Public-sector workers earn less
– Last year, EPI published a paper by Rutgers University professor Jeffrey Keefe, which supplied overwhelming evidence that public-sector workers, on the whole, earn less than those in the private sector. Keefe offered some suggestions for why these public employees are often perceived to be overcompensated. For starters, public sector workers are, as a group, more highly educated, work in more highly paid occupations and they tend to work moderately fewer hours than those in the private sector. In addition, it is frequently noted that public employees earn more in benefits such as health care and pensions: therefore, a simple wage comparison will not accurately capture difference in total compensation. Nonetheless, after controlling for multiple factors including level of education, hours worked and non-cash compensation, Keefe’s 2010 paper, Debunking the Myth of the Overcompensated Public Employee
found that, on average, full-time state and local employees are undercompensated compared to “otherwise similar private-sector workers.”
Failure in the Gulf – Editorial – NYTimes -The document released Wednesday by the presidential commission investigating last spring’s oil blowout in the Gulf of Mexico is a riveting and chilling indictment of “systemic failures” throughout the oil business and of the federal agencies that allowed themselves to be captured by the people they were supposed to regulate. The commission will offer specific recommendations for reform in its full report next Tuesday. But the chapter it decided to release early is, by itself, a powerful summons to the Obama administration to press rapidly forward with stronger regulations, and to the industry as a whole to behave far more responsibly than it has. Another tragedy like the one in the Gulf of Mexico could well occur, the report suggests, unless there is “significant reform in both industry practices and government policies.”
US Fed’s balance sheet at record in latest week – (Reuters) – The Federal Reserve’s balance sheet rose to $2.418 trillion in the week ended Jan. 5 from $2.403 trillion the prior week. The balance sheet has been expanding since the U.S. central bank last month began a second round of quantitative easing, known as QE2. The Fed expects to but about $600 billion in U.S. government debt over an eight-month period in an effort to stimulate the economy.The balance sheet topped the previous record of $2.333 trillion set in May as the Fed was about to end its initial round of bond purchases that involved $300 billion of Treasuries and $1.425 billion in mortgage-related securities. The second round of quantitative easing follows the Fed’s use of proceeds from maturing mortgage securities in its portfolio to buy Treasuries — a move that started in August. Since that time, it has purchased about a combined $254 billion in Treasuries. The central bank’s holdings of U.S. government securities totaled $1.031 trillion on Wednesday, up from $1.016 trillion last week.
Fed’s Balance Sheet Expands In Latest Week – The U.S. Federal Reserve’s balance sheet expanded in the latest week as the central bank’s Treasury holdings increased and commercial bank borrowing fell. The Fed’s asset holdings in the week ended Jan. 5 rose to $2.439 trillion, from $2.423 trillion a week earlier, it said in a weekly report released Thursday. The Fed’s holdings of U.S. Treasury securities rose to $1.031 trillion on Wednesday from $1.016 trillion a week earlier. Meanwhile, Thursday’s report showed total borrowing from the Fed’s discount lending window slipped to $44.62 billion Wednesday from $45.08 billion a week earlier.Borrowing by commercial banks fell to $10 million Wednesday from $58 million a week earlier. Thursday’s report showed U.S. government securities held in custody on behalf of foreign official accounts
rose to $3.355 trillion, from $3.351 trillion in the previous week.
U.S. Treasurys held in custody on behalf of foreign official accounts climbed to $2.621 trillion from $2.618 trillion in the previous week.
Foreign central banks’ US debt holdings rise – Fed – (Reuters) – Foreign central banks’ overall holdings of U.S. marketable securities at the Federal Reserve rose in the latest week, data from the U.S. central bank showed on Thursday. The Fed said its holdings of U.S. securities kept for overseas central banks rose $3.44 billion in the week ended Jan. 5, to stand at $3.355 trillion.The breakdown of custody holdings showed overseas central banks’ holdings of Treasury debt rose by $2.6 billion to stand at $2.621 trillion.
