Thursday, August 28, 2008

2nd Quarter 2008 GDP: Revised to 3.3%

GDP, the broadest measure of the nation's economic activity, stood at an annual rate of 3.3% in the quarter, adjusted for inflation, the Commerce Department said.

Economic growth between 2.5% and 3.5% is typically viewed as the norm for a healthy economy.

read the CNN story

Cartoon: Inflation

Tuesday, August 26, 2008

$11K Coffee Maker

The Clover, which runs about $11,000, makes one cup at a time and aims to coax each of the hundreds of flavors known to reside in the average coffee bean. In addition to brewing a complex flavor, the by-the-cup versatility means a wider array of beans can be used -creating a top shelf coffee menu of sorts.

tarbucks says the system is "one of the most significant innovations in coffee brewing since the introduction of the espresso machine" and says its introduction of the system with some small-batch beans is a "key initiative in transforming the company."...

"We committed to our customers that we would reinvent coffee, and once they taste coffee brewed from the Clover, we know they will want to come back for more," Aimee Johnson, vice president of Starbucks Strategic Coffee Initiatives, said in a statement.

read the CNN story

Friday, August 22, 2008

Economic Ignorance

From David Leonhardt's NYT piece on Obamanomics:

Yet laissez-faire capitalism hasn’t delivered nearly what its proponents promised. It has created big budget deficits ...

Laissez-faire capitalism may or may not live up its proponents hopes (I think it does--or would if we actually tried it since what we see in the world around us isn't truly laissez-faire capitalism), but it certainly does not create big budget deficits. The responsibility for deficits lies with pols about whose abysmal performance there can be no doubt. Leonhardt's assertion has to rank as one of the stupidest things ever written.

from Division of Labor

Thursday, August 21, 2008

Market Price

Gas Prices Drop 35 Days in a Row

Gas prices continued their month-long slide Thursday, bringing the total decline in 35 straight days of decline to more than 41 cents a gallon, according to a daily survey of gas station credit card swipes.

Regular gasoline fell 1.5 cents to $3.702 a gallon from $3.717 a day earlier, according to the Daily Fuel Gauge Report from motorist group AAA and the Oil Price Information Service.
Gasoline prices have fallen 10% since hitting a high of $4.114 a gallon in mid-July, reflecting a 20% decline in oil prices, but remain more than 91 cents higher than they were a year ago.

read the CNN story

Is College Worth It?

For more than two decades, colleges and universities across the country have been jacking up tuition at a faster rate than costs have risen on any other major product or service - four times faster than the overall inflation rate and faster even than increases in the price of gasoline or health care (see the chart to the right). The result: After adjusting for financial aid, the amount families pay for college has skyrocketed 439% since 1982...

College finance experts point to a record number of applicants in recent years as the baby boomlet comes of age (many of the more selective schools reported double-digit increases for 2008); that trend, coupled with growing demand for degrees (undergraduate enrollment has jumped more than 20% over the past decade), puts heavy upward pressure on prices. Dwindling support for higher education from cash-strapped federal and state governments doesn't help the situation.

Normal supply and demand can't begin to explain cost increases of this magnitude, though. If the usual rules applied, tuition would eventually stop rising because families would cut back enrollment, especially at the most expensive private schools, just as they curtailed consumption of gas once prices hit $4 a gallon.

read the CNN story

Thursday, August 14, 2008

Inflation: Highest in 17 Years

The annual inflation rate surged to 5.6% in July - the highest point in 17 years, the government announced Thursday.

The previous month's reading on annual inflation was 5%.

The July increase matched the 5.6% level in January 1991, when the Persian Gulf War was raging.

"It's obviously disturbing - it's a bad number," said David Wyss, chief economist for Standard & Poor's.

read the CNN story

Cartoon: Housing Crisis

Wednesday, August 13, 2008

Cartoon: Standardized Testing

Businesses Avoiding Taxes

Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes, according to a congressional report released Tuesday.

The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes - despite having a combined $2.5 trillion in revenue...

