3 Reasons the Economy has Some Spring in its Step

"After a winter of confusing economic date, some important indicator show an economy coming out of hibernation". Over the past few months, the long winter, showed that consumers and the economy weren't quite as healthy as they should have been. However, now it looks like the economy is finally picking up and shaking off the cold-weather blues:

1. Retail Sales
The Commerce Department has stated that retail prices increase 1.1% in March, which is about what economists were expecting. This increase suggest that consumers have been waiting for the weather to become warm to spend big.

2. New Car Sales
US GD is primarily composed of consumer spending. When shoppers are spending on items like cars, this is a good sign for economic output and ultimately job growth. Automakers announced that they had sold 16.4 million new cars in March, the highest number since June 2006. Here we see the effects of the weather. The recent jump in sales is probably making up for a weak winter.

3. Jobless Claims 
Economist track the number of Americans applying for jobless benefits. If this number falls, it is a good sign that the labor market is getting healthier. The Labor Department announced that this number dipped to 300,000, its lowest level since 2007.

It look's like the many months where Economists blamed the cold weather for the slowdown in the economy was true. Based on these three points, the economy is finally picking up where it left off in the Fall.

http://finance.fortune.cnn.com/2014/04/14/economic-recovery-accelerates-as-winter-turns-to-spring/

China GDP slows to 7.4% in first quarter

http://money.cnn.com/2014/04/15/news/economy/china-gdp/index.html?iid=SF_E_River

China's growth has slowed to 7.4% in the first quarter. China's GDP growth is very important to keep an eye on because it is the most comprehensive gauge of the country's economic health. Some experts are predicting there will additional slow growth, while others aren't sure. China is searching to find a source of a more sustainable growth...where do you think they will find it? What do you predict will happen to China's economy? 

Avg American Pays $8,577 for Welfare

http://moneymorning.com/ext/articles/wealthandpoverty/new-study-shows-average-american-pays-8577-for-welfare.php?iris=205888

  According to the US Census Bureau, 101.7 million full time workers are paying for welfare benefits but 108.5 million Americans are receiving these benefits.

  This article attacks President Obama for keeping the poor out of work and welfare.

  The total benefit(food, medical care, housing, social service and cash) that a family of four could receive is $40,000/year in tax payer funded subsidies.
 
 So the writer wonders, why would someone work making around $55,000 when, after paying taxes,they will receive LESS than they could stay at home live on welfare earnings ?

To keep the welfare program solvent, each American taxpayer is forced to pay an average of $8,776 every year. The avg welfare recipient is given $9,500 per year.

The difference of $724 per person aka "free govt benefits" is adding up in the already large
$17 trillion deficit.

The number of Americans relying on food stamps have risen by 1,625% since 1969.
It has also been projected that approximately 50% of all US children will be on food stamps at some point in their lives.

In 2011, the government spent $41.3 million ONLY for the advertisements of food stamps.

Coal as an alternative source

http://www.economist.com/news/business/21600987-cheap-ubiquitous-and-flexible-fuel-just-one-problem-fuel-future



Coal is being recognized as an efficient power source recently: The cheap price and less cost in mining and assimilating is irresistible. However the emission of CO2 from coal burning is very high and also combustion of coal releases SO2 (Sulphur dioxide), which is harmful for the lungs and crumbles structures. Moreover the radioactivity emission from coal is technically higher than that of the nuclear power plants. mining itself also puts the miners in chemical and physical dangers, such as the toxic substances coming from the coal itself and the mines sometimes crash, killing or isolating the miners inside.
However, Japan, which had a recent disaster partially due to failure of nuclear power plants, is thinking of substituting coal as an energy source from nuclear power. On the other hand, USA is trying to cut down coal production but people predict that at least 20% + of the energy will be produced from coal. Yet it is quite clear that coal is not a very safe "fuel" to use. It has lots of risks of mining it (although it costs way less than petrol mining) and the pollution is lethal in a lot of ways as well, thus it's not a very good energy source.

Housing Markets - The spectre haunting San Francisco

The housing industry in places like San Francisco present many issues.  This is surprising as San Francisco is a place where many people would be very excited to live in, but that is partly the problem. In order to keep the area desirable, costs for housing must be increased in terms of individual houses and rent prices.  This keeps over-population out of the question, but it also rises the issue that not just anyone can live there.  Only the wealthy can.  This presents housing issues for those who cannot afford the heavy price tags.

