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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July 25, 2014, 4:04 pm, 1305679

Here is a video from the IMF…

At the 4 minute point, the representative talks about youth unemployment in Europe and recommends two things…

training to appropriate skills which would make someone more valuable. bringing down costs of employment.

Oh, how wonderful!… Make your skills more valuable only to ...


July 25, 2014, 3:33 pm, 1305674
The grim economic news from France keeps piling up. Today, Europe Online reports Number of Unemployed in France Hits New High.

The number of unemployed people in France has hit a new high as the country grapples with the fallout of the financial crisis and a sluggish ...


July 25, 2014, 3:03 pm, 1305613

The International Monetary Fund has plenty of advice for the Federal Reserve ahead of its policy meeting next Tuesday and Wednesday.

Fed officials are expected to continue discussions about what combination of interest-rate tools to use when they decide it’s time to raise borrowing costs across the economy, and the IMF ...


July 25, 2014, 3:03 pm, 1305612

In case you missed this in today's links, it's worth noting explicitly:

Devolution Number Nine, by MaxSpeak: Rep. Paul Ryan (R-Crazy) has a new plan to fight poverty..., the common theme throughout the report is to convert Federal programs into block grants. A block grant is a fixed pot ...


July 25, 2014, 3:03 pm, 1305611

From BBC:

Russia’s central bank has unexpectedly raised its key bank interest rate over concerns about inflation and “geopolitical tension”.

The bank’s board decided to raise the interest rate by 50 basis points, or half a percent, to 8% per year.

The Central Bank of Russia said on Friday that ...


July 25, 2014, 3:03 pm, 1305610
The automakers will report July vehicle sales next Friday, August 1st. Sales in June were at 16.92 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in July will be above 16 million SAAR again. The analyst consensus is for July sales of 16.8 million SAAR.


July 25, 2014, 2:45 pm, 1305609
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July 25, 2014, 2:45 pm, 1305608
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July 25, 2014, 2:34 pm, 1305607

Two years ago, we apparently came alarmingly close to an event that we could not have possibly avoided which would have had widespread devastating consequences:

On July 23, 2012, the sun unleashed two massive ...


July 25, 2014, 2:05 pm, 1305606

Jeff Deist and Yuri Maltsev discuss not only his defection from the former USSR, but also his defection from the Marxist economic mindset, the crime of reading Hayek, why so many westerners still have a naïve, uninformed, and romantic view of socialism, how the Ruble ...


July 25, 2014, 2:05 pm, 1305605

Like much of her commentary, I find this considerably overstated.  Still, it suggests a few points of interest and also concern:

The mere existence of this facility could exacerbate liquidity runs during times of market stress. Borrowers in the short-term debt markets will have to compete with it for investment dollars ...


July 25, 2014, 1:33 pm, 1305599

In his CNBC interview yesterday, President Obama offered a misleading criticism of corporate inversions and missed an opportunity to call for structural reform of corporate income taxation.

President Obama began by condemning inversion transactions, in which corporations effectively swap their US charters for foreign charters. Inversions offer tax savings ...


July 25, 2014, 1:33 pm, 1305597

Republicans, generally, seem very worried about the Fed’s low-interest rate policy, not to mention its bond buying. So this is their response:

Several House Republicans are embracing Stanford University economist John B. Taylor’s call for the Federal Reserve to adopt a mathematical rule for determining interest rates, stepping into ...


July 25, 2014, 1:33 pm, 1305598

In the New York Times today, John Harwood asks the following of Hillary Clinton:

Harwood: Paul Ryan’s out with a plan today proposing that states be allowed to take all of the programs for those in need in one revenue stream as a way of finding better ways to ...


July 25, 2014, 1:33 pm, 1305596

… is from Karr Ingham, economist for the Texas Alliance of Energy Producers, from a recent presentation in Houston where he predicted that crude oil production in Texas will surpass its 1972 all-time high within two years:

When oil companies get richer, they don’t pocket their money. They invest ...


July 25, 2014, 1:23 pm, 1305595
Added to the familiar gallery of corporate monsters are those making money from parasitic smartphone apps


July 25, 2014, 1:03 pm, 1305535

It’s been an encouraging 24 hours for British economic policy makers. But the recent run of strong growth figures flatters the economy’s post-crisis performance, and understates the distance that still has to be covered until the recovery is complete.

For a fourth straight update, the International Monetary Fund Thursday raised its ...


July 25, 2014, 1:03 pm, 1305534

Robert Rubin:

How ignoring climate change could sink the U.S. economy, by Robert E. Rubin: ...When it comes to the economy, much of the debate about climate change ... is framed as a trade-off between environmental protection and economic prosperity. Many people argue that moving away from fossil fuels ...


July 25, 2014, 1:03 pm, 1305533
From HotelNewsNow.com: STR: US hotel results for week ending 19 July

In year-over-year measurements, the industry’s occupancy rate rose 2.9 percent to 77.1 percent. Average daily rate increased 4.1 percent to finish the week at US$117.57. Revenue per available room for the week was up 7.1 percent to finish ...


July 25, 2014, 12:45 pm, 1305532
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July 25, 2014, 12:05 pm, 1305529

Friday July 25 (Central Daylight Time)
9:00 - 10:00 a.m.—Common Objections to Capitalism | Terrell
10:15 - 11:15 a.m.—Hayek and Friedman: Head to Head | Garrison
11:30 a.m. – 12:30 p.m.—Gold Standards: True and False | Salerno


July 25, 2014, 12:05 pm, 1305530

Mises Daily Friday by Ryan McMaken

The Navajos want to develop the southern rim of the Grand Canyon, but environmentalists are unhappy. There’s little private property involved, so don’t blame the capitalists, and it’s worth remembering that much of the tourist economy ...


