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Economy

A single family home is shown with a sale pending in Encinitas, California May 22, 2013. (Photo: Reuters)

A single family home is shown with a sale pending in Encinitas, California May 22, 2013. (Photo: Reuters)

The National Association of Realtors said Thursday the Pending Home Sales Index (PHSI) fell 0.8% to 111.4 in March from 112.3 in February. Despite last month’s decrease, the index is 0.8% above a year ago.

“Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” Lawrence Yun, NAR chief economist said. “In most areas, the lower the price of a home for sale, the more competition there is for it. That’s the reason why first-time buyers have yet to make up a larger share of the market this year, despite there being more sales overall.”

Mr. Yun said he forecasts existing-home sales to come in at roughly 5.64 million this year, an gain of 3.5% from 2016 (5.45 million). The national median existing-home price this year is forecast to gain by about 5%.

The PHSI in the Northeast fell 2.9% to 99.1 in March, though the region is still 1.8% above a year ago. In the Midwest, they fell 1.2% to 109.6 in March and is now 2.4% lower than March 2016.

Pending home sales in the South rose 1.2% to an index of 129.4 in March and are now 3.9% above last March. The index in the West fell 2.9% in March to 94.5, and is now 2.7% below a year ago.

[brid video=”135935″ player=”2077″ title=”Lawrence Yun on March Pending Home Sales Index (PHSI)”]

The National Association of Realtors (NAR) said

Opinion

President Donald J. Trump meets with the National Association of Manufacturers at the White House on March 31, 2017. (Photo: Reuters)

President Donald J. Trump meets with the National Association of Manufacturers at the White House on March 31, 2017. (Photo: Reuters)

I want tax cuts. I support tax cuts. I relish tax cuts.

  • I like tax cuts because I’m a curmudgeonly libertarian and I think people should have the first claim on the money they earn.
  • I like tax cuts because I’m an economist and we’ll get more growth if penalties on productive behavior are reduced.
  • I like tax cuts because the academic research supports the “starve-the-beast” theory of less revenue leading to less spending.

This is why I wrote favorably about Trump’s campaign tax plan, and this is why I like Trump’s new tax plan (with a few exceptions).

But I confess that my heart’s not in it. Simply stated, I don’t think the new plan is serious.

If Trump really wanted a big tax cut, he would have a comprehensive plan to restrain the growth of government spending. He doesn’t.

If Trump genuinely wanted lower taxes, he would be aggressively pushing for genuine entitlement reform. He isn’t.

And Congress isn’t much better. At least in the absence of leadership from the White House.

It’s not merely that I’m concerned lawmakers won’t put the brakes on spending. And it’s not just that I fear they won’t enact much-needed entitlement reform. I worry they’ll actually increase the burden of federal spending. Just look what’s happening as Congress and the White House negotiate a spending bill for the remainder of the 2017 fiscal year. The pending deal would trade more defense spending for more Obamacare subsidies. Everyone wins…except taxpayers.

In this profligate environment, it’s hard to be optimistic about tax cuts.

By the way, I fully agree we would get more growth if Trump’s tax plan was enacted. But the Laffer Curve doesn’t say that all tax cuts pay for themselves with faster growth. That only happens in rather rare circumstances.

Yes, the lower corporate tax rate would have a big supply-side impact (and there’s plenty of evidence from overseas to support that notion), but many of the other provisions of his plan are sure to reduce revenue.

Again, I don’t lose sleep about the prospect of less money going to Washington. But you can be sure that politicians pay attention to that issue.

Which is why I’m pessimistic. I don’t think Congress is willing to approve a big tax cut.

The bottom line is that there are three possible outcomes.

  1. Congress and the White House decide to restrain spending, which easily would create room for a very large tax cut (what I prefer, but I won’t hold my breath for this option).
  2. Congress decides to adopt Trump’s tax cuts, but they balance the cuts with dangerous new sources of tax revenue, such as a border-adjustment tax, a carbon tax, or a value-added tax (the option I fear).
  3. Congress and the White House decide to go for a more targeted tax cut, such as a big reduction in the corporate income tax (which would be a significant victory).

Ultimately, I want to completely junk our corrupt system and replace it with a simple and fair flat tax. But for 2017, I’ll be happy if we simply slash the corporate rate.

If President Donald Trump really wanted a

Video

[brid video=”135930″ player=”2077″ title=”Dan Mitchell Corporate Tax Cut Most Important in Trump Plan”]

CATO economist Dan Mitchell said on Mornings with Maria that cuts to the corporate tax rate are the most important aspect to President Trump’s plan. He also told Bartiromo and the panel that the rest of the plan should be offset with cuts to Medicaid and Medicare before the U.S. turns into Greece.

