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Disproven Austerity Still Reigns

NYT"s Paul Krugman rips flawed Reinhart-Rogoff paper: "What the Reinhart-Rogoff affair shows is the extent to which austerity has been sold on false pretenses. For three years, the turn to austerity has been presented not as a choice but as a necessity. Economic research, austerity advocates insisted, showed that terrible things happen once debt exceeds 90 percent of G.D.P. But 'economic research' showed no such thing; a couple of economists made that assertion, while many others disagreed. Policy makers abandoned the unemployed and turned to austerity because they wanted to, not because they had to."

Simpson-Bowles back again with another plan. W. Post: "...Bowles-Simpson 2.0 seeks far less in new taxes than the original, and it seeks far more in savings from federal health programs for the elderly. But it would end the sequester, the sharp, across-the-board cuts to agency budgets that took effect March 1. And it would eliminate the legal cap on government borrowing..."

"Unemployment Data Signals Tepid Growth" reports Reuters: "The number of Americans filing new claims for unemployment benefits rose last week and factory activity in the nation’s mid-Atlantic region cooled in April, providing further signs of a moderation in economic growth. Underscoring the softening growth outlook, another report on Thursday showed that a gauge of future economic activity fell in March for the first time in seven months. These reports are the latest to indicate a step back in the economy after a brisk start to the year as tighter fiscal policy began to set in."

Sequester brings airport delays. NYT: "With furloughs of air traffic controllers beginning on Sunday, average delays at O’Hare International Airport will be 50 minutes, and 20 at Newark Liberty, the head of the Federal Aviation Administration and the transportation secretary said on Thursday. Los Angeles International will have a shorter average delay, 10 minutes, but peak delays could reach three and a half hours in Atlanta, they said."

Immigration Bill Details Surface

Dems generally happy with immigration bill. Politico: "...when Democrats got a look at the 844-page measure, they discovered that their negotiators extracted more concessions than they thought possible. Those include an expansive version of the DREAM Act and subtle but meaningful tradeoffs on all the major pieces of the system, from family reunification to legalization and border security."

But civil rights groups have concerns. The Hill: "Black lawmakers and civil rights groups are concerned by a proposal in the Senate's immigration reform bill that would do away with 'diversity' visas that are often a pathway for African and Caribbean immigrants to enter the United States. Advocates said they haven't seen evidence yet that a new merit-based program is an acceptable replacement for the diversity visas, which total 55,000 each year and are granted via a lottery."

House bill may not be on same page. Politico: "Rep. Mario Diaz-Balart, a key player in shaping House immigration legislation, said on Thursday that the House bill will be 'a lot tighter, stricter' on border security than the Senate bill unveiled this week. The Florida Republican also pointed to the amount of guest worker visas to be issued under the Senate plan, saying they 'would not work .. because they seem to be so low.'"

Breakfast Sides

"Texas Plant May Not Have Been Inspected in Years, Despite Risks" reports Mother Jones: "In response to the West explosion, the Texas Commission on Environmental Quality (TCEQ)reports that it has pursued seven investigations of the fertilizer plant since 2002, both routine and in response to complaints. The last recorded investigation occurred in 2007 ... The Texas Tribune notes that this probably means the facility hadn't been inspected in the past five years. This would be consistent with a steep decline in the TCEQ's investigations in the past few years ... The plant's last OSHA inspection was in 1985—not surprising considering that it would take the short-staffed agency 98 years for the agency to inspect each of the state's workplaces ..."

Multinationals still outsourcing. WSJ: "Multinational companies based in the U.S. boosted their global work forces in 2011 almost entirely by hiring workers overseas ... The companies' employment in the U.S. rose by just 0.1% to 22.9 million workers in a year when total private employment in the U.S. rose 1.8%. Their overseas employment increased 4.4% to 11.7 million."

Banks resuming risking mortgage investment vehicles. NYT: "...the revival also underscores how these investments, known as structured financial products, have largely escaped new regulations that were supposed to prevent a repeat of the last financial crisis. ... Banks have won over investors by taking steps to make this generation of structured products safer than the last one. But with demand for these products on the rise, credit ratings agencies and regulators are warning that the additional protections are already dwindling, allowing some of the old excesses to creep back into the market ..."

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