Economic Daily Outlook




Plans for US manufacturing may yield more votes than jobs

U.S. factories are hiring again, and Democratic President Barack Obama and some of his Republican rivals are pitching tax breaks to fuel a rebound in manufacturing and help rebuild a battered middle class.

A focus on manufacturing may be good politics, as Rust Belt states like Michigan, Ohio and Pennsylvania are likely to be hotly contested in the Nov. 6 election.

But is it good policy?

Economists on the left and the right say promises to bring back factory work may yield more votes than jobs.



EDITORIAL: A Further Look at Overdraft Fees

The Consumer Financial Protection Bureau is starting a much-needed examination of the overdraft fees that banks charge customers who spend more on debit cards than they have in their accounts. The bureau is collecting data on how banks assess overdrafts and the effect of high fees on low-income customers, and says it will issue a reform plan later this year. But it is already clear that banks need to provide uniform, straightforward fee-disclosure documents that allow consumers to protect themselves from surprise charges.

The typical overdraft fee averages between $30 and $35 and has risen by about 17 percent over the last five years. According to Moebs Services, a research company that has conducted studies for both the government and some banks, banks earned nearly $30 billion from these fees last year and have pushed up charges to improve that haul. This means particular trouble for the 10 percent of customers, mainly low-income, who pay about 90 percent of these fees.

EPA Air Rules Head to Court

Republicans on the campaign trail have long bashed President Barack Obama’s environmental regulations. This week the battle moves to the courtroom, where several industries and GOP lawmakers are trying to overturn the administration’s rules for reducing greenhouse gases.

Industry groups, including those representing chemical, energy, farming and mining interests, have brought several challenges to the Environmental Protection Agency’s first-ever rules limiting carbon-dioxide emissions.

In the lead case, the plaintiffs are challenging the EPA’s finding that such greenhouse gases endanger public health and welfare. That finding formed the basis for agency rules that imposed greenhouse-gas-emissions standards on cars beginning with the 2012 model year and set initial rules on permits for power plants and factories.



Many States Take a Wait-and-See Approach on New Insurance Exchanges

States are lagging in the creation of health insurance exchanges, the supermarkets where millions of consumers are supposed to buy subsidized private coverage under President Obama’s health care overhaul.

Many states are waiting for a Supreme Court decision or even the November election results, to see whether central elements of the new law might be overturned or repealed. But that will be too late to start work. By Jan. 1, 2013, the Obama administration will decide whether each state is ready to run its own exchange or whether the federal government should do the job instead.

Republican governors and state legislators across the country are split. Some want to set up rudimentary exchanges with limited features — as a defensive tactical maneuver — rather than cede control to Washington. More-conservative Republicans do not want to do anything at all.


BP oil spill trial delayed for settlement talks

The trial to decide who should pay for the 2010 Gulf of Mexico oil spill has been delayed by a week, to allow BP Plc to try to cut a deal with tens of thousands of businesses and individuals affected by the disaster.

Less than 24 hours before the case was set to start in a New Orleans federal court, U.S. District Judge Carl Barbier pushed back the date to March 5 from February 27.

The delay allows further talks between BP and the Plaintiffs’ Steering Committee (PSC), which represents condominium owners, fishermen, hoteliers, restaurateurs and others who say their livelihoods were damaged by the April 20, 2010, explosion of the Deepwater Horizon drilling rig and subsequent oil spill.

OPINION: Obama policies threaten America’s energy boom (Senator John Thune)

During our historically slow economic recovery, the energy industry has been a bright spot amid otherwise gloomy economic news. Domestic energy production is increasing, and jobs are beginning to spring up around new energy construction.

President Barack Obama likes to take credit for this energy boom, but in reality, recent U.S. energy growth is largely a result of private-sector investment and policies put in place by his predecessors. The energy policies this president has adopted are jeopardizing the progress we have made, and if he continues them, the U.S. energy boom could soon be over.

Moreover, the president’s policies are driving up energy prices for consumers. Gasoline prices have already doubled under Obama — the 2011 average of $3.50 per gallon was the highest annual average ever recorded — and they are expected to increase even further in 2012, with some predictions suggesting $5 per gallon by the end of May. If the president continues to restrict access to domestic energy resources and drive up the cost of production, energy prices will continue to worsen.


After Release of Ratings, a Focus on ‘Top’ Teachers

One was a scion of the family behind the celebrated Italian bakery, Arthur Avenue Bread, and has since been promoted to assistant principal.

Natalie Guandique, 27, received one of the highest cumulative teacher rankings for her work with special-education students in the Bronx.

Another, a San Francisco transplant, was in her first job at the front of a classroom and insisted that her special-education students at Public School 49 in the Bronx be held to the highest standards.

A third said she benefited from the small class sizes at the tiny Special Music School on the Upper West Side of Manhattan: never more than 17 fifth graders, so she could group them by skill level in English and math and work closely with each student.

In the days leading up to the release on Friday of the city’s Teacher Data Reports, which are an effort to assess how much individuals added to the progress of students in their charge, many critics worried about the shame and humiliation low-scoring teachers would be subjected to, especially given the ratings’ wide margins of error. But the ratings also shined a spotlight on the educators who, at least by this measure, were best able to help their students post gains on the state’s standardized tests.


G-20 Defers Move on Aid for Europe

Officials from the world’s leading economies deferred for months key decisions on international aid for Europe as they awaited more euro-zone action to fight the Continent’s debt crisis.

Finance ministers and central bankers from the Group of 20 advanced and developing economies, after a two-day meeting here, indicated they anticipate an agreement to expand Europe’s rescue fund next month.

That move “will provide an essential input in our ongoing consideration to mobilize resources” to the International Monetary Fund, the G-20 officials said in a joint statement Sunday.

Violent Uproar in Afghanistan Casts Shadow on U.S. Pullout

American officials sought to reassure both Afghanistan’s government and a domestic audience on Sunday that the United States remained committed to the war after the weekend killing of two American military officers inside the Afghan Interior Ministry and days of deadly anti-American protests.

But behind the public pronouncements, American officials described a growing concern, even at the highest levels of the Obama administration and Pentagon, about the challenges of pulling off a troop withdrawal in Afghanistan that hinges on the close mentoring and training of army and police forces.


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