Paul Ryan on Fixing Entitlements

Rep. Paul Ryan: "We’re really on the cusp of trading our free market democracy, the American idea, for a cradle-to-grave social welfare state that will bankrupt us."

100-Point Increase in SAT = $2,350 for Egg Donors

Top Students Earn Big Money for Egg Donations

"Holding all else equal, such as demand for in vitro fertilization within a state and donor agency variables, Levine found that each increase of 100 SAT points in the average for a university increased the compensation offered to egg donors at that school by $2,350."

There Are No Other Major Retailers Willing to Come to the South Side of Chicago, Except One

CHICAGO — "Wal-Mart Stores Inc. has won the support of dozens of church ministers in its long-running battle to expand in Chicago, a sign of how the recession has softened skepticism of the retailer in a community desperate for jobs. The ministers, most of them African-Americans together representing thousands of congregants, are pressuring the city council to grant approval for a Wal-Mart "supercenter"—a store with a full grocery that also sells general merchandise—on the city's South Side. The ministers who support Wal-Mart say that if the city council doesn't act favorably on an ordinance that would allow the Chatham Wal-Mart, they will campaign against elected officials.

"The reality of the day is that there's no other retailer willing to come to the community," said Alderman Howard Brookins, a Democrat whose ward includes the development. "As the economy has faltered, there has been a renewed appreciation among customers for the Wal-Mart brand," said Julie Murphy, a Wal-Mart regional general manager involved in the company's recent effort to build support in the city."

Why Inflation Concerns Are Overblown: Annual M2 Growth Falls Below 1%, Lowest Rate Since 1995

Federal Reserve data show that the M2 growth rate on an annual basis fell in the week ending March 15 to 0.85%, the lowest money growth rate since May 1995 (see graph above). Notice also in the graph above that M2 growth in 2001 was actually above 10% for a longer period of time, than the money supply growth in early 2009. Further, there has been a much sharper decline in money growth in the last year than the decline between 2002 and 2005, when the growth rate fell but never went below 2.5%. In each of the last 10 weeks, M2 growth has been below 2.5%. Considering that average annual inflation never got higher than 3.4% in 2005 following the 10% M2 increase in 2001, so it just doesn't seem like there's enough money growth to create inflationary pressure now, at least nothing higher than maybe 3%.

Dallas Fed President Robert McTeer seems to agree in his Forbes article "Why Inflation Worries Are Overblown":

"It will no doubt come as a surprise to many that money growth has been moderate since its initial explosion at the end of 2008 (see chart above). That’s because they hear so much about the expansion of the Fed’s balance sheet, which would normally imply an expansion of bank reserves and money. Fed assets have more than doubled with virtually all the increase taking place in late 2008. The asset expansion has produced a sharp rise in bank reserves, and hence the monetary base, which is composed of bank reserves and currency outside the banking system.

However, banks have not used those reserves to expand loans and investments at a rate large enough to produce rapid money expansion. Instead, banks have accumulated reserves far in excess of the amount required to back their deposit liabilities. This accumulation of “excess reserves” is no doubt the result of banker uncertainty and fear about their viability during the period of crisis. In particular, banks are remaining more liquid than regulations require to protect their remaining capital. Virtually all of the expansion in the Fed’s assets are matched by an expansion of excess reserves—excess from a regulatory standpoint, but obviously not excess to the bankers themselves since they are holding them voluntarily."

Updates: Thanks to Scott Grannis for his most recent M2 post here from earlier today, and for adding one additional week of money supply data that doesn't appear at the St. Louis Fed website, but does appear here at the Fed. The growth rate in M2 in the week ending March 15 was 0.85%, the first time since May 1995 of M2 growth below 1%.

Markets in Everything: Lost iPod Touch Bidding War

Thanks to Mary Ritenour.

3 Reasons Healthcare Reform Won't Cut Deficit

From Reason.tv.

Jobless Claims (4-wk. Avg.) Fall to 18-Month Low

WASHINGTON, March 25 (Reuters) - "The number of U.S. workers filing new applications for unemployment insurance fell sharply last week, while the number of those on continued benefits was the lowest since December 2008, a government report showed on Thursday.

The decline in initial claims last week pushed them into a range that analysts reckon signals labor market stability. The labor market has lagged the economy's recovery from its worst downturn since the 1930s, but payrolls are expected to grow this month as the government steps up hiring for the 2010 census.

The four-week moving average of new claims, which irons out week-to-week volatility, fell 11,000 to 453,750."

MP: Based on the new revised jobless claims data, the four-week moving average fell to its lowest level last week (543,750) since September 13, 2008, and has now fallen by 175,500 from the peak last April of 643,000. Although there are many predictions of continuing weakness in the labor market, the worst is definitely behind us, and the trend in jobless claims over the last year suggests a gradual return to labor market stability, as the Reuters article reports.

Adjusted for the size of the labor market, jobless claims (4-week average) have now fallen to around 0.30% of the labor force. During the last two recessions (1990-1991 and 2001), that level of jobless claims (as a share of the labor force) was reached when the recessions had definitely ended, and in both cases signalled the beginning of the end to the two "jobless recoveries" that followed those two recessions. More analysis to follow on this topic.