July 25, 2014, 12:05 pm, 1305528

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 23 July 2014.


July 25, 2014, 12:05 pm, 1305527

Chris Westley’s article explaining how Carl Menger put consumers front and center in determining value has been translated into Italian: “I consumatori sono i re in un’economia di libero mercato.”


July 25, 2014, 12:05 pm, 1305526

1. The London pheromone party.

2. Get paid (a little) for Facebook posts.

3. “Both studies revealed similar patterns of relations between trolling and the Dark Tetrad of personality: trolling correlated positively with sadism, psychopathy, and Machiavellianism, using both enjoyment ratings and identity scores. Of all personality measures, ...


July 25, 2014, 12:04 pm, 1305525

ProGrowthLiberal in his comments on my last post and in his own post at EconoSpeak highlights the fact that drug-maker AbbVie already makes most of its profits outside the United States, about 87% in fact over 2011-2013 by his calculation. For PGL, then, AbbVie is not the best ...


July 25, 2014, 11:33 am, 1305521

Each week, The LEDGER highlights AEI’s research and commentary on economic matters, covering hot issues such as the budget, tax reform, housing policy, inflation, minimum wage, and the Eurozone crisis. So you don’t miss anything, here’s a sneak peek.

Financial regulatory reform—four years later

Testimony from Paul Kupiec ...


July 25, 2014, 11:33 am, 1305520

Here is President Obama in a chat yesterday with CNBC’s Steve Liesman:

STEVE LIESMAN: Mr. President, I just want to pivot back one more time to domestic issues.  You’ve said a bunch of times that getting the wealthy to pay a little bit more, and you’ve succeeded in raising that top ...


July 25, 2014, 11:23 am, 1305519
A report out yesterday from theHealth and Social Care Information Centreshows a dramatic fall in the consumption by young people (aged 11 to 15) of our favourite demerit goods – alcohol, cigarettes and drugs. The report suggests that over the last decade regular smoking fell from 9% to 3% ...


July 25, 2014, 11:03 am, 1305457

A European Central Bank paper has weighed in on a big debate among economists in recent years: how much of an effect fiscal belt-tightening has on the economy.

The paper was written by a pair of economists–one from the ECB and one from the International Monetary Fund–and concludes that fiscal consolidation ...


July 25, 2014, 11:03 am, 1305456
Here is a new indicator that I'm following that appears to be a leading indicator for industrial production.

From the American Chemistry Council: U.S. Economic Expansion Being Tempered By Uncertainty in Energy Markets, Shows Leading Economic Indicator

The Chemical Activity Barometer (CAB), a leading economic indicator created ...


July 25, 2014, 10:45 am, 1305455
A popular saying around the Obama White House during the economic crisis in 2009 was: If you’re not talking about the economy, you’re not relevant. That still seems to be the driving mantra in the West Wing.


July 25, 2014, 10:45 am, 1305454
The Journal's morning rundown of the biggest news stories and exclusive features from Washington on politics, policy, financial regulation, defense and more.


July 25, 2014, 10:45 am, 1305453
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July 25, 2014, 10:44 am, 1305452

AS ANY fruit enthusiast knows keeping track of the seasons is important. Looking for strawberries in winter or apples come the summer is bound to result in high prices, poor quality or both. Curiously,new researchby Justin Murfin of Yale University and Mitchell Petersen from the Kellogg School ...


July 25, 2014, 10:36 am, 1305451
Housing remains a weak spot for the US economy, as suggested in yesterday’s news of a surprisingly large decline in new home sales for June. The report follows last week’s update on new residential construction, which also slumped more than … Continue reading →


July 25, 2014, 10:36 am, 1305450

Nick Cohen describes how "diversity" can be used to justify illiberal inequality. I suspect this might be true in another way.

What I mean is that there might be less diversity of opinion and character now than there was in the past. Naturally, I can't ...


July 25, 2014, 10:04 am, 1305449
(July 25, 2014 09:49 AM, by Bryan Caplan) Though I'm no fan of The Economist's editorials, their science coverage remains outstanding. Check out their latest piece on overparenting. You could say I'm biased because the piece draws so heavily on my work, but as a pedantic professor, you'd... (0 COMMENTS)


July 25, 2014, 10:04 am, 1305448
(Don Boudreaux)

Cato’s David Boaz takes E.J. Dionne to task for carelessly and myopically – and ideologically blindly – criticizing the Halbig decision.  A slice:

Third, I wonder if E. J. Dionne Jr. really wants a judiciary that rolls over for the political branches, whether legislative or executive. Does he believe that ...


July 25, 2014, 9:33 am, 1305446

|Peter Boettke|

This is the cover from Vol. 2 (October 1959) edition of theJournal of Law and Economics and as you will notice 3 University of Virginia economics faculty are in this issue --- Coase, Buchanan and Nutter. Coase and Buchanan would go on to win the Nobel Prize, ...


July 25, 2014, 9:03 am, 1305383

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, July 25, 2014:

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Highlights

Hilsenrath’s Take: In A Quiet Moment, Big Decisions Loom for Fed Greenspan Says Bubbles Can’t ...


July 25, 2014, 9:03 am, 1305384

Has the number of American factories finally stopped its long, painful decline?

One economist thinks so. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, a research group in Arlington, ...


July 25, 2014, 9:03 am, 1305382
Getty Images

3.2%

The U.K.’s annualized growth in the second quarter. That’s a little slower than the 3.3% in notched up in the first three months but still a respectable performance. Growth was driven by the U.K.’s dominant ...


July 25, 2014, 8:45 am, 1305381
The Journal's morning rundown of the biggest news stories and exclusive features from Washington on politics, policy, financial regulation, defense and more.