CATO economist Dan Mitchell said on Mornings

Economy

A 787 Dreamliner being built for Air India is pictured at South Carolina Boeing final assembly building in North Charleston, South Carolina. (Photo: Reuters)

A 787 Dreamliner being built for Air India is pictured at South Carolina Boeing final assembly building in North Charleston, South Carolina. (Photo: Reuters)

The Commerce Department said Thursday durable goods orders rose by a modest 0.7% in March, fueled by first-quarter orders for civilian aircraft. The strength in commercial aircraft (8.7%) and military aircraft offset a drop in demand for motor vehicles.

It’s still the weakest showing since a 0.9% decline in December.

So-called core capital goods (nondefense ex-aircraft) were soft, up only 0.2%. That’s half of the increase that the median forecast expected.

The Commerce Department said Thursday durable goods

Companies

Customers of United wait in line to check in at Newark International airport in New Jersey, November 15, 2012. (Photo: Reuters)

Customers of United wait in line to check in at Newark International airport in New Jersey, November 15, 2012. (Photo: Reuters)

United Airline (NYSE:UAL) said on Thursday that it will reduce the amount of overbookings on flights and raise the incentive for voluntarily bumped passengers to $10,000.

“Every customer deserves to be treated with the highest levels of service and the deepest sense of dignity and respect,” Oscar Munoz, chief executive officer of United Airlines, said. “Two weeks ago, we failed to meet that standard and we profoundly apologize. However, actions speak louder than words. Today, we are taking concrete, meaningful action to make things right and ensure nothing like this ever happens again.”

United Continental Holdings, Inc. is a holding company and its principal subsidiary is United Air Lines, Inc. (United). The airline industry leader is still working to distance itself from the April 9 incident where a passenger who refused to leave was seen on video being dragged off a flight.

United commits to:

  • Limit use of law enforcement to safety and security issues only.
  • Not require customers seated on the plane to give up their seat involuntarily unless safety or security is at risk.
  • Increase customer compensation incentives for voluntary denied boarding up to $10,000.
  • Establish a customer solutions team to provide agents with creative solutions such as using nearby airports, other airlines or ground transportations to get customers to their final destination.
  • Ensure crews are booked onto a flight at least 60 minutes prior to departure.
  • Provide employees with additional annual training.
  • Create an automated system for soliciting volunteers to change travel plans.
  • Reduce the amount of overbooking.
  • Empower employees to resolve customer service issues in the moment.
  • Eliminate the red tape on permanently lost bags by adopting a “no questions asked” policy on lost luggage.

Several policies are effective immediately, but others will go into affect during the remainder of the year. The full review of United’s changes and of what happened aboard Flight 3411 can be found at hub.united.com.

“Our review shows that many things went wrong that day, but the headline is clear: our policies got in the way of our values and procedures interfered in doing what’s right,” Mr. Munoz added. “This is a turning point for all of us at United and it signals a culture shift toward becoming a better, more customer-focused airline. Our customers should be at the center of everything we do and these changes are just the beginning of how we will earn back their trust.”

United Airline said Thursday that it will

Economy

People wait in line to attend TechFair LA in Los Angeles, Calif. (Photo: Reuters)

People wait in line to attend TechFair LA in Los Angeles, Calif. (Photo: Reuters)

The Labor Department said jobless claims rose 14,000 for the week ending April 22 to a higher-than-expected 257,000. Still, at 242,250, the 4-week average is now slightly lower and compares well with the 250,000 levels of late March.

Continuing claims, in lagging data for the week ending April 15, rose slightly to 1.988 million and 4-week average also moved lower, to 2.007 million. That’s a new 17-year low. The unemployment rate for insured workers (excludes job leavers and re-entrants) remains at a very low 1.4 percent.

Claims data can be uneven during holiday periods such as Easter. However, the 4-week averages have been solid evidence that the labor market has remained very healthy this month, which is a positive indication for the employment report due out on Friday.

A Labor Department analyst said there are no special factors in today’s report, though Louisiana once again had to be estimated. No state was triggered “on” the Extended Benefits program during the week ending April 8.

The highest insured unemployment rates in the week ending April 8 were in Alaska (3.5), Puerto Rico (2.6), New Jersey (2.5), Connecticut (2.4), California (2.3), Illinois (2.3), Pennsylvania (2.3), Massachusetts (2.2), Rhode Island (2.2), and Montana (1.9). The largest increases in initial claims for the week ending April 15 were in California (+3,386), New Jersey (+3,098), Maryland (+1,563), Ohio (+1,239), and Connecticut (+992), while the largest decreases were in Texas (-3,478), Illinois (-1,953), Florida (- 1,725), Arizona (-1,472), and Oregon (-1,400).