In addition, there is not a ton of area to just continually build new homes.  This leaves builders hoping that home owners will want additions added to their house or improvements of some sort.  This is how the housing industry is overall - people buy an old home and renovate it.  

This housing dynamic raises the capital intensity of consumption which contributes to an increase in capital share of income.  Zoning restrictions are then used to dictate who can live where essentially.  It is like a government tool.  In order to fix this, one option could be to use the government in order to seize back the surplus of redistribution, which is definitely not the ideal solution.  Another idea, as mentioned by the author of this article, says to reform local institutions to generate better zoning outcomes.  This would create better living situations for everyone while keeping the economy in check. How to create these institutions is the difficult part.  

The housing market could correct itself, but it is highly unlikely. The government probably has the most influence in this situation, so they will need to use their power of zoning in order to help the economy out.

http://www.economist.com/blogs/freeexchange/2014/04/housing-markets

In Europe, Auto Sales Are Still Low, But They Are Rising

The european auto sales reported today that more newly cars were sold in the Eurozone in the past 12 month then had been in the earliest years. “The increase was a tiny one, just .4 percent,”  Floyd Norris says. This increase portrayed a return in economic growth in Europe. Countries that benefited from this growth were amongst those countries who experienced most of the recession. Countries like Greece, Portugal, Spain and Ireland had 10 percent increase than did in the previous years. However, this increase could be the result of a  decline in prices of the newly cars, but the economy in the Eurozone seems to be recovering.


http://economix.blogs.nytimes.com/2014/04/17/in-europe-auto-sales-are-still-low-but-they-are-rising/?_php=true&_type=blogs&ref=economy&_r=0

England's Housing Market Getting Too Hot Again

http://www.economist.com/news/britain/21600728-property-prices-are-rising-swiftly-bank-england-may-intervene-cool-it

Since the financial crisis, Great Britain has been recovering well. Housing prices are on the rise, especially in London. However, since last year prices have risen 6.8% and up to 13.% in London. This is nothing surprising since the demand for new housing has risen due extremely low interest rates and mortgages up to 5.5x income are available. Seeing the potential for another bubble and collapse, England's Financial Policy Committee is considering making borrowers meet more strict qualifications. One way to do this is to make banks ensure that applicants have enough to cope if the Bank of England raises interest rates as expected. Hopefully, they committee makes smart decisions so that England doesn't have another crisis in a few years.

Oklahoma Bans Minimum Wage Hikes

That headline sounds like a horrible joke, but it's real.  After some states have raised local minimum wage and President Obama and some of congress have urged the raising of minimum wage, Oklahoma has taken a huge step in the opposite direction.  The new law bans not only the raising of minimum wages in towns and cities, but also refuses to allow localities from setting required sick days and vacation days.

Critics of this move bring attention to the fact that a petition had been started to add a wage increase to the ballot measures in November.  Proponents say that allowing minimum wage to rise would result in loss of business as companies moved out of areas with a higher minimum wage and prices would rise for those that stayed.

Read the article here.

Yellen makes careful forecast on economy

http://www.washingtonpost.com/business/economy/yellen-makes-careful-forecast-on-economy/2014/04/16/19c57c64-c59a-11e3-9f37-7ce307c56815_story.html


Janet Yellen, chair of Federal Reserve, said U.S.’s economic recovery will be almost complete within two years on Wednesday in monetary policy speech. To be more specific, the Fed forecasts inflation rate will rise to moderate rate and unemployment will fall back to bottom in 2016. As the economy is recovering, the Fed nada announced that it will pull back its support.

I think this is kind of over-optimistic because Yellen just said  at the beginning of April that job market is still tough. Moreover, the higher interest rate is coming so investment will drop and we don't know how will market react.

