Good morning, all. I know you missed me, but I'm back with a full platter of daily reads on the U.S. economy.
Listen up: the next 48 hours matter
That's what the Washington Post's Neil Irwin says about today's first look at third-quarter GDP (the Bloomberg median estimate is for a 2.0 percent increase); the European Central Bank's rate decision, plus any new initiatives to combat disinflation, at 7:45 a.m.; and Friday's U.S. jobs report for October (estimate: +120,000), distorted by the 16-day government shutdown. The Bureau of Labor Statistics should provide data on furloughed government workers, but there's no way to determine the spillover effect on the private sector until next month. Irwin sees one saving grace: Employment expectations are so low, it won't take much to exceed them.
About those expectations
Maybe they aren't as low as they can go. If TrimTabs is correct, the U.S. economy added a scant 91,000 jobs last month. That compares with the ADP estimate of 130,000 new private-sector jobs. TrimTabs' estimates, which include government and private-sector workers, are "based on an analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees," the company said in a press release. (The report is for paid subscribers. The above link is to a website that republished some of the report.) TrimTabs claims its data are more reliable than the first estimate from the Bureau of Labor Statistics. Without knowing the ins and outs of TrimTabs' methodology or its track record, let me say that withholding tax data are among the most accurate numbers we have. Why? Because Americans don't pay taxes on income they didn't earn. QED.
Go Left, young man
The Center for American Progress clearly wasn't progressive enough for former Clinton aide John Podesta, because he's starting a research center "to investigate the causes and effects of growing income inequality," according to the New York Times' David Leonhardt. The new Washington Center for Equitable Growth will be housed at the CAP, and economist Brad DeLong will shift most of his blogging to the new center. I'm not sure what they'll learn about the causes, but I'm pretty sure the solution will focus on equality of outcomes, not equality of opportunity.
The ghost of John Maynard Keynes
Just when you think the foundation of Keynesian economics has been blown away, it comes back to haunt you. Even after a trio of "inflationary recessions" in the 1960s, 1970s and 1980s, and the most recent attempt by the U.S. to spend its way out of recession, the "Keynesian paradigm is more influential than ever," writes William Anderson on Mises.org. And what better proof than the "ongoing popularity of Paul Krugman, who has done more than any other person in the world to promote Keynesianism and demand it be applied, chapter and verse, to the world economy?" Faith in government spending never dies. And if you want to know why the ghost of Keynes lives, you can sign up for Anderson's six-week online course on the website.
Your doctor may not see you now
The untold story of Obamacare is not a malfunctioning website or health-insurance policy cancellations or premium increases for the young and healthy or even a restriction of participating hospitals and doctors. It's worse, says Hunter Lewis, a contributor to the Circle Bastiat. "In many of the policies, doctors will be paid significantly less than what private insurance has previously paid or that would be paid in other private policies sold outside the exchanges," Lewis writes. If you lose your doctor because she is no longer included in the policy network, you may also find that "the doctors who are included don't want your business." Medicare and Medicaid patients can attest to that. If Lewis is right, government may have no choice but to enact legislation that forces doctors to see patients. And guess what that means for the quality of medical care in the U.S.?
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