New residential homes are shown under construction in Carlsbad, California September 19, 2011. (Photo: Reuters)
The new residential construction report finds housing starts and building permits fell in June far more than expected.
Housing Starts
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,173,000, or 12.3% (±8.3%) below the revised estimate of 1,337,000 in May. It is 4.2% (±10.2%)* below the June 2017 rate of 1,225,000. Single-family housing starts in June were at a rate of 858,000, a decline of 9.1% (±8.8%) from the revised figure in May of 944,000.
The June rate for units in buildings with five units or more was 304,000.
Building Permits
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,273,000. That’s 2.2% (±1.2%) below the revised May rate of 1,301,000 and is 3.0% (±1.1%) below the June 2017 rate of 1,312,000. Single-family authorizations in June were at a rate of 850,000; this is 0.8% (±1.5%)* above the revised May figure of 843,000.
Authorizations of units in buildings with five units or more were at a rate of 387,000 in June.
Housing Completions
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,261,000. This is 0.0% (±11.3%)* below the revised May estimate of 1,261,000, but is 2.2% (±14.5%)* above the June 2017 rate of 1,234,000. Single-family housing completions in June were at a rate of 862,000; this is 2.3% (±8.4%)* below the revised May rate of 882,000.
The June rate for units in buildings with five units or more was 393,000.
U.S. President Donald Trump and Russia’s President Vladimir Putin talk during the family photo session at the APEC Summit in Danang, Vietnam November 11, 2017. (Photo: Reuters)
Russia has a long history with the North Atlantic Treaty Organization (NATO) that extends far beyond Donald Trump and its current leadership. In fact, Vladimir Putin and the Clinton family have a long history together, as well.
To begin with, a careful student of the current events must understand where we are now. Putin is a completely amoral leader that acts solely in the interests of his nation. He uses tools that most world leaders are too squeamish, or afraid to talk about about publicly or in polite circles– altering elections, assassinations and military force where applicable.
This makes him dangerous, and problematic for world leaders that have (up to now) relied on laws and only economic warfare to damage political enemies. His understanding of the world and how he relates to it is both rudimentary and unequivocally hard-nosed. He only knows and acts on what is, and what is not. He is not interested in the internal politics of a nation, only in how it relates to his country. Putin’s response to question’s about Russian interference in American elections is an example.
The American public still refuses to accept that the information contained in the Podesta emails, and what may be lurking on the missing Clinton server, is far more damaging to the nation than whatever Putin or Russian intelligence services did.
This was the point that Putin tried to make in the Chris Wallace interview of July 16th, 2018– that we have more problems with political infighting than we do with Russia, and that most of it is not his concern. To understand both the nature and intent of that interference, you have to look at the relationship history between Putin, the Clinton’s and NATO.
When you talk about election tampering and meddling, you can’t refer to Putin’s interference without realizing the Clintons and Putin have a long and troubled history with Russia and with Putin. It was Bill Clinton as POTUS that facilitated the breakup of the old Soviet Union and tried to expand NATO into Eastern Bloc nations, which was against the UN charter.
NATO formally agreed in January 1994 to establish the Partnership for Peace, which in effect created a pathway toward membership for nations joining the organization.
This agreement was supposed to protect former satellite nations from interference by either Russia or NATO. It would isolate the normal internal affairs of these former Soviet nations, and not extend the security commitment of the NATO alliance.
Russia agreed, and joined the Partnership in June 1994.
When the 1994 pact was signed, Western/NATO leaders prior to Bill Clinton – told Yeltsin (and earlier to Gorbachev) that they would not expand NATO an inch, and that the divided Germany would be neutral if unified.
Sufficed to say, that did not happen once the U.S. under the Clintons got involved. The Clinton Administration decided to not give a damn about promises made, started the expansion of NATO in 1994 and used interventionism in Yugoslavia for humanitarian purposes. The United States did not understand about its complexities, and acted without a UN Security Council mandate.
