News:

Welcome to week4paug.net 2.1 - same as it ever was! Most features have been restored, but please keep us posted on ANY issues you may be having HERE:  https://week4paug.net/index.php/topic,23937

Main Menu

Global Economics

Started by jedifunk, August 19, 2011, 10:53:31 AM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

runawayjimbo

Quote from: rowjimmy on June 13, 2012, 08:44:53 PM
Quote from: V00D00BR3W on June 12, 2012, 10:35:20 PM
So I'm guessing this guy would like us to buy gold?

Of course.
It would be good for his business.

Well, I did leave the disclaimer there for a reason. :wink:

I think the key point that most people miss about those who support sound money is that it's not about gold or salt or whatever is backing the money. It's that fiat money, money that derives its value solely because the gov't declares it to be so, is inherently worthless and that competition among many currencies would facilitate a more stable (not to mention more equitable) economy because people's perceptions of the value of goods and services they buy would be more aligned with the intrinsic value of them. Transactions would be inherently more voluntary (thus, more "fair") because the means of exchange is something that people themselves value not just because the gov't says it is so.
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

runawayjimbo

The pro-bailout party, New Democracy, wins the Greek re-election. Kinda interesting that Syriza, who opposed the bailout, would be likened to the Tea Party except they were the far left-wing party.

This was a big story, but the real fireworks will come at 2pm on Wednesday when Ben announces (or doesn't) QE3.

http://www.nytimes.com/2012/06/18/world/europe/greek-elections.html?pagewanted=all

Quote
Supporters of Bailout Claim Victory in Greek Election

ATHENS — Greek voters on Sunday gave a narrow victory in parliamentary elections to a party that had supported a bailout for the country's failed economy. The vote was widely seen as a last chance for Greece to remain in the euro zone, and the results had an early rallying effect on world markets.

Greece's choice was also welcomed by the finance ministers of the euro zone countries, who in a statement on Sunday night in Brussels said the outcome of the vote "should allow for the formation of a government that will carry the support of the electorate to bring Greece back on a path of sustainable growth."

While the election afforded Greece a brief respite from a rapid downward spiral, it is not likely to prevent a showdown between the next government and the country's so-called troika of foreign creditors — the European Commission, the European Central Bank and the International Monetary Fund — over the terms of a bailout agreement. Even the most pro-Europe of Greece's political parties, the conservative New Democracy, which came in first, has said that a less austere agreement is crucial to a country where the unemployment rate is 22 percent and the prospect of social unrest is rising.

The euro zone ministers pledged to help Greece transform its economy and said continued fiscal and structural changes were the best way for Athens to cope with its economic challenges. "The Eurogroup reiterates its commitment to assist Greece in its adjustment effort in order to address the many challenges the economy is facing," the statement said.

The ministers added that representatives of Greece's creditors would return to Athens to discuss emergency loans and changes as soon as a government was in place.

Official projections showed New Democracy with 30 percent of the vote and 128 seats in the 300-seat Parliament. The Syriza party, which had surged on a wave of anti-austerity sentiment and spooked Europe with its talk of tearing up Greece's loan agreement with its foreign creditors, was in second place, with 27 percent of the vote and 72 seats. Syriza officials had rejected calls for a coalition, ensuring its role as a vocal opposition bloc to whatever government emerges.

But unlike in the May 6 election, when New Democracy placed first but was unable to form a government, this time intense international pressure — and the fact that the Greek government is quickly running out of money — made it likely there would be a coalition with New Democracy's longtime rival, the socialist Pasok party. Pasok placed third in the voting, with 12 percent of the vote and 33 seats. The extreme right Golden Dawn party got 18 seats.

...

In a victory statement on Sunday evening, the New Democracy leader, Antonis Samaras, called for the formation of a government of national unity aimed at keeping Greece in the euro zone and renegotiating the loan agreement. "There is no time for political games. The country must be governed," he said, adding, "We will cooperate with our European partners to boost growth and tackle the torturous problem of unemployment."

Alexis Tsipras, the 37-year-old leader of Syriza, conceded defeat. "We fought against blackmail to put an end to memorandum," he said, referring to the loan agreement. "We're proud of our fight."

He added that Syriza would be "present in developments from the position of the main opposition party."

Any new leader will face an uphill battle to inject confidence into a paralyzed Greek economy that depends heavily on the continued infusion of money from its only remaining lifeline, the European Central Bank. The Greek economy and a deficit-ridden government have lost most of their ability to raise new revenues or borrow money to continue operations.

But political analysts said no matter what government was formed, it would be weak and likely short-lived, lacking deep popular support and the broader confidence of Europe. And it was unlikely that the election results would persuade Greece's European lenders to extend loans without economic reforms and drastic spending cuts.

Mr. Samaras "won a Pyrrhic victory," said Harry Papasotiriou, a political-science professor at Panteion University in Athens. "New Democracy will try to renegotiate part of the memorandum agreement, but they won't get far, and then they will have to implement within 100 days a very difficult program of reforms. And the unions of the public sector, supported by the radical left, will give him a hard time."

The fact that Syriza did not place first may make European leaders more likely to grant some concessions to Greece, but they also have to consider the larger economies of Spain and Italy, which are also under intense pressure,

Asked what the election results change, Daniel Gros, the director of the Centre for European Policy Studies, which is based in Brussels, said, "Unfortunately nothing." He said the government would most likely not be strong enough to enact the structural changes needed to turn around Greece's uncompetitive economy.

...
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

VDB

100 mind-blowing facts about the economy (via)

In no particular order...

1. The unemployment rate for men is 8.4%. For married men, it's 4.9%.

2. The unemployment rate for college graduates is 3.9%. For high school dropouts, it's 13%.

3. According to The Wall Street Journal, in 2010, "for every 1% decrease in shareholder return, the average CEO was paid 0.02% more."

4. According to The New York Times: "From 2001 to 2011, state and local financing per student declined by 24 percent nationally."

5. Transparency International's Corruption Perceptions Index ranks the United States as the 24th least-corrupt country in the world, just behind Qatar and ahead of Uruguay.

6. Since the recession began in 2007, the number of Americans receiving disability benefits has risen by 1.6 million, and the number of Americans employed has fallen by 4.8 million.

7. China's labor force grew by 145 million from 1990 to 2008. The entire U.S. labor force today is 156 million.

8. In 1998, oil industry executives told Congress that oil would average $10 a barrel for the following decade. In reality, it averaged $44.9 a barrel. Most people are terrible at predicting the future -- even (or especially) experts.