The Labor Department said jobless claims rose

Politics

President Donald J. Trump speaks on the phone with Mexican President Enrique Peña Nieto on Jan. 27, 2017.

President Donald J. Trump speaks on the phone with Mexican President Enrique Peña Nieto on Jan. 27, 2017.

President Donald Trump convinced the leaders of Mexico and Canada on Wednesday to renegotiate the North American Free Trade Agreement (NAFTA), the White House confirmed. The White House had drafted a notification of the United States’ intention to withdraw from NAFTA.

“it is my privilege to bring NAFTA up to date through renegotiation,” President Trump said in a statement. “It is an honor to deal with both [Mexican] President [Enrique] Peña Nieto and [Canadian] Prime Minister [Justin] Trudeau, and I believe that the end result will make all three countries stronger and better.”

NAFTA, the North American Free Trade Agreement, was pushed by former President Bill Clinton and enacted in 1994. It is a free trade agreement between the U.S., Canada and Mexico, and has largely been blamed for the destruction of much of the American manufacturing base.

The White House also said that the President “agreed not to terminate NAFTA at this time” and that all three leaders “”agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation” of the trade deal to “the benefit of all three countries.”

President Trump during the campaign repeatedly railed against NAFTA and the Trans-Pacific Partnership (TPP). He told supporters at rallies he would renegotiate the Clinton-era trade deal and, if partnering nations didn’t agree, he would pull out.

The trade issue won him Rust Belt states no Republican has carried since the 1980s. Almost immediately after taking office, President Trump signed executive orders stating his intention to renegotiate NAFTA and withdraw from the TPP. Commerce Department Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and Peter Navarro, the head of the newly-formed White House Trade Council, were put in charge of negotiating the new deals.

According to the Bureau of Labor Statistics, a division within the U.S. Labor Department, the state of Indiana alone lost roughly 18% of the manufacturing industry during the period 1994 to 2015, years impacted by NAFTA and the World Trade Organization. The cutoff for the figure is the second quarter of 2015, when the latest available employment data was released by the Labor Department.

From the third quarter of 1993 to the aforementioned period, The Hoosier State has lost at least 113,000 manufacturing jobs, a conservative number that factors both jobs created by exports and jobs displaced by imports. Meanwhile, the percentage of all private sector jobs that are manufacturing jobs in the state of Indiana fell from 28% to 20.2% during the NAFTA-WTO period.

President Donald Trump convinced the leaders of

Politics

President Donald Trump, followed by Treasury Secretary Steven Mnuchin, left, and White House Economic Council Director Gary Cohn arrives for a meeting on the Federal budget, Wednesday, Feb. 22, 2017, in the Roosevelt Room of the White House in Washington. (AP Photo/Evan Vucci)

President Donald Trump, followed by Treasury Secretary Steven Mnuchin, left, and White House Economic Council Director Gary Cohn arrives for a meeting on the Federal budget, Wednesday, Feb. 22, 2017, in the Roosevelt Room of the White House in Washington. (AP Photo/Evan Vucci)

The Trump Administration unveiled their tax reform roadmap that amounts to the biggest tax cut in U.S. history, for both businesses and working Americans. Treasury Secretary Steven Mnuchin and White House Economic Council Director Gary Cohn said they have been in constant contact with the House and Senate to work out the details, but the President’s plan emphasizes economic growth and simplification.

The individual tax rates will be reduced and simplified to 10%, 25% and 35%. The plan eliminates all deductions except for the popular mortgage deduction and charitable deductions.

The President’s plan will substantially increase the standard deduction for working families, including a doubling to $25,000 for a family of 4. It eliminates most of the tax breaks that are mainly targeted benefits for higher-earners, though it does repeal the Alternative Minimum Tax (AMT). Secretary Mnuchin said the AMT “creates significant complications and burdens” and “means some Americans need to do their taxes twice.”

“We will make sure that there are rules in place to make sure that wealthy people cannot get around paying their rate,” he added.

Fewer filers will need to take itemized deductions, thus the tax code would be dramatically simplified. The proposal lowers dividends and capital gains taxes by eliminating the 3.8% tax created on them by ObamaCare, and immediately repeals the death tax.

“This will be pay itself with growth, by eliminating deductions and by closing loopholes,” Secretary Mnuchin said.

The tax rate for all businesses, not just corporations but also small businesses, will be cut substantially to 15%. The United States has the highest corporate tax rate in the world and Secretary Mnuchin said analysis indicates it will result in trillions of American business dollars being repatriated from overseas.