U.S. politicians disagree about how much income tax the government should levy on corporations. Currently the rate is 35%, but most foreign governments have set their rates below the U.S. level.
"The U.S. corporate tax rate stayed the same while foreign countries have drifted down, which increases the incentive for companies to report income in other countries," said Toder. "If the U.S. drops the rate to 30% but closes other tax loopholes, that may ultimately generate more tax revenue for the government."

read the CNN story

My Thoughts: Good for them and good for consumers.

Obama's Tax Plan

read the article

Cartoon: Something Bad

Tuesday, August 12, 2008

Cartoon: Reality

Cartoon: "Cheap Gas"

Cartoon: Iraq Reality

George Will on the Olympics

This year's August upheaval coincides, probably not coincidentally, with the world's preoccupation with that charade of international comity, the Olympics. For only the third time in 72 years (Berlin 1936, Moscow 1980), the games are being hosted by a tyrannical regime, the mind of which was displayed in the opening ceremony featuring thousands of drummers, each face contorted with the same grotesquely frozen grin. It was a tableau of the miniaturization of the individual and the subordination of individuality to the collective. Not since the Nazi's 1934 Nuremberg rally, which Leni Riefenstahl turned into the film "Triumph of the Will," has tyranny been so brazenly tarted up as art.

A worldwide audience of billions swooned over the Beijing ceremony. Who remembers 1934? Or anything.

George Will

read the entire column

Oil and Gas Prices

Oil prices began to rise on Tuesday after BP shut down an oil pipeline in Georgia and continued fighting threatened supplies in the region...

Oil company BP said early Tuesday that it had shut down the Baku-Supsa, which carries 90,000 barrels of oil per day through the embattled nation of Georgia.

Georgia produces very little oil but serves as an important hub for transporting crude and natural gas between Europe and Asia...

A stronger dollar also pushed oil prices lower. The dollar extended its gains against the euro Tuesday amid concerns of weakening European growth...

The average price of retail gas in the U.S. has fallen more than 31 cents to $3.799 a gallon at the pump over the past 26 days. But gas prices remain more than a dollar higher than where they were 12 months ago.

read the CNN story

Cartoon: Windfall Profits

Tuesday, August 5, 2008

Protesting at the Fed

Federal Funds Rate Remain Unchanged at 2%

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2%.

Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.

from CNN

Cartoon: More Drilling

Monday, August 4, 2008

Gas Prices: An Explanation

from the Washington Post

Aleksandr Solzhenitsyn: RIP

Solzhenitsyn's unflinching accounts of torment and survival in the Soviet Union's slave labor camps riveted his countrymen, whose secret history he exposed. They earned him 20 years of bitter exile, but international renown.

And they inspired millions, perhaps, with the knowledge that one person's courage and integrity could, in the end, defeat the totalitarian machinery of an empire.

Beginning with the 1962 short novel "One Day in the Life of Ivan Denisovich," Solzhenitsyn devoted himself to describing what he called the human "meat grinder" that had caught him along with millions of other Soviet citizens: capricious arrests, often for trifling and seemingly absurd reasons, followed by sentences to slave labor camps where cold, starvation and punishing work crushed inmates physically and spiritually.

His "Gulag Archipelago" trilogy of the 1970s shocked readers by describing the savagery of the Soviet state under the dictator Josef Stalin. It helped erase lingering sympathy for the Soviet Union among many leftist intellectuals, especially in Europe.

from the New York Times

But let us be generous. We will not shoot them. We will not pour salt water into them, nor bury them in bedbugs, nor bridle them up into a "swan dive," nor keep them on sleepless "stand-up" for a week, nor kick them with jackboots, nor beat them with rubber truncheons, nor squeeze their skulls with iron rings, nor push them into a cell so that they lie atop one another like pieces of baggage - we will not do any of the things they did! But for the sake of our country and our children we have the duty to seek them all out and bring them all to trial! Not to put them on trial so much as their crimes. And to compel each one of them to announce loudly:

"Yes, I was an executioner and a murderer."

--The Gulag Archipelago

Alas, three and a half decades after the publication of The Gulag Archipelago, it looks like we'll never see the Russian analog of the Nuremberg trials. But if any writer can make future generations of Russians look on the Soviet era with the horror it deserves, it's the man who stared down the Soviet Union at the height of its power - and outlived it by 17 years.

Bryan Caplan