Why long-time unemployed can’t get back on track

This article talks about true problem of long term unemployment and the risk that people face when looking for a job after being out of the market for more than 6 months. The article focuses on this who had higher income in their careers and lost their jobs. After losing their jobs, it has become very hard to go back to making the exact same money the longer they are not in the job market. Eventually, some end up having to find a job somewhere and end up getting part time jobs for fear of not having any money to live. Much of the problems that deal with this long term unemployment has to do with the fact that Congress failed to extend unemployment benefits last year.


http://www.marketwatch.com/story/for-long-time-unemployed-full-time-work-is-elusive-2014-04-04

Intersection: the Job Market, Wages, and Inflation

How much slack is left in the job market? Or in layman's terms: how many unemployed people are available to take jobs if they were to appear? "Slack," so defined, is important to Economists because "many at the Fed, believe lots of slack helps hold down inflation pressures. If the amount of slack is smaller than they think, or shrinking faster than they think, inflation pressures may start building before they know." Basically think of it in terms of Econ 110: when there is little supply (little slack in the labor market) prices rise if demand is constant. Basically, wages will begin to rise quicker if the there is little slack. This relationship illuminates why the Fed cares about wages and labor-market conditions.

This article summarizes new research showing that short-term interest rates need to be adjusted based on short-duration unemployment, not long-term unemployment as Chairwoman Yellen is wont to mention. Do you think the long-term unemployed should remain the focus of Fed policy, or should the Fed adjust its decision-making process?

http://blogs.wsj.com/economics/2014/02/12/the-best-gauge-of-the-labor-market/

Government urged to target seniors, families in budget cuts by economics group Macroeconomics

In this article, Stephen Anthony urges the government to "cut hard, and cut early on in your term". This is a contractionary fiscal policy, and helps balance the budget. He says specifically that he would like to see the family tax benefit income test lowered. Basically, people will feel the difference, rather than other programs. He says it is this important to balance our national budget.

I thought this concern raises two major issues. One, is it really possible for a politician to cut programs at the beginning of their term. With our current political system, cutting programs doesn't allow for re-election. Also, targeting areas of the programs, some economists say it will hurt those who are already hurting. I am not sure specifically where government programs would be helped or hurt, but I know cutting a program isn't necessarily easy.

On the other hand, cutting programs is a better political strategy than raising taxes. We saw this during the Clinton administration.

Do you think cutting programs is politically possible to balance a budget?

Where would you target the cuts?

http://www.abc.net.au/news/2014-04-14/government-should-target-seniors-familes-budget-cuts-economists/5387174

Technology unemployment fell from 3.5% in the previous year to just 2.7% in the first quarter of 2014. The most growth occurred in technology consulting, with 17,200 new jobs being created. Data processing and hosting jobs lost 1,600 jobs from the previous quarter, and computer and electronic products lost about 2,900, according to government data. This report shows  that technology workers continue to be far more likely to find work than the workforce as a whole. Dice president (Dice released the report) said, “More and more companies are turning to consulting companies to help them harness the new tech age: analytics and data, infrastructure flexibility and making internal and external applications easy to use,” in a statement regarding technology unemployment. I think it is safe to say that seeking employment in the field of technology remains one of the safest bets when trying to obtain a job.

http://www.washingtonpost.com/business/on-it/tech-unemployment-drops-to-27-percent-in-the-first-quarter-of-2014/2014/04/09/391848cc-bffe-11e3-bcec-b71ee10e9bc3_story.html

Talk about Leisure Time

In an interesting move, the French government and business sector have colluded to introduce new laws which will protect approximately 250,000 employees from having their leisure time interrupted. Employees in the digital and consultancy sectors will now no longer have to respond to work-related emails outside of work hours (basically after 6pm). This will help to maintain a policy enforcing a 35-hour work week, introduced in 1999. As it is, studies show that in Europe people tend to enjoy themselves and work less than Americans do, including working less hours per week and working fewer weeks per year. Personally, I think that in a world driven by money, it is nice to see emphasis being placed on living outside the work place. Thoughts?

http://www.theguardian.com/education/2014/apr/09/new-work-life-balance-france-sweden-laws-countries-better-job-hours-work

260,000 graduates in minimum wage jobs

Will getting a college degree guarantee a higher paying job? In theory, yes. In reality, apparently not at the moment according to this CNN article by Emily Jane Fox. According to the Bureau of Labor Statistics, about 260,000 people who had a college or professional degree are currently earning at or below federal minimum wage of 7.25 per hour last year. The worst year of low income college grads are in the past (327,000); however, 260,000 is still a significantly high number comparing to what it was before the Great Recession.
Consistent to my last blog post, the article mentions that the only jobs that are really growing in the U.S. are low-wage jobs; in addition:

"and at the same time, wages across occupations, especially in low-wage jobs, are declining."