9. In 1999, one of the best years for the market ever, more than half of stocks in the S&P 500 declined. Two companies, Microsoft (Nasdaq: MSFT ) and Cisco, accounted for one-fifth of the index's return.

10. From 1929 to 1932, the total amount of money paid out in wages fell by 60%, according to historian Frederick Lewis Allen. By contrast, from 2007-2009, total American wages fell less than 5%. What we experienced in recent years was nothing close to the Great Depression.

11. A Honda Civic hybrid starts at $24,200 and gets 44 miles per gallon. A Civic with a normal gas engine starts at $16,000 and gets 39 MPG. If you drive 15,000 miles a year and gas averages $4 a gallon, it will take 47 years for the hybrid to justify its cost over the traditional model.

12. China's working-age population is expected to shrink by more than 200 million between now and 2050. The U.S.' is expected to rise by 47 million.

13. According to author Charles Murray, just 3% of American couples both had a college degree in 1960. By 2010, 25% did.

14. At the height of his success, Andrew Carnegie's annual income was 20,000 times the average American's wage, according to historian Frederick Lewis Allen. That's the equivalent of about $720 million in today's economy. In 2010, hedge fund manager John Paulson earned $4.9 billion, or nearly seven times what Carnegie earned in his prime. The key difference: Carnegie made steel to construct buildings. Paulson bought derivatives to bet against them.

15. If state, local, and federal employment followed the same trend from 2008 through today as it did from 2005-2008, the unemployment rate would be 6.5% instead of 8.2%.

16. In Russia, 0.00007% of the population (100 people) controls 20% of the wealth.

17. According to the International Energy Agency, global governments spent $409 billion on fossil- fuel-industry subsidies in 2010. That's nearly double the annual GDP of Ireland.

18. According to a 2007 Gallup poll, Americans give Hugo Chavez a 9% approval rating -- the exact same as they gave Congress last fall.

19. For the 2012-2013 fiscal year, California will spend $8.7 billion on prisons and $4.8 billion on its UC and state college systems.

20. Boeing (NYSE: BA ) accounts for almost 2% of all U.S. exports.

21. North Dakota has 0.7 unemployed people for each available job opening.

22. Because of its one-child policy, China's labor force will start to decline in 2016.

23. A rare 1-cent coin from 1793 recently sold for $1.38 million. That sounds amazing until you realize it's an annual return of less than 9%, or about the same as stocks have produced historically.

24. The U.S. makes up less than 5% of the world's population, but a third of the world's spending on pharmaceuticals, according to the IMS Institute for Healthcare.

25. Average monthly rent in New York City ($2,935) is about the same as the nationwide average monthly income ($3,052).

26. Since December 2007, male employment has fallen 4.7%. Female employment fell just about half that amount, 2.7%

27. In 1929 -- the golden year before the Great Depression-- 60% of American households earned a wage below what Brookings Institution economists classified as "sufficient to supply only basic necessities." Well over half the country lived in poverty, in other words. One-fifth of households earned half the poverty wage.

28. According to writer Dan Gross: "The United States produced about as much output in the third quarter of 2011 as it did in the third quarter of 2007, albeit with about 6 million fewer workers on the payroll."

29. According to the Department of Agriculture, one-third of the calories Americans consume come from restaurants, almost double what it was three decades ago.

30. Since 1994, stock market returns are flat if the three days before the Federal Reserve announces interest-rate policy are removed.

31. PCs outsold Macs by nearly 60-to-1 in 2004. Last year, the ratio was closer to 20-to-1, according to analyst Horace Dediu.

32. Apple (Nasdaq: AAPL ) earned more in net income last quarter than its entire market cap was in 2004.

33. If you earn minimum wage, you'll need to work 923 hours to pay for a year at an average public four-year college. In 1980, it took 254 hours.

34. According to a study by the Dallas Federal Reserve, foreign-born citizens made up 14% of the labor force in 2002, yet accounted for 51% of total jobs growth from 1996-2002.

35. Forty percent of kids raised in a family in the top income quintile stay there as adults, and 40% of those born into the lowest quintile remain there. Only 8% of those raised in the top quintile drop to the lowest quintile as adults, according to the Pew Economic Mobility Project.

36. According to a report by the Harvard Graduate School of Education, just over half of students who enroll in a four-year college receive a bachelor's degree within six years.

37. Federal government spending declined year over year in the third quarter of 2011 for the first time since 1955.

38. In 1914, Henry Ford made the unprecedented move of paying line workers $5 for an eight- hour shift -- double the going rate. Adjusted for inflation, that works out to around $13 an hour in today's dollars. By contrast, a New York Times article broke down an average auto worker's 2008 salary, including insurance and paid vacation, and came to $45 to $55 an hour.

39. Five of every six American families earn more than their respective parents did, according to the Pew Economic Mobility Project.

40. Federal Reserve economist Bhashkar Mazumder has shown that incomes among brothers are more correlated than height or weight.

41. According to David Wessel of The Wall Street Journal, "the share of insured workers with deductibles of $1,000 or more rose to 31% in 2011 from 18% in 2008."

42. A composite hedge fund index has returned 1.3% year to date as of July 11. The S&P 500 returned 8.3% during that time. People call the former "smart money."

43. Ten percent of Medicare recipients who received hospital care made up 64% of the program's hospital spending in 2009, according to The Wall Street Journal.

44. According to a Rutgers survey based on a nationwide sampling, only 51% of those who have graduated college since 2006 are now employed full time. Twenty percent are in graduate school. The rest...

45. As a percentage of GDP, government spending was higher in 1983 under President Ronald Reagan than it will be this fiscal year (23.5% vs. 23.3%, respectively), according to data by the Tax Policy Center.

46. More government jobs were eliminated on net in 2010 than in any other year since at least 1939. As a percentage of government workers, the decline was the largest since 1947.

47. According to Sheldon Jacobson of the University of Illinois, the added weight carried by vehicles due to obesity in America consumes an additional 938 million gallons of gasoline a year.

48. The median American family's net worth fell to $77,300 in 2010 from $126,400 in 2007, according to the Federal Reserve's Survey of Consumer Finance. That erased nearly two decades of accumulated wealth.

49. According to UCLA: "Only 3.1 percent of the world's children live in the United States, but U.S. families buy more than 40 percent of the toys consumed globally."

50. Delaware, a famous business haven, has more corporations than people -- 945,000 to 897,000, according to The New York Times. One office building in Wilmington is home to more than a quarter-million registered businesses.