Foreign institutions’ holdings of securities issued or guaranteed by the biggest U.S. mortgage financing agencies, including Fannie Mae and Freddie Mac, rose by $849 million to stand at $734.34 billion. For balance sheet graphic: link.reuters.com/buf92k Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years, and own over a quarter of marketable Treasuries. China and Japan are the biggest foreign holders of Treasuries.
How tied in with Wall Street is the Obama administration? –
President Obama’s appointment of William Daley as his chief of staff has elicited two basic reactions
. One is to complain that the administration has long cared too much what the business community thinks. The other is to commend the administration for finally paying attention to what the business community thinks.They can’t both be right. Can they? One way to measure the administration’s "business-friendly" attitude is to examine how many members of it have ties to business. There are several prominent administration officials, past and present, who have come from or left for the business community—in particular, Wall Street. Former director of the Office of Management and Budget Peter Orzsag, for instance, resigned from his post and took a job at Citigroup. Incoming National Economic Council Chair Gene Sperling earned nearly $1 million from Goldman Sachs
in 2008. And Daley is an executive at JPMorgan Chase, the investment bank that received a $12 billion bailout during the financial crisis. But a review of the careers of senior administration officials—members of the Cabinet, the economic advisory councils, and the president’s special adviseors—shows characteristically minimal ties, but lucrative ones.
House GOP Backtracks on Pledge to Cut $100 Billion – Even if you put the close-to-impossible politics aside, any budget wonk would have told the GOP that for purely technical reasons it was going to be almost impossible to deliver on the promise it made in its Pledge to America to cut $100 billion from the federal budget this year. That’s why it was anything but a surprise when, as Jackie Calmes noted in yesterday’s New York Times, on the first day they formally took control of the House of Representatives Republicans did what every fiscal technician knew was inevitable: They announced that they were not going to cut domestic discretionary spending to 2008 levels as they repeatedly said they would do.
Why Are Birds Falling From the Sky? –
A mysterious rain of thousands of dead birds
darkened New Year’s Eve in Arkansas
, and this week similar reports streamed in from Louisiana
, and elsewhere. (See pictures of the Arkansas bird die-off
.)But the in-air bird deaths aren’t due to some apocalyptic plague or insidious experiment—they happen all the time, scientists say. The recent buzz, it seems, was mainly hatched by media hype.
At any given time there are "at least ten billion birds in North America … and there could be as much as 20 billion—and almost half die each year due to natural causes," said ornithologist Greg Butcher
, director of bird conservation for the National Audubon Society in Washington, D.C.
The Japan Myth – Policymaking is often dominated by simple “lessons learned” from economic history. But the lesson learned from the case of Japan is largely a myth. The basis for the scare story about Japan is that its GDP has grown over the last decade at an average annual rate of only 0.6% compared to 1.7 % for the US. The difference is actually much smaller than often assumed, but at first sight a growth rate of 0.6 % qualifies as a lost decade. According to that standard, one could argue that a good part of Europe also “lost” the last decade, since Germany achieved about the same growth rates as Japan (0.6%) and Italy did even worse (0.2 %); only France and Spain performed somewhat better.But this picture of stagnation in many countries is misleading, because it leaves out an important factor, namely demography.
ObamaCare Repeal: GOP Should Be Careful What It Wishes For – Republicans in the House, now in the majority, say they’ll vote to repeal the health-care law on Jan. 12. It will largely be a symbolic vote: Even in the unlikely event that 60 senators agree, Republicans don’t have the votes to override President Obama’s certain veto. A more likely scenario in the weeks and months to come will be the Republicans’ attempt to strip the Department of Health and Human Services of the money necessary to implement the law’s requirement that all Americans buy health insurance. This could easily precipitate a showdown with the White House—and a government shutdown later this year. The individual mandate is the linchpin of the health-care law because it spreads the risks. Without the participation of younger or healthier people, private insurers won’t be able to take on older or sicker customers with pre-existing medical conditions, or maintain coverage indefinitely for people who become seriously ill.