 This online article also features a short video (~ 3 min) called "The engineer drop-out problem", which is worth checking out.

Thank you for reading
Comments are appreciated.

Source 260,000 graduates in minimum wage jobs

http://www.bostonglobe.com/opinion/editorials/2014/04/11/idle-workers-low-interest-rates-time-rebuild-infrastructure/UIYHNLdzN0frz0VMVkTS1K/story.html

This article talks about how a new influx of jobs created by repairing our countries current highways, airports and bridges. Rebuilding our nations infrastructure will lead to new jobs that could boost our current economic situation. Vice President Biden recently compared Laguardia airport to a third world country which is something that these new jobs could fix, as well as helping our countries economy. This would not be the first time our country has done something like this, most criticism for the idea comes from people that know what happened before. Much of the reasoning behind this idea also stems from the low interest rates that we see and idle workers.

Total Taxes on Wages Are Rising

In response to the recent recession, a fiscal expansionary policy was put into place in many parts of the world including the United States, cutting taxes to increase spending and promote economic growth. However in the past few years the trend has reversed in an attempt to lessen the government debt in the United States. Income taxes are now nearly back to where they were in 2007 and the whole recession began. Many countries are looking into ways to shift the tax burden through methods such as fiscal devaluation where the employers costs are cut through reducing payroll taxes.. It seems like there is always a back and forth between which should be done in the economy, growth? or reducing the deficit? It is hard to say whether one is more important than the other, but aybe a new idea like fiscal devaluation will be able to help some economies. http://www.nytimes.com/2014/04/12/business/economy/total-taxes-on-wages-are-rising.html?ref=economy

Herbalife under investigation

Herbalife is a popular weight loss healthy shake.  They have items such as protein shakes, meal drinks, and pre workout powders.  This successful business also has their company name over the largest MLS soccer team jersey the LA Galaxy.  However, this promising company is now under investigation for how they sell and market their product.  They are saying it is basically a pyramid scheme.  They defend themselves claiming it is no different then any other companies using a multi level marketing style.  The day the accusation came out Herbalife stock dropped by 30 percent and most likely will continue to fall.  This article caught my eye because I had a few friends that sold Herbalife.  It didn't seem as if they were getting ripped off by selling their product.  On the other hand this investigation seemed to be very similar to a company known as Verve.  I also had friends sell this and they did get ripped off.  Verve is an absolute pyramid scheme and I bet if they ever get as big as Herbalife they would get probed as well.

http://money.cnn.com/2014/04/11/investing/herbalife-shares/

N. Korea blasts reunification offer as 'psychopath's daydream'

South Korea's first female president, Park Geun-Hye, has recently announced a proposal to instigate unification between the the North and the South. She made her announcement on Saturday in Germany and even mentioned using Germany as her ideal economic model.  Her step by step plan includes expanding the reunion of separated families, increasing cross-border economic exchanges, increasing cross-border cultural exchanges, and finally allow the South to provide humanitarian aid to the North.
However, North Korea's response to the South's president was slightly insulting. Pyongyang said that the South's idea to begin laying the groundwork for reunification was the "daydream of a psychopath."
Although this response seems a bit salty, it is not surprising to me whatsoever. The North has no intention of reunification and it has been clear from the start.


http://news.yahoo.com/n-korea-blasts-reunification-offer-psychopaths-daydream-031617683.html;_ylt=A0LEV1nvOEtTfyMA9IZXNyoA;_ylu=X3oDMTB0ZWo3dXFsBHNlYwNzYwRjb2xvA2JmMQR2dGlkA1ZJUDMzM18x

"Firearms and Ammunition Industry Economic Impact Report 2013"

This article is from the National Shooting Sports Foundation website. The article shows the impact that the firearm business has on this countries economy.  As the current presidential office continues to battle with the 2nd Amendment, a fear drives gun owners to purchase merchandise before it is deemed illegal.   In 2013 the firearm industry was responsible for $37.7billion in total economic activity.  As the battle between both sides of the gun rights issue continues, these numbers will continue to increase due to the fear that this industry could soon come to an unconstitutional halt.

