• warning: date() [function.date]: It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EDT/-4.0/DST' instead in /var/www/vhosts/oregonindependent.com/httpdocs/modules/aggregator/aggregator.pages.inc on line 259.
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Kitzhaber: Special session target Sept. 30 - Portland Tribune

Oregon Political Headlines - Wed, 09/04/2013 - 1:54pm

kgw.com

Kitzhaber: Special session target Sept. 30
Portland Tribune
Oregon Gov. John Kitzhaber has told Oregon legislators to prepare for a special session on Sept. 30. The session is expected to consider new revenue for schools, cuts to Public Employee Retirement System costs, and whether Oregon should build the ...
John Kitzhaber stumps for Sept. 30 special session on PERS, taxesOregonLive.com
Oregon governor says session call imminentHeraldNet
Kitzhaber intends to call for special session this weekThe Register-Guard
Sacramento Bee -The Tribune
all 10 news articles »

'The Riksbank is Wrong about the Debt'

Economist's View - Wed, 09/04/2013 - 1:07pm

Here's a summary of a post from Lars Svensson at Vox EU:

The Riksbank is wrong about the debt: Higher policy rates increase rather than decrease the household-debt ratio, by Lars E.O. Svensson, Vox EU: The Riksbank maintains high policy rates since it fears that a lower rate would increase the household-debt ratio. This column argues that a higher rate in fact leads to a higher debt ratio, not a lower one. The higher rate reduces nominal housing prices and new mortgages, but since the new mortgages are such a small share of total mortgages, the total nominal debt falls very slowly. Yet nominal GDP falls much faster, so the debt-to-GDP ratio rises.

Barnhart says Legislature should submit legal pot measure - The Register-Guard

Oregon Political Headlines - Wed, 09/04/2013 - 12:08pm

Barnhart says Legislature should submit legal pot measure
The Register-Guard
A House committee chairman says the Oregon Legislature should write its own ballot measure to legalize marijuana. Democratic Rep. Phil Barnhart of Eugene tells The Oregonian that if the Legislature doesn't submit a measure to voters, someone else will.

Lawmaker says Oregon Legislature should write marijuana law - UPI.com

Oregon Political Headlines - Wed, 09/04/2013 - 11:22am

Lawmaker says Oregon Legislature should write marijuana law
UPI.com
PORTLAND, Ore., Sept. 4 (UPI) -- Oregon lawmakers should write their own legislation to legalize marijuana rather than wait for a ballot measure from proponents, a state representative says. Rep. Phil Barnhart says the Legislature has "the best shot of ...
Oregon Revenue Chairman: Legislators should send Marijuana measure to votersOregonLive.com

all 5 news articles »

Pfizer, Eli Lilly and Genentech Pour Money into State Elections - The Lund Report

Oregon Political Headlines - Wed, 09/04/2013 - 11:03am

Pfizer, Eli Lilly and Genentech Pour Money into State Elections
The Lund Report
This year the Oregon Legislature continued a practice of carving out psychiatric drugs from Oregon Health Plan requirements that patients first seek generics. The Legislature actually expanded the exemption list to include brand-name drugs to fight AIDS.

Is Consumer Confidence is a Useful Indicator of the Labor Market

Economist's View - Wed, 09/04/2013 - 10:07am

Consumer confidence (about current conditions, not future expectations) may be useful for predicting changes in labor market confitions:

Consumer Confidence: A Useful Indicator of . . . the Labor Market?, by Jason Bram, Robert Rich, and Joshua Abel: Consumer confidence is closely monitored by policymakers and commentators because of the presumed insight it can offer into the outlook for consumer spending and thus the economy in general. Yet there’s another useful dimension to consumer confidence that’s often overlooked: its ability to signal incipient developments in the job market. In this post, we look at trends in a particular measure of consumer confidence—the Present Situation Index component of the Conference Board’s Consumer Confidence Index—over the past thirty-five years and show that they’re closely associated with movements in the unemployment rate and in payroll employment. About the Index
Consumer confidence is a widely followed economic indicator, largely based on the idea that the consumer’s mood—driven by what Keynes referred to as “animal spirits”—can independently affect the degree to which he or she is prone to spend. Less well known is the linkage between consumer confidence and labor market conditions. This is an important distinction, because most formal analyses evaluating consumer confidence as an economic indicator examine its predictive content for consumer spending—after controlling for measured changes in the labor market—rather than study its co-movement with employment measures. The Conference Board measures consumer confidence based on responses to five questions. Three of the questions focus on expected changes—in business conditions, job availability, and the respondent’s household income. The responses make up the Expectations Component Index. The other two questions focus on the level of present conditions—specifically, present business conditions and present job availability. Responses to these form the basis of the Present Situation Index. The Conference Board’s Consumer Confidence Index is a composite of the two indexes. Between the overall index and its two components, our analysis suggests that the Present Situation Index is the more useful economic indicator to monitor employment.
Confidence Closely Tracks the Job Market
The chart below plots the Present Situation Index against the unemployment rate, whose scale is inverted so that high levels represent strong labor market conditions (low unemployment) and vice versa. One readily apparent feature is that the two series move together very closely throughout the period and, most notably, during all five of the recessions since 1977. It’s hard to tell from inspecting the chart, but the highest correlation (0.89) occurs at a two-month lead; that is, the Present Situation Index is even more strongly correlated with the unemployment rate two months into the future than it is with the concurrent rate.

The next chart looks at the relationship between changes in this index and payroll job growth—both over twelve-month intervals. This measure of employment is based on a different survey than the survey for the unemployment rate, but payroll employment is typically growing when unemployment is declining and vice versa. Once again, it’s very apparent that the two measures move closely together, and again formal analysis reveals that the Present Situation Index tends to foreshadow movements in employment by a couple of months. In particular, twelve-month changes in the index are most highly correlated with twelve-month job growth four months into the future—the correlation is 0.83.

While the charts look impressive enough as is, the consumer confidence numbers shown here are typically released one-and-a-half weeks before the employment numbers for the same month. Moreover, the confidence numbers don’t get revised, except for once in the subsequent month. The employment data, in contrast, undergo annual benchmark revisions, which can alter the reported path of job growth that can go as far back as a year-and-a-half. In particular, the most pronounced revisions to employment tend to come at or near cyclical turning points, and they tend to move the data in the direction of cycle—that is, the final, revised data (shown in the chart) tend to be somewhat clearer in signaling turning points than the initially reported data (see this Atlanta Fed article for further discussion). Thus, there’s an additional dimension by which the Present Situation Index can be informative about labor market conditions in real time. The capability of this confidence measure to predict revisions to payroll employment is an interesting issue for further research. OK, but Can It Predict Turning Points?
Looking more closely at the chart, one can also observe that major turns in the Conference Board’s Present Situation Index tend to precede corresponding turns in the unemployment rate—particularly at business cycle peaks (that is, going into recessions). Major upturns in the index also tend to foreshadow cyclical peaks in the unemployment rate, which often occur well after the end of a recession. Another useful feature of the index that can be gleaned from the charts is its ability to signal sustained downturns in payroll employment. Whenever the year-over-year change in this index has turned negative by more than 15 points, the economy has entered into a recession. The only time it was a bit late in doing so was going into the 1982 recession, which is often considered the second part of a “double-dip” after the 1980 recession. But in all four of the other post-1980 recessions, this signal turned negative just before the recession began. In terms of signaling an incipient cyclical upturn in employment, the index has also performed well. While its signal wasn’t in proximity to the end of the past few recessions as determined by the National Bureau of Economic Research’s recession dating committee, this is likely because the early stages of the subsequent recoveries were “jobless”—that is, each of the last three recessions has been followed by a delayed employment recovery. If one focuses on the respective upturns in employment, then the index has performed quite well in all five cycles. Has Confidence Given Any False Signals?
As a final exercise, we focus on a few episodes in which the Present Situation Index deviated from its usual relationship with the job market. For instance, why did the index get almost as low during the (relatively mild) 1990 recession as it did during the dramatic 2008 recession? Therein lies one shortcoming of this measure: It’s based on diffusion indexes, measuring whether a given respondent thinks things are bad, and not how bad they are. Thus, once the index gets to an exceptionally low level (near zero), it literally can’t go much lower. There have been minor, seemingly aberrant moves in the index. For instance, just as the economy was recovering from the 2001 recession, the index slumped to a new low in mid-2003, when the United States first invaded Iraq; while there wasn’t a renewed recession at that time, there was indeed a further, brief slump in the job market. But there’ve been several significant events that many commentators feared would lead to a recession but didn’t—the 1987 stock market crash, the 1994 bond market rout, the 1997 Asian crisis, and the 1998 Russian debt crisis. In each of these instances, consumer confidence held up well and proved to be a helpful and accurate economic indicator.
All of this, of course, begs the question: Why would the general public be able to give a slightly earlier read on the job market than the employment data do? One likely reason is that many people (survey respondents) are in the labor force, and almost everyone has close friends and relatives that work. So it stands to reason that most would be attuned to the general tone of the job market—at least in their region or neighborhood. For instance, people may well be aware, before layoffs actually begin, that a company’s business is slumping or that budgets are tight. Conversely, people are likely to be aware of a flurry of new job openings or a company’s need to increase staff before those new jobs actually get filled and are measured as new employment in the Bureau of Labor Statistics’ labor market report. If our readers have additional insights into the linkage between consumer confidence and the job market, we’d love to hear about them.