Despite this agreement on paper, NATO also started to interfere in numerous events. While Clinton objected to Russian military intervention in the autonomous region of Chechnya, including the siege of Grozny, Yeltsin objected to U.S. military intervention in Bosnia, including NATO airstrikes in September.
It was quickly spiraling out of control.
It could potentially break out into a Third World War. But did people really think that Russia would politely stand by forever as the European Union (EU) and NATO captured half of Eastern Europe? Despite being severely weakened by the Soviet breakup, Russia was determined to act in some way.
Putin, as an intelligence man, was nearby and cautioning Yeltsin not to do business on Clinton’s and NATO’s terms. Now comes the blowback after all these years.
In Madrid, July 1997, NATO formally invited three former Soviet satellites — Poland, Hungary, and the Czech Republic — to join the alliance. In March 1999, less than two weeks after their membership became effective, NATO began to bomb Serbia. It’s no coincidence that 9 months later — in December 1999 — Yeltsin was forced to turn over the presidency to Putin, a direct result of NATO capturing those former Soviet satellites.
Meanwhile the EU was developing into an economic powerhouse designed to isolate and threaten Russia’s economic security, knowing full well that Russia could not make any military moves with the US sitting in the catbird seat. NATO and the EU intended to steal those nations for their own enrichment.
It’s no wonder Putin has it out for the Clintons, and decided to weaken the EU economically.
So, by 2009, an opportunity presented itself to Russia with the weakness of Barack Obama. A new, economically stronger and well-positioned Russia under Putin began an intelligence operation to pit forces inside the U.S. against one another in an effort to destabilize America and its election process, in order to damage and weaken the probable next president, Hillary Clinton.
Putin also recognized that Team Clinton had been accepting large amounts of money from people like George Soros and the EU who had been economically squeezing Russia for years.
With her credibility damaged, if Putin came to the negotiating table with Hillary, he would have the upper hand, and be able to maintain the land grab he began under Barack Obama. He was not going to have a repeat of the continued pressure from NATO and the EU. After all, he now had them by the short hairs with their energy dependence on his cheap gas and oil supplies through the North Sea transit.
As it turned out, he is now dealing with Trump. Anything could happen from here on out since Trump and his economic team understands what is happening, and cannot rely on NATO or his own intelligence people (such as the the CIA and NSA) which have been politically (and possibly GRU) compromised.
Trump is reliably unreliable, and that random factor could be used now to regain the upper hand.
Builder confidence in the market for newly-built single-family homes remained solid and unchanged in July. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) came in at a reading of 68.
Builders are optimistic about the housing market given sustained strong demand for single-family homes. However, increases in construction costs are beginning to put pressure on price points.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”
The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI index measuring current sales conditions remained unchanged at 74 and the component gauging a 6-month outlook ticked down slightly 2 points to 73 and the metric charting buyer traffic rose 2 points to 52.
Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57 while the Midwest remained unchanged at 65. The West and South each fell one point to 75 and 70, respectively.
American Manufacturing Sector Graphic Concept. (Photo: AdobeStock)
Industrial production increased 0.6% in June after falling 0.5% in May, slightly beating the median forecast. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0%, its third consecutive quarterly increase.
Manufacturing output rebounded strongly, rising 0.8% in June and meeting the forecast.
The production of motor vehicles and parts rebounded last month after truck assemblies fell sharply in May because of a disruption at a parts supplier.
Factory output, aside from motor vehicles and parts, increased 0.3 percent in June. The index for mining rose 1.2 percent and surpassed the level of its previous historical peak (December 2014); the output of utilities moved down 1.5 percent.
At 107.7% of its 2012 average, total industrial production was 3.8% higher in June than it was a year earlier. Capacity utilization for the industrial sector increased 0.3% in June to 78.0 percent, a rate that is 1.8% below its long-run (1972–2017) average.
Employees have short meeting in the warehouse to check business inventory levels of goods. First in first out. (Photo: AdobeStock)
Business inventories were estimated at $1,936.9 billion, an increase of 0.4% (±0.1%) from April 2018. From May 2017, business inventories were up 4.4% (±1.2%), adjusted for seasonal variations but not for price changes.
