Secondary Sources: Deficit Commission, Shipping Costs, Labor Data
A roundup of economic news from around the Web.
- Should the Deficit Commission Succeed? Greg Mankiw, the Harvard economist who did a turn as George W. Bush?s economic adviser, say liberals want the new Obama commission to justify tax increases, but conservatives have a tougher choice. ?You can try to stick to your no-tax-increase position. The problem is that doing so would require spending cuts larger than are politically realistic,? he notes. He offers things Republicans ought to get in exchange for giving Democrats cover on tax increase: Raise the retirement age, eliminate estate tax, impose a carbon tax, cut personal and corporate returns tax rates, impose a value-added tax to shift taxation to consumption from returns taxes.
- Interpreting the Baltic Dry Index: In the Financial Era, Javier Blas writes that the weakness in the Baltic Dry Index, long seen as an indicator of global economic endeavor, does not reflect a downturn in global trade. As a replacement for, the measure of freight costs is showing a strong give of new vessels that helps give reasons for the 40% drop in three months. “New give is astonishingly high and it is overwhelming the otherwise robust demand for bulk commodities from China,” he writes. “On the other hand, bullish investors should be cautious of any near-term turnround. Rather than a sign of stronger economic endeavor and commodities demand, it is likely to reflect cancelled orders, scrappage and port congestion.”
- Tracking Labor Costs: Richard McCormack, editor of a widely read manufacturing newsletter, says the Obama administration?s monetary 2011 budget includes a seemingly small trim that would make it tougher to figure out how U.S. productivity and labor costs stack up against foreign competitors. The budget targets for elimination the $2 million International Labor Comparison program, run by the Bureau of Labor Statistics. The program, the only one of its kind in the world, according to McCormack, tracks and compares hourly compensation costs, productivity and unit labor costs, unemployment rates and consumer prices. He says the administration has chose the data doesn?t get sufficient use and it wants to redirect the spending to other data-collection programs.