51. A study of retired investors between 1999 and 2009 showed those who hired a stockbroker underperformed those managing their own money by 1.5% a year. "Fees accounted for only about half the gap," writes Jason Zweig of The Wall Street Journal.

52. According to Manpower's 2012 Talent Shortage Survey, 49% of U.S. businesses report difficulty filling available job openings.

53. According to U.S. News & World Report, the average law student graduates with more than $100,000 in student loans. According to the American Bar Association, just over half of those who graduated law school in 2011 have full-time jobs that require a law degree.

54. Researchers from the London School of Hygiene and Tropical Medicine estimate the world is overweight by a collective 17 million tons, or the equivalent of 226 million people weighing 150 pounds.

55. Only 52% of American families say they were able to save anything in 2010, according to the Federal Reserve's Survey of Consumer Finance.

56. Adjusted for inflation, the median average hourly wage was lower in 2011 than it was in 2001.

57. "In 2010, 6.0 percent of families reported that their spending usually exceeds their income,"
according to the Federal Reserve's Survey of Consumer Finance.

58. Five years ago, coal provided about half the nation's electricity. Today, it's about one-third. Natural gas' share during that time rose from 21% to 30%, according to the Energy Information Agency.

59. According to research by Demos, the average American couple will pay $155,000 in 401(k) fees over their careers. That reduces the average account size by about a third.

60. Since 1968, the U.S. population has increased from 200 million to 314 million, and federal government employees have declined from 2.9 million to 2.8 million.

61. According to the Boston Consulting Group, manufacturing wages, benefits and taxes are $22.30 an hour in America, compared with $2 an hour in China. But since American factory workers are more productive, China's effective labor costs are only 55% lower than Americans, and may drop to less than a third later this decade.

62. From 2002 to 2008, 12 congressional incumbents lost in primary elections. During that time, 13 members died in office. So the odds of losing a primary are lower than the odds of dying in office.

63. According to the Economist, "The average life expectancy of public companies shrank from 65 years in the 1920s to less than ten in the 1990s."

64. According to The New York Times: "In the last five years, the United States and Canada combined have become the fastest-growing sources of new oil supplies around the world, overtaking producers like Russia and Saudi Arabia."

65. As of June 2011, 32% of American homes were cellphone only, up from 17.5% in 2008, according to the National Center for Health Statistics.

66. Solar panel prices have plunged 82% since 2009, according to Bloomberg.

67. According to writer Tim Noah, average stock options granted to CEOs between 1992 and 2000
rose from $800,000 to $7 million, and average total compensation quadrupled.

68. According to analyst JW Mason: "In 2007, [nonfinancial corporate] earnings were $750 billion, dividends were $480 billion, and netstock repurchases were $790 billion." In other words, businesses paid shareholders nearly double what they earned.

69. Americans drove 85 billion fewer miles over the last 12 months than they did in 2008, according to the Department of Transportation.

70. Oil production at America's Eagle Ford was 787 barrels in 2004, 308,000 barrels in 2009, and 36.6 million barrels last year.

71. In 1989, the CEOs of the seven largest U.S. banks earned an average of 100 times what a typical household made. By 2007, more than 500 times.

72. In 1990, the three largest U.S. banks held 10% of the industry's assets. By 2008, the top three controlled 40% of the assets.

73. Clean water and sewers were voted "the greatest medical advance" since 1840 by readers of the British Journal of Medicine.

74. Americans will inherit $27 trillion over the next four decades, according to the Center on Wealth and Philanthropy at Boston College.

75. America is home to less than 5% of the world's population, but nearly a quarter of its prisoners.

76. According Dartmouth political scientist Dean Lacy, states that receive more federal government spending than they contribute in tax revenue tend to support Republican candidates, who typically vow to cut spending.

77. According to economists from the International Monetary Fund and analysis by Bloomberg, implicit government subsidies to large U.S. banks roughly equal their annual profits.

78. Ten years ago, people were stunned when overnight lending rates plunged to 2.5%. Today, that's the yield on 30-year bonds.

79. In May this year, the Dow fell 18 days and rose four days -- the worst combination since 1903. It never posted two consecutive gains, likely for the first time ever.

80. After new bank regulations go into effect, JPMorgan Chase (NYSE: JPM ) says 70% of customers with less than $100,000 in deposits or investments will be unprofitable for the bank.

81. According to John Cawley of Cornell and Chad Meyerhoefer of Lehigh University, obese people incur annual medical costs $2,741 higher than non-obese people, or almost $200 billion

82. According to economist Christina Romer, real GDP per capita in American grew 0.58% a year from 1800-1840; 1.44% from 1840-1880; 1.78% from 1880-1920; 1.68% from 1920-1960, and 1.82% from 1960-1991. We not only grew richer, but at an increasing rate.

83. In 2007, the Congressional Budget Office estimated federal tax receipts would be $3.4 trillion in 2012. In reality, they'll be around $2.5 trillion. Again, the future is unpredictable. Always.

84. Many talk about how much we import from China, but few discuss how much we sell to them. Exports from the U.S. to China were $19.2 billion in 2001, and $104 billion in 2011.

85. As recently as 1975, China wasn't one of American's top 10 trading partners. The world changes fast.

86. According to economists Thomas Piketty and Emmanuel Saez, 80% of all income growth from 1980 to 2005 went to the top 1% of wage earners.

87. From 1970 to 2012, median household income increased at one-tenth the rate it did from 1949-1979.

88. If you're fed up with unemployment caused by offshoring, you'll love this: According to a 2006 Government Accountability Organization study, the processing of unemployment insurance claims are partially offshored in several states.

89. Among high school seniors who scored more than 700 on the math and verbal portions of the SATs (a very high score), 87% have at least one parent with a college degree. Fifty-six percent have a parent with a graduate degree, according to author Charles Murray.

90. We tend to underestimate how powerful the agriculture boom has been in the last century. The 1952 book The Big Change describes life in America in the year 1900: "In most parts of the United States people were virtually without fresh fruit and green vegetables from late autumn to late spring."

91. The first American hotel to offer every guest a private bathroom didn't open until 1907.

92. According to biographer Ron Chernow, John D. Rockefeller's net worth peaked at $900 million in 1913. That equaled 2.3% of the U.S. economy. A comparable net worth today would be $340 billion, or eight times richer than Warren Buffett.

93. Some people don't see progress coming. In 1906, future President Woodrow Wilson said the automobile offered "a picture of the arrogance of wealth."

94. According to Morgan Stanley, 9% of all S&P trading volume is in Apple stock. One in 25 of all hedge funds has more than 10% of their fund in Apple.