While both are typically healthy builds, inventories are not building at a pace that keeps up with demand.
The combined value of distributive trade sales and manufacturers’ shipments for May, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,449.7 billion, up 1.4% (±0.2%) from April 2018 and was up 8.6% (±1.2%) from May 2017.
The total business inventories/sales ratio based on seasonally adjusted data at the end of May was 1.34. The May 2017 ratio was 1.39.
A factory worker at a New York manufacturing plant. (Photo: Reuters)
The Empire State Manufacturing Survey came in at 22.6 in July, indicating regional factory activity beat the forecast with no signs of overheating. With new orders index ticking down 3 points to 18.2, there’s only strength and no dangers of overheating.
Roughly 40% of manufacturers reported that conditions had improved over the month, while 17% said they had worsened.
Optimism regarding the next 6 months fell this month.
The index for future business conditions fell 8 points to 31.1, nearly reversing gains in May. Manufacturers still expect increases in employment in the months ahead, and the indexes for future prices remained elevated.
The index for planned capital expenditures fell 10 points to 17.1, and the technology spending index fell 8 points to 9.4; both are at their lowest levels in roughly a year.
A shopper passes a ”Sale” sign at Quincy Market in downtown in Boston, Massachusetts, U.S. January 11, 2017. (Photo: Reuters)
U.S. retail sales in June posted a solid as-expected gain, while May saw a big upward revision from 0.8% to 1.3%.
The advance estimates of U.S. retail and food services sales for June 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $506.8 billion. That’s an increase of 0.5% (±0.4%) from the previous month, and 6.6% (±0.5%) above June 2017.
Total sales for the April 2018 through June 2018 period were up 5.9% (±0.5%) from the same period a year ago. The April 2018 to May 2018 percent change was revised from up 0.8% (±0.5%) to up 1.3% (±0.2%). Retail trade sales were up 0.3% (±0.5%) from May 2018, and 6.4% (±0.5%) above last year.
Gasoline Stations were up 21.6% (±1.6%) from June 2017, while Nonstore Retailers were up 10.2% (±1.4%) from last year.
The best budget rule in the United States is Colorado’s Taxpayer Bill of Rights. Known as TABOR, this provision in the state’s constitution says revenues can’t grow faster than population plus inflation. Any revenue greater than that amount must be returned to taxpayers.
Combined with the state’s requirement for a balanced budget, this means Colorado has a de facto spending cap (similar to what exists in Switzerland and Hong Kong).
The second-best budget rule is probably a requirement that tax increases can’t be imposed without a supermajority vote by the legislature.
The underlying theory is very simple. It won’t be easy for politicians to increase the burden of government spending if they can’t also raise taxes. Particularly since states generally have some form of rule requiring a balanced budget.
Anyhow, according to the National Council of State Legislatures, 14 states have some type of supermajority requirements.
And more states are considering this reform.
Here are some excerpts from a column in the Washington Post.
Florida Republicans are pursuing a plan to make it harder for lawmakers to raise taxes in the state, adding new hurdles for Democrats hoping to enact bold social programs such as “Medicare for all” and more robust education spending. …Florida’s Republican lawmakers have approved a ballot measure that, if approved by the voters, would require a two-thirds “supermajority” of the legislature to enact any new taxes. …In…additional states — …Oregon and North Carolina — conservative lawmakers and business groups are currently advancing similar measures… The supermajority requirements have proved effective at keeping taxes low in the states where they have been implemented, said Joel Griffith of the American Legislative Exchange Council… “These supermajority rules make policymaking incredibly difficult,” said Elaine Maag, senior research associate at the Tax Policy Center, a nonpartisan think tank. “If a state can’t increase spending because of these very high bars for raising taxes, they can’t expand programs.”
There is some evidence that supermajority requirements have at least helped to restrain the growth of taxes. From 1980 to 1996, state tax burdens as a share of personal incomeincreased by 1.1 percent in states with supermajority requirements. Taxes rose five times faster in states without such requirements. In 10 states, residents face higher top personal income tax rates today than they did in 1990. None of those states require supermajority approval for tax hikes. None of the 13 supermajority states have higher top rates today than they did in 1990, and three of them have lowered their top rate in the 1990s.
