How increased immigration would help fix the economy – The SF Fed’s Giovanni Peri has the latest research on the subject: Statistical analysis of state-level data shows that immigrants expand the economy’s productive capacity by stimulating investment and promoting specialization. This produces efficiency gains and boosts income per worker. At the same time, evidence is scant that immigrants diminish the employment opportunities of U.S.-born workers. The effects of immigration on US wages are large, positive, and significant: Over the long run, a net inflow of immigrants equal to 1% of employment increases income per worker by 0.6% to 0.9%. This implies that total immigration to the United States from 1990 to 2007 was associated with a 6.6% to 9.9% increase in real income per worker. That equals an increase of about $5,100 in the yearly income of the average U.S. worker in constant 2005 dollars. Such a gain equals 20% to 25% of the total real increase in average yearly income per worker registered in the United States between 1990 and 2007.
State Tax Revenues Tick Up – Speaking of the different business models of each of the 50 states, those business models finally seem to be functioning a little better: state taxes rose modestly in the second quarter. They are still below their prerecession levels, however.Preliminary tax collection numbers released today by the Rockefeller Institute show that overall state tax revenues grew 2.2 percent in the second quarter of 2010, compared with same period a year earlier. This was the second consecutive quarter of overall year-over-year growth.During the first half of this year, the growth in tax revenues was driven by an increase in both sales taxes and personal income taxes. For four consecutive quarters, though, corporate income tax revenues have fallen, must recently by 18.8 percent on a year-over-year basis. And even the positive growth in personal income taxes was nothing to write home about, as it was largely because of a legislated tax increase in California. Excluding California, state personal income tax collections for the whole country during the second quarter declined 1.1 percent when compared to the same quarter in 2009.
Nobody – Via Atrios, this depressing item:Asked if the stimulus bill was too small, [White House press secretary Robert] Gibbs says: “I think it makes sense to step back just for a second. … Nobody had, in January of 2009, a sufficient grasp of … what we were facing.” He adds that any stimulus was “unlikely to fill” the hole the financial meltdown created. “What the Recovery Act did was prevent us from sliding even into a deeper recession with greater economic contraction, with greater job loss than we have experienced because of it,” he says. The truth is that some of us were practically screaming back in January 2009 that the administration was proposing too small a program. Start with this post and work forward. And no, the point isn’t that I’m so smart — it is that given the forecasts we had at the time, and given historical experience of recessions after financial crises, it wasn’t at all hard to see that the plan was too small. Things have been worse than expected — but not that much worse.
Europe Bond Yields – Usually I just post the bond spreads in Europe, but I think this excellent tool from Bloomberg shows visually what is happening with bond yields in Europe.You can click here for the graph for the Greece 10 year bond yields. Then you can add other bonds for comparison. This is a 3 year graph from Bloomberg.Where it says "Add a comparison" you can enter the symbols for Germany (GDBR10:IND) and then Ireland (GIGB10YR:IND) to create this graph. Nemo has links for more countries on the sidebar of his site. Starting in 2008 the bond yields started to separate – with Greece and Ireland paying more. Then in May of this year, the situation reached crisis levels. And now the spreads are steadily widening again – as the German bond yields have fallen recently (like the U.S. yields) and the Irish and Greek bond yields have been increasing.
Obama to Revamp U.S. Export Control, Ease Limits (Bloomberg) — President Barack Obama plans to ease restrictions on selling products with military applications to foreign buyers as part of a restructuring of U.S. export rules that companies said were too broad and burdensome. Obama will announce the changes, which will create narrower and more consistent rules for defense, technology and aerospace products, in a video message to an export-control conference in Washington tomorrow, the administration announced. “While there is still more work to be done, taken together, these reforms will focus our resources on the threats that matter most, and help us work more effectively with our allies in the field,” Obama will say in his remarks, according to a text released by the White House. “By enhancing the competitiveness of our manufacturing and technology sectors, they’ll help us not just increase exports and create jobs, but strengthen our national security as well,” he will say.
Biofuels Firms Buy Up African Land, Chase EU Goals, Study Says… (Bloomberg) — Biofuels companies from the U.K. to Brazil and China are buying up large swaths of Africa, causing deforestation and diverting land from food to fuel production, the environmental group Friends of the Earth said. Across the continent almost 5 million hectares of land, an area bigger than the Netherlands, have been sold to cultivate crops for biofuels since 2006, Friends of the Earth’s Brussels- based European division said today in a 36-page study. European companies including Portugal’s Galp Energia SGPS SA, the U.K.’s D1 Oils Plc and Sun Biofuels Ltd. and Agroils Srl of Italy joined firms from Canada and Israel in buying acreage to plant jatropha to make biofuels, the study said. The 27- nation European Union has set a goal of getting 10 percent of transport fuels from renewable sources by 2020. “The EU’s mandatory target for increasing agrofuels is a clear driver to the land grabbing in Africa,” Friends of the Earth said. “There is a risk that agrofuels, and with them, Africa’s agricultural land and natural resources, will be exported abroad with minimal benefit for local communities and national economies.”
It’s a Communication Challenge, Not a Scientific Challenge – Why anyone was surprised that Congress failed to enact climate change legislation is shocking to me. Similarly (though the data is mixed), why so many Americans refuse to believe the scientific consensus about global warming is extremely frustrating but hardly surprising. I don’t blame Americans for their misguided views about climate change. I also don’t blame the environmental and scientific communities or the politicians that favor an environmental agenda for failing to convince Americans that global warming is real and solutions are needed now. The way to overcome this dismal situation is not with more science but with more effective communication. Even if you’re Al Gore (and maybe especially if you’re Al Gore), I caution you against arguing the science of climate change. You cannot change the mind of a global warming skeptic by citing scientific facts. The reason is simple; resistance isn’t grounded in facts. Instead, it’s grounded in emotion, political ideology and perceived financial self-interest. Let’s examine each one:
Lawler: HUD Secretary May Have Just Made Near-Term Home Sales Worse – Here are economist Tom Lawler’s thoughts on HUD Secretary Shaun Donovan comments this weekend … In an interview with CNN over the weekend, HUD Secretary Donovan noted that the July plunge in home sales following the end of the federal home buyer tax credit was much sharper than the administration expected; that the administration was “very concerned,” and would “do everything we can” to stabilize the shaky housing market. Many folks appear to have interpreted Donovan’s remarks as meaning that the administration has not “ruled out” reviving the home buyer tax credit if home sale continue to be weaker than expected, thus confirming some potential home buyers’ views that it’s better to wait to buy a home until the government “does it again.” The home buyer tax credit, of course, was an enormously costly and inefficient program where many home buyers who would have purchased a home anyway got a tax credit for doing so.
Housing Bust Makes Paying for College Harder – Another casualty of the housing bust: Higher education. The biggest financial asset for most American families — and in many cases, the only asset — is their home. When real estate values skyrocketed in the early 2000s, many people borrowed against the value of their houses and spent far more than their incomes alone allowed. Now, of course, we’re living through the aftermath, and it ain’t pretty. But while plenty of that money may have been spent superfluously, it also appears to have played an important role in funding college educations, particularly for lower income families, according to Cornell University economist Michael Lovenheim. ( Read the study)