Economic Daily Outlook




Young Adults See Their Pay Decline

Young people entering the job market are taking the brunt of the downward pressure on wages caused by high unemployment, according to a new analysis of pay trends.

In data compiled for a coming report, the Economic Policy Institute, a center-left think tank in Washington, found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80.

OPINION: Deficits and Virtue (Paul Krugman)

Ezra Klein and Mark Thoma both weigh in on the utterly bizarre claim that the large budget deficits we’re currently running are the result of a loss of self-control — as opposed to the result of the worst financial crisis since the 1930s, which has both savaged revenue and required a large rise in safety-net spending. Moreover, as Ezra points out, these deficits actually serve a useful purpose! Without the automatic stabilizers that led to rising deficits as the economy plunged, we might well be living in a full remake of the Great Depression.



CFPB to Crack Down on Force-Placed Insurance, Simplify ARM Disclosures

The Consumer Financial Protection Bureau will issue mortgage servicing rules this year that would impose new limits on force-placed insurance products and require additional disclosures for adjustable-rate mortgages, Director Richard Cordray said Tuesday.

The bureau will also issue a rule requiring servicers to provide consumers with better information in their billing statements, Cordray said in a speech to the National Association of Attorneys General annual meeting in Washington. Fixing the mortgage market is an “urgent priority” for the CFPB, he said.



Medicare Hopes to Combat Fraud With Billing Statements That Beneficiaries Can Understand

In the latest effort to enlist seniors in the fight against Medicare fraud, federal officials have overhauled Medicare billing statements to make it easier to find bogus charges without a magnifying glass.

The new, more consumer friendly format, which goes online Saturday on Medicare’s secure website,, includes larger type and explanations of medical services in plain English. The revised paper version, which is mailed to seniors every three months, will be phased in early next year.

EDITORIAL: Do Electronic Records Save Money?

Experts have long argued that computerized patient records will save the health system money by helping doctors reduce the number of redundant or inappropriate tests they order. A new study published in Health Affairs, disputes that, suggesting that office-based physicians who have access to electronic records of patient care are actually more likely to order additional imaging tests and laboratory tests than doctors who rely on paper records.

There are many other studies that support the value of computerization. But this one raises an important cautionary note for the federal government, which is spending billions of dollars to encourage the adoption of digital medical records. It is another reminder that there are no easy fixes for rising health care costs and that the structure for delivering care may have to be changed to reward doctors for prescribing only the appropriate tests.



With Gas Prices Rising, Obama Feels Heat

President Barack Obama on Tuesday said “there’s no silver bullet” to lower the price of gasoline—which has climbed to $3.74 a gallon on average—but he said his administration has taken steps to address long-term energy policy.

At a news conference, the president rebuffed Republican attacks on past statements by administration officials suggesting they saw merit in higher gas prices.



26 States, D.C. Join Bid for NCLB Waivers

Twenty-six states and the District of Columbia are seeking flexibility under the No Child Left Behind Act in the second round of federal waivers. That means the vast majority of states are on pace to be free from many of the fundamental requirements of the decade-old federal accountability law.

Already, 11 states have won waivers after promising to implement specific policy changes backed by President Barack Obama’s administration, including tying teacher evaluations to student performance, adopting college- and career-readiness standards, and devising new accountability systems that factor in student growth. In exchange, states no longer need to aspire to 100 percent student proficiency in reading and math by the end of the 2013-14 school year or provide tutoring and public school choice for students if they fall short.

Growing Gaps Bring Focus on Poverty’s Role in Schooling

The fractious debate over how much schools can counteract poverty’s impact on children is far from settled, but a recently published collection of research strongly suggests that until policymakers and educators confront deepening economic and social disparities, poor children will increasingly miss out on finding a path to upward social mobility.

The achievement gap between poor children and rich children has grown significantly over the past three decades and is now nearly twice as large as the black-white gap, according to Sean F. Reardon, a Stanford University sociologist. He examined data on family income and student scores on standardized tests in reading and math spanning 1960 to 2007.



Obama Scolds G.O.P. Critics of Iran Policy

President Obama on Tuesday forcefully rebuked Republicans on the presidential campaign trail and in Congress for “beating the drums of war” in criticizing his efforts to find a diplomatic solution to the crisis over Iran’s nuclear program, underscoring how squarely the national security issue had entered the election-year debate.

Mr. Obama’s comments, in which he suggested without naming Iraq that the United States had only recently gone to war “wrapped up in politics,” came in a televised news conference. The White House scheduled it on a day when leading Republicans were addressing an influential pro-Israel lobbying group, the American Israel Public Affairs Committee, known as Aipac, at its annual conference.

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