July 25, 2014, 8:44 am, 1305380

WHO would have thought a couple of years ago that the British economy would be among the fastest-growing in the developed world? The Office for National Statistics (ONS) has just releasedits latest GDP estimates, which confirm its surprising revival: the UK has expanded for the sixth consecutive quarter. Overall, ...


July 25, 2014, 8:44 am, 1305379

“IF I have seen further”, Isaac Newton once demurred, “it is by standing on the shoulders of Giants”. The process of invention has long been a cumulative one, in which incremental advances are made on previous innovations. However, a new NBERworking paper* by Alberto Galasso of the Rotman School ...


July 25, 2014, 8:36 am, 1305378

Corporate inversions: Not exactly a home-run campaign issue. But some Democrats are swinging for the fences anyway, including President Obama: “You shouldn’t get to call yourself an American company only when you want a handout from American taxpayers.” He reiterated a call for “economic patriotism” among corporations and ...


July 25, 2014, 8:34 am, 1305377

Ticket collectors at Southwest Airlines are our first line of defense.

GMA (“Family Booted Off Southwest Airlines After Dad Tweeted About ‘Rude’ Gate Agent“):

A Minneapolis man said ...


July 25, 2014, 8:05 am, 1305374

Now seems like an apposite time to remember, Congress intends no more than Congress smiles. As Ken Shepsle put it in his classic paper Congress is a “They,” not an “It”:

Legislative intent is an internally inconsistent, self-contradictory expression. Therefore, it has no meaning. To claim otherwise is to entertain a myth (the ...


July 25, 2014, 8:04 am, 1305373
For all the caveats about per capita GDP - not something that usually gets much emphasis in the policy debate - this was another good GDP number, following on from the symbolic uprating of UK growth forecasts by the International...


July 25, 2014, 8:04 am, 1305372
(Don Boudreaux)

… is from page 52 of the 1987 Liberty Fund edition of Helmut Schoeck’s excellent 1966 volume, Envy; it occurs in a section of the book where Schoeck discusses the practice of many primitive people to use black magic against those whose positions and possessions they envied:

The false ...


July 25, 2014, 7:33 am, 1305368

He's good.


July 25, 2014, 7:33 am, 1305369

Why does pain hurt, why does anesthesia work, and three more.


July 25, 2014, 7:33 am, 1305367

Revealing: "#5. Jennifer Aniston Is Always With a Guy and Never Really Happy About It".


July 25, 2014, 7:03 am, 1305350

Millennials get flack for postponing marriage, living with parents and shying away from homeownership. But what’s less discussed is how, to some extent, they’re just responding rationally to their local housing markets.

Nearly half of Americans between the ages of 23 and 34 who lived in metro areas with “ideal housing ...


July 25, 2014, 7:03 am, 1305349

The U.S. housing market appears to be finding its footing after a sharp rise in mortgage rates last summer, on top of some big price gains, deflated sales.

The National Association of Realtors reported on Tuesday that sales of previously owned homes rose 2.6% in June to a seasonally adjusted annual ...


July 25, 2014, 7:03 am, 1305343

The Wall Street Journal’s Daily Report on Global Central Banks for Wednesday, July 23, 2014:

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Highlights

Da Costa’s Take: The Fed Still Has Little Reason to Worry About Inflation Regulators Said ...


July 25, 2014, 7:03 am, 1305342

Manufacturers, by definition, make things.

But is that definition outdated? That’s the question behind a move among federal government agencies to reclassify as “manufacturers” companies like Apple Inc., which controls every aspect of the iPhones and other products it sells–except their actual fabrication. Production is ...


July 25, 2014, 7:03 am, 1305341

Hungary’s central bank governor has said the institution was done cutting interest rates, but analysts aren’t so sure.

The central bank  on Tuesday lowered its benchmark rate by 0.2 percentage point to 2.10%, a deeper cut than expected and the latest in a series of monthly cuts since August 2012, ...


July 25, 2014, 7:03 am, 1305344

Uncertainty breeds volatility. That’s why even though volatility levels are near record lows, the Institute of International Finance sees choppy markets ahead.

Investors have been willing to take on more risk, pushing borrowing costs down and buoying stock values, amid strengthening confidence in the U.S. and global recoveries. But with perhaps ...


July 25, 2014, 7:03 am, 1305347

When the Federal Reserve started tests late last year of its so-called reverse repo facility, some officials hoped it would play a starring role in the campaign to raise interest rates when the time comes.

But now the Fed thinks the new tool will play no more than a “useful supporting ...


July 25, 2014, 7:03 am, 1305340

By Eva Dou

Taiwan has long been home to many of Apple 's key suppliers.

Getty Images

But is the iPhone maker’s business really big enough to ...


July 25, 2014, 7:03 am, 1305348

It’s a good time to be a vegan. Meat prices are up 9.4% in June from a year earlier, and pork, fish and eggs are more expensive, too.

Prices for the food Americans ...


July 25, 2014, 7:03 am, 1305346
A wholesale market in Hyderabad. Agence France-Presse/Getty Images

India is on the verge of torpedoing another trade pact, and at issue yet again are the country’s ...


July 25, 2014, 7:03 am, 1305345
t Reuters

Last year, Australia’s central bank cut rates to a record low 2.5% to help boost flagging growth as a mining boom slowed.

While that extreme measure ...


July 25, 2014, 7:03 am, 1305338
Two cleaners rest on a bench at the Bund in Shanghai on July 23, 2014. Agence France-Presse/Getty Images

It has been a rocky year for China’s economy ...


July 25, 2014, 7:03 am, 1305333

It’s tempting to make sweeping statements that millennials don’t want to own anything and would rather rent it all—from cars on Uber to movies on Netflix to apartments ...


July 25, 2014, 7:03 am, 1305339

Japanese trade data for June, released Thursday, may not have encouraged analysts looking for a pickup in exports to end a two-year streak of trade deficits.

