A roundup of economic news from around the Web.
- Labor Market: Antonio Fatas writes about the divergence between jobs and output. “Why is employment growth being so weak in these years? Are there significant structural changes in terms of sectoral composition that can explain the weak behavior of employment growth? For 2009, did restrictions on access to credit cause an abnormal behavior by companies when it comes to hiring and firing? If we are talking about structural changes, we cannot expect a fast recovery in the labor market. If it is all a matter of credit availability then there is some hope that as the economy recovers we see a quick recovery in employment that will feed into faster GDP growth.”
- Drug Legalization: Jeffrey Miron on his blog points to his latest research on the budgetary impacts of drug legalization. “The report estimates that legalizing drugs would save roughly $48.7 billion per year in government expenditure on enforcement of prohibition. $33.1 billion of this savings would accrue to state and local governments, while $15.6 billion would accrue to the federal government. Approximately $13.7 billion of the savings would results from legalization of marijuana, $22.3 billion from legalization of cocaine and heroin, and $12.8 from legalization of other drugs. The report also estimates that drug legalization would yield tax revenue of $34.3 billion annually, assuming legal drugs are taxed at rates comparable to those on alcohol and tobacco. Approximately $6.4 billion of this revenue would result from legalization of marijuana, $23.9 billion from legalization of cocaine and heroin, and $4.0 billion from legalization of other drugs.”
- Failed Bank Assets: The FT’s Alphaville blog looks at bank assets being sold online. “About 200 banks have failed in the US since 2007, leaving FDIC with a number of often-unenviable loans and other financial assets to sell, securitise or use as collateral for bonds. What we hadnt realised is that the organisation auctions literally everything from failed banks right down to the furniture and fittings. Many of these seem to wind up on Rick Levin & Associations online auction site. The website is currently hosting at least eight auctions of FDIC failed-bank assets, which are due to finish in the next few weeks. And the pickings are varied; everything from laptops to garden party gazebos, in fact.”
Compiled by Phil Izzo