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Today's News

Obama Proposes $50 Billion Plan for Infrastructure Projects
September 7, 2010 | Washington Post
Faced with the twin challenges of boosting the economy and saving Democratic congressional seats in November, President Obama tried to do a little of both on Monday at a Labor Day rally that heralded a prominent role for him in a fiery fall campaign. Under pressure to show that he is doing all he can to deliver jobs, Obama announced a proposal to spend $50 billion in the next year on roads, railroads and airport runways.
Obama to Push Tax Break
September 7, 2010 | Wall Street Journal
President Barack Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to more quickly write off 100% of their new investment in plants and equipment through 2011. The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways.
The House Bubble Reconsidered
September 3, 2010 | Alphaville
Just what caused the damn housing bubble? A description of three academic studies from this week attempting to answer this question follows. The first study finds that the accommodative monetary policy following the post-tech bubble recession played only a modest role in price inflation and that monetary policy may have been too good throughout the so-called Great Moderation, in the sense that it led people and organizations to take on greater risks than during normal, more-volatile times.
What Can Be Done to Hasten the Recovery?
September 3, 2010 | David Beckworth's Blog
I believe the Fed can and should be doing more to create a more stable macroeconomic environment. There is much they can yet do to stabilize aggregate spending and improve economic certainty. However, even if we were to get this from the Fed it still would not solve all our economic problems. We are in the midst of a massive deleveraging cycle by households and unless something radical happens like swapping the underwater portion of household mortgages for equity this process will probably take years to unfold.
U.S. Jobless Claims Fall But Fears Remain
September 3, 2010 | Financial Times

New claims for jobless benefits in the US fell last week but still remain above the level economists have said is necessary to create jobs. Meanwhile, a separate report showed a surprise rise in pending home sales in July, lifting hopes that the beleaguered housing market may have reached a bottom.The report comes ahead of Friday’s closely watched government unemployment report, which is expected to show that the US economy shed 80,000 jobs in August. The unemployment rate is forecast to rise slightly to 9.6 per cent.

Bernanke Empowered
September 3, 2010 | Steve Matthews in Bloomberg
In November 2009, Senate Banking Committee Chairman Christopher Dodd advanced a radical proposal: to create a super-regulator that would take over most of the bank supervision that had been done by the Federal Reserve System, the Federal Deposit Insurance Corp. and other agencies. Six months later, when President Barack Obama signed into law a 2,300-page bill overhauling financial services regulation, the super-regulator had been forgotten.
IMF Ponders the Improbable: Will U.S. Default
September 3, 2010 | Washington Post

Using a concept known as "fiscal space" - basically how much latitude a country has to borrow before markets will shut off the spigot by demanding unsustainable interest rates - the IMF staff drew a bright red line through five nations it considers to be running out of room: Greece, Iceland, Italy, Japan and Portugal. Of the 23 developed nations it analyzed, four others, including the U.S., received a yellow caution flag.

Companies Already Lobbying Fed on Financial Rules
September 3, 2010 | Real Time Economics
U.S. firms eager to shape newly-passed financial laws have wasted no time in lobbying the Federal Reserve and other agencies, according to new details released Thursday by the central bank. Summaries of 11 meetings involving Fed staff and outside corporations and advocacy groups highlight the high-stakes rulemaking that will occur as U.S. regulators seek to implement the wide-ranging financial overhaul legislation.
White House Considering Major Tax Breaks for Businesses
September 3, 2010 | Washington Post

With the recovery faltering less than two months before the November congressional elections, President Obama's economic team is considering another big dose of stimulus in the form of tax breaks for businesses - potentially worth hundreds of billions of dollars. Among the options are a temporary payroll tax holiday and a permanent extension of the research and development tax credit. Permanently extending the research credit would cost roughly $100 billion over the next decade, tax experts said.

The Real Say on Pay
September 2, 2010 | New York Times Editorial
The Financial Times reported this week that lawyers for corporate America are warning of a “logistical nightmare” from a provision in the new financial reform law that requires companies to disclose the ratio between a chief executive’s pay package and that of a typical employee. The lawyers say that the ratio would be unfairly complex to calculate and could encourage false comparisons.