Yet the figures are not all ...


July 25, 2014, 7:03 am, 1305331

Singapore’s industrial production for June tells an interesting story. Output grew 0.4%, surprising analysts who expected a contraction. But electronics production continued to fall heavily, by 4.8% on year after a 4% ...


July 25, 2014, 7:03 am, 1305334

Federal Reserve Chairwoman Janet Yellen has made clear that her perceptions of a healthy labor market hinge on more than just the unemployment rate or the strength of recent job gains. Also high up on her labor-market dashboard is wage growth. As labor markets tighten, workers should be able ...


July 25, 2014, 7:03 am, 1305332

 

ZUMAPRESS.com

Japan’s annual inflation rate in June was stable enough that it is unlikely to trigger a fresh round of monetary stimulus by the Bank of Japan ...


July 25, 2014, 7:03 am, 1305335

Bankers tend to abhor risk. Especially geopolitical conflicts involving a nuclear power.

So risk managers around the world probably smiled Wednesday when the numbers came out showing their exposure to Russian creditors fell significantly in the first quarter, while Ukraine was facing the loss of its Crimea region and


July 25, 2014, 7:03 am, 1305337

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, July 24, 2014:

Sign up for the newsletter.

Highlights

Hannon’s Take: BOE Seeks Clarity on Wages As First Rate Rise Awaits Carney: U.K. Economy ...


July 25, 2014, 7:03 am, 1305336

It has become a common refrain: “It’s too hard to get a mortgage.” But is it true?

An analysis from economists at Goldman Sachs tries to shed some light ...


July 25, 2014, 6:45 am, 1305330
A popular saying around the Obama White House during the economic crisis in 2009 was: if you’re not talking about the economy, you’re not relevant. That still seems to be the driving mantra in the West Wing.


July 25, 2014, 6:45 am, 1305329
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July 25, 2014, 6:45 am, 1305327
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July 25, 2014, 6:45 am, 1305328
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July 25, 2014, 5:23 am, 1305324
This is a super report from BBC Newsnight on the issue of our throwaway society and the externalities of waste. How can the link between consumption and the discarding of unwanted and broken products be weakened? What role can innovation play - for example the rise of modular phones where ...


July 25, 2014, 5:03 am, 1305303

Singapore’s industrial production for June tells an interesting story. Output grew 0.4%, surprising analysts who expected a contraction. But electronics production continued to fall heavily, by 4.8% on year after a 4% ...


July 25, 2014, 5:03 am, 1305302

It was a triumphant story that was first published by the Northport Patch back on 5 August 2011. Then, the tiny community web site of the tiny town located on the northwest corner of Long Island, New York announced that then 13-year old ...


July 25, 2014, 5:03 am, 1305300

Beware of "anti-government propaganda":

Left Coast Rising, by Paul Krugman, Commentary, NY Times: The states, Justice Brandeis famously pointed out, are the laboratories of democracy. And it’s still true. For example, one reason we knew or should have known that Obamacare was workable was the post-2006 success of Romneycare ...


July 25, 2014, 5:03 am, 1305301

July 25, 2014, 4:45 am, 1305299
A


July 25, 2014, 4:05 am, 1305298

…they all had help in the early going from Matt Scherer. Scherer is, or was up until about a week ago, a professional track pacer, one of only a handful of people worldwide who used his speed and finely honed sense of time to help other people run ...


July 25, 2014, 4:05 am, 1305297

The Ryan plan is here (pdf), an NYT summary is here. Overall it’s pretty good.  It attacks excess incarceration and occupational licensing and regressive regulations, three issues where a serious dialogue is badly needed.  It makes a good attempt to limit the incentives for lower-income people ...


July 25, 2014, 3:33 am, 1305295
Corporate Deserters

President Obama was beating the drums on Thursday in Los Angeles regarding corporate tax deserters, companies that move headquarters or tax shields to another country in order to escape high US tax rates.

The LA Times provides the details in President Obama Hits ...


July 25, 2014, 3:23 am, 1305294

I love economic history books, and I believe that most investors should read economic history.  History offers a broader paradigm for analyzing investment situations than mathematical models do.

Mark Twain is overquoted on this, but only because he deserves to be quoted:
“History doesn’t ...


July 25, 2014, 2:44 am, 1305255

It is too easy to miss poignant moments in the news avalanche of Argentina debt litigation. Here is one from Judge Griesa's monologue at the July 22 hearing:

I can't remember whether it was 2010 or 2011, but thereabouts, the attorneys for the plaintiffs requested the Court ...


July 25, 2014, 2:05 am, 1305253

What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits — but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to ...


July 25, 2014, 1:03 am, 1305207

 

ZUMAPRESS.com

Japan’s annual inflation rate in June was stable enough that it is unlikely to trigger a fresh round of monetary stimulus by the Bank of Japan ...


July 25, 2014, 1:03 am, 1305206

I was at the NBER Summer Institute’s meeting of the International Finance and Macro group where (in addition to finally meeting Jim Hamilton) I had the opportunity to hear two papers on a topic near and dear to me — namely the relationship between the forward premium (the gap ...


July 25, 2014, 12:34 am, 1305205
Teaser:

Scott ...


July 25, 2014, 12:04 am, 1305203
(July 24, 2014 10:32 PM, by Scott Sumner) Keynesians often say that it's "obvious" that more government spending will boost GDP. I love this reply by Nick Rowe: The average reader of the New York Times probably thinks he knows about fiscal policy. "We know that Y=C+I+G+NX, so... (1 COMMENTS)


July 24, 2014, 11:03 pm, 1305142

I have an op-ed in Business Spectator endorsing the sceptical approach to macro-prudential regulation taken in the Murray inquiry’s interim report:

Macro-prudential policies are seen as providing policymakers with a more targeted set of policy instruments that might complement or even substitute for changes in official interest rates. However, these ...