Academic experts also have found positive effects.
In a 1990 study published in the William and Mary Law Review, Jim Miller and Mark Crain found some evidence of modest spending restraint.
Seven states require approval of tax proposals by a super-majority vote in the legislature. …According to this hypothesis, the amount of revenue available to politicians resembles a budget constraint, and when this constraint shifts, government spending consequently changes. …the tax-and-spend literature suggests a causal connection that should be controlled. This variable is expected to produce a negative coefficient because in making an increase in revenues more difficult, the requirement tightens the total constraint on spending options. …The super-majority required to increase taxes variable is negative, as expected, although it is significant at only the 10% level in the three models.
In a 2000 study published in the Journal of Public Economics, Brian Knight also determined that supermajority provisions limited taxation.
This paper measures the effect of state-level supermajority requirements for tax increases on tax rates. …A model is presented in which legislatures controlled by a pro-tax party adopt a supermajority requirement to reduce the majority party agenda control. The propensity of pro-tax states to adopt supermajority requirements results in an underestimate of the true effect of these requirements on taxes. To correct this identification problem, the paper first uses fixed effects to control for unobserved attitudes and then employs instruments that measure the difficulty of amending state constitutions. The paper concludes that supermajority requirements have significantly reduced taxes.
In a 2014 study published in State Politics & Policy Quarterly, Soomi Lee concluded that a supermajority has restrained the fiscal burden in California.
My article examines whether supermajority vote requirements (SMVR) to raise taxes in California’s constitution suppresses state tax burdens. The rationale behind the rule is to contain the growth of government by making it costly to form a winning coalition to raise taxes. …I take a different approach from extant literature and estimate the causal effect of SMVR by using synthetic control methods. The results show that, from 1979 to 2008, SMVR reduced the state nonproperty tax burden by an average of $1.44 per $100 of personal income, which is equivalent to 21% of the total tax burden for each year. The effect…has abated over time.
This last study is remarkable. The long-run fiscal outlook is quite grim in California, so just imagine how much worse it would be if the supermajority requirement didn’t exist.
I’ll close with this amateurish visual that I created.
Though the evidence from California shows the kitten shouldn’t be peacefully sleeping if there is a supermajority requirement.
The best way to think of such a provision is that it is akin to putting locks on your doors in a crime-ridden neighborhood. The crooks may figure out how to mug you on the street or break through your windows, so you’re still in danger.
But having locks on your doors is definitely better than not having them.
Ben Cohen, right, and Jerry Greenfield, left, at a rally for socialist Vermont Senator Bernie Sanders in Exeter, N.H., February 2016. (Photo: Reuters)
Earlier this year, I explained why Nordic nations are not socialist. Or, to be more precise, I wrote that if they are socialist, then so is the United States.
And my slam-dunk evidence was this chart from the Fraser Institute’s Economic Freedom of the World., which shows that there is almost no difference in overall economic liberty when comparing the United States with Finland, Norway, Sweden, and Denmark.
This doesn’t mean, incidentally, that we have identical policies. I pointed out that the United States gets a better (less worse) score on fiscal policy, but also reiterated that Nordic nations are more market oriented than America when looking at other variables (especially rule of law).
The net effect, though, is that we wind up with near-identical scores.
I’m rehashing this old data because there’s a column in The Week that celebrates Norway as an example of “democratic socialism.”
The spectacular upset victory of Alexandria Ocasio-Cortez in her recent New York congressional primary election has catapulted the topic of democratic socialism to the top of America’s political discussion. …we have a country that very closely approximates the democratic socialist ideal. It’s a place that is…considerably more successful than the United States on virtually every social metric one can name. I’m talking about Norway. …Norwegian workers are heavily protected, with 70 percent of workers covered by union contracts, and over a third directly employed by the government. The Norwegian state operates a gigantic sovereign wealth fund, and its financial assets total 331 percent of its GDP… Meanwhile, its state-owned enterprises are worth 87 percent of GDP. Of all the domestic wealth in Norway, the government owns 59 percent, and fully three-quarters of the non-home wealth.
