Qld floods ‘linked to climate change’… Climate change has likely intensified the monsoon rains that have triggered record floods in Australia’s Queensland state, scientists said, with several months of heavy rain and storms still to come. But while scientists say a warmer world is predicted to lead to more intense droughts and floods, it wasn’t yet possible to say if climate change would trigger stronger La Nina and El Nino weather patterns that can cause weather chaos across the globe. "I think people will end up concluding that at least some of the intensity of the monsoon in Queensland can be attributed to climate change," said Matthew England of the Climate Change Research Center at the University of New South Wales in Sydney. "The waters off Australia are the warmest ever measured and those waters provide moisture to the atmosphere for the Queensland and northern Australia monsoon," he told Reuters.
Fed’s Fisher Says Monetary Policy Not Cure for Nation’s `Fiscal Pathology’ – Federal Reserve Bank of Dallas President Richard Fisher said monetary policy isn’t a “salve for the nation’s fiscal pathology” and that Congress should focus on reducing the federal deficit and creating incentives for companies to grow. “There are limits to what we can do on the monetary front to provide the bridge financing to fiscal sanity,” Fisher, 61, said in a speech in New York today. “The Fed has done much, in my words, to provide the bridge financing until the new Congress gets to work restructuring the tax and regulatory incentives American businesses need to confidently expand their payrolls and capital expenditures here at home.” Through its asset purchases, known as quantitative easing, the Fed runs “the risk of being viewed as an accomplice to Congress’ fiscal nonfeasance,” said Fisher, who votes this year on the FOMC. The program “roughly means we are purchasing the equivalent of all newly issued Treasury debt through June.”
Could Federal Spending be Capped at 20 Percent of GDP? Should it Be? – As the budget debate heats up, we will hear much about capping U.S. federal government spending at 20 percent of GDP, roughly its level for several decades leading up to the global financial crisis. Likely presidential candidate Rep. Mike Pence (R-Ind.) has been among the most vocal backers of this idea. Together with colleagues, he has packaged it in the form of a proposed Spending Limit Amendment. Part of its attraction is that the 20 percent solution appears to require no real sacrifice. If we were content with the level of government services enjoyed in past, pre-crisis decades, why would there be any hardship in holding to that level in the future? Unfortunately, the pretense that it would be possible to maintain the same level of real government services as in the past without future increases in spending is an illusion. The reality is that holding government spending to past levels would require a significant reduction in real public services
The End of Procyclical Labor Productivity? – The fact that falling hours have been accompanied by rapidly-rising productivity is what has given us not a jobless recovery but a massive job-loss recovery. The normal pattern we would expect from the past two years’ output growth would be that employment and hours would have been nearly flat. Why the different pattern this time? We think that it is because firms are no longer "hoarding labor" when times are slack because the industries losing jobs no longer expect employment to bounce back. These days U.S. labor productivity looks to be countercyclical: firms take advantage of downturns in demand to rationalize operations and increase labor productivity, pleading business necessity in the face of the downturn to their workers. It seems fairly clear to me that calling this "structural change" is somewhat of a misnomer. . For workers to lose jobs in contracting industries and to not find them in expanding industries is not "structural change" but rather something else.
Tumbling from middle-class security, and struggling to regain it – There is the single mother from Manassas who after losing her job and going on public assistance could no longer afford to pay her mother to watch her children and had to send her mother to child development and CPR classes to qualify for public child-care assistance. There is the laid-off TV repairman who 30 years ago received a degree after studying Greek, Latin and Hebrew and now, facing meager job prospects, regrets having chosen to work with his hands. There is the well-dressed couple who after losing their jobs in the auto industry pulled into a food pantry in Gaithersburg in a gleaming, gas-guzzling four-door truck they had bought for fun a few years ago and now wish they hadn’t. The recession exposed how precarious a hold many middle-class families had on their status. The housing meltdown and credit crunch wiped out nest eggs and the ability to maintain a credit-fueled lifestyle.
Campus Notes – UNC estimates more job losses – A 5 percent cut to the UNC system budget – which officials say is a reasonable expectation – could result in the loss of 900 jobs across the state. Of those, 400 would like be faculty cuts, according to data being presented this morning to the UNC system’s Board of Governors. After several years of budget cuts, the system appears ready to reduce its budget again, doing its part to help the state patch a hole in its budget estimated now at more than $3.5 billion. A 10 percent cut would more than double those job eliminations – to 2,000 positions across the UNC system, including 1,000 professor slots. UNC-Chapel Hill has already instituted a permanent 5 percent budget cut effective July 1. In dollars, that’s $26 million. And fewer instructors means fewer classes offered. The data also suggests the loss of 2,750 course sections across the UNC system with a 5 percent cut. With a 10 percent cut, 6,400 class sections would get the axe.
But the two statements, made within hours of each other, were seized on by deficit hawks as further evidence that the government must reduce spending and debt to avert disaster. But many economists say the reckoning, if it comes, is still years or even decades away. The bond market shrugged at Thursday’s news. Indeed, even some experts who want to see the deficit reduced said now is not the time to cut federal spending drastically, given the weakness in the economy and high unemployment.
Traders’ Smaller Bonuses Still Top Pay for Brain Surgeons, 4-Star Generals – Wall Street traders discouraged by declining bonuses this month can take solace: They still earn much more than brain surgeons and top U.S. generals. An oil trader with 10 years in the business is likely to earn at least $1 million this year, while a neurosurgeon with similar time on the job makes less than $600,000, recruiters estimated. After a decade of deal-making, merger bankers take home about $2 million, more than 10 times what a similarly seasoned cancer researcher gets (see table below). The pay gap between finance and other professions widened between the 1980s and 2006, exceeding the record set before the Great Depression, according to a 2009 study by Thomas Philippon, a professor at New York University’s Stern School of Business. After the 2008 financial crisis, Wall Street started paying a larger portion of bonuses in stock and restricted cash. Yet there’s little sign the gap with Main Street is narrowing.