“We believe we can get back to 3% GDP that is sustainable,” Mr. Mnuchin said. “We will unlock the economic growth that has been held back for too long in this country.”

get pushback from critics citing the usual D.C. obstacles to tax reform, the Joint Committee on Taxation (JCT) and the Congressional Budget Office (CBO). The JCT said Tuesday a big cut to corporate taxes would add to long-term budget deficits and the CBO also does not score tax proposals dynamically, assuming dollar for dollar losses that do not factor economic growth.

Democrats, who were silent when President Barack Obama added more to the national debt than all of his predecessors combined, will oppose the plan regardless. Senate Minority Leader Chuck Schumer, D-N.Y., has already expressed an unwillingness to work with the President and congressional Republicans on the proposal.

“We will be attacked by the left and we will be attacked by the right,” White House economic advisor Mr. Cohen said. “But one thing is certain. I will never, ever bet against the President. He will get this done for the American people.”

The Trump Administration unveiled their tax reform

Politics

House Freedom Caucus member Rep. Dave Brat, R-Va., arrives at the White House, Thursday, March 23, 2017, in Washington. (Photo: AP)

House Freedom Caucus member Rep. Dave Brat, R-Va., arrives at the White House, Thursday, March 23, 2017, in Washington. (Photo: AP)

The House Freedom Caucus has released a statement announcing their support for the ObamaCare repeal and replace bill, the American Health Care Act. Rep. Mark Meadows, R-N.C., the chairman of the House Freedom Caucus, backs the new legislation and sources say Republicans anticipate it will pass even with the addition of the MacArthur Amendment.

“Over the past couple of months, House conservatives have worked tirelessly to improve the American Health Care Act (AHCA) to make it better for the American people. Due to improvements to the AHCA and the addition of Rep. Tom MacArthur’s proposed amendment, the House Freedom Caucus has taken an official position in support of the current proposal,” Meadows said in a statement.

The MacArthur amendment permits states to repeal costs that were left in place under the original AHCA. People’s Pundit Daily was first to report last week that the HFC was on board with the latest version of the bill, which would be reintroduced this week after the health care reform bill failed.

While most of the blame for the failure of the initial ObamaCare repeal and replace bill fell on his conservative coalition, roughly two-thirds of the caucus did support the bill after numerous amendments were introduced. But as the bill got more conservative, Republican moderates from the Tuesday Group and more competitive districts began to withdraw support, as well. The President asked House Speaker Paul Ryan, R-Wis., to pull the vote and the White House has been negotiating with the House Freedom Caucus since.

“While the revised version still does not fully repeal ObamaCare, we are prepared to support it to keep our promise to the American people to lower healthcare costs,” Rep. Meadows said. “We look forward to working with our Senate colleagues to improve the bill. Our work will continue until we fully repeal ObamaCare.”

The Tuesday Group, the moderate wing of the Republican Party, is meeting this afternoon to discuss the changes. However, the bill’s conservative critics are in support and it’s now a numbers game in the House.

“Today, we believe the hard work of Rep. Mark Meadows and Rep. Tom MacArthur (NJ-03), facilitated by Vice President Mike Pence, has yielded a compromise that the Club for Growth can support,” said Club for Growth president David McIntosh. “Since the AHCA was released, conservatives have done the GOP an enormous favor by pushing for needed changes that will benefit taxpayers, including the immediate repeal of Obamacare’s taxes and block-granting of Medicaid funding to states.”

The House Freedom Caucus has released a

Politics

Protesters demonstrate against the Bears Ears National Monument in Montecello, Utah, on Dec. 29, 2016. The Bears Ears National Monument will cover over 1 million acres in the Four Corners region. (Photo: AP)

Protesters demonstrate against the Bears Ears National Monument in Montecello, Utah, on Dec. 29, 2016. The Bears Ears National Monument will cover over 1 million acres in the Four Corners region. (Photo: AP)

President Donald J. Trump signed an executive order to review prior monument designations and suggest legislative changes. The Executive Order to Review the Designations Under the Antiquities Act aims to undo what was widely seen as last-minute land grabs by the Obama Administration in Utah and other states.

Flanked by Secretary Ryan Zinke at the U.S. Department of Interior, the President praised the workers at the federal agency, but slammed his predecessor’s actions.

‘They protect the ability of the people to protect and access the land that truly belongs to them,” he said. “The previous administration used a 100-year old law known as the an act to put 100 million acres of land under strict control eliminating the people who best know how to utilize that land.”

The monument designation period covered in the executive order stretches back to January 1, 1996 and includes monuments that are 100,000 acres. Secretary Zinke said that includes about 24 to 40 monuments.

President Donald Trump signed an executive order

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