U.S. Trade Gap Drops as Exports Rise to Two-Year High – The trade deficit in the U.S. shrank more than forecast in October as a weaker dollar and growing economies overseas propelled exports to a two-year high. The gap narrowed 13 percent to $38.7 billion, less than the lowest estimate of 78 economists surveyed by Bloomberg News and the smallest since January, Commerce Department figures showed today in Washington. Exports were the strongest since August 2008 as Mexico and China bought record amounts of U.S. products. 3M Co. and General Dynamics Corp. are among companies that will probably benefit from growing demand in markets like China, Brazil and South Korea, which this year are among the top-10 buyers of American-made goods. Imports stagnated in October as U.S. demand for crude oil plunged, an outcome that may prove to be temporary as the world’s largest economy picks up
Is it time to call it quits on the Euro? – It pained me to write this as I have never been a Euroskeptic, but I fear the answer for Greece, Ireland, Spain, and Portugal may well be yes. These countries need both debt restructuring and a boost in competitiveness, and it is very difficult to see how they will get those while remaining in the Eurozone. The most likely alternative is economic decline and political turmoil. Through long and painful experience, Europe’s leaders first learned that financial integration requires eliminating volatility among national currencies. Next they learned that eradicating currency risk requires doing away with national currencies altogether. Now they are learning – but resisting – the lesson that you cannot achieve monetary union, among democracies, without political union. In other words, Europe is learning that political trilemma of the world economy applies there too. It is a very sad story for one of this century’s boldest economic experiments.
Fed Assets Reach Record $2.39 Trillion on Purchases of Bonds – The Federal Reserve’s balance sheet reached a record $2.39 trillion as the central bank increased its holdings of Treasury securities as part of a bid to boost economic growth. Treasuries held by the Fed increased by $32.2 billion to $949.6 billion as of Dec. 8, according to a weekly release by the central bank today, while the Fed’s holdings of mortgage- backed securities and federal agency debt securities were unchanged. The Fed has bought $106.3 billion in Treasuries on its way to purchasing $600 billion of government debt through June 2011. Separately, it has purchased $75.8 billion of Treasuries as part of its plan, announced in August, to reinvest maturing mortgage holdings. The second round of unconventional monetary easing is aimed at spurring economic growth and preventing inflation from falling too low.
Governor says Arizona wants Medicaid waver – PHOENIX – Arizona Gov. Jan Brewer said Thursday she’ll ask for a waiver under the federal health care overhaul so Arizona can reduce its Medicaid rolls to lower costs that Brewer and fellow Republicans say the cash-short state can’t afford. If approved, the change could mean the loss of government-funded health care for hundreds of thousands of people. Brewer’s administration previously said it might request a waiver, but the governor on Thursday said "yes we are" when asked directly whether she would. "We need flexibility from the federal government in order to get our state budget in line," she said. Brewer spokesman Paul Senseman later said details of the waiver request are still being decided, including how many people could lose coverage.
Nevada Medicaid Program Continues To Grow, Adding To State Budget Challenges– Despite the need for drastic spending reductions to balance Nevada’s budget, the government program that provides health care to the poor continues to expand, consuming a growing share of the state’s scarce state revenues. Medicaid, the cost of which is shared by both the federal government and the state, could require about $1.25 billion in state general fund support in the upcoming two-year budget. That’s a spike up from the $835 million approved by the 2009 Legislature for the current spending plan. The increase is due both to an ever rising caseload and the loss of federal stimulus funds that paid for a greater share of the Medicaid budget in the current biennium. Unlike many other state-funded programs, the state must provide Medicaid coverage to those who qualify. Higher education funding can be cut and prison populations can be managed with early parole or alternative sentencing.
Feeding A Larger Population On A Warmer Planet - At a recent event hosted by the International Food Policy Research Institute (IFPRI) in Washington D.C., Mark Rosegrant, Director of the Environment and Production Technology Division, said, “Income and population growth drive food prices higher, putting pressure on our food system.” And climate change adds more pressure to these already big challenges. “We can expect to see more extreme events – more floods, more droughts, more shocks to agriculture,” noted Sherman Robinson from the United Kingdom’s Foresight Programme on Global Food and Farming Futures Project. There is, therefore, an urgent need to manage these challenges in a more sustainable way.The event marked the launch of a new IFPRI report titled “Food Security, Farming, and Climate Change to 2050,” co-authored by Rosegrant and a team of 12 other researchers. By focusing on the period between 2010 and 2050, the report details the impact of climate change on food security, highlighting how policymakers can effectively facilitate adaptation and mitigation.
China Can Slow Global Warming If The US Won’t – Below are charts for current emissions and cumulative emissions. The United States bears 27% responsibility for cumulative emissions. China is second at 9.5%. On a per capita basis, the United States is more responsible than China by about a factor of ten. Nevertheless, China’s annual emissions have rocketed past those of the United States and other developed countries, and, if they continue on their current growth path, China will become the principal cause of climate change within the next few decades. Also, as shown in the graphs below, the task of getting global CO2 emissions to stabilize can be accomplished only if the rapidly growing emissions of all developing countries can be stabilized and begin to decline over the next few decades. How can I possibly be optimistic about that? I must start with a fundamental law: as long as fossil fuels are the cheapest energy, they will continue to be burned. This law is as certain as the law of gravity. No "caps," "goals" for future emissions, or other self-deceptions can alter this fact. Caps only alter who burns the fuel and the pace of burning – they will not leave fossil fuels in the ground, as science demands. Caps are also inherently disingenuous – a pretense that the price of fossil fuel energy does not need to steadily rise, an attempt to circumvent the "law of gravity" 2.