The Economy Hub
With Michael Hiltzik
The dollar store merger shows just how badly Americans are doing

Mergers-and-acquisition types on Wall Street are no doubt cackling over the proposed $8.5-billion merger of Dollar Tree and Family Dollar Stores -- and why not, since it was spurred in part by corporate sharpshooter Carl Icahn?

But the grim reality underlying the deal is that there are so many American households  struggling that the market segment is worth battling for. And the fight is all the more ferocious because the spending of these households is stagnant, like their income. 

What's especially demoralizing is that these shoppers are even falling below the radar screen of those traditional retail destinations of the low-price market, Wal-Mart and Target.

Both retailers have reported weak to declining same store sales in recent months -- at Wal-Mart, sales at stores open at least a year were down 0.6% for the year ended Jan. 31. A Wal-Mart executive cited high unemployment, along with "reductions in government benefits, higher taxes and tighter credit."

Among other things, he's...

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This billionaire is still trying to make you panic about federal debt

Crusaders know they're nothing without something to crusade against. That's undoubtedly why hedge fund billionaire Peter G. Peterson keeps harping on the federal debt.

It's the same reason that army generals talk up the capabilities of national enemies, and World Series teams express the deepest respect for their opponents. It's why Robert DeNiro's White House operative Conrad Brean in "Wag the Dog" told William H. Macy's CIA man: "If there's no threat, what good are you?"

Peterson has made a name for himself as a deficit hawk, and even though the federal deficit as a share of the economy has come down sharply over the last six or seven years, he's damned if he's going to give up a good issue, even if he has to fake things a teensy bit.

Hence, the Peter G. Peterson Foundation's "fiscal confidence index," which purports to "gauge public opinion on the national debt, and provide the public with an instrument to communicate their concerns or optimism to elected officials." The foundation...

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Good news and warnings in the Social Security and Medicare reports

The release of the annual trustees reports for Social Security and Medicare customarily give rise to an outburst of disinformation from the enemies of these social insurance programs -- that comes with the territory when you're putting out documents of hundreds of pages densely packed with graphs, charts and statistics.

There may be less of that with the release of both reports Monday (months after the statutory deadline). That's because "the news is essentially that there is no news" in the reports, as

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Finally! An app to turn the ordinary person into a criminal

Via this recent piece in Wired, we are introduced to a breakthrough in technological services that could make everyone's home or office immeasurably less secure and give almost everyone with a cellphone the opportunity to become a burglar. 

Extra dividend: the purveyors of these services think they're doing the world a favor. Maybe they are, but there are obvious downsides.

We're talking about key-duplication services that allow anyone to take a smartphone picture of a key, upload it at a street kiosk or email it to a service provider, and get a workable key in return.

The services, including New York-based KeyMe and San Francisco-based KeysDuplicated, say they've eliminated the problem of getting locked out of your home or office, or the difficulty of getting a key to a friend or neighbor to enable emergency access. 

As Wired's Andy Greenberg writes:

The services "let you upload your coded chunks of metal to the cloud, where you can access and duplicate them, or even email them to a...

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Here's the single best analysis of the Halbig anti-Obamacare ruling

Northwestern University law and political science professor Andrew Koppelman moves past the absurd legal theory underlying the Halbig ruling on the Affordable Care Act -- in which a federal appeals court invalidated subsidies provided to insurance buyers on federal, as opposed to state, insurance exchanges -- to ask why the lawsuit's backers brought the case in the first place.

We know the consequences of the ruling: If it stands, about 4.8 million Americans will lose their subsidies and likely their health insurance, since it would be rendered unaffordable; there are residents of as many as 36 states that let the federal government establish their exchanges.

But is that what the plaintiffs and their backers really desired? And if not, what was their real goal?

Koppelman's conclusion is that the lawsuit is a product of the "moral dysfunction" infecting the fight over Obamacare.

"The opponents of Obamacare," he writes in the New Republic, "have from the beginning found themselves driven...

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Conservative hostility to Dodd-Frank continues unabated

You might have thought, listening to the general political discourse, that the Affordable Care Act is the single greatest economic threat foisted on us by Congress in recent years.

Silly you. The real threat comes from the Dodd-Frank Act, the 2010 measure designed to stem risky banking practices, improve consumer protections on financial products such as mortgages and credit cards, and provide regulators with more authority to deal with troubled big banks.

But according to Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, Dodd-Frank is the reason that "we are in the slowest, weakest recovery in the history of our nation." Hensarling declared during a hearing last week that it's the reason "tens of millions of our countrymen are now unemployed" and why we had "negative economic growth in the last quarter." Et cetera, et cetera.

That would be a heavy burden for a statute to bear, if Hensarling's assertion weren't undermined by the dubiousness of his...