95. Housing may be turning faster than you think. According to David Wessel, "The fraction of homes that are vacant is at its lowest level since 2006."

96. America is aging. Older workers (age 55+) are about to overtake younger workers (age 25-34) for the first time.

97. According to the Pew Research Center, every one of the eight largest EU nations ranks Germany as the hardest working -- except for Greece, which ranks itself as the hardest working. Five of the eight rank Greece as the least hardworking.

98. In 1900, the standard American workweek was 10 hours a day, six days week. Historian Frederick Lewis Allen notes in a 1952 essay: "If anybody had suggested a five-day week he would have been considered demented."

99. Facebook (Nasdaq: FB ) claims 100 billion friend connections have been made on its social network. That's about the same number of humans that have ever lived since 50,000 B.C., according to the Population Reference Bureau.
100. According to Bankrate.com, nearly half of Americans don't have enough savings to cover three months expenses. Worth noting: The average duration of unemployment is now 10 months.
Is this still Wombat?

sls.stormyrider

interesting.

lots of good potential soundbites in there
"toss away stuff you don't need in the end
but keep what's important, and know who's your friend"
"It's a 106 miles to Chicago. We got a full tank of gas, half a pack of cigarettes, it's dark and we're wearing sunglasses."

runawayjimbo

A great piece on a rarely discussed reason why the economy can't get it's shit together: too much debt weighs down everything. And the solution from today's most noted thinkers and policy makers? Don't allow the deleveraging to occur because it would cause short term pain; instead, lower the cost of debt more so people can take on more debt and start spending. Fucking brilliant.

http://reason.com/archives/2012/08/09/private-debt-is-crippling-the-economy

Quote
Private Debt Is Crippling the Economy
There won't be a recovery until credit card and household debt levels come down.


America's economic pundits are not very creative. For the past several years, their gripes about economic growth have fallen into several staid categories: Monetary policy ("the Fed should do less" vs. "the Fed should do more"); the struggling housing market ("let housing bottom out" vs. "we must save housing"); income inequality ("it doesn't matter" vs. "it does matter"); and the federal deficit ("lower taxes, pretend to lower spending a lot" vs. "raise taxes, pretend to lower spending a little").

While most of these are legitimate causes of economic stagnation, there is another category that is having an outsized negative impact on growth: privately held debt.

The housing bubble should have been the warning needed to correct American thinking on debt, but the media's positive spin on reports that borrowing is "coming back" suggest the lessons have not been learned.

The concept of debt has a troubled history. Historically when debts accumulate to a breaking point, the associated social unrest can lead to revolution and insurrection. This sociological trend gave rise to the Occupy Wall Street movement, particularly regarding debt from student loans.

However, debt isn't inherently a bad thing. Innovation in the past three centuries has sped up societal evolution and technological breakthroughs at breakneck speed compared to the last 5,000 years, and much of this has been built on borrowing and lending.

Entrepreneurs with ideas often don't have the capital to launch their business, and organizations with capital often don't have the ideas to grow that money on their own. The beauty of finance is that we have developed tools to connect these two groups so that the entrepreneurs and capital investors have mutual benefit.

The biggest challenges of debt come when loans are taken out irresponsibly (like no income, no job mortgages), when money is borrowed for consumption rather than investment (like excessive credit card debt), and when lenders are guaranteed a return of their money by law even in the case of bankruptcy (like student loans that are not discharged in bankruptcy, one of the leading reasons for the Occupy complaints).   

Unfortunately, all of those examples of irresponsible borrowing and lending are from the past few decades in America. Since the mid-1990s, privately held debt has soared to record highs. Promises that housing prices would rise forever deluded households into taking out big mortgages. At the same time a bull market in equities and low interest rates for several years made the costs of borrowing appear inconsequential.

Many borrowers believed their debt was for a good investment (and therefore "good" debt), or weren't concerned about taking on a high mortgage or big credit card balances because perpetual economic growth would solve all the problems. But the bursting of the housing bubble left households with high levels of debt to deleverage or to take into bankruptcy court.

This part of the story is well known in towns across the country, but what is not widely recognized is that this debt level is also preventing the private sector from rebounding after the recession.

For those who believe that the problem in the economy is aggregate demand, high debt levels mean households are limited in what they can contribute to consumption. Even if stimulus was able to build a bridge through a recession, the historically high levels of debt have years of deleveraging ahead of them, keeping consumption off the table as a way of spurring recovery.

For those who believe that aggregate supply could boost growth, small businesses too are saddled with having to pay the bill for decades of fun since many are linked to individuals and households, and therefore don't have the capacity to invest at levels needed for a robust recovery.

Washington has tried to solve this problem by encouraging more borrowing to get the music going again. Public support for more quantitative easing is primarily focused on pushing down interest rates so that businesses and households will borrow again. The Federal Reserve's purchases of housing debt are about lowering mortgage prices so households will borrow again to buy homes.

This has led to the media buying into the idea that if only Americans could borrow again, aggregate demand and supply would bounce back. An article from Businessweek on Monday referenced recently increased bank lending as "supporting" economic growth.

This is totally backward thinking. Literally.

Recovery should not be defined as moving backward to the way the economy used to be structured. That was a bubble, built primarily on cheap credit and not long-term investments.

Moreover, much of the recent borrowing increases have been in revolving credit, primarily credit card debt, in order to meet basic needs. That is not the kind of consumption that will generate a recovery, especially since the costs of credit card debt are high and will weigh back down on household balance sheets in the months and years to come. A recovery built solely on expanding consumer credit and mortgage credit is simply another bubble and unstable economic foundation.

America had started the process of household balance sheet deleveraging after the bubble burst. Mortgage debt levels have fallen sharply. And consumer credit—all debt other than mortgage debt—was declining as well. But in the summer of 2010, as the post-recession faux-recovery created false hope that the good times were back and as savings decimated by the bursting bubble began to hit zero in the midst of a weak economy, consumer credit levels (led by credit card purchases) began to rise again.

The figure below shows that consumer credit fell 7.1 percent from June 2008 to June 2010, but since then has grown 6.9 percent to June 2012 (according to data released this month by the Fed).



The rising aggregate consumer credit level means that household balance sheets are not shedding debt like they need to in order to contribute substantively to economic growth. Unless this changes, we're pretty much screwed.

High household debt means less economic and labor mobility. Families cannot move to better employment if they are stuck in a house they cannot sell or have credit card bills crushing their credit score and making it harder to move. Private sector debt also means fewer family vacations, no upgrades on household appliances, and less investment.