Firearms and Ammunition Industry Economic Impact Report 2013

Fed's Stein: Financial Stability Should Inform Policy

http://www.nytimes.com/reuters/2014/04/13/business/13reuters-usa-fed-stein.html?src=busln


This article talks about a Federal Reserve policy maker that thinks that Financial Stability should be looked at as well when making a monetary policy.  It would take looking past just the interest rate, unemployment rate, and taking more supervision.  The problem though is that he didn't mention a way that this could be gone about.  Any ideas on how they could go about this?

The Great Moderation is Back

http://economix.blogs.nytimes.com/2014/04/11/the-great-moderation-is-back/?_php=true&_type=blogs&module=BlogPost-ReadMore&version=Blog%20Main&action=Click&contentCollection=Business%20Day&pgtype=Blogs&region=Body&_r=0#more-173575

The Great Moderation was a term used to describe the period in the 1980s when the economy was in a period of relatively steady growth.
With the economic recession still fresh in our minds, very few would relate our current times to the Great Moderation. However, Jason Furman, the head of the President's Council of Economic Advisers argued that the Great Moderation is currently in progress.
He argues that over the last five years, there has been a pattern of steady growth, even the great recession does not alter this, as he states that economic volatility is still lower on average compared to earlier decades.

Health reform: Medicare, the opera

This article talks about how this past month has been a good month for Obama care, in that about 7 million Americans have signed up for various healthcare plans. It also discusses how because of this, the country has it's lowest rate of uninsured individuals.

The article continues on to discuss that this may not be a good thing for democratic political elections. Many elderly Americans are on Medicare, and they can still vote. But, Obamacare cuts Medicare spending, meaning that the elderly are getting less coverage. It continues on to talk about how both democrats and republicans believe that Medicare spending should be cut some, but the republicans will not mention this in their platform because the Medicare citizens are more likely to vote against Medicare cuts.

Stay-at-home moms on the rise

http://money.cnn.com/2014/04/08/news/economy/stay-at-home-moms/index.html?iid=SF_E_River

The amount of stay-at-home moms has been steadily on the rise over the past 15 years, which comes as a surprise to many.  Today, 29% of mothers in America stay at home--meaning aren't included in the labor force.  It is often thought that stay-at-home moms are only able to do so due to their spouse being wealthy, but in reality over a third of these moms live under the poverty line, while 49% have a high school diploma or less.  These numbers point to the notion that there are not enough jobs in the economy, because of the fact that many of these stay-at-home mothers are not choosing to not work, but are actually unable to find work, and do not have an excessive amount of time to continue searching for a job over a long period of time--hence why they are not included in the labor force.

Minnesota to increase minimum wage

Minnesota is the next state to join the trend of increasing the minimum wage. State officials approved the raise last Thursday. The increase will raise the minimum wage to $9.50 and is set to begin in 2016. However the change does not apply to every company or business. the bigger the company, the more they have to pay closer to that $9.50 mark. Some smaller employers who are exempt from certain federal labor laws can pay a lower rate. That will increase to $6.50 hourly in August, $7.25 the following year, and then $7.75 a year later. The minimum wage will also be set at $7.25 for workers at larger businesses if they are under the age of 18 and as a temporary training wage for those 19 and 20 years old. That rate is also the federal minimum. Obama also commented on this raise "I urge Congress to follow Minnesota's lead, raise the federal minimum wage, and lift wages for 28 million Americans,"

http://money.cnn.com/2014/04/10/news/economy/minnesota-minimum-wage/index.html?iid=SF_E_LN

http://money.cnn.com/2014/04/11/investing/herbalife-shares/index.html?iid=HP_River

Herbalife shares plunge

Herbalife's shares ended the day 14% lower after the publishing of a Financial Times article about the company. This article contains an allegation by hedge fund manager Bill Ackman that the company operates as a pyramid scheme. An unnamed law enforcement official confirmed to CNN on Friday that the U.S. Attorney's Office and FBI have been investigating Herbalife for several months. Herbalife has strongly defended itself against Ackman's claims, saying its business model is no different from other multi-level marketing firms.  Herbalife claims that it has no knowledge of any ongoing investigation. The company's stock price fell last month after it announced that it was the subject of a civil inquiry by the FTC.

