Archive for August 2013
Laboring On
The Friday File: Looking at both federally-mandated paid vacation and holidays among rich nations, Austria ranks number one with 35 days/year, Germany and Spain tie for second with 34, followed by Italy and France at 31, Belgium and New Zealand with 30 and Ireland at 29. Canada is third from the bottom with 19, Japan…
Read MoreLousy Legislators
The most active Congress, as measured by the number of bills passed into law, excluding private bills, was the 84th (1955-1956) which passed 1,028 bills. Eisenhower (R) was President; Lyndon Johnson (D) was Senate Majority Leader and Sam Rayburn (D) Speaker of the House. The least active was the 112th (2011-2012) which passed 238 bills.…
Read MoreHazardous Headwinds
While the economy is improving, it’s now facing huge headwinds. They include the need for a Continuing Resolution, hitting the debt ceiling, Syria and its impact on oil prices, who will be the next Chairman of the Federal Reserve, the start date of tapering, fear about whether Abenomics will work in Japan, and concerns about…
Read MorePlunging Purchases
Purchases of new homes plunged 13.4% in July to only 394,000, the steepest drop in years underscoring the uneven pace of recovery. Worse, April, May and June new home sales were revised sharply lower and are officially in the books at just 446,000, 439,000 and 445,000 respectively. Moreover, the sales rate is only 6.8% higher…
Read MoreAccidental Growth
While Congress will inevitably pass a Continuing Resolution to fund the government beyond 9/30/13 when the current CR expires, a key question is at what spending level. If current funding levels are carried into FY14, as is usually the case for short term CRs (but maybe not this time), they would exceed the 2014 budget…
Read MoreBogus Benevolence
The Friday File: Organizations often promise that 10%, 20%, or even all profits go to charity, while other firms promise that a percentage of revenues go to charity. Of course charitable giving is always good, but as a curmudgeonly economist, I much prefer the latter approach because it gives firms no incentive to boost salaries…
Read MoreHarmful Housing
Since housing is long-lived, when a city chronically loses population, the existing housing stock lowers house prices, preventing new construction and renovation activity, leading to deterioration in the housing stock. While cheap housing attracts the poor and slows population declines, it also makes it harder for the city (think Detroit) to turn its economic fortunes…
Read MoreFederal Reserve Flexibility
The just-released minutes of the Federal Reserve’s July meeting are a Rorschach test. For those reluctant to taper, there’s a nod to the still struggling labor market and the very low inflation rate. Conversely, others felt that the recent rise in interest rates would exert little restraint and that easier lending standards would help juice…
Read MoreHot Lots
In a move to streamline operations and cash in on the home building renaissance, Weyerhauser is selling its home-building unit. The prize, 27,000 lots including 18,000 in market-constrained litigation happy California, mostly in L.A. and San Diego. Assuming no goodwill, if the home-building unit sells for $3 billion, that’s just $110,000/lot. At $4 billion it’s…
Read MoreFired, Not Hired
Healthy labor markets consist of many things including low rates of involuntary termination and high rates of hiring. Usually they’re highly correlated. Not now. First time unemployment insurance claims at 332,000/week are at levels last seen in 11/07 before the Great Recession. Yet total hires at 4.2 million in June are now where they were…
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