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The poison pill at the heart of Paul Ryan's poverty plan

Rep. Paul Ryan (R-Wis.), this week revived his quest to be taken seriously as a "reformist" conservative ("reformicon" is becoming the preferred terminology) by releasing a position paper on refashioning the federal government's poverty programs

Ryan's latest report bears some marginal improvements over his previous effort in the anti-poverty line, which we examined here, as well as his string of proposed budgets. It doesn't propose the same wholesale slashes in the social safety net as his earlier proposals, for example. Ryan advocates increasing the Earned Income Tax Credit, one of the most effective federal assistance programs, as does President Obama.

That said, he would pay for the increase by removing benefits from some immigrant families, and treats the increase as an alternative to a hike in the minimum wage. (Responds Chuck Marr of the Center on Budget and Policy Priorities: "It takes both a strong EITC and an adequate minimum wage to ensure that work 'pays' adequately for...

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California's stem cell scandal gets worse

Anyone who cares about the advance of medical science and about the promise of biotechnology should be dismayed by how badly the California stem cell agency has handled its latest conflict-of-interest scandal.

We reported on the scandal last week, but developments since then are making it look worse.

The agency, known formally as the California Institute for Regenerative Medicine, or CIRM, continues to demonstrate the drawbacks of its insular, insider-like way of doing business. This is the legacy of Proposition 71, the 2004 ballot initiative that created the agency and made it immune from accountability to the state legislature--or practically speaking, any elected officials. CIRM's endowment comes from $3 billion in state bond funds backed by the taxpayers, who are also on the hook for $3 billion in interest, so the issues aren't trivial.

To recap the latest fiasco, CIRM's former president, Alan Trounson, accepted a position on the board of directors of one of its highest-profile...

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Dr. Strangelove explains the stupidity of Halbig ruling on Obamacare

The controversial appeals court ruling Tuesday in the Halbig case turned on the question of whether Congress intended to withhold health insurance subsidies from people who enrolled through federal rather than state exchanges.

The 2-1 majority finding that Congress did so intend--based on a theory promulgated by Michael Cannon of the Cato Institute--will be debated until the full court reconsiders or the Supreme Court decides the issue.

But over at the Incidental Economist, Nicholas Bagley of the University of Michigan puts a stake through the heart of the argument that Congress intended to threaten the states into establishing their own exchanges by barring subsidies for residents in states that failed to do so.  

If that really was Congress's intent, Bagley observes, the lawmakers would have made the threat explicit, not buried it deep within an obscure provision of a 900-page law. He illustrates the point with a reference from "The Godfather," when Vito Corleone backed up his offer...

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A new right-wing claim: Obama must be lying about inflation!

Obama birth-truthers are so 2008. (When your movement's leading intellectual is Donald Trump, you know your time has passed.) The new meme on the right appears to be inflation-truthing. This is the assertion that President Obama is deliberately low-balling inflation numbers to make his economic record look better.

The invaluable Barry Ritholtz labels them cranks, which seems pretty fair, even charitable. But even James Pethokoukis of the American Enterprise Institute is unnerved by the degree that "conspiracy theories that government is manipulating the data to hide skyrocketing prices" have moved into the mainstream of rightist thought.

Pethokoukis points his finger at Amity Shlaes of National Review, whose effort to revive the economic reputations of Calvin Coolidge and Herbert Hoover now encompasses two volumes. Earlier this month, Shlaes yoked some casual personal observations to the work of a discredited inflation truther to suggest that "inflation is higher than what the...

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The latest Obamacare rulings: A roundup of the damage reports

For a brief moment Tuesday, it looked as though the Affordable Care Act was in big trouble, for a three-judge panel of the federal appeals court for the District of Columbia had overturned federal insurance subsidies for insurance buyers in 36 states. 

But the triumph of conservatives' latest "not-so-veiled attempt to gut" the act (I am quoting from Judge Harry Edwards' dissent from the 2-1 majority ruling in the case of Halbig v. Burwell) was short-lived. Within a few hours, three judges of the 4th Circuit Court of Appeals, sitting in Richmond, ruled the other way in King v. Burwell, upholding the insurance subsidies.

Most legal observers expect the Obama Administration to appeal the D.C. panel's ruling to the full 11-member court, whose Democratic-appointed majority is considered likely to uphold the subsidies. Whether the issue makes it to the Supreme Court is uncertain: If the appeals courts both end up supporting the subsidies, the Supreme Court might let their opinions stand.

But...

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Conflicts of interest pervasive on California stem cell board

There's no good time for a public agency to be embroiled in a conflict-of-interest scandal, but this is an especially delicate time for California's stem cell agency.

The California Institute for Regenerative Medicine, as the program is known formally, is on track to finish doling out its $3 billion in funding from the state's voters as soon as 2017. Its original sponsor, Northern California real estate developer Robert Klein II, has been quoted talking about another $5-billion infusion, perhaps via the 2016 ballot.

Any such effort will refocus attention on the program board's inherent conflicts of interest, which were baked in by the terms of Proposition 71, Klein's 2004 ballot initiative that created CIRM and funded it through a bond issue. The prestigious Institute of Medicine in a 2012 report found these conflicts to lead to questions about "the integrity and independence of some of CIRM's decisions."

And now here comes another case. This one involves CIRM former President Alan...

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