Obamacare 2015 Rate Hikes May Soon Come Into View

         This week health insurance companies will begin reporting their first quarter earnings. This information will be used to forecast for the the potential rise in premiums for the 2015 year under the Affordable Care Act. Although not all of the numbers are in yet alot of people are already wanting to know rates for next year. Consumers will begin to sign up for plans in the next open enrollment period that begins in November. Health Plans are sadly in a bit of a bind. Insurance companies are asking for rate hikes they won't yet disclose because they don't yet know the mix of patients they are signing up for this year, complicating the rate picture for 2015. For rates to not rise at an alarming rate there needs to be a substantial amount of young healy patients buying into the program. However the make up is still unclear. Over 400,000 people were allowed to sign up after the March 31st sign up deadline. This pushed the total number of people under the program to around 7.5 million.



http://www.forbes.com/sites/brucejapsen/2014/04/13/obamacare-2015-rate-hikes-may-soon-come-into-view/

Jobs recovery killing entrepreneurial spirit

http://money.cnn.com/2014/04/09/smallbusiness/jobs-entrepreneur-kauffman/index.html?iid=SF_E_River

 476,000 new businesses were created each month  last year, mostly in the construction and services industries.That's down 7% from 2012, when 514,000 new businesses were being created monthly.
And,  Men, who are substantially more likely to start a new business than women, led last year's entrepreneurial decline.Older adults, aged 45 to 54, opened more new businesses last year. And, immigrants tend to start up business more than before.  So, people who wants to start up business are changed. I think that American men  lose their entrepreneurial spirit.

  The author is concerned it could lead to fewer high-growth startups, which typically generate revenue and jobs at a more robust rate than other small businesses.

 before reading this article, I thought that the good job market stimulates the an entrepreneur. However the relationship is the opposite from what I thought. Perhapas, people who are satisfid with the salary and the job does not want to start up a business ,because they don't have to take a risk.

Many Added Jobs in March, But the Unemployment Rate Remained Unchanged

http://www.washingtonpost.com/business/economy/economy-adds-192000-jobs-in-march-unemployment-rate-unchanged-at-67-percent/2014/04/04/467a8114-bc12-11e3-9a05-c739f29ccb08_story.html

                Recent data released by the government revealed that about a half-million people, most of them without a college degree joined the labor force in March. This was the 3^rd consecutive month that the workforce has increased and the largest expansion since 2010. This growth represents some hope for less-educated workers, who were the ones to take the hardest hit during the recession.

                The economy added 192,000 jobs in March after hiring slumped during winter’s harsh conditions. Although more people found work, the ballooning labor force meant that the national unemployment rate remained unchanged at 6.7 percent. The labor force participation rate, the percentage of the population that either has a job or is looking for one dropped to the lowest level in 35 years. As a result, the unemployment rate fell more quickly than expected. No one is sure what was driving the decline. Some believe the answer is demographics: Baby boomers are retiring, and fewer people are immigrating to the United States. But others have a different explanation. They argue that many potential workers became so discouraged that they gave up the job search and were no longer counted as part of the labor force. That means that a stronger economy could entice them back into the mix.

                The Obama administration used the jobs report to highlight the plight of the long-term unemployed, who account for more than one-third of people out of work. The Senate is expected to vote on a measure that would restore unemployment benefits to those workers. Federal payments to those who have been unemployed six months or more expired in December, and Democrats have been seeking a way to reinstate them. Perhaps even more heartening, the nation’s workforce grew by half a million people in March. The expansion in the labor force meant that the unemployment rate remained unchanged at 6.7 percent in March, even though more people found jobs.

China's Economy Loosing Steam

http://money.cnn.com/2014/04/08/news/economy/china-economy-survey/index.html?iid=SF_E_River

China's economy lost momentum in the first quarter and growth in 2014 could fall short of the government's official target, according to a CNNMoney survey of economists. China's current projected GDP is around 7.3%, lower than the targeted 7.5%. China's GDP growth is being closely watched as the government works to reform the world's second largest economy after years of runaway expansion. The article outlines the steps the Chinese government have taken to help the economy grow, and also talks about what more the government should be doing. 

