found, the meals she sampled at Thai restaurants abroad were unworthy of the name, too bland to be called genuine Thai cooking. The problem bothered her enough ...


September 29, 2014, 3:33 pm, 1343150
Note: These are remarks I gave in a concluding panel at the Conference on Inequality in Memory of Gary Becker, Hoover Institution, September 26 2014. The conference program here, where you can see the great papers I allude to. I'll probably rework this to a more general essay, ...


September 29, 2014, 3:33 pm, 1343149
The alleged recovery in Spain is already over. Retail sales are down month-over-month and year-over-year in July. August and September are both projected to be weak.

Vial translation from El Economista, Manufacturers and Retailers Warn of Another Consumption Slowdown.

After a slight recovery in the first ...


September 29, 2014, 3:33 pm, 1343148

Quite a lot, as James Courtovich explains in today’s Wall Street Journal – they are both examples of pro-consumer, innovative, disruptive, superior and cheaper alternatives to entrenched, bureaucratic, unionized, and anti-consumer/student, status quo monopoly providers. In words, both Uber and school choice provide better, low-cost alternatives to transportation and ...


September 29, 2014, 3:03 pm, 1343085

Each year, the Council on State Taxation (COST) estimates the share of total state and local taxes that are paid by businesses. The lastest edition of the report found that firms paid 44.9 percent of total U.S. state and local taxes last year—amounting to nearly $671 billion.

Here’s the breakdown ...


September 29, 2014, 3:03 pm, 1343084
Note: I follow several house price indexes (Case-Shiller, CoreLogic, Black Knight, Zillow, FHFA, FNC and more). The timing of different house prices indexes can be a little confusing. Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), ...


September 29, 2014, 2:45 pm, 1343083
A


September 29, 2014, 2:35 pm, 1343082

Lending programs create special challenges for federal budgeting. So special, in fact, that the Congressional Budget Office estimates their budget effects two different ways. According to official budget rules, taxpayers will earn more than $200 billion over the next decade from new student loans, mortgage guarantees, and the Export-Import ...


September 29, 2014, 2:05 pm, 1343081

September 29, 2014, 2:04 pm, 1343080
Jared Bernstein has offered a muscular and cogent response to my recent take-down of his CAP paper on inequality and growth. (I called it “week-kneed.”) I’d like to respond to his many excellent points in just two ways. 1. My critique is primarily of his rhetoric, not his reasoning. Progressives, IMO, should ...


September 29, 2014, 1:33 pm, 1343077

Lending programs create special challenges for federal budgeting. So special, in fact, that the Congressional Budget Office estimates their budget effects two different ways. According to official budget rules, taxpayers will earn more than $200 billion over the next decade from new student loans, mortgage guarantees, and the Export-Import ...


September 29, 2014, 1:33 pm, 1343076

In today’s “The Showoff Society” Paul Krugman continues to blame the drive for status among America’s most successful workers for abundant waste that yielded stagnant wage growth.

Yesterday, he failed to recognize the drive for status fuels investment, risk-taking and innovation that helped spur US ...


September 29, 2014, 1:33 pm, 1343075

Last week, the Treasury Department finally put out a description of the Financial Stability Oversight Council (FSOC), complete with everything but candor.

Those who have been following my op-eds about FSOC know that this is an agency set up by the Dodd-Frank Act, consists of the heads of all the federal ...


September 29, 2014, 1:33 pm, 1343074

Here’s an excerpt from Russell Gold’s article in today’s WSJ about “peak oil” titled, “Why Peak-Oil Predictions Haven’t Come True: More Experts Now Believe Technology Will Continue to Unlock New ...


September 29, 2014, 1:33 pm, 1343073

For 28-straight months, the Fed’s preferred inflation gauge — the price index for personal consumption expenditures — has undershot the central bank’s 2% target. It advanced just 1.5% in August. Given what happened before the past three tightening cycles, should there be any rush to start raising rates? ...


September 29, 2014, 1:33 pm, 1343072

Paul Krugman recently accepted a position at an income inequality institute at the City University of New York (CUNY). According to a public records request (first reported by Gawker), Krugman will be paid $25,000 per ...


September 29, 2014, 1:23 pm, 1343071
1. Labor under-utilization: We keep thinking, long and hard, about how much slack there is in the job market. Gavyn Davies brings our attention to a timely conference put on by the Peterson Institute. The "consensus" --at least as gauged by Davies-- is that the unemployment rate in ...