Perhaps most damning is that households deep in debt mean downward pressure on entrepreneurial expansion. Many small businesses are family run, or are financed from household balance sheets. As long as entrepreneurism is stagnant, the U.S. economy is not going to see real growth.

Rather than public policy seeking to make borrowing cheaper, American leaders need to allow for household balance sheets to deleverage. That will mean short-term economic pain in exchange for a more robust economic growth period on the other side. And since the economy is in stall mode currently, the directly-associated pain will be muted anyway. Both President Barack Obama and his Republican opponent Mitt Romney are kidding themselves if they think they can inspire a recovery in the next several years without consumer credit levels falling and household debt levels coming down.
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

runawayjimbo

Why do central banks fail? Because you can't manage something that is undefinable.

This is easily one of the best things I've ever read.

http://azizonomics.com/2012/09/01/the-shape-of-40-years-of-inflation/

Quote
The Shape of 40 Years of Inflation

I have written before that there is no single rate of inflation, and that different individuals experience their own rate dependent on their own individual spending preferences. This — among other reasons — is why I find the notion of single uniform rate of inflation — as central banks attempt to influence via their price stability mandates — problematic.

While many claim that inflation is at historic lows, those who spend a large share of their income on necessities might disagree. Inflation for those who spend a large proportion of their income on things like medical services, food, transport, clothing and energy never really went away. And that was also true during the mid 2000s — while headline inflation levels remained low, these numbers masked significant increases in necessities; certainly never to the extent of the 1970s, but not as slight as the CPI rate — pushed downward by deflation in things like consumer electronics imports from Asia — suggested.

This biflationary (or polyflationary?) reality is totally ignored by a single CPI figure. To get a true comprehension of the shape of prices, we must look at a much broader set of data [see Chart 1].

Yet the low level of headline inflation has given central banks carte blanche to engage in quantitative easing, and various ultra-loose monetary policies like zero-interest rates — programs that tend to benefit the rich far more than anyone else. Certainly, lots of goods and services — especially things like foreign-made consumer goods and repossessed real estate — are deflating in price. But you can't eat an iPad or a $1 burnt-out house in Detroit. Any serious discussion of monetary policy must not only consider the effects on creditors and debtors, but also the effects on those who spend a larger-than-average proportion of their income on necessities.

Another issue is that CPI leaves out both house prices as well as equity prices.
Below is CPI contrasted against equities and housing [see Chart 2].

It is clear from this record that a central bank focused upon a price index that fails to include important factors like stock prices and house prices can easily let a housing or stocks bubble get out of hand. CPI can — as happened in both the 1990s as well as the early 2000s — remain low, while huge gains are accrued in housing and stocks. Meanwhile, central bankers can use low CPI rates as an excuse to keep interest rates low — keeping the easy money flowing into stocks and housing, and accruing even larger gains. However, because such markets are driven by leverage instead of underlying productivity, eventually the ability to accrue new debt is wiped out by debt costs,  hope turns to panic, and the bubble bursts.

Both of the above examples indicate that the contemporary headline price index measures of inflation are deeply inadequate. Attempts to measure the rate of inflation that ignore data like house or stock prices will lead to flawed conclusions (rendering any such notions of "price stability" as meaningless), which has tended to lead to failed policy decisions such as those which led to the bust of 2008.



Chart 1

                                                      Chart 2


Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

runawayjimbo

A German court allows ratification of the 2nd Euro bailout fund but limits Germany's contribution to €190B (unless Germany legislatively allows further contributions). This seems like a punt in every sense of the word to me, as Europe continues to try to "calm" the markets while they figure out how to fund years of profligate spending through further insolvency.
 
But like I said a couple of months ago, the bigger decision will come at 2pm tomorrow with the Fed's announcement (or lack thereof) of MOAR QE.
 
http://www.bloomberg.com/news/2012-09-12/germany-can-ratify-esm-bailout-fund-with-conditions-court-rules.html
 
Quote
Germany Can Ratify ESM Fund With Conditions, Court Rules

Germany's top constitutional court rejected efforts to block a permanent euro-area rescue fund, handing a victory to Chancellor Angela Merkel, who championed the 500 billion-euro ($646 billion) bailout.

The Federal Constitutional Court in Karlsruhe dismissed motions that sought to block the European Stability Mechanism, while ruling Germany's 190 billion-euro contribution can't be increased without legislative approval. The court said Germany can ratify the ESM if it includes binding caveats it won't be forced to assume higher liabilities without its consent.

"We are an important step closer to our goal of stabilizing the euro," German Economy Minister and Vice Chancellor Philipp Roesler told reporters in Berlin after the ruling today. "It has always been the goal of this government" to establish a "clear limit and to include parliament in all important decisions."

The legal challenge delayed efforts by Merkel and other euro-area policy makers to stem the region's debt crisis. In the neighboring Netherlands, Prime Minister Mark Rutte, a Merkel ally, is seeking re-election today. Stocks and the euro rose after the ruling. The single currency gained 0.5 percent to $1.2916 at 12:13 p.m. in London, while the Stoxx Europe 600 Index rose 0.8 percent.

Spain, Italy

Much of the effort to resolve the crisis hinges on the permanent ESM, which is designed to go into operation when the temporary European Financial Stability Facility is phased-out next year. The bailout fund would work in tandem with the European Central Bank's bond buying to lower yields for states such as Spain and Italy.

Last week, ECB President Mario Draghi said the ECB was ready to buy unlimited quantities of short-dated government bonds of nations signed up to rescues from the ESM or EFSF. While rejecting a last-minute request for an emergency injunction over the Draghi announcement, the court said it would review a challenge to the ECB bond-buying programs during additional hearings in the case.

Today's cases were filed after German lawmakers approved the ESM and the fiscal pact, a deficit-control treaty designed to impose budget discipline on European Union members. About 37,000 people signed up to endorse a constitutional complaint filed by political group "Mehr Demokratie e.V." Other plaintiffs included opposition party Die Linke as well as Peter Gauweiler, a lawmaker from Merkel's CSU Bavarian sister party.

Transferred Power

The challengers, which sought an injunction against the bailouts while the court reviewed the cases in detail, argued the crisis-fighting legislation transfers constitutionally mandated authority from German lawmakers and undermines democratic rule.

The court ruled the ESM treaty must be interpreted in a way that bans it from borrowing from the ECB, since this would violate EU law. The ESM also can't be allowed to deposit bonds, including those acquired on the secondary market, with the ECB as collateral for loans, according to the judgment.