I don’t know if those specific statistics are true, but I certainly don’t disagree with the assertion that Norway has a large public sector.
But here are a couple of passages that don’t pass the laugh test.
Norway is unquestionably more socialist than Venezuela… Indeed, it is considerably more socialist than supposedly-communist China.
This is absurdly inaccurate. If there was a thermonuclear version of wrong, you would be seeing a giant mushroom cloud.
Here’s the data on overall economic freedom for Norway, Venezuela, and China. As you can see, Norway is far more market oriented.
So how does the author, Ryan Cooper, rationalize his fantastical assertion of Norwegian super-socialism?
If you read the article, he has a tortured definition of democratic socialism. One of his variables is government ownership, which normally would be a reasonable piece of data to include.
But it’s an artificial number when looking at Norway since the government controls the nation’s oil and also has a big sovereign wealth fund that was financed by oil revenue.
In other words, Norway is geographically lucky because all that oil boosts Norwegian GDP. It makes Norwegians relatively prosperous. And it definitely helps partially offset the economic damage of big government.
But it’s nonsensical to argue that oil-rich Norway somehow provides evidence for overall notion of democratic socialism. It’s sort of like looking at data for Kuwait and asserting that the best economic system is a hereditary sheikdom.
Yet he wants people to support socialism simply because of Norway, as illustrated by this final excerpt.
…when it comes to building a decent place to live, Norway is completely blowing America out of the water. So while conservatives have been pointedly ignoring the most obvious and relevant piece of evidence in their spittle-flecked tirades against socialism, Norwegians can and do point to the United States as an example of what happens when you let capitalism run wild.
But there’s one itsy-bitsy, teeny-weeny problem. As you can see from the chart, Norway and the United States have almost identical levels of economic liberty.
So if America is “capitalism run wild,” then so is Norway. Or if Norway is “socialism,” then so is the United States.
The bottom line is that both the United States and Norway are admirable nations by global standards. We both rank in the top-20 percent for overall economic freedom.
For additional information about what’s good and bad about Norway and other countries in the region, I recommend these columns from January 2015 and June 2015.
For additional information about why socialism is bad (both democratic and totalitarian versions), just open your eyes and look at world evidence. Or you can also peruse these columns from June 2017 and August 2017.
Deputy Attorney General Rod Rosenstein announces the indictment of 13 Russian nationals for election meddling among other crimes on February 16, 2018. Mr. Rosenstein noted there was “no allegation in the indictment that the charged conduct altered the outcome of the 2016 election.
A grand jury in the U.S. District of Columbia indicted 12 Russian intelligence officials for hacking schemes meant to interfere with the 2016 election. Deputy Attorney General Rod Rosenstein held a press conference to announce the indictments, though he said they didn’t change the outcome or effect the result.
“The indictment charges 12 Russian military officials by name for attempting to interfere with the 2016 presidential election,” Deputy Attorney Rosenstein said in a statement. “There’s no allegation that any American citizen committed a crime.”
“There’s no allegation that they changed a vote count or effected the result.”
The deputy attorney general said the online personas DCLeaks and Guccifer 2.0 were created and controlled by the Russian GRU, or Main Intelligence Directorate. The GRU is an intelligence agency of the General Staff of the Armed Forces of the Russian Federation.
Mr. Rosenstein did not state whether these conclusions were drawn from an independent analysis of the servers used by the Democratic National Committee (DNC) or the Clinton campaign. In fact, he offered no details at all as to how these conclusions were reached.
According to the indictments, the investigation concluded the officials also hacked a state election board and stole the information of about 500,000 registered voters, as well as a software program designed to verify that information.
The deputy attorney general said that he briefed President Donald Trump on the case earlier in the week. The curious timing of the indictments come as President Trump is scheduled to meet with Russian President Vladimir Putin.
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