Legislature urged to submit legal pot measure - Longview Daily News

Oregon Political Headlines - Wed, 09/04/2013 - 8:12am

Legislature urged to submit legal pot measure
Longview Daily News
A House committee chairman says the Oregon Legislature should write its own ballot measure to legalize marijuana. Democratic Rep. Phil Barnhart of Eugene tells The Oregonian (http://bit.ly/14j8gk0) that if the Legislature doesn't submit a measure to ...

Oregon House Revenue Committee Chair: Either We Legalize and Tax ... - Reason (blog)

Oregon Political Headlines - Wed, 09/04/2013 - 7:26am

Oregon House Revenue Committee Chair: Either We Legalize and Tax ...
Reason (blog)
The Oregon legislature will be in session through the month of February, and any bill to legalize marijuana would go through Barnhart's committee in the Assembly. Both chambers of the state legislature are controlled by Democrats. I put Oregon at the ...

Oregon Revenue Chairman: Legislators should send Marijuana measure to voters - OregonLive.com

Oregon Political Headlines - Wed, 09/04/2013 - 5:11am

Oregon Revenue Chairman: Legislators should send Marijuana measure to voters
OregonLive.com
Oregon lawmakers shouldn't wait for a ballot measure legalizing marijuana, they should write their own, says Rep. Phil Barnhart. Barnhart, D-Eugene, chairs the House Revenue committee, which would likely be charged with sorting out how the state would ...
Lawmaker says Oregon Legislature should write marijuana lawUPI.com

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Is Business Losing Control of the GOP?