"Some uncertainties" about the limit on Germany's contribution to the ESM and the scope of the German parliament's say over the fund were reviewed as part of the ruling, Chief Justice Andreas Vosskuhle said when delivering the ruling. The judges also said Germany must make clear when ratifying that it won't be bound by the treaty unless these conditions are met.

"The relevant factor for adherence to the principles of democracy is whether the Bundestag remains the place in which autonomous decisions on revenue and expenditure are made," according to the unanimous judgment.

National Goals

Lawmakers must not allow Germany to shoulder an amount it can't control or that would result in it being unable to determine its political agenda, the court said.

"No permanent mechanisms may be created under international treaties which are tantamount to accepting liability for decisions by the will of other states, above all if they entail consequences which are hard to calculate," the eight judges wrote.

For today's ruling, the court chose six cases. The judges only had to decide whether to halt ratification of the treaties while reviewing the suits more closely. The German judges heard oral arguments on July 10 from groups challenging the viability of the EU's fiscal pact and the ESM, which both houses of parliament approved with two-thirds majorities on June 29.

Previously, the court cleared each step of European integration. Last year, the judges cleared the Greek bailout and the EFSF, while saying Germany may not agree to take over unlimited future liabilities incurred by other EU member states.
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

sls.stormyrider

I'm not in favor of continuing the practice of govt bailouts, but this is interesting

http://bottomline.nbcnews.com/_news/2012/09/11/13810129-aig-bailout-earns-the-government-another-27b?lite

QuoteBy Associated Press
WASHINGTON -- The Treasury Department says it has received an additional $2.7 billion from the sale of American International Group stock. The sale comes one day after the government reported a profit on its four-year investment in the bailed-out financial firm.

Treasury says the banks underwriting the sale have exercised their option to buy 83.1 million additional AIG shares at $32.50. Together with Monday's $18 billion in stock sales, Treasury says the government has recovered a total $197.4 billion from the company. That's all of its original investment of $182.3 billion plus a return of $15.1 billion to taxpayers.
The sales cut the government's stake in AIG to less than 16 percent. At the height of the financial crisis, the government held a 53.4 percent stake in the company.
"toss away stuff you don't need in the end
but keep what's important, and know who's your friend"
"It's a 106 miles to Chicago. We got a full tank of gas, half a pack of cigarettes, it's dark and we're wearing sunglasses."

runawayjimbo

Quote from: slslbs on September 12, 2012, 04:28:39 PM
I'm not in favor of continuing the practice of govt bailouts, but this is interesting

http://bottomline.nbcnews.com/_news/2012/09/11/13810129-aig-bailout-earns-the-government-another-27b?lite

QuoteBy Associated Press
WASHINGTON -- The Treasury Department says it has received an additional $2.7 billion from the sale of American International Group stock. The sale comes one day after the government reported a profit on its four-year investment in the bailed-out financial firm.

Treasury says the banks underwriting the sale have exercised their option to buy 83.1 million additional AIG shares at $32.50. Together with Monday's $18 billion in stock sales, Treasury says the government has recovered a total $197.4 billion from the company. That's all of its original investment of $182.3 billion plus a return of $15.1 billion to taxpayers.
The sales cut the government's stake in AIG to less than 16 percent. At the height of the financial crisis, the government held a 53.4 percent stake in the company.

The thing about the "profit" is it depends on how you count it. $85 of the $182 billion was the Fed's "investment" (and of course by "investment" I mean "money created out of thin air and given to a failed company for the sole purpose of paying back Goldman Sachs at 100¢ on the dollar"). If you only count the TARP portion of the bailout (since the Fed's stake came at no direct cost to Treasury), the break even price is around $43/share, so Treasury is still looking at a loss (currently $33.80). And of course as you point out, that doesn't even begin to capture the unseen costs borne from the nationalization of the financial system.

Still, it's unquestionably a good thing that the US gov't is no longer the majority shareholder of AIG.
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

VDB

Paging runawayjimbo ...  the Fed just announced QE3.
Is this still Wombat?

runawayjimbo

Quote from: V00D00BR3W on September 13, 2012, 12:38:57 PM
Paging runawayjimbo ...  the Fed just announced QE3.

Open ended MBS buying of $40B/month

Zero interst rate policy extended into 2015

Operation Twist extension

"Keep policy stimulative for considerable time"

Congrats on your re-election, Mr President
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

VDB

Quote from: runawayjimbo on September 13, 2012, 12:43:01 PM
Congrats on your re-election, Mr President

So you calling nanners?
Is this still Wombat?

runawayjimbo

Quote from: V00D00BR3W on September 13, 2012, 05:02:25 PM
Quote from: runawayjimbo on September 13, 2012, 12:43:01 PM
Congrats on your re-election, Mr President

So you calling nanners?

What that the Fed, a supposedly independent body would embark on an unlimited round of monetary easing in coordination with the central banks in Europe, England, and Japan just 2 months before an election in an attempt to influence the outcome? No, I don't think it's (necessarily) political; I think the banksters just had enough of all this whipsawing and speculation and finally got their way. But I do think Obama won his second term today.

Also, I was joking with tet the other day about how QE/Keynesian stimulus is about one thing: making people feel like they're richer so that they'll hopefully go out and spend more money. Now, I had believed this was the Fed's strategy for some time, but when Bernanke said the quote below in the press conference today I almost shit a goddamned brick. I never thought he would have the balls to come out and say "No, really, we're just trying to pull one over on all you sheep."

One more thing: a lot of talk from the Dems about not going back to the policies that got us into this mess, yet this kind of monetary policy is unquestionably more responsible than anything a dumbass politician could ever dream up.

Quote
QUESTION: My question is -- I want to go back to the  transmission mechanism, because speaking to people on the sidelines of the Jackson Hole conference, that seemed to be the concern about the remarks that you made, is that they could clearly see the effect on rates and they could see the effect on the stock market, but they couldn't see how that had helped the economy.

So I think there's a fear that over time this has been a policy that's helping Wall Street, but not doing that much for Main Street. So could you describe in some detail, how does it really different -- differ from trickle-down economics, where you just pump money into the banks and hope that they lend?

BERNANKE: Well, we are -- this is a Main Street policy, because what we're about here is trying to get jobs going. We're trying to create more employment. We're trying to meet our maximum employment mandate, so that's the objective. Our tools involve -- I mean, the tools we have involve affecting financial asset prices, and that's -- those are the tools of monetary policy.