July 24, 2014, 11:03 pm, 1305141
CR Note: The comments on D.R. Horton are very interesting (more incentives, no price increases). Also see table at bottom for summary stats.

From housing economist Tom Lawler:

D.R. Horton reported that net home orders in the quarter ended June 30, 2014 totaled 8,551, up 25.3% from the ...


July 24, 2014, 10:44 pm, 1305140

So we are again treated to what has become an annual tradition:  the analysis of Dodd-Frank on its anniversary.  The Republicans trot out a report critical of the Act, and the Democrats defend it.  Yawn.

Actually, this year the Republican report is not half bad.  Sure ...


July 24, 2014, 10:35 pm, 1305139

The Bring Jobs Home Act is a classic message bill. Its Democratic sponsors have no interest in making it law, they merely see it as a way to boost the party’s Senate candidates in part by forcing Republicans to vote against something that sounds like a good idea. After ...


July 24, 2014, 10:34 pm, 1305138

The Navajos want to develop the southern rim of the Grand Canyon, but environmentalists are unhappy. There’s little private property involved, so don’t blame the capitalists, and it’s worth remembering that much of the tourist economy in the West is a subsidized invention ...


July 24, 2014, 9:33 pm, 1305135
It Fits

Reader Eric comments "It is amazing what internet, twitter, etc. has done for the pursuit of truth. Here is an individual who shows where the piece fits on the plane."

From @ErzaBraam



The Piece


July 24, 2014, 8:36 pm, 1305076

The Bring Jobs Home Act is a classic message bill. Its Democratic sponsors have no interest in making it law, they merely see it as a way to boost the party’s Senate candidates in part by forcing Republicans to vote against something that sounds like a good idea. After ...


July 24, 2014, 8:05 pm, 1305075

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 23 July 2014.


July 24, 2014, 8:05 pm, 1305074

The guns and butter model is used by economists to contrast the costs of spending resources on domestic-economy amenities (butter) or on foreign policy and war (guns). Every government knows, however, that if it plays its cards right, this need not ...


July 24, 2014, 8:04 pm, 1305073

I’ve been working for quite a while now on a book which will respond to Henry Hazlitt’s Economics in One Lesson a book that was issued just after 1945 and has remained in print ever since. It’s an adaptation of the work of the 19th century French free-market advocate Frederic ...


July 24, 2014, 7:33 pm, 1305072


July 24, 2014, 7:03 pm, 1305011

It’s tempting to make sweeping statements that millennials don’t want to own anything and would rather rent it all—from cars on Uber to movies on Netflix to apartments ...


July 24, 2014, 7:03 pm, 1305010

“Trolls Just Want to Have Fun”

I have been thinking about this paper, particularly over the past day:

…Across two studies and two measures of trolling,…[trolls] displayed high levels of the Dark Tetrad [narcissism, Machiavellianism, psychopathy, and sadistic personality] traits and a BFI [Big Five Inventory] profile consistent ...


July 24, 2014, 6:45 pm, 1305009
A


July 24, 2014, 6:05 pm, 1305007

We’re still adding photos there, but you can see what’s been added so far at our Picasa page for Mises U 2014.


July 24, 2014, 6:05 pm, 1305008

Mises Daily Thursday by Gary Galles:

Only individuals can determine what is efficient for themselves, and they will only engage in voluntary exchange when they believe it is the efficient thing to do. Some economists, and most governments, prefer to use other ...


July 24, 2014, 6:05 pm, 1305006

Thursday, July 24 (Central Daylight Time)
1:30 - 2:30 p.m.—The Corrupt Origins of Central Banking in America | DiLorenzo
2:45 - 3:45 p.m.—Energy Policy | Murphy
4:00 - 5:00 p.m.—Four Things the State is Not | Woods


July 24, 2014, 6:05 pm, 1305005

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 23 July 2014.


July 24, 2014, 5:33 pm, 1305002
The first half of 2014 sported record junk bond purchases by investors thirsty for yield, no matter how absurd the bond covenants or how risky the investment.

Things may have changed in July as the following chart shows, using JNK (the Barclays High Yield ETF) as a proxy for ...


July 24, 2014, 5:33 pm, 1305001

If you want America to become Scandinavia, then you won’t like Paul Ryan’s new anti-poverty plan. The House Budget chairman didn’t call for a universal basic income or universal preschool. And if you want Republicans to hush up and just accept the Obama minimum-wage agenda, you won’t like ...


July 24, 2014, 5:33 pm, 1305000

Both Sean Davis and Ben Domenech at the web magazine The Federalist have used the chart above in their recent posts about food inflation here and here. As the title of the chart implies, Davis ...


July 24, 2014, 5:03 pm, 1304938

Just as Australia repealed its debated carbon tax, India is intensifying its own taxation of non-renewable energy by doubling its coal tax from $0.83 to $1.67 per metric ton.

India estimates that the tax increase will generate $1.2 billion of additional revenues for its National Clean Energy Fund, ...


July 24, 2014, 5:03 pm, 1304937

Bankers tend to abhor risk. Especially geopolitical conflicts involving a nuclear power.

So risk managers around the world probably smiled Wednesday when the numbers came out showing their exposure to Russian creditors fell significantly in the first quarter, while Ukraine was facing the loss of its Crimea region and


July 24, 2014, 5:03 pm, 1304936

Federal Reserve Chairwoman Janet Yellen has made clear that her perceptions of a healthy labor market hinge on more than just the unemployment rate or the strength of recent job gains. Also high up on her labor-market dashboard is wage growth. As labor markets tighten, workers should be able ...