Economist's View - Wed, 09/04/2013 - 2:42am

The role of money in politics may have more to do with the growing wealth of chief executives than anything else:

Business Losing Clout in a G.O.P. Moving Right, by Eduardo Porter, NY Times: How did corporate America lose control of the Republican Party? From overhauling immigration laws to increasing spending on the nation’s aging infrastructure, big business leaders have seemed relatively powerless lately as the uncompromising Republicans they helped elect have steadfastly opposed some of their core legislative priorities. The rift is not only unusual in light of the tight historical alignment between the business community and the G.O.P., but it is also outright incomprehensible after the Supreme Court’s Citizens United decision, which allowed companies to spend unlimited amounts from their corporate treasuries... But what may be most surprising is how reluctant big business has been to put its money on the line. ... That argument can be carried only so far, however. Jacob S. Hacker, a political scientist from Yale, said that the idea of a rift opening between businesses and the “party of business” was overstated. ... And even if corporations didn’t turn on the spending spigot,... executives and directors of Fortune 500 companies spent a whopping $217 million on state and federal elections, more than twice as much as the same individuals spent four years earlier. That’s about 70 percent of what was spent by more than 1,500 corporate PACs. ... Corporate chiefs and other top executives  ... giving is more ideological and less strategic than that of their companies. ... That suggests a new take on the role of money in politics. If big-money people are drowning out the political voice of ordinary Americans rather than big business, American democracy still has a problem. But it is not the problem we thought we had.

Update: Dean Baker offers a different reason for the decline in corporate giving:

Eduardo Porter's column notes evidence that individual donors are becoming increasingly important to political campaigns while business donors appear to be less important. The column interprets this to imply a lessening of their political influence, especially over the Republican Party. There is an alternative explanation. After-tax corporate profits are at their highest level in the post-war period. This suggests that business has collectively been enormously successful in pushing its agenda. In this context, businesses may see little reason to spend vast sums on elections...

'The Austerian Mask Slips'

Economist's View - Wed, 09/04/2013 - 1:34am

Many of us have argued repeatedly that the push for austerity was, for many, nothing more than a means of achieving the ideological goal of a smaller government, hence the opposition to increases in taxes to solve the budget problem and the insistence that it come trhough spending cuts. Paul Krugman highlights evidence that this is true:

The Austerian Mask Slips: Simon Wren-Lewis looks at France, and finds that it is engaging in a lot of fiscal austerity — far more than makes sense given the macroeconomic situation. He notes, however, that France has eliminated its structural primary deficit mainly by raising taxes rather than by cutting spending. And Olli Rehn [European Commissioner for Economic and Monetary Affairs and the Euro and vice president of the European Commission] — who should be praising the French for their fiscal responsibility, their willingness to defy textbook macroeconomics in favor of the austerity gospel — is furious, declaring that fiscal restraint must come through spending cuts. As Wren-Lewis notes, Rehn is very clearly overstepping his bounds here: France is a sovereign nation... — and is not, by the way, seeking any kind of special aid from the Commission. So he has no business whatsoever telling the French how big their government should be. But the larger point here, surely, is that Rehn has let the mask slip. It’s not about fiscal responsibility; it never was. It was always about using hyperbole about the dangers of debt to dismantle the welfare state. How dare the French take the alleged worries about the deficit literally, while declining to remake their society along neoliberal lines?

'Lighting the Rocket of Growth and Lightening the Toil of Work'

Economist's View - Wed, 09/04/2013 - 1:07am

Brad DeLong:

Lighting the Rocket of Growth and Lightening the Toil of Work: Another Outtake from My "Slouching Towards Utopia" Ms…: John Stuart Mill’s claim--that even as late as 1871 the First Industrial Revolution had not yet really begun to matter very much--will probably strike you as surprising, even bizarre, especially if you have taken a course in economic or technological history. Was not the steam engine invented by Thomas Newcomen in 1712? Was not the spinning jenny invented by Thomas Hargreaves in 1764? Was not the first cotton mill built in 1771? Was not the thirty-five mile Liverpool and Manchester Railroad opened in Britain on September 15, 1830? ... Were there not 20,000 miles of railroads worldwide by 1850? Were there not 25,000 miles of telegraph wires in the United States alone by 1850? ... Didn’t all this matter? The answer is: yes it did matter for population, and no it did not matter--or it barely mattered--for living standards. ... John Stuart Mill was largely right even if not completely right insofar as England itself was concerned. The inventions since 1712 and perhaps since 1640 had in fact lightened the toil and boosted the real incomes of England’s working class. But the pace was very slow: an average annual growth rate of working-class real wages of only 0.2% per year from 1640-1800, and only 0.4% per year from 1800-1870. Each generation had, on average, a real wage level 10% higher than its predecessor. Contrast that with us today, where we expect real incomes to rise by 10% in five years—or with China today where 10% is the real income growth of a year and a half. The pace of improvement was slow because higher living standards meant faster population growth and because the pace of invention was slow. The pace of invention was relatively slow because science was not yet hooked to invention and invention and innovation were not yet hooked together to business, industrial research, and profit. Things did not change that much even in the age of the first Industrial Revolution. ... In 1870 nearly all human beings still earned their bread out of the earth by the sweat of their brow. Most human beings could not read. Most human beings had not seen a steam engine up close, or travelled in a railway train, or spoken on a telephone, or lived in a city. For most human beings life expectancy was still low—little higher than it had been in most parts of the world since the neolithic revolution. ... Even in Great Britain the veneer of modernity was little more than a veneer..., a quarter of Britons were still illiterate as late as 1870. Primary school enrollment did not become universal until the eve of World War I. Life expectancy at birth was still less than fifty years or less. Less than five percent of the population went to secondary school. And Britain was by far the most advanced and industrialized of the world’s economies. In the United States, and in Europe outside of Britain, farmers still made up the largest single occupational group. More than half the population still lived in the country, farming the land or providing the basic goods and services that farmers needed. Agriculture was still a very substantial share of GDP in the late-nineteenth century. ... John Stuart Mill was depressed about the past but optimistic about the future--about those “those great changes in human destiny” that he expected to follow not from productivity revolution but from moral, cultural, and political uplift. He died in 1873, just as the pace of invention and innovation and the rate of increase in productivity and living standards took a sudden, discrete, large upward jump throughout the North Atlantic. Before, from 1800-1870, we see living standards and labor productivity levels grow at 0.4% per year. After, from 1870-1950, we see 1.2% per year. (And then 1.9% per year from 1950-present). The pace of economic growth in living standards and productivity levels triples as we move across 1870. Lightspeed communications and capital flows across the globe was the first. Cheap world trade in staple commodities was the second inflection point. The invention of the process of continual invention was the third, and the biggest. That is when technological progress and rising incomes become something standard and routine and fast, rather than something extraordinary and haphazard and glacial. To put it another way: In 1870 the daily wages of an unskilled worker in London would have bought him (not her: women were paid less) about 5,000 calories worth of bread--5,000 wheat calories, about 2½ times what you need to live (if you are willing to have your teeth fall out and your nutritionist glower at you). In 1800 the daily wages would have bought him about 3,500 calories, and in 1600 2,500 calories. ... Continue that for another two seventy-year periods, and we would today be at 10,000 calories per unskilled worker in the North Atlantic today per day. Today the daily wages of an unskilled worker in London would buy him or her 2,400,000 wheat calories. Not 10,000. 2,400,000. That is the most important fact to grasp about the world economy of 1870. The economy then belonged, even for the richest countries, much more to its past of the Middle Ages than to its future of--well, of you reading this. Compared to the pace of economic growth since 1870 and even more so since 1950, all other centuries--even the first-half of the nineteenth century that so impressed Karl Marx--were all but standing still. That is why there is a very good case that it is 1870 that is the most important historical axis on which the wheel of economic modernity, modern economic growth, the modern economy--whatever you choose to call it--turns.

Lasting, collaborative solutions to protect our water resources - Capital Press

Oregon Political Headlines - Tue, 09/03/2013 - 9:22pm

Lasting, collaborative solutions to protect our water resources
Capital Press
The 2013 Oregon Legislature approved $1.5 million per biennium in state funding for collaborative, voluntary, locally led pesticide stewardship projects and community pesticide collection events in Oregon. Oregon's Departments of Agriculture (ODA) and ...