There are a number of different channels -- mortgage rates, I mentioned other interest rates, corporate bond rates, but also the prices of various assets, like, for example, the prices of homes. To the extent that home prices begin to rise, consumers will feel wealthier, they'll feel more -- more disposed to spend. If house prices are rising, people may be more willing to buy homes because they think that they'll, you know, make a better return on that purchase. So house prices is one vehicle.

Stock prices -- many people own stocks directly or indirectly. The issue here is whether or not improving asset prices generally will make people more willing to spend.

One of the main concerns that firms have is there's not enough demand. There are not enough people coming and demanding their products. And if people feel that their financial situation is better because their 401(k) looks better or for whatever reason -- their house is worth more -- they're more willing to go out and spend, and that's going to provide the demand that firms need in order to be willing  to hire and to invest.
Quote from: DoW on October 26, 2013, 09:06:17 PM
I'm drunk but that was epuc

Quote from: mehead on June 22, 2016, 11:52:42 PM
The Line still sucks. Hard.

Quote from: Gumbo72203 on July 25, 2017, 08:21:56 PM
well boys, we fucked up by not being there.

sls.stormyrider

From the NYT
Business Leaders Urge Deficit Deal Even With More Taxes

http://www.nytimes.com/2012/10/26/us/politics/business-leaders-urge-deficit-deal-even-with-more-taxes.html?_r=1&hp

QuoteThe partisan rift over taxes has blocked a deficit reduction deal for two years and has spilled into the 2012 campaigns. Yet as Republicans and Democrats continue to brawl, business leaders are stepping up pressure on Washington to reach a deal, even if it calls for more revenue — including higher tax bills for themselves.
Related

Obama's Remark Aside, No Imminent Deal on 'Fiscal Cliff' (October 23, 2012)

The Election 2012 App
A one-stop destination for the latest political news — from The Times and other top sources. Plus opinion, polls, campaign data and video.
Download for iPhone
Download for Android
On Thursday morning, more than 80 executives of leading American corporations signed a statement calling for a debt reduction compromise that would "include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit." Several members of the group — which includes highly paid chief executives of financial and industrial corporations who will stand to pay more if President Obama succeeds in his effort to raise taxes on the wealthy — then helped ring the opening bell at the New York Stock Exchange to draw attention to their coalition, Fix the Debt. The group has raised $37 million for a nationwide education and lobbying effort.

Alarmed last year by Washington's brinkmanship over raising the nation's debt ceiling, these executives are now mobilizing to avert another such crisis at the turn of this year. After the election, they plan to press the two parties to compromise on a long-term substitute for the "fiscal cliff" — the immediate across-the-board spending cuts and tax increases that would hit nearly all Americans on Jan. 1, potentially adding substantial strain to the economy.

The business leaders' goal contrasts with the campaign messages of both parties. While the executives seem to answer Mr. Obama's call for "economic patriotism" by their tentative embrace of higher personal taxes, in interviews many of them have rejected his "pay your fair share" talk as class warfare, and a good number oppose his re-election.

But the business leaders' position also contradicts the stand of Mitt Romney and other Republicans, who say that all tax increases are "job killers," that the federal budget can be balanced with spending cuts alone and that any overhaul of the tax code should be "revenue neutral," neither raising nor lowering the government's total tax collection.

"To say that you can solve this without increases in taxes is ludicrous," said David M. Cote, the chief executive of Honeywell, a Republican and a member of Mr. Obama's Bowles-Simpson fiscal commission in 2010. He added: "Most wealthy people get it. They just don't want to be put in the position, though, where you pay more in the taxes and the profligate spending continues."

The Wall Street event on Thursday was just the latest, if the most high-profile, of near daily developments in recent weeks in which prominent figures have stepped out of corporate suites to back a deal that would generate more revenue and, by implication, raise taxes on themselves — if those moves are part of a bipartisan compromise that also reduces the long-term costs of the social programs, chiefly Medicare and Medicaid, that are the biggest factors driving projections of unsustainable federal debt.

"The people, including myself, who are willing to give more revenue don't want to take on the moral hazard" of sending more money to Washington unless the White House and Congress "deal with the pressing need to cut the budget," said Lloyd C. Blankfein, the chief executive of Goldman Sachs, who is a Democrat.

On Monday, Jamie Dimon of JPMorgan Chase hosted a Wall Street lunch for about 75 other chief executives to hear from budget experts, including Senator Mark Warner of Virginia, a Democrat, and Senator Lamar Alexander of Tennessee, a Republican, about what the business leaders could do to promote a bipartisan deal. How, for example, could they persuade Republicans to drop their antitax position?

Business leaders "think it's just really important that we fix this," said Mr. Dimon, an early backer of Mr. Obama whose relationship with him later frayed. "They're not into whether the tax rate for higher-paid individuals is 35 percent or 39.6 percent." He was referring first to the top Bush-era tax rate, which high-income taxpayers now pay, and then to the Clinton-era rate, which they face after Dec. 31 if the Bush tax cuts expire as scheduled, as Mr. Obama supports for high incomes and Republicans oppose.

On Tuesday, attendees at the national conference of the Securities Industry and Financial Markets Association met in New York with Mr. Warner and Senator Saxby Chambliss, Republican of Georgia. The two belong to the Senate's "Gang of Eight," which has struggled for nearly two years to draft a spending-and-taxes deal.

"I'm talking to everybody in this room," Mr. Chambliss told his audience. "If you like the package that we ultimately come up with, then we haven't done our job — because everybody is going to have to ultimately pay a price in this."

Like others who have privately lobbied lawmakers, Mr. Blankfein and Mr. Cote reject suggestions that the philosophical chasm between the parties is unbridgeable.

"There are very conservative Republicans in the House who sit there and say, 'I would agree to a revenue increase if there was significant entitlement reform,' " Mr. Cote said. "And then you'll run into Democrats who say there won't be any entitlement reform unless there's revenue increases. For most of us in the business community, we say: 'It sounds to us like you've got a deal. You just need to sit down and flesh out the details.' "

That, as the Simpson-Bowles commission can attest, is easier said than done.

The panel's dissenters, who opposed the majority's recommendations of a $4 trillion, 10-year package to reduce annual deficits with a combination of spending cuts and new revenue, included all three House Republican members. Among them were Representative Paul D. Ryan of Wisconsin, the House Budget Committee chairman, who is now Mr. Romney's running mate.

After decades in which both parties have complained that business too often sits on the sidelines of budget battles, the Fix the Debt campaign could be among the most muscular interventions by corporate America in memory. More than 100 leaders have signed on, including more than 80 chief executives and some foundation heads.