July 24, 2014, 5:03 pm, 1304935
From the National Multi Housing Council (NMHC): Apartment Markets Continue Expansion in July NMHC Quarterly Survey

Apartment markets continued to expand in the second quarter of 2014, as growth accelerated in all four indexes in the National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions. The market ...


July 24, 2014, 4:45 pm, 1304934
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July 24, 2014, 4:44 pm, 1304933

Roberts returns to the topic of development this week in his conversation with Columbia's Chris Blattman, advocate of a radical approach to fighting poverty.

Share YOUR thoughts on this week's episode...Join the conversation in the comments, or start your own offline. We love to hear from you!

Check Your Knowledge:

1. ...


July 24, 2014, 4:05 pm, 1304931

…in South Korea, the Hanwha Eagles (former team of Hyun-Jin Ryu) have gone “next level” by providing robots to stomp and yell unifying chants for those who cannot attend the game in person.

There is more here, good short video, the robots take on the actual ...


July 24, 2014, 4:04 pm, 1304930
(July 24, 2014 03:00 PM, by Art Carden) Earlier today, I blogged about Adam Thierer's Permissionless Innovation. Over the last few months, I've been struck by how frequently I hear public policy questions expressed in terms of granting permission: should we allow people to earn such high incomes,... (3 COMMENTS)


July 24, 2014, 3:33 pm, 1304927
90% Customer Satisfaction Too Much for Brussels

Bussels and Spain both stepped up attacks on Google over the past few days. Let's dive into the insanity with a Mish-translated report from Les Echos: Brussels Ready to Revive Showdown with Google

Pressure from Brussels increases on Google. The ...


July 24, 2014, 3:33 pm, 1304926
Some interesting happenings in Ukraine today, in Kiev rather than the war zone. Issues concern unpaid soldiers, pro-Russian MPs, and various oil schemes to finance the war.

Let's take a look starting with Kiev Government Breaks Up as EU Mulls Fresh Russia Sanctions

Ukraine’s premier Arseniy ...


July 24, 2014, 3:33 pm, 1304925

On July 15 the Congressional Budget Office rolled out updated projections for Social Security, which show the system’s long-term deficit has nearly quadrupled since 2008 to 4% of payroll. This means that to pay full benefits through 75 years would require an immediate and permanent increase in the Social ...


July 24, 2014, 3:33 pm, 1304924

As in a Greek tragedy, Argentina finds itself yet once again moving rapidly and inexorably towards an external debt default. For barring any last minute backing down by US District Court Judge Thomas Griesa, Argentine President Cristina Fernandez, or Elliot Management’s Paul Singer, Argentina will almost certainly default on July ...


July 24, 2014, 3:23 pm, 1304923
The Fed's QE3 program is scheduled to end later this year. This will bring to a close the Fed's five year experiment with QE programs. They have been incredibly controversial, especially among those who believe these programs enabled the federal government to run large budget deficits. Those holding ...


July 24, 2014, 3:03 pm, 1304859
Two cleaners rest on a bench at the Bund in Shanghai on July 23, 2014. Agence France-Presse/Getty Images

It has been a rocky year for China’s economy ...


July 24, 2014, 3:03 pm, 1304860

Japanese trade data for June, released Thursday, may not have encouraged analysts looking for a pickup in exports to end a two-year streak of trade deficits.

Yet the figures are not all ...


July 24, 2014, 3:03 pm, 1304857

It has become a common refrain: “It’s too hard to get a mortgage.” But is it true?

An analysis from economists at Goldman Sachs tries to shed some light ...


July 24, 2014, 3:03 pm, 1304856

Bankers tend to abhor risk. Especially geopolitical conflicts involving a nuclear power.

So risk managers around the world probably smiled Wednesday when the numbers came out showing their exposure to Russian creditors fell significantly in the first quarter, while Ukraine was facing the loss of its Crimea region and


July 24, 2014, 3:03 pm, 1304858

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, July 24, 2014:

Sign up for the newsletter.

Highlights

Hannon’s Take: BOE Seeks Clarity on Wages As First Rate Rise Awaits Carney: U.K. Economy ...


July 24, 2014, 2:44 pm, 1304855
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July 24, 2014, 2:44 pm, 1304854
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July 24, 2014, 2:35 pm, 1304850

Maybe Chicago is not their kind of town. Five Chicagoans, all Walgreen board members, need to decide whether to pack up and move the company’s headquarters to Europe. Walgreen is in the second stage of its merger with Swiss-based Alliance Boots that could slash Walgreen’s tax bill by ...


July 24, 2014, 2:35 pm, 1304848

In an extensive new analysis of House Ways & Means Committee Chair Dave Camp’s tax reform plan, my Tax Policy Center colleagues confirm his proposal would raise about the same amount of money over 10 years as current law and impose roughly the same tax burden across income groups as ...


July 24, 2014, 2:35 pm, 1304851

The IRS is getting a lot of flak these days about lost emails and alleged politically motivated activity. But last week I ran into a problem that hit much closer to home. It appears that the IRS telephone help line is out of service, at least for my basic tax ...


July 24, 2014, 2:35 pm, 1304852

On the Hill this week: The House may vote to make bonus depreciation permanent. The Senate Finance Committee may present a transportation funding plan reflecting a compromise with the House Ways and Means Committee. The House Oversight and Government Reform Committee has scheduled ...


July 24, 2014, 2:35 pm, 1304853

When President Obama proposed his 2015 budget last March, he vowed to cut taxes for working class Americans while making sure high income households pay their “fair share.” New Tax Policy Center estimates show that, like it or not, Obama would do pretty much as he promised. Low-income ...


July 24, 2014, 2:35 pm, 1304847

Smoothing pensions to fund highways: A bumpy, short road. The House Ways & Means Committee will include “pension smoothing” in a $10.9 billion highway funding bill to be marked up tomorrow. In 2012 lawmakers covered two years of highway and transit funding by ...