The Oregonian To Legislature: Refer Marijuana Legalization To Voters - THE Weed Blog (blog)

Oregon Political Headlines - Tue, 09/03/2013 - 7:49pm

THE Weed Blog (blog)

The Oregonian To Legislature: Refer Marijuana Legalization To Voters
THE Weed Blog (blog)
Oregon marijuana policy The Oregonian, the state's largest newspaper, called for legislators in Salem to work with New Approach Oregon's Anthony Johnson to craft a marijuana legalization measure for referral to the voters in 2014. This marks the second ...

In Oregon's War Against Invasive Species, All Is Fare - Wall Street Journal

Oregon Political Headlines - Tue, 09/03/2013 - 7:20pm

In Oregon's War Against Invasive Species, All Is Fare
Wall Street Journal
Oregon's Legislature has earmarked $5 million to battle the plants and fauna that threaten indigenous species. So far about $300,000 has been collected in an Invasive Species Emergency account, money generated by user fees thanks to a slew of ...

and more »

'U.S. Price-Level Dynamics'

Economist's View - Tue, 09/03/2013 - 3:03pm

David Andolfatto wants you to explain why he's wrong about NGDP targeting (this is part of a much longer post):

...let's take a look at the (log) PCE from 1990 onward, together with linear trend: The PCE inflation rate since 1990 averaged 2.09% per annum. What's interesting about this diagram is that even though the Fed does not officially target the PCE price level, the data above suggests that the Fed is behaving as if it does. As a price-level (PL) target is equivalent to a nominal GDP (NGDP) target in a wide class of macroeconomic models (especially under the assumption of constant productivity growth), then what more does the NGDP crowd expect from an official NGDP target? Seems to me that they are just asking for more price inflation and wishfully hoping that some of the subsequent rise in NGDP will take the form of real income. Tell me I'm wrong (and why).

What is the Link between Unionization and Inequality?

Economist's View - Tue, 09/03/2013 - 3:03pm

Stephen Gordon asks:

What is the link between unionisation and inequality?

After looking at the data he concludes:

Increases in inequality were accompanied by declines in union coverage in Canada, the US, the UK and some other countries. But similar increases in inequality were accompanied by increased union coverage in Sweden, Norway and Finland. I don't really see much of a link - either in theory or in the data - between unionisation rates and increases in inequality across occupations. (Inequality within an occupation is a different story.) 

Clock ticking on Oregon full-day kindergarten: Agenda 2013 - OregonLive.com

Oregon Political Headlines - Tue, 09/03/2013 - 2:49pm

Clock ticking on Oregon full-day kindergarten: Agenda 2013
OregonLive.com
The tuition problem also helped motivate the Oregon Legislature in 2011 to make full-day kindergarten free -- or at least free to families -- by the 2015-16 school year. The vote tally was 27-3 in the Senate and 36-23 in the House, and supporters ...

Fed Watch: ISM a Solid Start to the Month

Economist's View - Tue, 09/03/2013 - 12:12pm

One more from Tim Duy:

ISM a Solid Start to the Month, by Tim Duy: The ISM report surprised mildly on the upside this morning, with a reading of 55.7 that remains well above the break-even point:

New orders extended last month's gains to lift the component above 60:

Export orders continue their gradual recovery from a slip earlier this year and last year's swoon:

And import orders suggest strong domestic demand:

Sam Ro at Business Insider worries about a slip in the employment component:

I am not sure the the decline is anything more than noise, and I don't think anyone is counting on significant support for nonfarm payrolls from the manufacturing sector in any event:

Bottom Line: A generally solid report consistent with expectations that the Federal Reserve will begin tapering asset purchases this month. It is probably time for me to change my charts to indicate timing of first rate hikes in past tightening cycles.