The campaign's inspiration is the dormant Simpson-Bowles framework, and the group's formation is due in large measure to nonstop proselytizing of business leaders by the commission's chairmen, Erskine Bowles, a businessman who was the White House chief of staff to President Bill Clinton, and Alan K. Simpson, a former Senate Republican leader from Wyoming.

"The business community gets it," Mr. Bowles said. "They absolutely get that it has to be a balanced package with revenues and spending cuts both."

According to the group's president, Maya MacGuineas, the money raised is paying for a growing staff of about 35 at a Washington "war room," chapters in up to 35 states and, ultimately, perhaps, television ads and other help for politicians — members of Congress or even the president — who need support in taking unpopular positions on tax increases or spending cuts. Some in the group say Republicans are especially fearful of drawing a Tea Party opponent in a party primary if they support higher taxes.

Mr. Dimon, speaking for JPMorgan Chase, said: "You know, we're in 1,900 hamlets in America. I'd — we'd — be calling them all up, literally we'd start flying people in. It would be a whole different ballgame, I think, if we had something to support, and with the president supporting it."
"toss away stuff you don't need in the end
but keep what's important, and know who's your friend"
"It's a 106 miles to Chicago. We got a full tank of gas, half a pack of cigarettes, it's dark and we're wearing sunglasses."

sls.stormyrider

http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html?hp

QuoteNonpartisan Tax Report Withdrawn After G.O.P. Protest
By JONATHAN WEISMAN
Published: November 1, 2012
WASHINGTON — The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economy theory, after Senate Republicans raised concerns about the paper's findings and wording.

Mitch McConnell, the Senate Republican leader, center, and other Republicans raised concerns with an economic report that questions a central tenet of conservative economic theory.
The decision, made in late September against the advice of the agency's economic team leadership, drew almost no notice at the time. Senator Charles E. Schumer, Democrat of New York, cited the study a week and a half after it was withdrawn in a speech on tax policy at the National Press Club.

But it could actually draw new attention to the report, which questions the premise that lowering the top marginal tax rate stimulates economic growth and job creation.

"This has hues of a banana republic," Mr. Schumer said. "They didn't like a report, and instead of rebutting it, they had them take it down."

Republicans did not say whether they had asked the research service, a nonpartisan arm of the Library of Congress, to take the report out of circulation, but they were clear that they protested its tone and findings.

Don Stewart, a spokesman for the Senate Republican leader, Mitch McConnell of Kentucky, said Mr. McConnell and other senators "raised concerns about the methodology and other flaws." Mr. Stewart added that people outside of Congress had also criticized the study and that officials at the research service "decided, on their own, to pull the study pending further review."

Senate Republican aides said they protested both the tone of the report and its findings. Aides to Mr. McConnell presented a bill of particulars to the research service that included objections to the use of the term "Bush tax cuts" and the report's reference to "tax cuts for the rich," which Republicans contended was politically freighted.

They also protested on economic grounds, saying that the author, Thomas L. Hungerford, was looking for a macroeconomic response to tax cuts within the first year of the policy change without sufficiently taking into account the time lag of economic policies. Further, they complained that his analysis did not take into account other policies affecting growth, such as the Federal Reserve's decisions on interest rates.

"There were a lot of problems with the report from a real, legitimate economic analysis perspective," said Antonia Ferrier, a spokeswoman for the Senate Finance Committee's Republicans. "We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled."

The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical.

The Bureau of Labor Statistics on Friday will release unemployment figures for October, a month after some conservatives denounced its last report as politically tinged to abet President Obama's re-election. When the bureau suggested its October report might be delayed by Hurricane Sandy, some conservatives immediately suggested politics were at play.

Republicans have also tried to discredit the private Tax Policy Center ever since the research organization declared that Mitt Romney's proposal to cut tax rates by 20 percent while protecting the middle class and not increasing the deficit was mathematically impossible. For years, conservatives have pressed the nonpartisan Congressional Budget Office to factor in robust economic growth when it is asked to calculate that cost of tax cuts to the federal budget.

Congressional aides and outside economists said they were not aware of previous efforts to discredit a study from the research service.

"When their math doesn't add up, Republicans claim that their vague version of economic growth will somehow magically make up the difference. And when that is refuted, they're left with nothing more to lean on than charges of bias against nonpartisan experts," said Representative Sander Levin of Michigan, the ranking Democrat on the House Ways and Means Committee.

Jared Bernstein, a former economist for Vice President Joseph R. Biden Jr., conceded that "tax cuts for the rich" was "not exactly academic prose," but he said the analysis did examine policy time lags and controlled for several outside factors, including monetary policy.

"This sounds to me like a complete political hit job and another example of people who don't like the results and try to use backdoor ways to suppress them," he said. "I've never seen anything like this, and frankly, it makes me worried."

Janine D'Addario, a spokeswoman for the Congressional Research Service, would not comment on internal deliberations over the decision. She confirmed that the report was no longer in official circulation.

A person with knowledge of the deliberations, who requested anonymity, said the Sept. 28 decision to withdraw the report was made against the advice of the research service's economics division, and that Mr. Hungerford stood by its findings.

The report received wide notice from media outlets and liberals and conservative policy analysts when it was released on Sept. 14. It examined the historical fluctuations of the top income tax rates and the rates on capital gains since World War II, and concluded that those fluctuations did not appear to affect the nation's economic growth.

"The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie," the report said. "However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."

The Congressional Research Service does such reports at the request of lawmakers, and the research is considered private. Although the reports are posted on the service's Web site, they are available only to members and staff. Their public release is subject to lawmakers' discretion.

But the Hungerford study was bound to be widely circulated. It emerged in the final months of a presidential campaign in which tax policy has been a central focus. Mitt Romney, the Republican nominee, strongly maintains that any increase in the top tax rates on income and capital gains would slow economic growth and crush the job market's tentative recovery.

President Obama has promised to allow cuts on the top two income tax rates to expire in January, lifting the rates from 33 and 35 percent, their level during most of George W. Bush's presidency, to 36 percent and 39.6 percent, where they were during most of the Clinton administration. Mr. Obama maintains the increases would not hurt the economy and are the fairest way to reduce the deficit.

Mr. Hungerford, a specialist in public finance who earned his economic doctorate from the University of Michigan, has contributed at least $5,000 this election cycle to a combination of Mr. Obama's campaign, the Democratic National Committee, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee.
"toss away stuff you don't need in the end
but keep what's important, and know who's your friend"
"It's a 106 miles to Chicago. We got a full tank of gas, half a pack of cigarettes, it's dark and we're wearing sunglasses."