July 24, 2014, 2:35 pm, 1304849

Tax expenditures for retirement saving top $100 billion annually—from 401(k)-type plans ($61.4 billion) to IRAs ($17.6 billion) to tax preferences for pensions ($35.1 billion)—but these subsidies disproportionately benefit higher-income households and do relatively little to improve the balance sheets of low- and moderate-income Americans. According to one study, the ...


July 24, 2014, 2:35 pm, 1304842

A highway bill could soon head down Pennsylvania Avenue. The House Rules Committee  plans to send to the floor the Ways & Means panel’s short-term highway funding bill today. After a floor vote sometime this week, it’s seen as the likely version to land ...


July 24, 2014, 2:35 pm, 1304846

Pity House Ways & Means Committee Chairman Dave Camp. He wants to rewrite the tax code in a serious way, but instead he’s spending his days trying to come up with imaginary revenue sources to pay for important spending priorities ...


July 24, 2014, 2:35 pm, 1304840

Kansas Governor Sam Brownback and his state legislature have embarked on a wonderful natural experiment. Once again we are testing the question: Can tax cuts pay for themselves? The answer– yet again– is a resounding no.

We’ve tried this experiment time and again. And tax cut proponents such as economist Art Laffer ...


July 24, 2014, 2:35 pm, 1304843

Congress keeps playing with the Highway Trust Fund—but why? The House Ways & Means Committee approved its effort to fund the Highway Trust Fund through May, 2015. To reach a bipartisan deal, the Senate Finance Committee ultimately took a slightly different approach in a $10.8 billion proposal ...


July 24, 2014, 2:35 pm, 1304841

Expect the House to approve some permanent changes in the charitable deduction this week. They include contributions of food inventory, real property for conservation purposes, and  IRA distributions for charitable purposes. The measure would also allow individuals’ charitable contributions made between the end of ...


July 24, 2014, 2:35 pm, 1304844

Congress is in the midst of another Perils of Pauline political showdown: This time the drama is over how to finance the highway trust fund, which will be unable to pay its bills in a couple of weeks. House Republicans have cooked up one set of gimmicks to keep ...


July 24, 2014, 2:35 pm, 1304845

The thing about pension smoothing: The bumps always come back. Neither the Committee for a Responsible Federal Budget nor TPC’s Len Burman will suspend disbelief when it comes to the latest gimmick to patch the Highway Trust Fund. Maybe “stupid tax tricks” work politically but “pretending ...


July 24, 2014, 2:35 pm, 1304835

Congress and corporate America are in a dangerous and mutually destructive race: The more lawmakers threaten to ban the practice of inversions—where U.S. based multinationals merge with foreign firms to lower their tax bill– the more firms race to complete the deals while they can. The more deals, the more ...


July 24, 2014, 2:35 pm, 1304834

Australia repeals its two-year-old carbon tax. It’s been a contentious issue for seven years. Australia is one of the biggest producers of carbon emissions per capita. Its government is committed to reducing emissions to 5 percent below year 2000 levels  by 2020. A carbon ...


July 24, 2014, 2:35 pm, 1304836

Treasury calls for quick Congressional action, because Congress is known to be… quick. Secretary Jack Lew asked top congressional tax writers to act now to end corporate inversions, and make such legislation retroactive to May of this year, giving Congress time to


July 24, 2014, 2:35 pm, 1304838

The newest Congressional Budget Office long-term budget outlook, released today, is more evidence that the long-term federal budget problem may be forgotten, but it is not gone.

Here are six takeaways.

1. The size of the budget deficit today isn’t a problem, and it’s not much of a problem for ...


July 24, 2014, 2:35 pm, 1304833

Another big inversion deal heads to closing. Pharmaceutical giant AbbVie agreed to purchase UK drugmaker Shire, making it the largest US company so far to move its address overseas for lower taxes. The deal, now estimated to be worth about $55 billion, will likely close despite ...


July 24, 2014, 2:35 pm, 1304839

If you cut it, will it do more? The IRS budget has been cut by $1 billion over the past four years, with a subsequent loss of 10,000 IRS jobs. Late Monday night, the House GOP by voice vote voted to cut $1.14 billion for the ...


July 24, 2014, 2:35 pm, 1304837

Nice piece by Tax Notes reporter Lindsey McPherson describing the recent history of the tax extenders. Four take-aways:  There is always last-minute drama over bringing them back, most are repeatedly extended, they are almost never paid for, and they are frequently rolled into a bigger bill.

In 2004, 2006, ...


July 24, 2014, 2:35 pm, 1304827

Has President Obama’s tax policy reduced income inequality? It depends on what you are comparing it to.

White House Council of Economic Advisors chief Jason Furman claims that President Obama’s tax policies have sharply reduced inequality. Today’s Washington Post Wonkblog featured some new tables from the Tax Policy Center ...


July 24, 2014, 2:35 pm, 1304826

Have Obama’s tax policies reduced income inequality? TPC has some new data, but the answer depends on who you compare him to. Relative to George W. Bush, who pushed major tax cuts for high-income households, Obama has reduced inequality. But compared to Bill Clinton, his policy is pretty ...


July 24, 2014, 2:35 pm, 1304832

Did banks help a hedge fund avoid $6.8 billion in US taxes? Yes, according to the Senate Homeland Security and Government Affairs panel’s Permanent Subcommittee on Investigations. Its report, released in advance of this morning’s hearing, argues that “basket option structures” were designed to conceal two things: the ...


July 24, 2014, 2:35 pm, 1304828

Two appeals courts deliver opposing rulings on Affordable Care Act tax subsidies. The DC Circuit Court ruled yesterday that the tax credits can only go to residents in states that run their own  health exchanges. In Richmond, VA, the 4th Circuit Court said the ACA language isn’t clear, so the ...