Lessons Learned from the Recession

http://www.coloradoan.com/story/money/2014/04/13/column-recession-lessons-learned/7545227/


After the Great Recession the United States has reanalyzed how it handles its finances. This occured on a national level, but also on and individual level. This article describes the great advances that United States citizens have made in making more responsible investments. One of the more impressive statistics is that bankruptcy filings have decreased by sixteen percent in the past month. These trends are very similar to those that occurred after the Great Depression and hopefully point towards a more fiscally responsible United States..

Medicare doctors: Who gets the big bucks & for what http://money.cnn.com/2014/04/11/news/economy/medicare-doctors/index.html?iid=SF_E_Lead

This article argues at who truly gets the real money in Medicare. It's is said in the article that billions of dollars which came from the tax payers pockets went to doctors and government programs. There are so called Medicare millionaires where the top 2% claim Medicare when in all reality they have the money to provide themselves with the care they need. The money in Medicare needs to be given in a way to kind of even out who gets more or less help.

Where Did the Good Jobs Go?

This article by Sid Mohn of the Huffington Post raises an interesting issue about the job market at the moment. According to the statistics by the Labor Department, the job market experienced a 192,000 job growth in March, which is good news. However, most of these jobs are coming from low-wages industries. As observed, more and more people are employed into fast food service, office administration, retail and other customer service - occupations that do not provide sufficient income for individuals and families to get by.
The author places the blame on short term/discretionary policies from the government  (the issue we discussed in class on Friday).
What are your thoughts on this article?
Comments are appreciated.

Source:  Where did the good jobs go?

IMF April 2014 Communique

http://www.lse.co.uk/macroeconomicNews.asp?code=9iq8zu7c&headline=TEXTIMF_steering_committee_April_2014_communique

Goal: To create a balances, stable and dynamic economy.

• There's growth in the Euro, but it's still fragile.
• Many advanced economies: inflation is below the target and will likely remain so.
• Emerging markets: Growth has moderated but will strengthen gradually.
• Low income economies: Growth has remained resilient.
• Unemployment: High in many countries.
• Monetary policy in advanced economies should provide necessary accommodation.
• Continued tapering of asset purchases by the Fed remains appropriate.
• The ECB should continue with its policies but should act if the inflation keeps declining.
• Emerging economies with no inflationary pressures should use accomodative monetary policies in response to growth slowdown.

Mergers Are Back in Fashion—for Now

After years of holding back as Europe lurched from crisis to crisis, the region’s companies are leading a global dealmaking comeback. Western European buyers announced $149 billion of acquisitions in the first three months of the year, a gain of almost 60 percent over the same period in 2013 and the biggest jump worldwide, according to data compiled by Bloomberg.  Interest rate cuts and central bank pledges to buy the bonds of crisis-hit countries have boosted business confidence in Europe, and the euro area economy grew more than economists expected in the fourth quarter of 2013. Worldwide, the value of announced acquisitions rose about 26 percent, to $637 billion in the first quarter, the best start to a year since 2007. Technology and communications companies announced $174 billion of takeovers globally, the data show. Chief executive officers are “more optimistic that they can operate within the context of an improving economy,” says Hernan Cristerna, global co-head of mergers and acquisitions at JPMorgan Chase in London. But, as last year showed, a strong start in M&A can fizzle. After takeovers of Dell and H.J. Heinz in the first two months of 2013, activity during the rest of the year was lackluster. “Conditions for dealmaking have been quite good for the last couple of years, but the mindset has been cautious because of whatever the looming crisis of the day was,” says Gregg Lemkau, global co-head of M&A at Goldman Sachs.

http://www.businessweek.com/articles/2014-04-03/merger-mania-is-back-europe-leads-global-revival

Chances of getting audited by IRS lowest in years

Because of budget cuts, the IRS now has fewer employees than it has in the past. This decline in labor force further reduces their already declining ability to police businesses on the accuracy of their financial statements. To respond to this unfortunate circumstance for the IRS, President Obama has proposed a 10 percent increase in their budget for next year, which is something that the IRS Commissioner, John Koskinen, disagrees with "because it exceeds spending caps already set by Congress." This increase in government spending to fund the IRS would increase output and consumer income. If the government continues to spend more, not just on the IRS budget but spend more in general, in the long run this will lead to a rightward shift in the IS curve on the IS-LM model. To respond, the government may hold M constant, r constant, or Y constant which would all have different effects on the economy.

http://abcnews.go.com/Politics/wireStory/chances-audited-irs-lowest-years-23307720