July 24, 2014, 2:35 pm, 1304829

Unlike the rest of us, many high-income, influential people and organizations have close to a free hand when it comes to their taxes. Already underfunded and understaffed, the IRS seems incapable of stopping many aggressive or even abusive interpretations of the tax laws, often by hedge funds or politically-motivated tax-exempt ...


July 24, 2014, 2:35 pm, 1304831

In recent months, several governors have complained about the April, 2014, surprise in state tax revenues. They say they were shocked when personal income tax payments fell far below expectations. They shouldn’t have been.

What happened? In part, in an effort to beat an upcoming increase in capital gains taxes, ...


July 24, 2014, 2:35 pm, 1304830

Today, I testified before the U.S. Senate Permanent Subcommittee on Investigations (the “Subcommittee”) on the abuse of structured financial products by hedge funds, in particular by the Renaissance funds. This is what I told the Subcommittee:

Almost a century ago, Congress reduced the tax rate for long-term capital gains. Then, ...


July 24, 2014, 2:05 pm, 1304824

Interesting interview by David Andolfatto of Michael Woodford. Woodford is skeptical of QE.

Andolfatto

You talk about Fed purchases of risky assets. I mean, do you have in mind some loose connection of the Fed’s purchase of the mortgage-backed securities, the agency debt?

Woodford

I think that the main ...


July 24, 2014, 2:05 pm, 1304823

There is a new piece of interest in Technology Review, here is one excerpt:

Psychologists have always assumed that patterns of behavior change more quickly in countries that emphasize collectivism. Once an idea has taken hold, the pressure to conform means it spreads rapidly. “It has previously been argued ...


July 24, 2014, 1:33 pm, 1304820

John Stossel’s column this week is called “Policing America,” and he points to the fact that violent crime in America peaked in 1991 at 758.2 crimes per 100,000 population, and has consistently fallen in almost every year since then. ...


July 24, 2014, 1:33 pm, 1304821

This morning at AEI, House Budget Committee Chairman Paul Ryan (R-WI) unveiled a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America. Ryan’s plan seeks to reconnect struggling Americans with their local communities and give social-services programs the flexibility to better serve individual needs. ...


July 24, 2014, 1:33 pm, 1304819

In an interesting article that is forthcoming in the next issue of Economic Affairs, Vincent Geloso (Ph.D. candidate at the London School of Economics) presents an interesting defense of “ticket scalping,” arguing that it can provide an effective form of risk management and greater certainty of profits for artists, concert ...


July 24, 2014, 1:03 pm, 1304758

This week’s map takes a look at when each state first adopted its cigarette tax. Although the federal government had been taxing tobacco since the 18th century and cigarettes specifically since 1862, states did not begin doing so until the early 20th century – when manufactured cigarettes surpassed ...


July 24, 2014, 1:03 pm, 1304757

Is this why prices are sticky?:

Sticky prices and behavioural indifference curves, by John Komlos, Vox EU: Many quantities fail to respond smoothly to price changes. This column stresses that the ‘endowment effect’ – a well-known behavioral economics concept – implies kinks in indifference curves at the current consumption ...


July 24, 2014, 1:03 pm, 1304755

Me, at MoneyWatch:

Should the Fed have to play by a rule?: What if the U.S. Federal Reserve Board had to implement monetary policy according to a specific rule that would require specific policy actions depending on the circumstances?

That's the intent of a bill Republicans in the House of ...


July 24, 2014, 1:03 pm, 1304756

Andrew Gelman:

Meritocracy won’t happen: the problem’s with the ‘ocracy’, by Andrew Gelman, Monkey Cage: I’ve written about this before but I think the topic is worth returning to, because it comes up a lot in our political discourse.

For example, consider this recent post by Robert ...


July 24, 2014, 1:03 pm, 1304754
The new home sales report for June - combined with the downward revisions for previous months - was very weak.

The Census Bureau reported that new home sales this year, through June, were 225,000, Not seasonally adjusted (NSA). That is down 4.3% from 235,000 during the first half ...


July 24, 2014, 12:45 pm, 1304753
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July 24, 2014, 12:34 pm, 1304752
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July 24, 2014, 12:05 pm, 1304749

Thursday, July 24 (Central Daylight Time)
9:00 - 10:00 a.m.—How War Leads to Big Government | Higgs
10:15 - 11:15 a.m.—The Case for Privatization… of Everything | Block
11:30 a.m.- 12:30 p.m.—The Robber Barons and the Progressive Era | Woods


July 24, 2014, 12:05 pm, 1304748

July 24, 2014, 12:04 pm, 1304747
(July 24, 2014 10:04 AM, by Bryan Caplan) When backed into a corner, most hard-line utilitarians concede that the standard counter-examples seem extremely persuasive. They know they're supposed to think that pushing one fat man in front of a trolley to save five skinny kids is morally obligatory.... (6 COMMENTS)


July 24, 2014, 12:04 pm, 1304746
(July 24, 2014 11:45 AM, by Art Carden) This morning, I read Adam Thierer's Permissionless Innovation, which you can get as a $0 PDF. From a few discussions in which I've been involved regarding Uber's attempt to enter the Birmingham market, it's clear that the idea of a... (0 COMMENTS)


July 24, 2014, 11:33 am, 1304745

This is very very crude. It's something off the top of my head scribbled on a scrap of paper as an outline for a first draft. But I will never go beyond that outline, because I wouldn't be any good at doing it.

The history of the Old Keynesian model is ...


July 24, 2014, 11:33 am, 1304744

When I heard the phrase "Margarita Declaration" I had much higher (and drunker) hopes than 131 environmental groups banding together to call for an end to capitalism.

A UN-backed conference on climate change ended with a call to end capitalism. The conference, organised by the Venezuelan government, saw 130 ...